In crypto, whoever controls the keys controls the funds, so how you store them is one of your most important decisions.
What is a wallet?
A wallet doesn't hold coins like a physical purse: it holds the keys that let you manage your funds on the blockchain.
Custodial vs. self-custody
- Exchange: the company holds the keys for you. Convenient, but you depend on its security and solvency.
- Self-custody: you control the keys. More control, but full responsibility if you lose them.
Hot and cold wallets
Hot wallets (apps, web) are online and handy for small amounts. Cold wallets (hardware devices) keep keys offline and are generally considered safer for larger amounts.
Best practices
- Write your recovery phrase on paper and keep it offline in a safe place.
- Never photograph it, store it in the cloud or share it.
- Buy hardware wallets only from official sellers.
- Test with a small amount first.
- Learn to spot scams.
General educational content. It is not financial, tax or legal advice, nor a recommendation to buy or sell any asset. Crypto assets carry a risk of total loss.