Wallet Types: A Reference Table

Entry last verified August 2026. Categories rather than products, because the properties belong to the category.

The table

Type	Keys held by	Protects against	Does not protect against
Exchange account	The venue	Your own key loss	Venue failure, freeze, insolvency
Mobile wallet	You, on a phone	Venue failure	Device malware, phishing, phrase loss
Browser extension	You, in a browser	Venue failure	Malicious sites, extension compromise
Hardware wallet	You, on an offline device	Malware, most remote attacks	Phishing you approve, phrase loss
Multi-signature	Several parties	Single key compromise, single point of failure	Coordinated compromise, complexity errors
Paper or metal backup only	You, offline	Everything remote	Physical loss, fire, theft, transcription error

What each is actually for

Exchange account. Buying, selling, and a working balance. Not storage. The counterparty risk is real and the recovery process for a lost password is a genuine advantage for the portion you actively use.

Mobile wallet. Everyday amounts. Convenient, exposed to whatever else is on the phone.

Browser extension. Interacting with applications. The highest-exposure category, because it connects to unfamiliar sites by design. Best used with a small balance kept separate from long-term holdings.

Hardware wallet. Long-term holdings. The screen is as important as the key storage, because it shows what you are signing independently of a possibly compromised computer.

Multi-signature. Larger holdings, shared control, and inheritance planning. Removes the single point of failure at the cost of setup complexity.

Backup only. Not a wallet in use, but the recovery path for all self-custody. Its quality determines whether any of the above survives a device failure.

The structural recommendation

Three tiers, sized by what you would lose.

1. A working balance at a venue, small enough that its total loss would be an annoyance.
2. A hot wallet for on-chain activity, with a separate address for unfamiliar contracts.
3. Long-term holdings on hardware or multi-signature, with a tested paper or metal backup stored away from the device.

Most losses documented in this sector come from holding the wrong amount in the wrong tier, not from any tier failing.

The two checks that apply to every tier

Test the recovery before funding. Wipe and restore, confirm the address matches, then send.

Send a small test transaction before any large transfer. Catches wrong networks, wrong addresses, poisoned history and clipboard substitution in one step.

On venue selection for tier one

The relevant criteria are narrow: authorised where you live, withdrawals that process reliably, account security that does not depend on SMS, and a published fee schedule. Platforms meeting those, including a regulated European platform, are adequate for a working balance, which is all tier one is for.