There are two kinds of wallets: Hardware and software. A software wallet is an app that lives on your computer or smartphone, or even on the web, while a hardware wallet is a separate physical device (much like a wallet or purse). This hardware wallet is connected to a PC or mobile device to carry out transactions.Software wallets range in price from free to, well, not free, so they are great for those starting out. Since hardware wallets cost you money, there's a financial investment that you have to make right from the beginning.