The phrase hardware wallet might make it seem like your bitcoin live inside the wallet itself, but that’s not the case—bitcoin is never in your device at all. In actuality, your wallet generates and stores your keys only. Your wallet also makes accessing the keys user-friendly by either plugging your device into a general-purpose computer or sharing information with your computer via a microSD card.

So where does bitcoin live, then? The bitcoin blockchain is a ledger that keeps track of every transaction that has ever occurred and the balances of every address on the network. Instead of storing your bitcoin, your hardware wallet protects and stores the keys used to unlock—or spend—bitcoin from those addresses.