What is a Software Wallet?
A software wallet is an app on your phone or computer that lets you hold and use Bitcoin.
It creates and stores your private keys on the same device where the app runs. When you send Bitcoin, the wallet uses those keys to sign the transaction and broadcast it to the network.
For most people, this is the first step into self custody.
Why People Use Software Wallets​
Software wallets are popular because they are:
- Easy to install
- Free
- Simple to use
- Good for learning how Bitcoin works
They feel familiar, like using a banking app, but without a bank in control.
The Trade-Off​
Because software wallets live on internet connected devices, they are less secure than other options. If your phone or computer is infected with malware, stolen, or compromised, your Bitcoin could be at risk.
For this reason, software wallets are best used for:
- Small amounts
- Everyday spending
- Learning and experimentation
Think of them like cash in your pocket, not a long term vault.
- You are still in full control of your keys
- You must back up your seed phrase
- If you lose your phone but have the seed, you can recover everything