It is reasonable to think of your crypto wallet as a safe that holds your cryptocurrency funds. As a practical matter, there’s nothing wrong with envisioning it that way.
The underlying reality is quite different, however. A crypto wallet is really a user interface that allows you to query your cryptocurrency’s underlying blockchain for information, receive funds from other users, and send funds to others by writing transactions to the blockchain. Your crypto wallet doesn’t actually hold any funds
Wallets Manage Cryptography
Bitcoin wallets and other crypto wallets are based on public-key cryptography. The essential elements of a wallet are a public key, a private key, and an address.
It all starts with the private key, a 256-bit binary number that is generally represented as 64 numbers and letters like so: D88C 5E31 8005 A994 C378D 9021 66E9 04E2 69CA 3860 8DBB E274 884F 3010 F004 C08C. The private key is essentially the password you use to gain access to your data and resources on the blockchain.
You can think of the public key as your account number. It, too, is a long series of numbers and letters. It is used to encrypt information that is intended for you before the information is posted on the blockchain. Only your private key can decrypt information that is encrypted with your public key.