Crypto wallet
A crypto wallet is software or hardware that stores the cryptographic keys used to access and manage crypto assets. It does not hold coins directly. The assets live on a blockchain, and the wallet holds the private key that authorizes transactions and lets a person interact with blockchain apps.
Wallets fall into two types. A custodial wallet is one where a company holds the private keys for the user, similar to how a platform manages an account balance. A self-custody wallet is one where the user holds the keys directly and no third party can move the funds.
Each type carries trade-offs. With a custodial wallet, the user relies on the provider for security. With a self-custody wallet, the user must store the private key or recovery phrase. If that key is lost or exposed, the funds can be lost or stolen, and blockchain transactions generally cannot be reversed.
Related terms: Private key · Self-custody · Non-custodial vs custodial
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