Wallets: where bitcoin is kept

A bitcoin wallet doesn't hold coins. The coins stay in the shared record; a wallet holds the keys that let you spend them. So the real question about any wallet is: who holds the keys, you or someone else?

The kinds of wallet

Kind	Who holds the keys	Good to know
Exchange or app account	The company	Easy to start. The company can freeze withdrawals, and if it fails your coins can be stuck with it.
Phone or computer app	You	Free and quick. The keys sit on a device that is online, so a hacked or infected device puts them at risk. Often called a hot wallet.
Hardware device	You	A small device that keeps the keys offline and signs payments itself. Costs money; better suited to larger amounts. Often called a cold wallet.
Shared or multisig	You and others	Needs two or more keys to spend, held in different places or by different people. More work to set up.

Bought on an app: do you need a wallet?

Not to own bitcoin. If you bought on an exchange or app, the company holds the coins for you, the way a bank holds deposits. Many people move their bitcoin to a wallet of their own so that nobody else can freeze it or lose it in a collapse. See on an exchange or in your own wallet for what that trade-off looks like.

Backup words

When you create a self-custody wallet it shows you 12 or 24 words. Those words can recreate every key in the wallet on any compatible app or device, so they are the wallet, more than the phone or device is. Losing them can mean losing everything; anyone who sees them can take everything. Seed phrases and backups covers how people keep them.

What to check before choosing

We don't recommend particular wallets. These are questions people commonly ask before picking one:

• Does it give you backup words, and do you hold the keys, or does a company?
• Is it widely used and has it been around for years? Is its code public?
• Did you get it from the maker's own site or the official app store, not a link in a message or an ad?
• Can it receive to bc1 addresses, the newer, cheaper kind?
• Does it fit the amount: an app for spending money, something offline for savings?
• For a hardware device: is it bought from the maker, not second-hand or from a marketplace seller? A device that arrives with backup words already printed or filled in has been tampered with.