Spoiler: it does not hold coins. It holds the keys that prove you own them on the blockchain. Here is how it works.
Your wallet stores private keys. Whoever has the key controls the crypto. Lose the key = lose the crypto forever.
Connected to internet. Examples: MetaMask, Phantom, Trust Wallet. Convenient but vulnerable to hacks.
Hardware device offline. Examples: Ledger, Trezor. Most secure option. Best for holdings you do not trade daily.
Your 12-word seed phrase = full access to your wallet. No legitimate app, exchange, or person will ever ask for it.
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