The Golden Rule: Not a Piggy Bank
Location of Crypto: Your Bitcoin or crypto does not live inside your wallet. It always exists on the Blockchain (the public digital record).
Wallet Function: A wallet is a tool that holds the secret codes (keys) which grant you access and control over your funds on the Blockchain.
1. The Two Essential Keys
| Key Type | Analogy | Purpose |
| Public Key (Address) | Mailbox Label | The address you share to receive crypto. (Low Risk) |
| Private Key | Actual Key | Used to authorize transactions and spend your crypto. Must be kept secret. (CRITICAL) |
Seed Phrase: The master key (12-24 words) that can restore your private keys. Losing it means losing your funds forever.
2. Hot vs. Cold Storage
Wallets are defined by their connection to the internet, affecting security and convenience.
| Wallet Type | Analogy | Connectivity | Ideal Use |
| Hot Wallet | Wallet in Pocket | Always Connected (online) | Quick trading and small, active amounts. |
| Cold Wallet | Bank Vault | Always Offline (hardware device) | Large, long-term savings and maximum security. |
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