Simple definition
A crypto wallet is an app or device that holds the keys to your digital assets and lets you approve transactions. Your coins do not sit inside it like cash. The wallet holds the keys that prove they are yours.
How it works
- The wallet creates a pair of keys: a public one, like an account number, and a private one, like a secret signature.
- You share your public address to receive assets.
- You use the private key, kept safe by the wallet, to approve sending.
- A recovery phrase, which is a list of words, can restore the wallet. Anyone who has it can take your assets.
- Public keyLike an account numberCreates your wallet address. People use it to send you assets.Safe to share
- Private keyLike a PIN and signatureProves you approve a transaction. Your wallet keeps it for you.Never share
- Recovery phraseThe backup wordsCan restore your wallet. Anyone who has it can take everything in it.Keep offline
Everyday example
In real life
Ada installs a wallet app, writes her recovery phrase on paper, keeps it somewhere safe and offline, and tests with a very small amount before doing anything bigger.
Benefits and why this matters
Why this matters
A wallet is the doorway to almost everything in Web3. Knowing how it works is the best protection against costly mistakes.
- You control access yourself
- Works with many apps
- No company has to give you permission
Risks and limitations
Things to watch out for
- Watch out: If you lose your recovery phrase, nobody can recover your wallet
- Watch out: Anyone who learns your phrase can empty your wallet
- Watch out: Fake wallet apps and fake websites exist
Your beginner action
Try this
Do not create or fund anything yet. First read our wallet security checklist in the Safety Centre, then decide whether you want to try.