On NFT-O-Matic (and everyone in web3 universe), a “wallet” is simply the place where you store your NFTs. It is just like the old-fashioned wallet in which people used to stick dollar bills, but the web3 wallet is all-digital and stores tokens instead of physical money. Those tokens can be NFTs, cryptocurrencies or other digital assets. Wallets in web3 also serve as a form of on-chain identity, playing an important role in access to services, validating ownership or approving transactions.
Wallets can be either custodial or non-custodial. Think of a custodial wallet like a bank account, where an institution holds the wallet for you and transacts on your behalf as you direct. A non-custodial wallet is held directly by the owner with no intermediary. The technical difference is who has control over the private key for the wallet, which is the long code needed to approve transactions. You don’t need to trust a third party when using a non-custodial wallet, but the downside is that you are 100% responsible for safeguarding your private key. There is no “lost password” function for a custodial wallet.