A cryptocurrency wallet is where we store our private keys. Cryptocurrencies don't leave their networks, so what determines ownership is access to a password that will allow us to transfer them. A private key is a long, random string of numbers and characters, practically impossible to remember. A cryptocurrency wallet is where we have it stored.

Example:

If I have 2 bitcoins and want to send them to Tom, I need to know his public address. It's like a letter that arrives in someone's mailbox - you need to know the address and provide it. The letter arrives in the mailbox, but in order for Tom to take it out, he must have a key to open it. If Andrew loses the key, he cannot get to the contents of the mailbox.

The difference between the letterbox key and the private key that allows us to access our cryptocurrencies is that the latter cannot be reset or recovered. There is no locksmith who is able to open our mailbox. If you lost access to your private key, you lost your cryptocurrencies. This is why wallets were created.

Cryptocurrency wallets are used to store private keys. "Physically" all bitcoins and other cryptocurrencies are located all the time in their networks - blockchains. Private keys are assigned to them, which make these funds have their exclusive owners.

It is worth mentioning that there are wallets designed exclusively for specific cryptocurrencies as well as those supporting multiple types of them. If you send a particular cryptocurrency to a wallet not intended for it, you will probably lose it.

What are the crypto wallets? Do we actually need them?