Introduction
A Cardano wallet does not “store coins”. Your ada lives on the blockchain. The wallet stores the keys that prove you control it. Those keys are created from a recovery phrase (also called seed phrase) — a list of words shown once when you create the wallet.
Types of wallets
| Type | Who holds the keys | Examples |
|---|---|---|
| Non-custodial software wallet | You | Lace, Eternl (browser extension / mobile) |
| Hardware wallet | You, on a separate device | Devices supported by Cardano wallets such as Lace and Eternl |
| Custodial (exchange account) | The exchange | Your account on a centralised exchange |
With a non-custodial wallet you are fully responsible: if you lose the phrase, nobody can recover your funds.
Example
Ravi installs a wallet browser extension from the official website (typed manually, not from an ad), writes his recovery words on paper, stores the paper somewhere safe, and sends a small test amount first before moving larger amounts.
Practise without real ada
Developers and learners can use the Preprod or Preview test networks, where test ada is free from the official faucet and has no value. Many wallets let you switch to a testnet in their settings.
Common mistakes
Downloading a fake wallet from a search ad or an unofficial app store listing. Always start from the project's official site.
Storing the recovery phrase in screenshots, email or cloud notes.
Leaving everything on an exchange. Exchange accounts are custodial: the exchange controls the keys.