Digital wallets (or blockchain wallets) are designed for storing and managing cryptocurrencies (e.g. Ethereum, Bitcoin) or NFTs. Blockchain transactions typically take place between digital wallets (or addresses). Wallet owners may be recognized as having direct ownership of their currency, as the blockchain is a public ledger or series of transactions between user wallets. That’s as opposed to banks which take custody of currency.
This is a major advantage for those looking for a more anonymous, decentralized experience, but it’s also a potential hindrance for those required to keep close watch of their wallets. A user who accidentally loses access to their digital wallet, or simply forgets their password, cannot seek help from a central authority.
Some of the most popular digital wallets are Coinbase, Exodus, and Metamask. Users may store cryptocurrencies on a physical blockchain wallet, too, including Ledger.