A cryptocurrency wallet is a digital tool that stores your private keys and allows you to send, receive, and manage your cryptocurrencies. Wallets don't actually store your coins (those exist on the blockchain); instead, they store the cryptographic keys that prove ownership and enable transactions.

Wallets come in various forms: software wallets (mobile/desktop apps), hardware wallets (physical devices like Ledger), web wallets (browser extensions like MetaMask), and paper wallets (printed keys). The main trade-off is between convenience and security.

Key Characteristics of Wallet

  • Private Keys: Your wallet's secret password that controls your crypto
  • Public Address: Your wallet's "account number" for receiving funds
  • Types: Hot wallets (online) vs Cold wallets (offline storage)
  • Non-Custodial: You control your keys vs Custodial (exchange controls keys)
  • Seed Phrase: 12-24 word backup that can restore your wallet

Real-World Example

A MetaMask wallet (hot wallet) is convenient for daily DeFi use but connected to the internet. A Ledger hardware wallet (cold wallet) stores your keys offline, making it more secure for long-term storage of large amounts.

Understanding Wallet is easier when you're familiar with these related concepts:

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