Library · Crypto, word by word · Wallets and keys
What is a crypto wallet?
A crypto wallet is software or a device that holds the keys controlling your crypto and uses them to sign transactions. The coins themselves stay recorded on the blockchain; the wallet shows your balance and proves you are allowed to move it.
What it means for you
Whoever has the keys a wallet holds can move the funds, and a signed transaction cannot be reversed. Deleting a wallet app does not delete the coins, but restoring them needs the recovery phrase or keys. Check whether you or a company holds those keys.
A common mistake: “My crypto is stored inside my wallet app.”
In fact: Wallets store the private keys, not the coins; the coins are entries on the blockchain. Lose the device but keep the recovery phrase and the coins can be restored elsewhere. Lose the keys and every backup, and no one can move them.
How it works
A wallet does three jobs: it stores or derives private keys, shows a balance by reading what the blockchain records for its addresses, and signs transactions before sending them to the network. Most wallets are hierarchical deterministic: one seed generates every key in a fixed tree, so the same recovery phrase restores all addresses in another compatible app. Wallets differ in where the keys live, on a phone, in a browser extension, on a dedicated device or with a company in a custodial account, and so in who can sign. An address is only a receiving identifier derived from a public key; one wallet can hold many.
Sources: ethereum.org: Ethereum wallets, ethereum.org: Ethereum accounts, SEC Office of Investor Education: Crypto asset custody basics for retail investors, Bitcoin developer guide: Wallets, bitcoin.org: Frequently Asked Questions · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.