What Is A Crypto Wallet?
Simply put, a crypto wallet is a wallet for your crypto... seriously. You store your cash and credit cards in a physical wallet. You store your crypto and digital assets in your crypto wallet.
If you want to put it into more technical terms, a crypto wallet is a software that is accessed with a private key, which then allows you to make a transaction on the blockchain. Basically, if you ever plan on ever “using” your Crypto, you’re going to need to set up a digital wallet.
This wallet is what most of you are probably familiar with. Think Coinbase, Binance, Robinhood, or Gemini. When you make your first purchase of a Cryptocurrency, regardless if it’s DOGE or Bitcoin, you probably have heard people buying it on Coinbase or maybe even Robinhood. Because you are purchasing it through their exchange, they are technically hosting your Crypto in their wallet. Hence a custodial wallet.
This is the wallet that you’re going to want if you want full control of your assets. You will have your own private key, which is extremely important that you don’t lose. This wallet is much more secure however it also comes with a ton of responsibility. If you lose or forget that private key, you’ll lose all of your digital assets. If someone finds out your private key, they can take all your assets. It’s crucial you understand the importance of this key. Don’t be the guy that is 1 incorrect password away from losing hundreds of millions of dollars worth of Bitcoin. Check it here…
Types of wallets
My favorite mobile wallet is Rainbow for displaying my NFT’s and Metamask Mobile for making purchases on my cell.
A hardware wallet is a much more safe wallet that lives off of your computer. It’s essentially a USB that sticks into your computer when you need to make a transaction. I personally use a Ledger Nano X. This is the most secure way to store your NFT’s and cryptocurrencies!
Setting up your wallet
In my opinion, Metamask.io is the best and most trusted wallet out there. I started using them in 2020 and it’s been great for both the desktop version and the mobile version. Here’s the step by step process to get setup:
- Go to metamask.io and click Download Now. It will take you to a page where you can select which browser you are using. (Side note, I use Brave browser and I suggest you look into it)
- Click “Install Metamask for Brave” or “Chrome” whichever you’re using and it will take you to a page where you will click “Add to Brave” or “Add to Chrome”.
- Click whichever applies to you and once it’s done installing, you will see the orange Metamask Fox in the top right corner of your browser by clicking on the puzzle piece. You can also pin it to the browser so you have easy access.
- Click “Get Started” and start by selecting a new wallet and then clicking on create a wallet. Create a login and password, agree to the terms and then press create!
- This is the most important step because once you create your wallet, you’re going to get your seed phrase. It’s a 12 word sequence that is used to backup your wallet and recover any assets if needed to transfer crypto back into cash. Write this down on a piece of paper and please keep it somewhere very safe. I have mine memorized, but I’m a freak. It’s important you do not lose this key phrase!
- Once you’re confident you have this seed phrase in a safe spot and you’re comfortable and understand the ramifications if you lose this are, you can enter that sequence and click confirm.
How easy was that?! 6 steps and now you’ve got your Metamask wallet set up and ready to use. If you need help learning how to buy Crypto and then transferring it over to your Metamask wallet, please read Buying Crypto and NFT’s.
I hope this really helps you understand what a Crypto/Digital wallet is and what it’s used for. I also hope you have a good understanding and feel comfortable with setting up and using your wallet. If you have any questions, please don’t hesitate to shoot me a DM on Instagram.