On the basis of storage of private keys, Web3 wallets may be divided into hardware and software wallets. While the former stores the keys in a physical device, the latter can be accessed via an app or even a website. There is yet another category called paper wallets that consist of the wallet’s keys being printed on paper. This, however, is the least secure of the three.
Depending on their connectivity to the internet, wallets can be either hot or cold. Hot wallets can be accessed anytime, anywhere through the internet. However, it must be noted that they may have limitations in security. You also have cold wallets that are not connected to the internet and, therefore, more secure.