Crypto, NFT and Web3 Basics: Part 1
Hello, and welcome to this series on how to plant your roots in web 3 and get a solid start in NFTs. This series is brought to you by the Spirit Seed and Living Tree NFT projects, which let you save the planet while also building enduring relationships inside the communities that the co-founders of the Edge of NFT Podcast (Eathan Janney, Jeff Kelley and Josh Kriger) have built. Together with our incredible team we produce the top downloaded Edge NFT Podcast featuring the top 1% in NFTs today and what will stand the test of time as well as the NFT LA convention, with it’s first inaugural session March 28-31, 2022, an event leveraging the incredible entertainment scene of LA and featuring notable speakers like Mark Cuban, Steve Aoki and Medha Parlikar. Join our discord today by visiting https://www.edgeofnft.com/discord and find out how owning our NFTs can get you everything from a Free VIP pass to our convention to exclusive access to the most powerful information about web3 you’ll find anywhere. Let’s get started!
What Are Cryptocurrency Wallets?
The crypto world is experiencing some exciting changes. Even though it has existed for years, many people are just discovering it. If you are one of the newbies in the crypto world, this series is for you. We’ll guide you through exactly what you need, to get started safely and securely.
Before diving into all the intricacies of setting up your wallets let’s first understand what Cryptocurrency wallets are. In simple terms, a crypto wallet is a programmed software system that allows users to exchange, receive and access crypto through interaction with the blockchain. While it may seem similar to our traditional wallets, these are a little different. Instead of storing crypto inside your wallet, cryptocurrency is stored in blockchains (also known as public ledgers). In short, your crypto wallets don’t hold any assets, however, they provide you with a private key or a unique digital password that lets you conduct transactions on the blockchain. You can get these wallets in the form of stand-alone devices, smartphone applications or browser extensions. So in order to use your crypto, you’ll need one of these wallets.
Two Types Of Crypto Wallets
Let’s talk about how you can store your crypto in any of these two types of wallets:
Custodial wallets are very simple to use if you’re a beginner. Wallets like Coinbase are custodial wallets. The service providing them, such as Coinbase, have complete control over your assets and you just give them permission to send or receive your cryptocurrency.
In contrast, non-custodial wallets give you control over your private key and assets. In other words, you can make transactions directly on the blockchain.
Which one is best for you?
If you wish to purchase NFTs, you’ll need to use a non-custodial wallet. But you might ask what if I already have crypto on a Coinbase wallet? Well, you can then simply transfer your crypto to a noncustodial wallet like Metamask.
Let’s next talk about…
Crypto Wallet Formats
- Software wallet/Hot Storage
Software wallets are also called Hot Storage, primarily because they are directly connected to the internet. There are several types of software wallets you can use. Some of them are:
1. Web Wallets
Web wallets can be accessed directly from their websites or browser extensions. Some examples of these wallets are Metamask and Mycrypto.com.
2. Mobile Wallets
Mobile wallets can be accessed using mobile applications. These are perfect for people who are always on the go.
3. Desktop Wallets
Desktop wallets are downloadable software programs that can be installed on your pc or laptop. However, these are prone to attacks by hackers and viruses, and not quite as secure.
And that was all about hot storage.
1. Hardware wallets
Examples of hardware wallets include Ledger and Trezor. These are some of the most secure options as you can make transactions without exposing your seed phrase or private key. They typically look like a USB or Pendrive which you can connect to your computer for making transactions.
2. Paper Wallets
Paper wallets are the most secure way for storing crypto. However, they were popular in the earlier times of bitcoins and cryptocurrency. They don’t necessarily store physical crypto though they store the information required to access your crypto and NFT assets.