A Bitcoin wallet is a computer or smartphone app or hardware device that stores and secures Bitcoin. Bitcoin wallets have varying degrees of security and user-friendliness, so choosing your Bitcoin wallet is very important.
A Bitcoin wallet contains the digital private keys needed to spend funds from the wallet. Typically, a backup of this private key is made during the setup process, so that funds can be restored if something happens to the wallet itself.
The least secure way to store your bitcoin are wallets that access funds stored on an exchange, and browser-based apps.
A more secure way to store your bitcoin is by using a hardware wallet, which are small devices that keep the private key disconnected from the internet at all times, and therefore less prone to attack.
The most secure way to store your bitcoin is by using multisignature, or “multisig” solutions that require 2 or more keys to spend bitcoin. This allows you to geographically distance your keys from each other and greatly reduces the risk of theft.
Ideally, you would use a combination of hardware devices and multisig. Apps like Casa make this easy.