Keystore

Keystore wallets refer to a method of storing cryptocurrency private keys in an encrypted JSON file format, commonly used in Ethereum and similar blockchains. This file (often called a "keystore file" or "UTC file") encrypts the private key with a user-defined password, allowing it to be imported into compatible wallet software for accessing funds. They are typically associated with software wallets and provide a way to back up or transfer wallet access without exposing the raw private key.

How they work:
You generate or import the keystore file in a wallet app (e.g., MyEtherWallet or TokenPocket), unlock it with your password, and use it to sign transactions.

Pros: Portable as a file, adds encryption layer for security, easy to back up on external storage.

Cons: If the password is weak or the file is compromised (e.g., via malware), the wallet can be accessed. They are "hot" if used online, making them vulnerable to hacks.