What is a software wallet?
A software wallet is an app on your computer or phone that lets you manage your crypto yourself. One thing to know up front: your crypto is not inside the wallet, it lives on the blockchain. The wallet holds the keys that give you access, think of it as a digital keyring.
When you set it up, the wallet creates a seed phrase: 12 to 24 random words. Those words prove that you are the owner. Lost your computer? Your seed phrase restores everything on a new device. Lost the seed phrase too? Then your crypto is gone, and nobody can undo that.
Those keys sit locally on your device. That gives you full control, but it also means the backup is entirely your responsibility.
Software wallet, hardware wallet or exchange?
Exchange account | Software wallet | Hardware wallet | |
|---|---|---|---|
Who holds the keys? | The exchange | You, on your device | You, on a separate device |
Protected against an exchange hack? | No | Yes | Yes |
Cost | Free | Free | 50 to 200 euros one-off |
The difference is where your keys sit. With an exchange they sit with the company. With a software wallet they sit on your own device, which is connected to the internet. With a hardware wallet they sit on a separate device that you only plug in when you sign a transaction.
Which software wallets are there?
Software wallets differ on two things: how many networks they support, and which device they run on.
- Multi-coin wallets support several blockchains in one app. Among the wallets we work with, Exodus, Trust Wallet and Coinomi fall into this group.
- Single-network wallets focus on one blockchain and its features. Xaman is built for the XRP Ledger, Solflare for Solana.
- Form: the same wallet often exists as a program on your computer, an app on your phone and a browser extension. You need that extension if you want to use apps inside your browser.
Only download from the official website. Hackers spread fake versions of well known wallets through ads and fake app stores. Always check the URL and the publisher account before you install.
How to set up a software wallet safely
- Download from the official website. Not through ads, and not through links someone sent you.
- Pick a strong password that you use nowhere else.
- Write your seed phrase on paper. Never a photo, never in a notes app, never in the cloud.
- Store the paper somewhere you can reach it and others cannot. A locked drawer or a safe.
- Test your backup. Delete the wallet, install it again and restore with your seed phrase.
Start with a small test amount, so you can see everything works before you transfer more.
Paper does not survive fire or water. A metal backup such as SOLIDHODL keeps your words engraved on a plate, resistant to heat and water.
Frequently asked questions
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