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 generate and store private keys, which are essential for accessing and controlling the user's funds. Software wallets come in various forms, including desktop wallets, mobile wallets, and web wallets. While they offer ease of use and quick access to funds, they are also more vulnerable to hacking and malware compared to hardware wallets, which store keys offline for added security.