Wallets, keys and security

A wallet does not hold coins in the way a purse holds cash. What it holds is a set of cryptographic keys. A private key is a secret number that proves control of an account and signs transactions, and the public address derived from it is the only part you should share to receive funds. In a custodial arrangement, a company holds the keys for you and you rely on its systems and its terms. In self-custody, you hold the keys yourself, which gives direct control but also makes you solely responsible for them. Neither model is automatically better; each moves the risk to a different place.

Most losses come from a small number of mistakes. A recovery phrase, the list of words that can rebuild your keys, should be written down and stored offline, never photographed, typed into a website or given to anyone who asks for it. Two-factor codes help most when they come from an app or a security key rather than a text message. Phishing messages imitate wallets, exchanges and support staff to collect phrases or codes, and they often create urgency. If something feels rushed, stop and go to the official address you typed yourself. Before a large transfer, send a small test amount and compare the full address.