A crypto wallet is an app or device that holds the keys to your crypto. The crypto itself isn't stored in the wallet. It is recorded on the blockchain, and the wallet holds the private keysPrivate keyA secret number that proves you own the crypto in your wallet. Whoever holds the private key controls the crypto. that prove it is yours and let you send it.
How does a crypto wallet work?
Think of a PO box and its key. Your wallet address is like the box number: you can give it to anyone, and they can put crypto in the box. The private key opens the box. Without it, nobody can take anything out, not even you.
The wallet handles the complicated part. It shows your balance, creates addresses and signs transactions when you send crypto.
What kinds of wallets are there?
Wallets are grouped in two ways:
- Who holds the keys? With a custodial walletCustodial walletA crypto wallet where a company holds the private keys for you, so you don't have to look after keys or a seed phrase., a company such as a crypto exchange holds the keys for you. With self-custodySelf-custodyHolding the private keys to your crypto in your own wallet, so nobody else controls it but all the responsibility for the keys is yours., you hold them.
- Is the wallet online? A hot walletHot walletA crypto wallet on an internet-connected device such as a phone or computer, convenient for everyday use but more exposed to attacks. runs on a device connected to the internet, like your phone. A cold walletCold walletA way of storing the keys to your crypto completely offline, so hackers on the internet can't reach them. keeps the keys offline.
What should you know?
When you set up a self-custody wallet, you usually get a seed phrase of 12 or 24 words. It is your backup. If you lose your phone, you can use it to restore the wallet on a new device.
Anyone who gets hold of your keys or seed phrase can take your crypto, and the transaction can't be reversed. Keep them safe and never share them with anyone.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.