A software wallet (software wallet) is a computer program or mobile application that allows you to store cryptocurrency, send and receive transfers, and manage private and public keys. Unlike physical devices, such a wallet exists in the form of a set of files on a computer, phone, or in a browser extension. Most such solutions are distributed free of charge, and their source code is often open for community review.

Technically, a software wallet does not "store" coins in the usual sense: the assets themselves remain records in the blockchain, and the wallet manages the keys that confirm the right to dispose of these records. Therefore, the key value lies precisely in the safekeeping of the private key and the backup phrase (seed phrase).

Types of software wallets

• Desktop — installed on a computer and give full control over the keys.
• Mobile — convenient for everyday payments and working with QR codes.
• Browser extensions — simplify interaction with decentralized services.

The main advantage of a software wallet is its accessibility and convenience. However, since the device is connected to the internet, it is potentially vulnerable to malware and phishing. For increased security, large amounts are recommended to be stored in cold or hardware wallets, while a software wallet is used for operational transactions.