A wallet is a piece of software that can hold cryptocurrencies by storing their private keys, which are used in cooperation with the appropriate public keys. There are many kinds of wallets available, which can be categorised as: mobile, hardware, desktop and web wallets.
Wallets are useful because they save us the hard work of memorising or writing down long cryptographic keys, and instead work on passwords and key phrases, which are much easier to remember. However, in most cases, it is best to also note down one’s private key in a separate and safe location as a backup.
When browsing for wallets you could also come across these two terms: ‘Cold Wallet’ and ‘Hot Wallet’. The wallets that are not connected to the internet are called Cold wallets. The ones opposite to this are known as Hot wallets, which are connected to the web. As you can suspect, Cold wallets are safer to use and we recommend using them when you hold large amounts of coins. If you have a small number of coins and regularly use your wallet then it is easier to use a Hot wallet.