What is a crypto wallet? A beginner’s guide to safely storing your digital assets

A crypto wallet is a digital tool that lets you store and manage the keys needed to access your cryptocurrencies. It doesn't store crypto itself — your funds live on the blockchain. Instead, it holds your public and private keys which you need to send, receive, and manage your crypto securely.

These wallets make it possible for anyone to interact with the blockchain, giving you a gateway to digital currencies like Bitcoin, Ethereum, and others.

Why are crypto wallets important?

If you don’t control your private keys, you're not in full control of your crypto. A wallet gives you autonomy over your digital assets by safeguarding the cryptographic keys needed to access your holdings.

Your public key is like your bank account number — used to receive funds and safe to share.

Your private key is your password — used to authorise transactions and only known to you.

Losing access to your private key means losing access to your assets. That’s why secure wallet management is crucial in the crypto space.

How do crypto wallets work?

Crypto wallets operate by storing and managing your key pair — the public one and the private one.

Public vs private keys — what’s the difference?

• Public key: A long string of characters used to receive funds. Others can send crypto to this address.
• Private key: Used to sign transactions and prove ownership. It must be kept confidential at all times.

Together, they create a wallet address that allows interaction with the blockchain.

What is a wallet address?

A wallet address is a compressed, readable version of your public key. It functions like an email address for your crypto — you share it to receive payments.

Each transaction is signed using your private key, confirming that you have authorised it.

Example: A typical Bitcoin wallet address might look like this: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa. When someone sends Bitcoin to this address, the blockchain updates to reflect the new ownership — but only the person with the private key linked to this address can access or spend the funds.

It’s worth noting that different blockchains use different address formats. Ethereum wallet addresses, for instance, typically start with 0x and are 42 characters long. For example: 0x742d35Cc6634C0532925a3b844Bc454e4438f44e.

Types of crypto wallets

Crypto wallets come in 2 fundamental categories: hot wallets and cold wallets. The key distinction lies in how and where they store your private keys — either connected to the internet (hot) or completely offline (cold).

Hot wallets

Hot wallets are digital wallets that stay connected to the internet. They are typically offered as mobile apps, browser extensions, or desktop software. Because they are always online, hot wallets provide convenience and ease of use, especially for those who actively trade or use their crypto for daily transactions. These wallets are popular with beginners and experienced users alike due to their user-friendly interfaces.

Pros:

• Easy to access and use across devices
• Ideal for frequent transactions or active trading
• Often free or low-cost to set up and use

Cons:

• Online connectivity means additional steps should be taken to enhance protection
• Depends on the security of the device and internet connection

Cold wallets

Cold wallets store your private keys entirely offline. These are often physical devices (like USB drives) or even pieces of paper. Because they aren’t constantly connected to the internet, they offer a higher level of isolation, which many see as an extra layer of assurance when storing crypto for the long term. Cold wallets are best suited for those holding significant amounts of crypto or those who don’t need to access their funds frequently.

Pros:

• Keeps your keys offline, adding a buffer against common digital threats
• Provides peace of mind for long-term storage

Cons:

• Less convenient for regular transactions or quick access
• Hardware wallets often require a purchase and careful physical handling

Software wallets explained

Software wallets are digital applications that you can install or access via your personal devices, including smartphones, desktops, and web browsers. As hot wallets, they connect to the internet, offering convenience and speed for regular crypto use. They're generally intuitive, flexible, and offer a range of features depending on the provider.

Mobile wallets

Mobile wallets are smartphone apps specifically built to store and manage money on the go, including cryptocurrencies. Ideal for those who want to buy coffee with crypto or trade during a commute, they provide a high level of accessibility. Many mobile wallets also support QR code scanning to simplify transactions and reduce human error. Revolut, for example, offers an in-app crypto experience that acts as a hot wallet — letting customers trade and store crypto within the same secure mobile banking interface.

Pros:

• Convenient for day-to-day use
• Supports features like QR code payments and face/fingerprint login

Cons:

• Relies on mobile device security and internet connection

Desktop wallets

These wallets are installed on your laptop or desktop computer. They offer robust interfaces for managing multiple assets, and some even integrate with crypto exchanges or allow local storage of transaction histories. Desktop wallets are suitable for users who want more control and functionality but are willing to manage their own device security.

