Unlike a regular wallet that stores your cash in a physical form, cryptocurrency wallets store cryptos digitally, as cryptos don’t exist in physical form. The closest thing to a crypto wallet in cash terms is a digital bank account. As a digital bank account, a crypto wallet is a digital entity on the internet or on an electronic device that digitally holds your cryptocurrency, it has a unique address and has the ability to receive and send crypto transfers from other wallets. However, unlike a digital bank account, the wallet does not reveal the real identity of its owner and keeps the transactions anonymous.
There are two types of wallets based on their security features, hot wallets, the crypto wallets on the internet that are susceptible to hacks and theft, and cold wallets that are on a secluded electronic device, which can only be accessed through a physical connection.