Crypto Wallets
Understanding wallets is fundamental to cryptocurrency safety. Learn the different types and how to protect your keys.
NEVER SHARE YOUR SEED PHRASE
Your seed phrase is the master key to all funds in your wallet. Anyone who has it can steal everything — instantly and permanently. There is no recovery.
“A legitimate support representative should never need your seed phrase or private key.”
What is a wallet?
A cryptocurrency wallet does NOT store your coins. Your coins exist on the blockchain — a public, distributed ledger that nobody owns or controls.
A wallet stores your private keys — the cryptographic proof that you are authorized to spend the funds at a given blockchain address. Without your keys, you cannot move your funds.
Think of it this way: your wallet is the keychain. The blockchain is the vault. Anyone can see what's in the vault (it's public). Only you can open it (with your keys).
Key Terms
Wallet Types
Hot Wallet
A wallet connected to the internet. Convenient for frequent transactions but more exposed to online threats.
- + Convenient for daily use
- + Free to use
- + Easy to set up
- − Connected to internet — higher risk
- − Vulnerable to phishing and malware
- − Not ideal for large long-term holdings
Cold Wallet
A wallet that stores keys completely offline. The most secure way to store cryptocurrency long-term.
- + Keys never exposed to the internet
- + Best protection against hacking
- + Ideal for long-term storage
- − Physical device can be lost or damaged
- − Less convenient for frequent transactions
- − Requires secure physical storage
Custodial Wallet
A wallet where a third party (usually an exchange) holds your private keys on your behalf.
- + Easy to use — no key management
- + Password recovery is possible
- + Built-in trading features
- − You do not control your keys
- − Account can be frozen
- − Exchange could be hacked
- − Not your keys, not your coins
Non-Custodial Wallet
A wallet where you — and only you — control your private keys. True ownership of your crypto.
- + Full ownership of your funds
- + Cannot be frozen by any company
- + Works with DeFi and dApps
- − You are solely responsible for key security
- − No password recovery — losing seed phrase = losing funds
- − Requires more education to use safely
Hardware Wallet
A physical device that stores private keys in a secure chip, completely isolated from the internet.
- + Gold standard for security
- + Keys never touch the internet
- + Supports many cryptocurrencies
- + Works with major software wallets
- − Costs money to purchase
- − Physical device can be lost
- − Setup requires more steps than software wallets
Browser Wallet
A wallet that runs as a browser extension, allowing you to interact with web3 applications directly in your browser.
- + Seamless DApp interaction
- + Convenient for DeFi and NFTs
- + Free to use
- − Connected to internet at all times
- − Browser extension can be targeted by malware
- − Phishing attacks specifically target browser wallets
Mobile Wallet
A wallet app on your smartphone, combining portability with key self-custody.
- + Convenient and portable
- + QR code scanning for payments
- + Often non-custodial
- − Phone can be lost or stolen
- − SIM-swap attacks can be a risk if 2FA uses SMS
- − Screen capture malware is a risk