If you’re about to embark on your journey with NFTs, congratulations! Digital asset authentication can certainly seem like a daunting and unfamiliar process at the start, but with the right guidance - and an NFT wallet - you’ll be well on your way to making profitable transactions.
If you read the words ‘NFT wallet’ and thought, ‘what is that?’, then this article is for you. Not only will we be briefly covering the basics of how NFT wallets work and what types of NFT wallets are out there, but we’ll also be explaining how to get or create your own NFT wallet today!
We have a lot of information to cover, so grab a drink and get ready to start your NFT journey for real!
What is an NFT Wallet?
Before we confuse you with all the different types of NFT and cryptocurrency wallets you can get, we should probably explain what exactly an NFT wallet is and what it’s used for.
In short, an NFT or cryptocurrency wallet is software that you can use to access your assets and complete transactions (both sending and receiving) with your non-fungible tokens.
These wallets work by connecting to something called the Blockchain.
For anyone who isn’t yet familiar with the Blockchain network, it’s basically a virtual transaction ledger used to record transaction data in a safe and secure way, making it extremely difficult for anyone on the outside to hack into or compromise the system. The Blockchain is where your NFTs will be stored.
‘Hang on a minute,’ we hear you cry, ‘if NFTs are stored on the Blockchain, what is the NFT wallet for?’
While it might be logical to assume that an NFT or cryptocurrency wallet, like a traditional wallet, is for storing the assets you’ll be transacting with, that’s actually not the case. An NFT wallet serves the simple purpose of protecting your private key.
What is a Private Key?
You can think of your NFT private key as similar to the PIN number you are provided with when you set up a bank account.
A private key is an alphanumerical code, meaning that it’s a code made up of a combination of letters and numbers. It’s longer and, due to the increased range of characters (numbers and letters as opposed to just numbers), more complex than your average PIN. Moreover, a private key is encrypted for privacy and security reasons.
As with any asset that has monetary value, it’s imperative that you keep your security details safe and (whether physically or virtually) locked away.
You wouldn’t leave your PIN number for your bank account lying around where anybody else could see it and use it for nefarious purposes. The same goes for your NFT wallet’s private key.
Except, when you think about it, protecting your private key is probably even more crucial than protecting your PIN. Why? Because if somebody gains access to your PIN number, there are steps you can take to mitigate the damage.
You can call your bank, cancel your card, and in some cases, recover any stolen money.
You can’t do any of this if somebody gets their hands on your private key. Once your NFT wallet is compromised, there really is nothing you can do to rectify the situation, which is why keeping your private key extra safe as a preventative measure is vital.
NFT Wallet Types
Now, here’s where things get a little trickier because there are several types of cryptocurrency and NFT wallets that you could create or download.
However, not all wallets designed for cryptocurrency will work for NFTs. Moreover, you’ll need to think carefully about what type of wallet will best suit your day-to-day needs.
There are two main, overarching types of cryptocurrency wallets: custodial and non-custodial.
Custodial wallets are the most popular means of transaction for cryptocurrencies.
A custodial wallet (like Coinbase, for example) operates as a custodian for your assets. The custodial wallet holds your currency and your private key, similar to a bank account that you would trust to keep traditional currency safe.
However, NFT, as most of us already know, is not actually a form of cryptocurrency. There are similarities between the two, but ultimately, while cryptocurrencies like Bitcoin are interchangeable, NFTs are not.
An NFT is a non-fungible token (fungible meaning mutually interchangeable), and an NFT can be worth whatever the buyer is willing to pay.
Currently, custodial wallets only cater to fungible tokens, which means that you can’t currently set up a custodial wallet for NFT.
Unlike a custodial wallet, a non-custodial wallet gives you full control over your assets and your private key.
Non-custodial wallets are suitable for use with NFTs, so this is the type of wallet you will need if you want to start transacting with your non-fungible tokens.
The idea of being the only one responsible for the safety of your NFTs can definitely be daunting, and it certainly requires a lot of care and responsibility.
However, the upside to this is that it eliminates the additional security risk that comes with involving a third party in your assets.
NFT Wallet Subtypes
If you’ve read this far, you now know that you will need a non-custodial wallet for NFT purposes.
However, there are a few different subtypes of non-custodial wallets that you will need to choose between before you can start the process of actually downloading or creating your NFT wallet.
Hardware NFT Wallets
Possibly the most secure type of NFT wallet is the hardware wallet.
The reason people often choose a hardware wallet instead of a web-based or desktop wallet (more on these later) is that although cryptocurrency and NFT wallets on the Blockchain are very difficult to hack into, it’s not an impossible task.
There have been some reports of NFT wallets being compromised through platforms like Nifty Gateway.
So, it’s no surprise that informed NFT owners are increasingly choosing to base their NFT wallets on hardware rather than software.
