In this lesson
- find out where the keys live in different wallets
- compare mobile, desktop and hardware wallets
- understand why we no longer recommend paper wallets
A wallet is like a pocket: you put change for coffee in your back pocket, not your salary. Crypto works the same way – a wallet "in your pocket" for everyday payments and a safe for savings.
Hot wallets#
A hot wallet keeps its keys on a device connected to the internet:
- Mobile app – convenient, your phone is always with you. But phones get lost, stolen and filled with apps.
- Browser extension – the most convenient for blockchain apps. But the browser is where you meet the most scam websites.
- Desktop program – similar to a phone; a computer is as safe as the way you use it.
A hot wallet suits smaller amounts and everyday use.
Cold wallets#
A so-called hardware wallet is a small device that never lets the keys out. A computer or phone prepares the transaction, but the device signs it – and you confirm it with a button or a touch on its screen. Even if the computer is infected, it cannot steal the key from the wallet.
It costs roughly 50 to 250 euros depending on the model. Well-known brands include Trezor, Ledger, BitBox or Keystone – mentioned only as examples, not as recommendations.
How to choose#
- Screen – it must be big enough to read the whole address and amount.
- Supported networks – does it support the cryptocurrencies you want to hold?
- Open code – with some manufacturers anyone can check the software, with others only part of it.
- Secure chip – it makes a physical attack harder if someone steals the device.
- The manufacturer's reputation – how it handled past problems and how quickly it releases fixes.
Why not a paper wallet#
It used to be recommended to print a private key on paper. Not any more:
- the printer and the computer the key was created on may be compromised,
- a paper wallet usually has a single address, and it is easy to make a mistake when withdrawing,
- you cannot sign anything safely with paper – you still have to type the key into some device.
Today paper makes sense as a backup of the seed phrase, not as a wallet. Backups are the topic of the third module.
A hardware wallet does not protect against everything
It protects the key from an infected computer. It does not protect you if you sign a fraudulent transaction, lose your backup or reveal your seed phrase to someone.
Common myths#
- "A mobile wallet is as safe as a hardware one." For small amounts it is enough, for savings it is not.
- "The most expensive hardware wallet is the best." The screen, network support and the manufacturer's reputation decide.
- "A paper wallet is the safest because it is offline." It is offline, but easy to make mistakes with.
Summary
- Hot wallets (phone, browser, computer) are for smaller amounts and everyday use.
- A hardware wallet keeps the key inside and signs transactions itself – it is for savings.
- Choose by screen, supported networks, open code, chip and the manufacturer's reputation.
- Paper is for backing up a seed phrase today, not as a wallet.