What is a wallet?
A Bitcoin wallet is an app or device that holds your keys and lets you send and receive. Your bitcoin itself lives on the blockchain. The wallet holds the proof that it is yours.
Two kinds of key
- Private keys are secret. They sign your payments. Whoever has them controls the coins.
- Addresses come from your keys and are safe to share. They are how people pay you, a bit like a bank account number.
Most wallets create all your keys from one seed phrase of 12 or 24 words. Look after those words and you can rebuild the wallet on a new device. See Seed phrases and backups.
Custodial or not
With a custodial wallet, such as an exchange account, a company holds the keys for you. It is easy, but you rely on them to let you withdraw. With a self-custody wallet, you hold the keys and nobody can freeze your coins, but nobody can reset your password either.
Getting started
Download wallet apps only from the official website or app store listing, and check the developer name. Set it up, write down the seed phrase on paper, then send in a small amount to try it. The next lesson explains hot and cold wallets.
Key takeaways
- A wallet holds keys. The coins live on the blockchain.
- Addresses are safe to share. Private keys and seed phrases are not.
- Custodial means a company holds the keys. Self-custody means you do.
Not financial advice. These lessons are general education only. Bitcoin prices can swing hard. Never put in more than you can afford to lose, and do your own research.