August 30, 2022
Victoria Rudi

What’s a Wallet?

What’s the safest way to manage, buy or sell NFTs? What’s a blockchain wallet? And finally, what are the best NFT wallets? If you’re interested in knowing the answer to these questions, check out this quick introduction to safely storing your NFTs.  

→ What’s a Blockchain Wallet?

A blockchain wallet can be both a digital space or a physical device where you can store, buy, sell, and manage different cryptocurrencies and NFTs.

A blockchain wallet allows you to:

  • Visualize your digital assets
  • Maintain your privacy
  • Exchange funds between different parties
  • Execute instant transactions without intermediaries

Depending on its type, you can access and operate your blockchain wallet from different devices by using your public and private keys.

→ Your public and private keys

Blockchain wallets work based on public and private keys. When creating a wallet, you’ll generate a public and a private key.

You can use the public key to exchange funds or send cryptocurrencies/NFTs into a wallet. Think about your public key as if it’s your email address. You have to share it with the rest to receive emails. To receive digital assets, you have to share your public key with the rest, ensuring they’ll know where to send cryptocurrencies or NFTs.

On the other hand, your private key works the same as your email password. Similar to your password, you can’t share it with anyone else, as you’ll use it to log in and access your wallet.

→ Hot Wallets

It’s a type of blockchain wallet that allows you to manage, send, receive, and view the tokens you have available.

When using a hot wallet, you can access your digital assets only when connected to the Internet or cryptocurrency network. Your hot wallet resides on your desktop, mobile device, or in a cloud-based service.

Hot wallets are easy to use. Gemini states:

“Because they are always online, there’s no need to transition between offline and online to make a cryptocurrency transaction.”

However, this type of wallet is vulnerable to online attacks as it can be hacked. Keeping all your funds in your hot wallet is not recommended.

→ Examples of Hot Wallets

  • Metamask: Available as a browser extension and as a mobile app, MetaMask equips users with a key vault, secure login, token wallet, and token exchange.
  • Coinbase Wallet: A self-custody crypto wallet, putting users in control of their crypto, keys, and data.
  • Math Wallet: A multi-platform (mobile/desktop/hardware) universal crypto wallet that enables token storage of 100+ chains, including BTC, ETH, Polkadot, and more.
  • AlphaWallet: An open-source blockchain wallet. AlphaWallet is a production-ready Ethereum Wallet focused on helping users to leverage blockchain and tokenization for their businesses.
  • Trust Wallet: Owned by Binance, Trust Wallet is an Ethereum and cryptocurrency wallet for storying BEP2, ERC20, and ERC721, tokens.

→ Cold Wallets

It’s a hardware-based wallet you can always carry with you. You don’t have to be connected to the Internet to access the digital assets you’re storing on your hardware wallet.

Cold wallets are pretty secure. According to Gemini:

“Stealing from a cold wallet usually would require physical possession of or access to the cold wallet, as well as any associated PINs or passwords that must be used to access the funds.”

However, compared to hot wallets, you need to find a device, such as a computer, to plug your cold wallet, move assets to your hot wallet, then exchange or transact them.

→ Examples of Cold Wallets

  • Ledger: The company offers two products. Beginners can start by purchasing the Ledger Nano S Plus. Easy to use, the device allows users to install up to 100 apps simultaneously. A bit more expensive, the Ledger Nano X is mobile-friendly, enabling Bluetooth connection.  
  • Trezor: The company offers two products, called Trezor One with a monochrome display and Trezor Model T with a multicolor display. The second product allows storing a wider variety of coins and tokens.

Quick note: You should consider purchasing a cold wallet when you have more digital assets than you’d be comfortable losing.