The name is misleading, so it helps to replace the picture. Nothing is inside a wallet the way notes are inside a leather one. The coins sit on the chain, visible to everybody; your wallet is the keyring that opens your particular part of it. Install a new wallet app, enter the same recovery words, and the same balance reappears, because the balance never moved.
Wallets divide roughly by where the key lives. A hot wallet keeps keys on an internet-connected phone or browser, which is convenient and exposed to whatever malware reaches that device. A <a href="/glossary/cold-wallet/">cold wallet</a> keeps them offline, usually on a dedicated device that signs transactions internally; our <a href="/toolkit/how-to-set-up-a-hardware-wallet/">hardware wallet walkthrough</a> covers that setup step by step.
Almost every self-custody wallet hands you a recovery phrase during setup. Those words are the master key from which every address is derived, which makes backing them up properly the single most important thing you will do. Write them down offline before you put anything of value into the wallet, and follow a deliberate process such as our <a href="/toolkit/how-to-back-up-a-seed-phrase/">seed phrase backup guide</a>.
Self-custody has no undo. There is no password reset, no support desk and no chargeback: a transaction sent to the wrong address is gone, and a key that leaks is a wallet already emptied. Approvals deserve the same care, since granting a contract permission to spend your tokens can be exploited long after you have forgotten the application existed.
What Is a Crypto Wallet? Keys, Not Coins
Key takeaways
- Wallets hold keys, so backing up a wallet means backing up the recovery phrase, never copying an app or a file.
- The same recovery phrase restores your funds on any compatible wallet, which is exactly why anyone else holding it can restore them too.
- Review and revoke old token approvals occasionally; they persist silently until you remove them.
Wallet — frequently asked questions
If I delete my wallet app, do I lose my crypto?
Not if you still have the recovery phrase. The coins live on the blockchain, and the app is only an interface to the keys. Reinstall a compatible wallet, restore from the phrase, and the balance is there again. Without the phrase, however, deleting the app can be permanent, so verify your backup before uninstalling anything.
How many wallets should I have?
Many people keep more than one on purpose: a small everyday wallet for connecting to applications, and a separate long-term wallet that never touches unfamiliar sites. Splitting them limits the damage if a signature goes wrong. It also means more recovery phrases to store safely, so only add wallets you are genuinely willing to back up properly.
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