Your keys, not your coins
A wallet does not actually store your ada. Your coins live on the Cardano blockchain. What a wallet stores are the keys that prove the coins are yours and let you spend them.
Each wallet has a public key, used to receive funds, much like an account number you can share, and a private key, used to sign transactions and spend funds. Anyone who holds the private key controls the funds, so keeping it secret is everything.
Wallet types
Hot wallets vs cold wallets
Wallets differ by whether they are connected to the internet.
A hot wallet is connected to the internet and can be accessed at any time with the requisite keys. Examples include mobile and software wallets, and funds stored on exchanges. They are convenient for everyday use.
A cold wallet is offline. It is not connected to the internet and is used for securely storing funds that do not need to be accessed frequently. Examples include hardware wallets, secure devices that store the private keys, and paper wallets. Cardano is supported by hardware wallets such as Ledger, Trezor, and Keystone.
Custodial vs non-custodial
With a custodial wallet, a third party such as an exchange holds your private keys for you. It is convenient, but you are trusting that party with your funds.
With a non-custodial wallet, you alone hold the keys. No company can freeze your funds or lose them for you, but no one can recover them for you either. As the saying goes: not your keys, not your coins.
Light wallets vs full-node wallets
A light wallet connects to the blockchain through a remote service, so it is quick to install and runs on phones and browsers.
A full-node wallet downloads and verifies a copy of the blockchain itself. It needs more disk space and time, but it relies on no third party to read the chain.
Keys and recovery
Your recovery phrase is the master key
When you create a non-custodial wallet you receive a list of 12, 15, or 24 words. This is your recovery phrase, also called a seed phrase. It is a human-readable form of your private key.
Anyone with these words can restore your wallet on any device and take your funds. Write the phrase down and store it offline. Never type it into a website, never store it in a photo or cloud note, and never share it with anyone.
Staying secure
Security basics
- Keep your recovery phrase offline, on paper or metal, in more than one safe place.
- For larger amounts, use a hardware wallet such as Ledger, Trezor, or Keystone so your keys never touch an internet-connected device.
- No legitimate person or support team will ever ask for your recovery phrase. Be aware of the most common scams.
Wallets and apps
Connecting to apps
Most Cardano wallets include a dApp connector. It lets a website ask your wallet to sign a transaction without ever seeing your private keys.
You stay in control: the wallet shows you exactly what you are approving, and nothing happens until you confirm. Always check the site address and review each request before you sign.
How to choose a wallet
- Does it support hardware wallets? Connecting a device like Ledger, Trezor, or Keystone adds an extra layer of security.
- Is it open source? Open-source code lets the community review and verify the wallet's security.
- How long has it been on the market? Established wallets have a longer track record of reliability.
FAQ
No. Your ada lives on the Cardano blockchain. The wallet stores the keys that let you access and spend it.
With a non-custodial wallet there is no help desk and no reset. If you lose the recovery phrase and the device, the funds are gone. Back the phrase up offline in more than one place.
No. Creating a wallet is free. You only need ada once you want to transact.
Use a hot wallet for small amounts you spend often, and a cold or hardware wallet for larger savings you rarely touch. Many people use both.
This page is for educational purposes only and is not financial or security advice. Always do your own research.