A hardware wallet for NFTs is contained on a portable drive (similar to a USB), which means that you can connect the drive to your computer while making a transaction and remove it again straight away, so your private key and NFTs never have to remain accessible through the computer system.
Web NFT Wallets
Web NFT wallets are extremely common and easy to set up, which makes them a popular choice for all NFT owners, but especially for beginners.
Usually, web wallets are accessible through websites, but they can also be provided as browser extensions.
These wallets are highly convenient and beginner-friendly, although admittedly, they don’t have the same protection against hackers as hardware wallets do.
In fact, web wallets are some of the most high-risk when it comes to theft, so if you do choose to go this route, you will need to make sure that the platform you are working with is reputable and encrypted and that you are extra responsible with your use of your private key.
Desktop NFT Wallets
A desktop wallet could be a good idea if you want your wallet to be accessible straight away when you start up your computer. Having your wallet installed on your desktop as software can also provide a sense of security.
Since your wallet will be limited to the device onto which it has been installed, you won’t have to worry about it being accessible through any other devices.
However, in the vast majority of circumstances, we wouldn’t really recommend desktop wallets as a first choice. This is because computer software is, in the grand scheme of things, relatively easy to hack into.
For this reason, if you have a lot of potential value at stake through your NFT wallet, we wouldn’t advise you to keep it on your desktop.
Mobile NFT Wallets
If you’re somebody who makes a lot of use out of your NFTs and likes to have your private key accessible throughout the day, wherever you go, then having an NFT wallet on your mobile device might be the right choice for you.
Like a web wallet, a mobile wallet can be downloaded to your phone or tablet through software - although, of course, in this case, we’re talking about software specifically designed for mobile devices.
The security risk associated with mobile NFT wallets does vary depending on what kind of device you are using. For example, iOS systems are notoriously difficult to hack into but not impossible. Android devices are, generally speaking, more vulnerable.
Regardless of which mobile device you’ll be entrusting your NFTs to, you should always make sure that you have a strong password and never download an NFT wallet onto a Jailbroken device.
How Can I Get an NFT Wallet?
So, now we know all about the different types of NFT wallets you can sign up for and why you might want to use them. But how do you actually go about getting one?
Luckily, the process of downloading or creating an NFT wallet is relatively simple. However, it will be different depending on what type of wallet you have decided to opt for.
How to get a Hardware Wallet
Because a hardware wallet is stored on a physical device (a drive), it isn’t something you can simply download like a software-based wallet.
If you want to keep your NFTs extra safe using a hardware wallet, you will need to purchase a hardware wallet drive.
Something similar to the Ledger Nano S, which uses a secure chip and a second-factor anti-malware verification system to keep your private key safe, would be ideal.
How to get a Web Wallet
If you’re going to be using a web wallet, you will have plenty of platforms to choose from. Therefore, the first step to committing to a web wallet is to do your research and find out which system will be safest and most compatible for you.
One of the most popular web wallet platforms is MetaMask, which is available as a browser extension.
To download MetaMask, you will need to have a trusted browser such as Chrome pre-downloaded.
When you go to the MetaMask website and click ‘download,’ you will have the option to select the Chrome, iOS, or Android version.
Of course, in this situation, you’ll select the Chrome option and then click on ‘Install MetaMask for Chrome.’
You’ll then be asked to confirm the installation by selecting ‘Add to Chrome.’ Once the download is complete, you should be able to make the extension active by setting it up through the ‘Extensions’ (puzzle piece) icon in the top right corner of your browser.
At this point, you will be able to create your wallet by setting up a password and a seed phrase, which will then give you access to your private key.
How to get a Mobile Wallet
Getting a mobile NFT wallet is easy! Take AlphaWallet as an example.
AlphaWallet is a mobile application designed to allow users to access their cryptocurrency or NFT wallet from their mobile device(s).
AlphaWallet is available through the Apple and Android app stores and can also be downloaded on Google Play.
Similarly to MetaMask, when you click ‘download’ in the top right of the AlphaWallet homepage, you’ll be able to select your mobile system.
After that, it’s a simple case of authenticating yourself through your preferred app store and downloading the application to your device.
Once you’ve downloaded AlphaWallet, you can either import any existing wallet by clicking on the ‘Change/Add Wallet’ icon in the Settings menu or set up a brand new wallet.
The software will issue you with your seed phrase, so it’s even easier (and safer!) than applications that ask you to create your own.
We know that learning about NFT wallets, and NFT in general, can feel a little overwhelming at first, but if you’ve read this far, you’re doing a great job!
The key information to remember from this article is that hardware wallets are more secure than software wallets, with iOS software wallets such as AlphaWallet generally being safer than Android apps, desktop software, or web extensions.
Never share your private key, and always make sure it’s kept somewhere safe and secure.