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Analyzing Market
Glossary

Wallet

A crypto wallet is a tool that stores the private keys needed to access and move cryptocurrency. The coins themselves never leave the blockchain; the wallet holds the keys that prove ownership and let you sign transactions.

How it works

Each wallet manages one or more key pairs. The public key produces an address you can share to receive funds; the private key authorises spending and must stay secret. Wallets fall into two camps: hot wallets are connected to the internet for convenience, while cold wallets stay offline for security. Most wallets let you restore access from a seed phrase if the device is lost.

Why it matters

In crypto, controlling the keys means controlling the funds — the phrase “not your keys, not your coins” captures this. A custodial service holds keys on your behalf, which is convenient but reintroduces trust; a self-custody wallet puts you fully in charge, along with full responsibility for backups.

Example

A hardware wallet keeps your private key on a dedicated offline device, signing transactions without ever exposing the key to an internet-connected computer.

Wallet: Frequently Asked Questions

Does a wallet actually hold my coins?
Not exactly. The coins themselves never leave the blockchain; the wallet holds the private keys that prove ownership and let you sign transactions. The public key produces an address you share to receive funds, while the private key authorises spending and must stay secret.
What is the difference between a hot wallet and a cold wallet?
Hot wallets are connected to the internet for convenience, making them easy to use for frequent transactions but more exposed. Cold wallets stay offline for security, like a hardware wallet that keeps your private key on a dedicated device and signs transactions without ever exposing the key to an internet-connected computer.
What does 'not your keys, not your coins' mean?
It means that whoever controls the private keys controls the funds. A custodial service holds keys on your behalf, which is convenient but reintroduces trust in a third party. A self-custody wallet puts you fully in charge, along with full responsibility for backups, usually through a seed phrase.
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