Wallets: Hot, Cold, and Who Holds the Keys

A wallet doesn't hold coins

Your coins never actually leave the blockchain. A wallet stores the private keys that prove you own them and let you sign transactions. Lose the keys and the coins are still on the blockchain, but nobody can move them ever again.

From those keys your wallet creates addresses, which work like an account number you can safely share so people can pay you.

Hot wallets

A hot wallet keeps its keys on a device that's connected to the internet, like a phone app, a browser extension, or a desktop program.

• Good for: everyday spending at Small Business shops, P2P meetups, and Garage Sales.
• Popular examples: most chains have their own favorite apps, and multi-chain apps like Trust Wallet cover many at once.
• Risk: malware, phishing, or a stolen unlocked phone can expose the keys.
• Rule of thumb: keep only what you'd carry in a physical wallet.

Cold wallets

A cold wallet keeps its keys offline. Usually that's a hardware wallet, a small device that signs transactions without ever exposing the key to your computer or phone.

• Good for: savings and anything you can't afford to lose.
• Trade-off: slower to use, and you have to keep the device and its backup safe.
• Popular examples: Ledger, Trezor, and Keystone. Current models support most major chains, paired with a wallet app on your phone or computer.

Self-custody vs. exchange custody

With self-custody you hold the keys, so only you can move the funds. When your coins sit on an exchange, the exchange holds the keys and you hold a promise. That's where the saying "not your keys, not your coins" comes from.

Exchange deposit addresses also behave differently. Some don't credit tokens, some change over time, and some are shared or swept. That's why Crypto Barter asks whether an address is Self Custody or an Exchange Address when you add it.