The RareCircles Guide to NFT Wallets
You’ve purchased — or made — your first NFT. Here’s where you’ll put it.
So you’ve decided to enter the world of non-fungible tokens, a market that hit $2.5 billion in sales volume in the first half of 2021. Whether you’re purchasing an NFT or minting one, the next big question is: where will you keep it?
The answer, fittingly, is a wallet. Non-physical wallets provide access to your asset using a private key that functions as an address to your holdings — say, an NFT of an art piece — on the blockchain. It’s like a hybrid email and bank account, minus the tellers.
Read on for all you need to know about owning a wallet (chic leather casing sold separately).
How do wallets work?
Think of them as secure storage for your token. The wallet is a crypto key that gives you access to your holdings, allows you to manage transactions, and supports the currency (Ether, say) that you’ll use to purchase more NFTs. According to Dr. Merav Ozair, a leading blockchain expert and fintech professor at Rutgers University, it’s your “account on the blockchain.” The wallet is made up of a pair of “keys,” public and private, the latter of which serves as the crypto’s destination address, sort of like the combination to a safety deposit box. “A wallet is the only way we can tell the assets are actually yours,” says Ozair. In some cases, the wallet allows storage for NFT art after it’s minted.
What are the upsides?
Unlike banks, the holder of a wallet’s private key — one not hosted by a third-party or exchange — effectively functions as the CEO of their own bank. In fact, the freedom of sole ownership is one of the biggest draws for wallet users, allowing them to send and receive crypto transactions (or “sign”) as they please. (Once you transact with someone, they have your public address, meaning they can send you stuff on a whim. Recently, airdropping NFTs has become a novel way of gamifying the blockchain.)
A wallet is also a fairly simple way to track your assets across devices. It’s a kind of sign-in skeleton key: Over time, you’ll be able to unlock experiences of all stripes on various websites because your wallet lives in your phone or tablet. The wallet also provides a new paradigm for engagement, allowing for direct communication between fans and founders. (In Web 2.0, this was achieved mostly via email or social channels, though in the case of the latter, audience access was typically gated.)
And the downsides?
The figurative buck stops with you. Wallet owners necessarily assume all liability for transactional glitches, even though two-factor authentication is involved. Plus, while wallets are designed to be fairly intuitive to use, there is a learning curve involved in setting one up. That said, we’re still in Wallet 1.0, so any kinks should be worked out as the concept mainstreams.
How do I begin my search?
First, decide between a hardware and software wallet. Software wallets are also known as “hot wallets,” because they store assets online using browser extensions, desktop programs, or mobile apps. The hardware, or “cold,” versions function similarly, but store crypto offline, on a USB device, for example, that can be plugged into a computer. Also, software wallets are unique to the currency being used, whereas hardware wallets usually support multiple currencies. In essence, the trade-off is between convenience (software) and security (hardware), but Ozair emphasizes the latter. “Your wallet has to be super secure — some require multiple signatures and have a multitude of ways to protect you,” she says. “Just do your homework.”
What additional features should I look for?
Whether it’s a toss-up between Trust Wallet, Coinbase, MetaMask, or any of the other competitors, experts typically recommend searching out a wallet that is overtly user-friendly. For example, an easy-to-navigate interface is important, as NFTs can be confusing for first-timers. If you’re considering a software option, look for a wallet that works as seamlessly as possible across devices — that is, desktop to mobile and back again.
Most NFTs also trade on the Ethereum blockchain, so be sure to select a wallet platform that supports the Ether currency. That said, if you’re interested in minting, buying or selling NFTs on other networks, you’ll need to choose a wallet that supports cross-chain compatibility.
Written by: Katie Underwood