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How does a crypto wallet work?

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Quick answer

A crypto wallet stores the secret keys that prove you own your cryptocurrency — it doesn't actually hold coins, which live on the blockchain. Your private key signs transactions to spend funds, while your public key works like an address others can send to.

Step by step

  1. It stores your private and public keys, not the coins themselves.
  2. The private key signs transactions and must stay secret.
  3. The public key acts as your receiving address.
  4. Lose the private key and you lose access to the funds.

People also ask

How does a crypto wallet work?
It holds the keys that let you prove ownership and authorize transactions of crypto stored on the blockchain.
What's the difference between a public and private key?
The public key is your shareable address; the private key is the secret that authorizes spending.
What happens if I lose my private key?
You permanently lose access to that crypto — there's usually no way to recover it.