What is a Crypto Wallet?

A crypto wallet is a digital or physical solution that enables you to access, manage and secure your cryptocurrencies and NFTs on various blockchains.

A crypto wallet does not hold your digital assets directly. It secures your private keys, granting you access to your digital assets that live on the blockchain.

 You can choose from several types of crypto wallets, each with varying levels of convenience and safety.

A hardware wallet is a physical device that generates and stores your private keys in an environment separated from an internet connection. Hardware wallets are also considered to be self-custodian wallets, meaning that you are the sole owner of your crypto, and maintain full control over your confidential keys. You decide when to use them to sign transactions and interact with the blockchain. By remaining disconnected from the internet, hardware wallets provide the highest level of security for holding crypto and minimize exposure to online threats. These physical crypto wallets are ideal for storing both large and small amounts of crypto, for daily transactions or long-term investments.

A software wallet is an application (App) you install on your computer or mobile phone. Always connected to the blockchain, it allows you to send, receive, and manage your crypto assets. Software wallets are a popular choice because they are usually free to download and quick to set up. However, since they operate on internet-connected devices, they are considered online wallets, meaning your private keys are more vulnerable to hackers and various threats. To enhance security, it's essential to generate and store your keys offline using a hardware wallet, which you can then connect to your software wallet only for transactions.

A crypto exchange wallet is provided when you create an account with an exchange, making it a convenient solution for users who frequently trade or move funds. However, the exchange then controls your wallet, managing your private keys and securing your assets, not you. This reliance on the platform means your funds are at risk if the exchange faces a security breach or any type of legal complications, which can potentially leave your assets inaccessible or under the control of a third-party. It’s the least secure option.