On a really simple level, a wallet is just a personal and unique cryptographic key (as shown below). Wallet apps like Rainbow are user interfaces that allow you to create, store, and manage cryptographic keys without having to have technical skills or knowledge.

Wallets have 3 main components:

1. Public wallet address
2. Secret phrase
3. Private cryptographic key

• Anyone who knows your public address can see your transaction history and what assets you have inside of your wallet. They can also send things to your wallet without your permission, similar to how anyone with your email address can send you emails.
• A private key or secret phrase on the other hand grants control over everything inside of a wallet.

<aside> 📌 It’s important to know that your money and assets don’t actually live “inside” of your wallet. Rather, they are merely a record of ownership associated with your wallet’s address on a public decentralized ledger. If you own 1 ETH, then the blockchain will show that 1 ETH belongs to your wallet address.

</aside>

• Whenever you go to make a transaction or do something on the blockchain, you will have to “sign” a message that verifies you possess the wallet’s key.

What do you do if you lose your private key or secret phrase?

If you lose your wallet's private key and secret phrase, there's no way of recovering access to the wallet. You can't just click a "forgot password" button, and there's no 2-factor authentication. Wallet providers like Rainbow don't even know your private key, so we can't retrieve it for you either.

Instead, you need to personally backup your private key and/or secret phrase. There are many ways of doing this, and each method gives you a different level of protection. Here are a few examples:

• Rainbow's iCloud (iOS) / Google Drive (Android) Backup feature
• Password Manager like 1Password
• Written on a piece of paper