A Bitcoin wallet doesn't hold coins; it holds keys, finds the coins they control, and builds and signs transactions. Learn how to choose one.
Keys, not coins
Your coins never leave the blockchain. What a wallet holds is the keys that can spend them, more like a keychain than a purse.
What a wallet does
- Creates keys from a seed phrase and shows you addresses to receive to.
- Finds your coins by scanning the blockchain (via a node) for outputs your keys can spend.
- Builds transactions: picks UTXOs, adds change, sets a fee.
- Signs them and broadcasts them to the network.
Kinds of wallet
| Kind | Example | Good for |
|---|---|---|
| Mobile | Phone app | Small, everyday amounts |
| Desktop | Computer app | More control, coin selection |
| Hardware | Dedicated signing device | Savings |
| Watch-only | No keys at all | Monitoring |
| Custodial | Exchange account | Convenience, but you don't hold the keys. See Self-custody vs custodial |
Restoring a wallet
Because keys come from the seed, you can lose the phone and still restore every coin on another device, as long as you have the seed words.
Choosing a first wallet
- Open source so experts can check it.
- Shows you a seed phrase at setup: if it doesn't, you don't control the keys.
- Supports SegWit or Taproot addresses for lower fees.
- Lets you set the fee and bump stuck payments.
- Can connect to your own node later, if you run one.
Check your wallet's work
After receiving a payment, paste the txid into MyBitcoinExplorer's search to confirm it independently of your wallet app.
Key takeaways
- A wallet stores keys, not coins.
- It finds your UTXOs, builds and signs transactions.
- Your seed phrase can restore the wallet anywhere.
Common questions
If I delete my wallet app, is my bitcoin gone?
No, if you have your seed phrase. Restore it in any compatible wallet.
Can I have several wallets?
Yes, many people keep a small spending wallet and a separate savings wallet.
Is a crypto exchange account a wallet?
It's a custodial account: the exchange holds the keys. A wallet you control shows you a seed phrase.
Can I use the same seed in two wallet apps?
Yes, if both support the same standards, but it's simplest to use one at a time.