A concrete example
A backup must be protected and tested; never enter it into this website.
In context
Hot signing is readily available online. Cold arrangements keep key operations offline or highly isolated, generally trading speed for separation. Warm wallets often occupy an intermediate model with additional human or technical controls. Custodial wallets rely on a provider; self-custody places recovery responsibility with the user.
The related mechanism, visually
- 01Create and verify setup
- 02Protect backup
- 03Review every authorization
- 04Test recovery safely
Read these as connected concepts, not necessarily consecutive steps.
Read the explanation
A wallet is an interface and key-management system, not a container physically holding coins. The chain records balances or spendable outputs. Recovery restores the ability to authorize transactions when the necessary secret and configuration survive. A hardware wallet separates signing from a general-purpose computer, but the user still has to review the intended action.
Put the mechanism into context
A person loses their phone but retains a correct backup. Another retains the phone but exposes the recovery phrase. Compare access availability and unauthorized-spending risk in both cases. Do not treat possession of the phone as the only security boundary.
Apply it in the workshop →What this mechanism does not guarantee
Plan setup, receiving, spending, backup and eventual recovery as distinct stages. A backup that has never been checked can fail when needed. A recovery phrase exposed to a website or cloud account may compromise the wallet even if the physical device remains secure. For learning, use fictional data and avoid any real transfer.
Explore the full explanation
Hot, warm and cold wallets
A wallet manages access to assets recorded on a network.