Glossary

Wallet

Plain-language definition Crypto glossary

Key takeaways

A crypto wallet is a tool that stores the private keys needed to access and move cryptocurrency, while the coins themselves never leave the blockchain.
Each wallet manages key pairs in which the public key produces an address for receiving funds and the secret private key authorises spending, with hot wallets kept online for convenience and cold wallets kept offline for security.
Controlling the keys means controlling the funds, captured by the phrase "not your keys, not your coins," so a custodial service reintroduces trust while self-custody puts you fully in charge.

Definition

A crypto wallet is software or hardware that stores the cryptographic keys needed to access and manage cryptocurrency on a blockchain. The wallet does not hold coins the way a physical wallet holds cash; the coins exist as entries on the blockchain, and the wallet holds the keys that prove ownership and authorize transactions.

Why it matters

Whoever controls a wallet’s private key controls the funds it can spend, regardless of who set the wallet up or where it is displayed. This is why wallet security, specifically protecting the private key or seed phrase, is treated as the single most important practical skill in using cryptocurrency directly rather than through a custodial exchange account.

Example

Wallets range from mobile apps and browser extensions to dedicated hardware devices. See our entries on hot wallets and cold storage for how different wallet types trade off convenience against security.

FAQ

Frequently asked questions

If coins are on the blockchain, what does a wallet actually hold?

A wallet does not hold the coins themselves, which always remain on the blockchain. It holds the private keys that prove ownership and let you sign transactions to move those coins.

What is the difference between a hot wallet and a cold wallet?

A hot wallet stays connected to the internet for convenience, making it easy to transact but more exposed. A cold wallet stays offline for greater security, which suits longer-term holdings that do not need frequent access.

What does "not your keys, not your coins" mean?

It means that whoever controls the private keys effectively controls the funds. A custodial service holds keys on your behalf, which is convenient but reintroduces trust, while a self-custody wallet puts you fully in charge along with full responsibility for keeping the keys safe.