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How wallets work
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
A wallet does not hold coins — it manages keys. Your assets live on the blockchain, and whoever holds the key can move them.
Key points
- A wallet manages keys, not coins
- Leaving assets on an exchange means someone else holds the key
- Never show your seed phrase to anyone or store it online
Definition
Software or hardware that stores the private keys used to sign transactions for on-chain assets.
Hot wallets — apps and browser extensions — stay connected to the internet. Hardware wallets isolate the key in a dedicated device. A common split is hot for daily use, hardware for long-term holdings.
A seed phrase — 12 to 24 words — can regenerate your keys. Any site, DM or 'support agent' asking for it is a scam, without exception. This site will never ask for it.
Watch out for
- · Never screenshot a seed phrase or store it in the cloud
- · Never install a wallet from a search advert
- · Do not interact with tokens or NFTs that arrive unexpectedly