Concepts · Where the money is
Where is your crypto really? (it isn’t in the wallet)
Your coins are not on your phone, nor on your computer, nor inside that device in your drawer. They are in a public ledger shared by thousands of computers worldwide. What you have is the key that lets you move what is recorded as yours.
The land registry analogy
Think of a public registry recording who owns what, visible to anyone. You don’t keep your house in your pocket: you keep the key and the deed. Crypto works the same way: the registry is the chain, and your wallet is only the keyring.
What is in each place
| Where | What is there |
|---|---|
| On the chain | Your coins, and the record of everything you did |
| In your wallet app | Your key, and a window onto the chain |
| In your hardware device | Your key, and nothing else |
| On your paper with words | The seed your key comes from |
| On the wallet company’s servers | Nothing of yours |
The five things this explains
- Why you can lose access without losing the money. The money is still recorded on the chain; what is missing is your key.
- Why an abandoned app isn’t a problem. You switch apps and open the same thing. See abandoned wallets.
- Why you can check your balance without getting into the wallet. The registry is public: your address is enough.
- Why nobody can reset anything. There is no company holding your balance. See why nobody can reset your wallet.
- Why whoever sees your phrase takes everything. They need neither your device nor your app: with the key, they move what is recorded from wherever they like.
The exception: if your money was with a company
All of the above applies if the wallet was yours. If your money was on a trading platform, then a company did hold it, the coins were recorded in its name, and what you had was an account. That case works the opposite way in almost everything, and it is in self-custody versus exchange.