What is a mobile wallet?
A mobile wallet is an app on your smartphone that lets you manage your crypto yourself. You receive, hold and send your coins from your phone, without having to trust an exchange or a bank. You download the app like any other, from the App Store or the Play Store.
The difference with an exchange account: with a mobile wallet you are the one holding your coins. With an exchange, a company holds the keys for you.
Worth knowing: your crypto is not actually inside the app. Your coins always live on the blockchain. Your wallet holds the keys that show the coins are yours. Think of a wallet as a keyring: without those keys you cannot reach your coins, with them you can move them.
Which mobile wallet suits you depends on how you plan to use it. Further down this page we put the three types side by side.
BTC Direct has been guiding new crypto buyers since 2013. We are based in the EU, registered with the Dutch and Belgian regulators and compliant with MiCA.
How does a mobile wallet work?
When you create a new wallet you get a seed phrase: 12 or 24 random words in a fixed order. Those words are your backup. With the seed phrase you can always reach your coins again, even if your phone is lost or breaks.
Write the seed phrase down on paper and store it somewhere only you know about. Do not photograph it and do not store it digitally. Anything connected to the internet can in theory be hacked. Whoever has your seed phrase can move your coins.
You use the wallet itself to see your balance, to receive and to send. For every transaction you pay a network fee. That fee goes to the blockchain, not to the wallet and not to BTC Direct.
Three types of mobile wallets
Almost every wallet app you come across falls into one of these three groups. They differ in convenience and in where your keys are held.
Standalone software wallet
An app that runs entirely on your smartphone. The company behind the app has no access to your coins or your balance. Your keys sit on a device with an internet connection. Mostly used for amounts you send regularly.
Companion app for a hardware wallet
An app that connects to a separate device. Your keys sit on that device, not on your phone. You sign every transaction on the device itself. You do need a hardware wallet for this.
Lightning wallet
An app built for small bitcoin payments over the Lightning Network. Transactions are near instant and fees are low. Meant for spending bitcoin, not for parking large amounts.
Type of app | Where are your keys? | Do you need extra hardware? | What it is mostly used for |
|---|---|---|---|
Standalone software wallet | On your phone, so on a device with an internet connection | No | Everyday use, receiving and sending |
Companion app | On a separate device, offline | Yes, a hardware wallet | Amounts that stay put for a long time |
Lightning wallet | On your phone, inside a payment channel | No | Small bitcoin payments |
You will also often hear the terms hot wallet and cold wallet. A hot wallet is connected to the internet, like an app on your phone. A cold wallet is not, like a hardware wallet. The less your keys are online, the smaller the chance that someone reaches them digitally.
How do you set up a mobile wallet?
Setting up a mobile wallet takes a few minutes. With almost every app it comes down to the same three steps.
Download the app and open it
Find the app through the maker's official website and follow the link to the App Store or Play Store. Check the developer name and the number of downloads: fake copies of popular wallets do exist. Then choose "create new wallet" and set a PIN or biometric lock straight away.
Write down your seed phrase
The app generates your keys and shows you 12 or 24 words. Write them down in the right order on paper, or punch them into a metal backup. Not as a screenshot, not in your notes app, not in the cloud.
Check your backup and receive your first coins
The app asks you to repeat a few words to confirm you copied them correctly. If everything matches, you can copy your receiving address and bring in your first coins.
Which mobile wallet suits you?
There is no single app that is right for everyone. These questions help you choose.
- What will you use it for? Mostly receiving and sending? A standalone software wallet is practical. If it is an amount you want to leave untouched for years, a companion app with a hardware wallet is worth considering, because then your keys stay offline.
- Which coins do you hold? Some apps only handle bitcoin. Others support hundreds of coins and tokens. Check this before you send anything, because sending a coin to an address on the wrong network cannot be undone.
- Do you want to pay with bitcoin? Then a Lightning wallet is built for that. Transactions are near instant and fees are low.
- How much do you want to manage yourself? More self custody means more control, and also more responsibility for your own backup.
Many people combine the two. An app on the phone for everyday use, and a hardware wallet for what can sit still. Like a current account next to a savings account.
Read recent reviews before you download an app. Crypto apps change often. Stick to names you know and only download through the official App Store or Play Store.
Lost your phone, now what?
Your coins live on the blockchain, not on your phone. If your device is lost or breaks, your coins are still there. All you need is your seed phrase to reach them again.
Install the wallet app on a new device, choose "restore wallet" and enter your 12 or 24 words in the right order. Your balance and your transaction history come back.
Think someone else has seen your seed phrase? Create a new wallet and move your coins there. A seed phrase cannot be changed, any more than a key can be reprogrammed.
Lost your seed phrase and no longer have access to your phone? Then nobody can help you, we cannot either. There is no party holding the keys for you. That is exactly the flip side of holding them yourself.
We will never ask for your seed phrase
BTC Direct will never ask for your seed phrase. Not over chat, not by email and not over the phone. If someone does ask, even if they say it is needed for an update or for support, it is a scam. Contact us through our official channels if that happens.
Never enter your words on a website or in a second app either. A genuine wallet app only asks for your seed phrase when you choose "restore wallet" yourself.
Frequently asked questions about mobile wallets
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