The popular image is that a crypto wallet is a safe full of coins. In reality, the coins "live" on the network. The wallet stores the keys you use to prove the funds are yours.
Public key and private key
- The public key (your address) can be given to anyone. It works like an account number.
- The private key is the signature you use to approve transactions. Whoever holds it, holds the money.
The private key is usually handled through a recovery phrase (seed phrase) of 12 or 24 words. That list of words is, quite literally, access to everything.
Rules that protect your funds
- Never type your phrase anywhere online. No legitimate app will ever ask you for 24 words on a website.
- Write it down offline. A piece of paper in a safe place beats a screenshot in the cloud.
- Consider a hardware wallet for larger amounts. The key never leaves the device.
- Verify addresses before sending. Malware can swap out an address you have copied.
There is no "forgot password" option. If you hand your phrase to someone, you hand over your funds, with no way to undo it.
Security in web3 is not about complicated tools. It comes down to a few habits. This article is your starting point. Come back to it before you set up your first wallet.