Wallets & Keys — Coffee Break Quotes

In one minute

Your wallet = key manager. Coins live on the blockchain, not “inside” the app. The wallet stores the private key that proves ownership.
Public address: Like an email address you can share to receive funds.
Private key / seed phrase: The secret that lets you spend. Anyone with it can take your funds. Never share it.
Backups: Write down your 12–24 word seed. Test a restore before storing real value.

Educational only: Not financial advice. Always verify addresses and start with tiny test transactions.

Public vs private keys (plain English)

Public address

Derived from your public key.
Safe to share for receiving funds (QR codes are common).
Looks different per chain (e.g., Ethereum-style hex, Bitcoin bech32, Solana base58).

Private key & seed phrase

Private key: A long secret number that signs transactions.
Seed phrase: 12–24 words that can recreate your private keys and addresses.
Passphrase (optional): An extra word/phrase that “locks” your seed; don’t forget it if you use it.

Tip: Never screenshot or cloud-store your seed unencrypted. Paper or metal backups are common.

Custodial vs self-custody

Self-custody (you hold keys)

Pros: Only you control funds; portable across wallets; no account freezes.
Cons: You’re responsible for backups and security; no password reset if lost.
Good for: People willing to learn basic security habits.

Custodial (a company holds keys)

Pros: Easier logins, recovery options, customer support.
Cons: You must trust the company; accounts can be frozen or hacked.
Good for: Small balances or convenience — but understand the trade-off.

Hot vs cold storage

Hot wallets

Connected to the internet (mobile, browser extension, desktop).
Pros: Convenient for daily use and dApps.
Cons: Larger attack surface (malware, phishing).

Hardware (cold) wallets

Keep private keys offline inside a secure device.
Pros: Strong protection against remote attacks.
Cons: Costs money; a bit more setup; still need safe seed storage.

Paper / metal backups

Write or engrave your seed phrase; store securely.
Pros: Simple, no electronics.
Cons: Fire/water/theft risk; keep off cameras & scanners.

Common approach: hot wallet for small spending; hardware wallet for savings.

Wallet types you’ll see

Mobile & browser wallets: Easy to use; great for dApps and NFTs.
Hardware wallets: Offline key storage; confirm on-device before funds move.
Multisig wallets: Require M-of-N approvals (good for teams or large amounts).
Smart-contract wallets: Extra features (spending limits, social recovery, batched transactions). Often called “account abstraction” wallets.
Watch-only: View balances & activity without keys — safe for monitoring.

Sending & receiving safely (step-by-step)

Receive

Open wallet → choose the correct network.
Copy your address or show the QR code.
For first-time sends, ask the sender to test with a tiny amount.

Send

Paste the recipient address (or scan QR). Compare the first/last 4–6 characters.
Confirm the network matches the asset you’re sending.
Leave funds for gas in the chain’s native coin.
For tokens, your wallet may ask to approve the token first. Approve the smallest amount you need.
Submit and wait for confirmation. Verify the transaction on a block explorer if needed.

If a token doesn’t show, add its contract address in your wallet to display the balance.

Approvals & permissions (important)

For fungible tokens, you often grant a contract permission to spend up to a limit on your behalf.
Best practice: Approve only what you need. Revoke unused approvals later via your wallet or a reputable revoke tool.
Blind signing risk: Avoid signing unreadable or suspicious prompts. Use wallets that show clear transaction details.

Backups & recovery

Write down your seed phrase: Use pen on paper or a metal backup; keep in a safe place.
Test restore: Before depositing real value, restore into a fresh wallet (offline if possible) to ensure your backup works.
Passphrase users: If you set an extra passphrase, it’s required to restore. Losing it can mean losing access.
Don’t share seeds: Support agents will never ask for a seed phrase. That’s a scam.

Multi-chain basics

Addresses differ by chain: An Ethereum address won’t work on Bitcoin or Solana, and vice versa.
Same seed, many addresses: A single seed can derive addresses on multiple chains, but only import it into trusted wallets and understand derivation differences.
Bridges: Moving assets between chains adds risk. Test with a tiny amount first.

Beginner mistakes to avoid

Wrong network: Sending to an incompatible chain or address format.
No gas: Forgetting to keep a little native coin for fees.
Unlimited approvals: Granting infinite allowances to random contracts.
Seed in screenshots/cloud: Storing unencrypted seeds in photos, notes, or email.
Phishing: Clicking fake sites or DM “support.” Bookmark official URLs.
Copycat tokens: Not checking the exact token contract address from official docs.

Educational content only. Do your own research.

Quick glossary

Address: Where funds can be sent on a given chain.
Private key: Secret used to sign transactions (never share).
Seed phrase: 12–24 words that can recreate your private keys.
Approval/Allowance: Permission for a contract to move your tokens up to a limit.
Multisig: Requires multiple signatures to move funds.
Account abstraction: Smart-contract wallet features like social recovery or spending limits.

More crypto topics

Types of crypto Coins vs tokens, utility, governance, and stablecoins. Layer 1 blockchains Base networks that handle transactions and security (e.g., Bitcoin, Ethereum, Solana). Layer 2s Scaling networks that batch/compress transactions and settle to an L1. Smart contracts Programs on a blockchain that run exactly as coded once triggered. dApps Apps that use smart contracts instead of centralized servers. DeFi Lending, DEXs, and yield in smart-contract form. Decentralization Spreading power so no single party controls the system. Wallets & keys Public addresses, private keys, and seed phrases explained. Gas & fees Why transactions cost money and why fees change. Consensus basics How nodes agree on the ledger without a central authority. Mining vs staking How PoW and PoS secure networks and issue new coins. On-chain vs off-chain What happens directly on the blockchain vs elsewhere. Privacy coins Coins that hide sender, receiver, and/or amounts (e.g., Monero, Zcash). Oracles Services that bring real-world data on-chain for smart contracts. Exchange tokens Tokens issued by trading platforms for fees, rewards, or governance. Stablecoins Tokens designed to track a stable value like the US dollar. NFTs Unique digital items with provable ownership on a blockchain. Ordinals Bitcoin inscriptions that attach data (like images) to individual satoshis. Tokenization of assets Turning real-world assets (like art or Treasuries) into on-chain tokens. Bitcoin: store of value? Why some view BTC like “digital gold” rather than day-to-day money.