The metaverse and the blockchain space has brought a whole new dimension to the Internet. This new begining of the online world has created new opportunities for many sectors like the creative economy. New opportunities but also new threats, so one of the first things an artist starting in this space should do is get familiar with the new concepts and terminology and understand them. One of those first concepts to be learnt is a wallet because it will be of vital importance to maintain the security over the NFTs they create.
What is a wallet?
A “wallet” is a digital tool or software that allows individuals to store, manage and interact with their cryptocurrencies or NFTs. It serves a similar purpose to a physical wallet for traditional currency but is used to store digital assets. So this way, the main purpose of a wallet is storage, to keep and control your digital assets on the blockchain through cryptographic keys (private and public keys) needed to access and control it. Another important function is security because they are used to protect your cryptocurrency holdings by requiring authentication to access the keys. The third function that we can apply to wallets is transaction management because they allow you to send and receive cryptocurrencies. You can use your wallet’s interface to create and sign transactions. And the last one could be balance inquiry because you can check your cryptocurrency balance within your wallet to see how much of a particular cryptocurrency you own.
Types of Wallets
Even though most of the wallets are used in a similar way and have the same functionalities in the market you can find several types.
- Software Wallets (Hot):
- Online Wallets: These are cloud-based wallets that you can access through a web browser. They are convenient but may be less secure.
- Mobile Wallets: These are apps that you can install on your smartphone. They are user-friendly and portable.
- Desktop Wallets: These are software applications that you can download and install on your computer. They provide control but are less portable.
- Browser Extension Wallets: These are browser add-ons that offer easy access to blockchain services.
- Hardware Wallets (Cold):
- These are physical devices specifically designed for securely storing cryptocurrency keys offline. They are often considered one of the most secure options.
- Multisignature Wallets:
- These require multiple private keys to authorize a transaction, providing added security and control.
Choosing the right wallet depends on your needs and priorities. If you’re actively trading or using cryptocurrencies, you might prefer a software wallet for convenience. However, if you’re holding a significant amount of cryptocurrency for the long term, a hardware wallet is often recommended for its security benefits. It’s important to thoroughly research and select a reputable wallet, as the security of your digital assets depends on it.