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Bitcoin Wallets

A Bitcoin wallet does not store coins like a physical wallet stores cash.

It stores the keys that let you control and spend your bitcoin on the blockchain.

What a wallet does​

  • Generates and manages your Bitcoin addresses
  • Holds your private keys securely
  • Lets you send and receive bitcoin
  • Shows your transaction history and balance

Public key vs private key​

  • Public key/address: share this to receive bitcoin
  • Private key: secret key that proves ownership and authorizes spending

If someone gets your private key, they can take your funds.

Seed phrase (recovery phrase)​

Most wallets create a 12 or 24 word backup called a seed phrase.

This phrase can recover your wallet if your phone or computer is lost.

Important: store this phrase offline and never share it.

Types of wallets​

1. Custodial wallets​

A company controls the keys for you.

Pros:

  • Easy for beginners
  • Password recovery is possible

Cons:

  • You do not fully control your bitcoin
  • You depend on a third party

2. Non-custodial wallets​

You control your own keys.

Pros:

  • Full ownership and control
  • Better privacy and sovereignty

Cons:

  • You are responsible for backups and security

3. Hot wallets​

Connected to the internet (mobile or desktop apps).

Best for daily spending, but higher exposure to hacks.

4. Cold wallets​

Offline wallets (hardware wallets or paper backups).

Best for long-term storage with stronger security.

Wallet safety basics​

  • Never share your seed phrase or private key
  • Back up your seed phrase in at least two secure places
  • Use strong passwords and device lock screens
  • Beware of phishing links and fake wallet apps
  • Consider a hardware wallet for larger amounts

Bitcoin ownership comes down to key ownership:

Not your keys, not your coins.

Next, read Lightning Wallets to compare popular options for faster everyday Bitcoin payments.