A software wallet is a digital application that allows users to store, send, and receive cryptocurrencies like Bitcoin and Ethereum. These wallets can be installed on computers or mobile devices, providing a convenient way to manage digital assets. They typically offer features such as transaction history, balance tracking, and security options. Software wallets come in two main types: hot wallets and cold wallets. Hot wallets are connected to the internet, making them easy to access but potentially more vulnerable to hacking. Cold wallets, on the other hand, are offline and offer enhanced security, making them suitable for long-term storage of cryptocurrencies.