Wallets do not literally hold coins — the coins live on the blockchain. The wallet holds the private keys that prove ownership. “Not your keys, not your coins” captures the risk of leaving assets on someone else’s platform.
Key takeaways
- A crypto wallet stores the keys that control your coins, not the coins themselves, which live on the blockchain.
- Custodial wallets are held by a third party, while non-custodial wallets put you in sole control and responsibility.
- Losing access to your wallet's keys or recovery phrase can mean permanently losing your funds.
Wallet — frequently asked questions
Does my wallet actually hold my coins?
No. Your coins are recorded on the blockchain; the wallet holds the keys that let you access and move them.
What is the difference between a hot and cold wallet?
A hot wallet is connected to the internet for convenience, while a cold wallet stays offline for stronger security.
This definition is educational and not financial advice. Crypto is volatile and high-risk — always do your own research.
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