What is Wallet?
Last reviewed 2026-05-03
Used by: Safe, Robinhood Crypto
Entity coverage: 3 protocols, 0 tokens, 0 chains reference this concept.
A wallet is software (or hardware) that holds private keys and signs transactions. Categories: hot/cold, custodial/non-custodial, EOA/smart account. Examples: MetaMask, Rabby, Phantom, Argent, Safe, Coinbase Wallet, Ledger.
How it works
A wallet begins by generating random entropy and encoding it as a 12- or 24-word seed phrase (BIP-39). From that seed it deterministically derives a tree of private keys, and from each private key a public key and address. The coins never live "in" the wallet — balances are records on the blockchain, and the wallet only holds the keys that control them.
To transact, the wallet constructs a transaction (recipient, amount, calldata, fee parameters), displays it for the user's approval, signs it locally with the private key, and broadcasts the signed payload to a node. The network verifies the signature against the sending address and executes the transfer. The private key itself never leaves the device.
Hardware wallets keep keys inside a secure element and sign on-device, so a compromised computer sees only the finished signature. Custodial wallets move key control to a company. Smart-contract accounts replace the single key with programmable validation logic — multisig approvals, spending limits, and social recovery.
Why it matters
The wallet is the user's sovereign interface to crypto. Wallet UX determines mainstream adoption.
Real-world examples
MetaMask, Rabby, Phantom (Solana), Argent, Safe, Coinbase Wallet, Ledger, Trezor, GridPlus, Frame.
Related terms
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