What is a crypto wallet

A crypto wallet is the tool that holds the keys to coins on a chain. The coins themselves stay on the ledger. The wallet stores the secret that can authorize a payment, and it shows the holder what that secret controls. Lose the secret and the coins are still on the chain. They are just no longer spendable by anyone who can prove they are the owner.

The secret is usually a seed phrase, a list of words that can rebuild the keys. Anyone who has the words has the coins. That is why a wallet maker tells a buyer to write the words down and keep them off a screenshot and out of a message. A hardware signer, the kind Ledger sells, keeps the keys inside a chip and asks the holder to confirm each payment on the device's own screen. The phone can build the transaction. The chip is what signs it.

Ledger's Crypto Loan is a use of that arrangement, not a different kind of wallet. An eligible holder can pledge wrapped bitcoin and borrow a stablecoin, and the signer still has to approve each step. The loan does not move the keys off the device. That product is here: https://cryptokeymedia.com/news/ledger-crypto-loan

A hot wallet is software on a phone or a browser. It is convenient, and it is only as safe as the device. A cold wallet, or a signer, stays offline until a payment needs a signature. An exchange account is neither. The exchange holds the keys. The customer holds a login. When people say their coins are on Coinbase, they mean Coinbase's wallets, not a seed phrase in a drawer. The customer can withdraw to a wallet they control. Until they do, the coins are the exchange's to move.

A wallet has addresses, and an address is not the key. The address is the destination a sender can see. The key is the secret that spends what arrives there. Sharing an address is how a person gets paid. Sharing a seed phrase is how a person gives the coins away. The two are easy to mix up the first time, and the mix-up is permanent.

One seed can produce many addresses, on more than one chain, if the wallet supports them. A bitcoin address and an Ethereum address from the same phrase are different doors. Sending bitcoin to an Ethereum address does not arrive. The chain a person picks on the withdrawal screen is part of the payment. A wallet that shows both coins is still sending one chain at a time.

Buying a device from the wrong seller is a wallet story of a different kind. Ledger told buyers who purchased from a reseller called CryptoBillis, after reports of lost funds, not to set the device up if they had not already. A signer is only a signer if the buyer is the first person to put a seed on it. A device that arrives with a phrase already written down is someone else's wallet.

What comes next, for a holder, is a choice of where the keys live. On an exchange, the login is the control. In a software wallet, the phone is the control. On a signer, the chip and the written seed are the control. The coins do not move when the holder picks. The right to spend them does.