A hosted wallet is currently the most popular and easy-to-use crypto wallet. When you buy cryptocurrency through an app, you are using a hosted wallet. This means that a third party is actually holding the crypto for you. You are using an account to trade the cryptocurrency through their platform. It is similar to how a bank holds and transfers money for you. The benefit is that the host is providing security for your accounts and creating the platform that you are trading on. The downside is that all your transactions may be tracked and if the host gets hacked your information could theoretically be leaked.