What is a crypto wallet?

If you’re just starting to explore the world of cryptocurrency, you’ll quickly come across the concept of a crypto wallet. It is a tool that allows you to interact with your assets on the blockchain.

The cryptocurrency itself is not stored inside the wallet app. Information about transactions and the current state of assets is recorded on the blockchain. The wallet reads this information, displays it to the user, and allows them to manage their assets using cryptographic keys.

In simple terms:

With a crypto wallet, you can view your balance and transaction history, receive and send crypto. Depending on the wallet, additional features may also be available. For example, IronWallet lets you manage supported assets, send, receive, and swap crypto, with more than 10,000 cryptocurrencies and tokens available in one wallet.

1. How does a crypto wallet give you access to your assets?

Cryptographic keys are at the core of how a wallet works. You don’t need to interact with them manually every time you make a transaction, but there are three basic concepts worth understanding.

Wallet address — an address that can receive cryptocurrency. You can share it with someone who wants to send crypto to you.

Private key — secret data that the wallet uses to sign transactions. A private key should never be shared with anyone.

Recovery phrase — a secret sequence of words that can be used to restore a wallet and the keys associated with it. In IronWallet, it can be used to restore access, for example, on another device. IronWallet does not store a copy of your recovery phrase.

In simple terms:

That is why saying you “store crypto in a wallet” is a useful simplification. The assets remain on the blockchain, while the wallet stores and uses the data needed to manage access to them.

In practice, this makes crypto much easier to use. You can open one app, see your supported assets, and manage them without interacting directly with the blockchain or private keys.

2. What happens when you send cryptocurrency?

Let’s say you want to send ETH to someone.

You open the asset in your wallet, enter the recipient’s address and the amount. The wallet creates a transaction and signs it using your private key. The signed transaction is then sent to the network.

In IronWallet, signing takes place locally on the device — the private key is never sent anywhere.

The process looks like this:

So cryptocurrency does not move directly from one app to another. The state recorded on the blockchain changes, and the wallets display the result of that transaction.

3. What happens when someone sends cryptocurrency to you?

To receive crypto, you give the sender your wallet address on the appropriate network.

For example, if someone sends ETH to your Ethereum address, their wallet creates a transaction to that address. Once the network processes it, the transaction is recorded on the blockchain. Your wallet then reads the updated blockchain data and displays the incoming transaction and your updated balance.

If an asset exists on multiple networks, it is also important to check which network is being used before sending. For example, USDT is available on several blockchains, so the sender must use a network that the recipient supports for that asset.

4. How is a crypto wallet different from an exchange?

A centralized exchange can look similar from the user’s perspective: you can see your balance, buy, sell, receive, and send cryptocurrency. The main difference is who controls the private keys.

On a centralized exchange, you access your crypto through an account, while the platform itself manages the keys. This means access to crypto operations also depends on the account and the rules and availability of the service.

With a non-custodial wallet, the private keys remain under the user’s control. The wallet provider does not hold them on the user’s behalf and does not control access to the assets.

From the perspective of control and protection from the risks of centralized custody, this is an important advantage: your keys are not stored by a third-party service, and access to your wallet does not depend on an exchange account. At the same time, the user is responsible for keeping their recovery phrase and device secure.

5. What types of crypto wallets are there?

Crypto wallets can come in different forms. For example, there are software wallets for smartphones and computers, as well as hardware devices. But one of the most important distinctions is who controls the private keys.

With a custodial wallet, the service manages the keys. With a non-custodial wallet, control remains with the user.

IronWallet is a non-custodial software wallet for mobile devices. Private keys are generated and stored locally and are not sent to IronWallet servers, while transactions are signed directly on the device.

At the same time, the wallet works through a simple, familiar app interface. You can manage more than 10,000 supported assets, receive and send crypto, and use available swap features. Creating a wallet and using its core features does not require registration or KYC, and 24/7 support is available directly in the app. Third-party services available through the app may have their own requirements, including KYC.

In simple terms, a crypto wallet gives you a convenient way to interact with assets on the blockchain — and with a non-custodial wallet, control of the private keys remains with the user.