A wallet does not hold coins. The coins are entries on the blockchain; the wallet holds the private keys that authorise moving them, and creates the signatures that prove the right to do so. Losing the wallet does not destroy the assets, but losing the keys makes them permanently unreachable.
The meaningful split is between self-custody and custodial. In a self-custodial wallet you hold the keys, so nobody can freeze or seize the balance and nobody can help you if you lose the backup. Hot wallets stay connected to the internet and are convenient for daily use; hardware wallets keep the keys on an offline device and sign transactions without ever exposing them.
What happens if I lose my wallet?
If you have the seed phrase, restore it in any compatible wallet and the funds are there. If the seed phrase is lost as well, the assets cannot be recovered by anyone.
Last updated October 17, 2026