Pros:

• Greater functionality and control
• Useful for users who trade or manage portfolios from their computer

Cons:

• Security depends on the integrity of the desktop system

Web wallets

Web wallets are accessed through your browser and usually hosted by a third-party provider. They're especially useful for beginners due to their simple setup process — just register and log in. Because your private keys are often stored by the provider, it’s essential to use trusted platforms with enhanced protection features.

Revolut’s web platform lets you view and manage your crypto portfolio in a custodial environment where robust, account-level protections like passcodes and multi-factor authentication are in place.

Pros:

• Quick access from any internet-connected device
• No installation required

Cons:

• Private keys may be managed by the provider, so you depend on their security systems and infrastructure to keep your assets accessible and well-protected

Hardware and paper wallets

Hardware wallets

Hardware wallets are physical devices, usually resembling USB sticks, that store your private keys in a secure, offline environment. By keeping the keys off your everyday devices, their exposure to cyber threats is minimised, while still enabling you to interact with blockchain networks.

When making a transaction, the hardware wallet signs it within the device, meaning your private key never leaves its secure casing. Some newer models support Bluetooth, which improves convenience but should be used with an understanding of potential wireless exposure.

Pros:

• Adds an extra layer of isolation from online risks
• Allows secure transaction signing without revealing private keys

Cons:

• Usually requires an upfront investment (often £100+)

Always buy from official or verified sellers to ensure authenticity.

Paper wallets

Paper wallets are printouts of your public and private keys. While immune to online attacks, they’re prone to physical damage or loss.

Tip: Store in a safe or safety deposit box and laminate for durability.

Custodial vs non-custodial wallets

Understanding custody is key to choosing a wallet.

Custodial wallet: A third-party (e.g. crypto exchange) holds your private keys. You access your crypto through their app or platform.

• Pro: easy to recover if you forget your login details
• Con: you rely on the provider’s security systems and infrastructure to keep your assets accessible and well-protected

Non-custodial wallet: You own and control your private keys.

• Pros: full control of your crypto
• Cons: if you lose your key or recovery phrase, there is no backup

Curious how Revolut helps protect your assets behind the scenes? Discover how we keep your crypto safe.

How to set up your crypto wallet

If you're using Revolut, you can add an external crypto wallet to withdraw your assets:

1. Go to Crypto in the bottom menu of the Revolut app
2. Tap Send
3. Choose the token you’d like to send
4. Tap Add wallet address

You'll be asked to indicate whether the wallet belongs to you or someone else. If it’s someone else’s, we'll prompt you to provide their full name to comply with Travel Rule regulations. Before the wallet is added, you’ll complete a quick security check by entering a 6-digit code sent to your phone.

Depending on the type of wallet address you add (e.g. an Ethereum Virtual Machine-compatible address), you might be able to send multiple tokens there — including any supported ERC-20 assets.

How to send crypto

Open the Revolut app. Go to Crypto on the bottom menu and tap Send. Choose the cryptocurrency you'd like to send and follow these steps:

1. Select one of the already added compatible wallets or tap New to add a new address. You can also paste a new wallet address in the search bar to proceed
2. Enter the amount you want to send or withdraw and tap Send
3. Review the transfer, check the details and network
4. Tap Send to confirm

Before sending larger amounts, it’s always a good idea to test with a small transaction first to make sure the wallet address is correct. Since blockchain transactions are irreversible, funds sent to an incorrect or incompatible address cannot be retrieved.

Backing up your wallet

Always back up your wallet using the recovery phrase. Store it securely (not on your phone or cloud).

Without this phrase, you can’t recover your wallet if you lose access.

Crypto storage with Revolut

You don’t always need an external wallet to start investing. Revolut offers a beginner-friendly solution:

• Buy and sell crypto in-app
• Access real-time price alerts
• Secure storage without managing private keys
• Option to withdraw to external wallets

Explore how crypto works with Revolut.

How to choose the best crypto wallet

Consider these factors:

• Security: offline wallets offer more protection but require safekeeping
• Access: need flexibility on the go? Choose a mobile or web wallet
• Assets supported: some wallets support multiple coins — others focus on specific tokens like Bitcoin
• Recovery: check the wallet offers a clear and secure recovery process
• User experience: look for beginner-friendly designs with reliable support

If you’re new to crypto, start simple. Revolut helps ease the learning curve.

Start with Revolut

Buy and hold crypto without needing to manage keys or devices.