Cryptocurrency wallets can take the form of either physical hardware wallets or an online protocol, software, or a service that stores keys that give you permission to make crypto transactions. Wallets can also function to let you encrypt to or sign information as in the case of a smart contract.
Crypto wallets are centralized or custodial wallets which means that the private keys are held by a third-party. Decentralized wallets or DeFi wallets operate differently in that the currency