Bitcoin wallets are interoperable, so you can send Bitcoin to anyone no matter which wallet they use.
There are many different Bitcoin wallets that differ in important ways. You can determine if a wallet is right for you by asking two simple questions:
IS IT A SELF-CUSTODY WALLET?
One of the innovations of Bitcoin is the ability to store it without relying on a custodian, like a bank. Self-custody wallets unlock the full power of Bitcoin.
With a self-custody wallet, you are the only one with the ability to spend or transfer your money. No one can stop you, censor you, or steal from you when you use a self-custody wallet. These are also called non-custodial wallets.
Custodial wallets are wallets where you are not in control of your money.
These wallets are more similar to the banking system where you must trust a third party to give you access to your money. If your Bitcoin is on an exchange, you are using a custodial wallet.
Custodial wallets can seem convenient, but the custodian has the technical ability to steal all user funds at any time.
Not your keys, not your coins!
IS IT HOT OR COLD?
Cold wallets store the keys to your Bitcoin in a manner that never exposes them to the internet.
This significantly limits the attack vectors that a thief might use to try to steal your Bitcoin, and is best used for large sums of Bitcoin that you don't need to transfer often.
You can think of a cold wallet as a long term savings account, also known as cold storage.
Hot wallets store the keys to your Bitcoin on a device that is connected to the internet, like your phone.
Hot wallets are generally considered safe, but they could have more security vulnerabilities than cold wallets.
You can think of a hot wallet like you would a physical wallet. You wouldn't store your entire savings in your wallet, but you would store some spending money.
Hot wallets make it much easier to spend your Bitcoin without having to pull your entire savings out of cold storage.