Wallet
wallets · beginner
Software (or hardware) that manages your private keys, derives addresses, and signs transactions.
A wallet does not store bitcoin — bitcoin lives on the chain. A wallet stores the keys that can spend it. Categories: hot (online, convenient, more attack surface), cold (offline, hardware devices), and custodial (someone else holds the keys, so it's not really your bitcoin).
Modern self-custody wallets are usually hierarchical-deterministic: one seed phrase regenerates every key the wallet has ever used or will use. Backup is a single 12 or 24-word phrase, written down and stored in metal or paper, sometimes split across locations. The keys themselves live in a hardware signer; an online watch-only wallet handles addresses and transaction construction.
Custodial wallets — exchanges, neobanks, payment apps — hold the keys on your behalf. They're convenient and look like normal apps, but the bitcoin you "have" is a database entry the custodian can freeze, lose, or hand to a regulator. The aphorism is "not your keys, not your coins"; it has been validated repeatedly by exchange failures and seizures.