Just the way we keep cash or cards in a physical wallet, bitcoins are also stored in a wallet - a digital wallet. The wallet saves your private key and public address which helps you store, send and receive cryptocurrencies.
The public key identifies the wallet so that other parties know where to transfer coins during a transaction. The private key, similar to a password, is the wallet's owner's special access code and acts as a security device to help ensure others cannot access the bitcoin stored within. Once the payment has been delivered to the address, the seller or receiver can only access the funds through his private key.
One of the most popular kinds of cryptocurrency wallets is called a hot wallet. The difference between a hot wallet and a cold wallet is that hot wallets are connected to the internet, while cold wallets are not. The biggest advantage of holding cryptocurrency in a hot wallet is that it can be used to help facilitate basic transactions.