// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS

What is Wallet?

1 min read Updated

A cryptocurrency wallet is software or hardware that manages private keys — enabling users to sign transactions, interact with blockchains, and control digital assets without relying on a third party.

WHY IT MATTERS

A crypto wallet doesn't store cryptocurrency — it stores private keys that control access to funds on the blockchain. Your funds exist on the blockchain regardless of your wallet; the wallet holds the keys to move them.

Wallets come in many forms: hot wallets (software, online), cold wallets (hardware, offline), browser extensions (MetaMask), and mobile apps. Each trades convenience for security.

For developers and agents, wallets are the interface to blockchain. Every transaction requires a wallet to sign it. Wallet infrastructure is foundational to any blockchain application.

HOW POLICYLAYER USES THIS

PolicyLayer wraps agent wallets with programmable spending controls. Instead of unrestricted private key access, PolicyLayer enables session keys with policy constraints — agents transact within limits without ever holding the master key.

FREQUENTLY ASKED QUESTIONS

Custodial vs non-custodial?
Custodial wallets (exchanges) hold your keys. Non-custodial wallets (MetaMask, hardware) let you control your own keys. Non-custodial gives full control and responsibility.
What if I lose my private key?
Funds become permanently inaccessible. No 'forgot password' exists for blockchain. Seed phrases must be stored securely offline as backup.
What is a seed phrase?
A 12 or 24 word mnemonic that regenerates all private keys in a wallet. Anyone with it controls all your funds. Store offline, never digitally.

FURTHER READING

Enforce policies on every tool call

Intercept is the open-source MCP proxy that enforces YAML policies on AI agent tool calls. No code changes needed.

npx -y @policylayer/intercept
github.com/policylayer/intercept →
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