Learn / Wallets
What is a crypto wallet?
A crypto wallet doesn't really "hold" your coins — it holds the keys that prove the coins are yours. Here's what that means, in plain words.
If you're new to crypto, the word "wallet" is a little misleading. Your money isn't sitting inside an app like cash in a leather wallet. Crypto lives on the blockchain — a shared record kept by thousands of computers. Your wallet is simply the tool that holds the secret needed to move your share of that record.
Public key and private key
Every wallet has two parts:
- A public key (your address): a long string of letters and numbers you can share. People send crypto to this address, like an account number.
- A private key: a secret that proves you own the address and lets you send crypto out. Whoever has the private key controls the coins.
Hot wallets vs cold wallets
Wallets come in two broad types:
- Hot wallet — an app on your phone or computer that's connected to the internet. Convenient for small amounts and everyday use.
- Cold wallet — a physical device (or even paper) that stays offline. Safer for larger amounts because hackers can't reach it over the internet.
A common approach: keep a little in a hot wallet for spending, and the rest in a cold wallet for safekeeping.
The recovery phrase
When you create a wallet, it gives you a recovery phrase — usually 12 or 24 words. This phrase can restore your wallet on any device. That makes it powerful and dangerous: write it on paper, keep it offline, and never type it into a website or send it to anyone. There is no "forgot password" button in crypto.
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- Write your recovery phrase on paper and store it somewhere safe and offline.
- Never share your private key or recovery phrase — not even with "support."
- Double-check addresses before sending; transactions are final.
- Use a hardware (cold) wallet once your amounts get meaningful.
Frequently asked questions
Do I need a crypto wallet to start?
To truly own crypto yourself, yes — but many beginners start on an app that holds the wallet for them, which is fine while you learn. You can move to your own wallet later.
What happens if I lose my wallet?
If you lose access and didn't save your recovery phrase, the crypto is gone — there's no password reset. That's why keeping your recovery phrase written down and offline matters so much.
Are crypto wallets free?
Software wallet apps are usually free. Hardware wallets (physical devices) cost money but add security for larger amounts.