What Is a Bitcoin Wallet?
A Bitcoin wallet is software or a device that stores the information needed to access your Bitcoin and to send or receive it. The Bitcoin itself is not stored inside the wallet; it exists as entries on the shared public ledger (the blockchain). The wallet holds the keys that control the addresses where your Bitcoin is recorded. If you are new to Bitcoin, our guide What Is Bitcoin? A Simple Guide for Beginners explains the basics of the system.
In practice, a wallet lets you see your balance, create or use addresses to receive Bitcoin, and sign transactions to send Bitcoin to someone else. You need a wallet to hold and use Bitcoin; without the keys that a wallet manages, you cannot prove that the Bitcoin at a given address is yours.
How a Bitcoin Wallet Works
When you set up a wallet, it generates or imports a secret (often called a private key or seed phrase). That secret is used to derive the addresses that belong to you and to sign outgoing transactions. Anyone who has the secret can control the Bitcoin at those addresses, so keeping the secret safe is the core of wallet security.
Addresses and receiving
To receive Bitcoin, you give the sender an address—a string of letters and numbers that works like a destination. The wallet can create new addresses for you. Each address is tied to your keys, so any Bitcoin sent to one of your addresses is under your control. For options when buying or receiving Bitcoin, see our guide Buy Bitcoin in Gaza and the practical guides on our Guides page.
Sending and confirming
To send Bitcoin, you enter the recipient’s address and the amount in the wallet. The wallet creates a transaction and signs it with your key. The transaction is then broadcast to the network and, once included in the blockchain and confirmed, the transfer is complete. Always double-check the address; transactions on the Bitcoin network are generally not reversible.
Types of Bitcoin Wallets
Wallets come in different forms. The main distinction is whether the keys are stored on a device connected to the internet (hot) or on a device or medium that stays offline (cold).
- Software wallets — Apps on your phone or computer. They are convenient for everyday use but are exposed to the internet, so device security (updates, no malware, strong password) matters.
- Hardware wallets — Dedicated devices that store keys offline and sign transactions when you connect them. They can reduce the risk of keys being stolen by malware, but you must buy from a trusted source and keep the device and recovery phrase safe.
- Custodial vs non-custodial — With a custodial wallet, a company holds the keys for you (e.g. an exchange account). With a non-custodial wallet, you hold the keys yourself. Non-custodial gives you full control but also full responsibility for securing the keys.
Our guide on Open a Bitcoin Account covers choosing a platform and basic security practices when setting up an account and storing Bitcoin.
Choosing and Using a Wallet Safely
No single wallet is right for everyone. When choosing one, consider how you plan to use Bitcoin (occasional use vs larger or long-term holding), whether you are comfortable managing keys yourself, and what device or platform you use. Prefer well-known, open-source options when possible, and only download from official websites or app stores to avoid fake or malicious software.
Basic safety practices: (1) Write down your recovery phrase (seed) and store it offline in a safe place; never share it with anyone. (2) Enable two-factor authentication where the service offers it. (3) Use a strong, unique password. (4) Keep your device and software updated. (5) Verify addresses when sending—a small mistake can mean lost funds.
This guide is for education only. Bitcoin Gaza does not recommend specific wallets or services. Always do your own research and only use amounts you can afford to lose.
Where to Go Next
To open an account and start using a wallet, see Open a Bitcoin Account. For more on buying Bitcoin in Gaza and Palestine, read Buy Bitcoin in Gaza. For other educational and practical guides, visit our Guides page.
For questions about our guides or workshops, Get in Touch.
Content for educational use only. Last reviewed: 2025. For questions, Get in Touch.