Blog #3 from our series "NFTs and Crypto: The next big asset class?"
If you haven’t read our previous article, a short crash course on NFTs, we strongly recommend you do. This is blog #3 of an NFT series which is accompanied by an NFT market analysis report.
Now that we understand what NFTs are, it's different types, how they are created and how they are stored, it is only logical that we delve deeper into the latter question. In this article, we will briefly identify the importance of NFT wallets, understand how they work and what the top 5 wallets are for storing your NFTs.
To take full advantage of this NFT mania, it is incredibly important that you have access to the best NFT wallet available with the capability to hold your cryptocurrencies and NFTs in one place. So, do these wallets work like they do in real life? Well, not exactly. NFT wallets do not actually hold the digital assets you own. In fact, an NFT wallet stores information regarding your assets’ location on a blockchain. It is easier to see it as an address book.
Now, like real-life wallets, there are tons of brands and options to choose from. While every single one accomplishes their main job, it is important to choose the right one by looking at certain features they have.
Hot or Cold?
Firstly, there is the question of choosing a “hot” or “cold” wallet. And no, this is not a Katy Perry song. A “hot” wallet refers to a digital storage which is connected to the internet and, due to this reason, it might be more vulnerable to attacks and leakages. This means that your crypto funds or NFTs are at a higher risk of being stolen. However, it is advantageous to own one because crypto transactions are undoubtedly faster and more convenient. On the other hand, a “cold” wallet is not connected to the internet. Thus, it has better security but is less convenient as it has reduced accessibility.
Typically, it is recommended that you own both a hot and cold wallet, depending on what you will be using your cryptocurrencies for.
Accessibility, security and cross-compatibility
Next up, you should choose an NFT wallet that is easily accessible to you and is simple to use. Cryptocurrencies and NFTs might already be overwhelming for someone who has never owned them before, so choosing a user-friendly wallet is incredibly important to enhance how comfortable you feel while manipulating your digital assets.
Moreover, you should choose a wallet which prioritizes security. This might involve going through the product’s history to see if there have been any cases of data leakages.
Finally, I would recommend that you look out for the cross-compatibility feature or multiple blockchain support. Like Ethereum, there are other blockchains which support NFTs and ERC-721 standard-based tokens so if you want to have access to as many NFTs as possible, it is important that you find a wallet with cross-chain compatibility. On a similar note, make sure that the wallet you are choosing supports NFTs. Many high-end crypto wallets are famous for holding your cryptocurrency, but not supporting the transferring and ownership of NFTs.
Top 5 NFT Wallets to use
MetaMask is currently the most popular NFT wallet that is available, now in web and mobile versions. Metamask supports all Ethereum-based NFTs and allows its users to perform trading and minting, offering smooth operations. Its interface is quite accessible for first-time users who are looking to start their NFT collections, and the wallet is supported by most NFT marketplaces. Nonetheless, MetaMask is a hot wallet, meaning that security-wise, it still has the dangers of being always connected to the internet. Also, given its vast popularity, it may at times be the desired target of data leakages and hackers.
To improve the reliability of MetaMask, we recommend that you integrate it with a Ledger device, which offers unparalleled security given that it is a hardware wallet. Think of the Ledger as the “keys” to your wallet, MetaMask. And the best thing of all, both work perfectly in sync so your experience will be incredibly smooth. Only con, I would say, is its $140 price tag! But I guess it's much better to pay for security for a digital wallet, rather than risk all your digital assets, right?
2. Coinbase Wallet
The Coinbase Wallet is also a strong contender as a first-time NFT and crypto wallet given that it is incredibly easy to use and it is highly reliable. Coinbase wallets allow users to send and receive NFTs as easy as making a financial transaction and supports most of the main cryptocurrencies, including Bitcoin. While its security is top of the game in comparison to other wallets, it is a hot wallet, meaning that it is constantly connected to the internet
AlphaWallet is our next shout as a top NFT wallet which is based on Ethereum and allows its users to mint and collect NFTs. It is supported by several marketplaces, including OpenSea and CryptoKitties. This is an open-source wallet, meaning that anyone can see the platform’s code (increased transparency) and can ensure that it is safe to use. It is also free to use and very user-friendly, especially for those beginners at NFT collecting and transferring. The only caveat here is that AlphaWallet is only available on your mobile phone, and this has definitely limited the number of users it harbours.
4. Trust Wallet
Coming in at number 4 we have Trust Wallet, who, like AlphaWallet, is a mobile-only option with over 5 million users. This wallet is widely accepted by NFT marketplaces and is generally very flexible and easy for users to manage their digital assets. Another positive feature is that it is compatible with multiple blockchain networks, so it allows its users to access different blockchains beyond Ethereum. Owned by Binance, Trust Wallet does exactly what its name suggests: it is a trustworthy and reliable wallet for storing your crypto and NFTs. Nonetheless, this Wallet does not allow users to perform NFT transfers which has discouraged users of other platform to switch to this wallet.
To finish off our list we have Enjin, a great digital wallet to store your NFTs and cryptocurrencies. Unlike other wallets, Enjin has access to its own marketplace to trade any digital assets you would like. Liked by many, Enjin’s UI for NFT collection seems to be the most attractive one, given that it shows your assets in an album format. Nonetheless, Enjin also remains available only on mobile app and works exclusively with Ethereum, reducing its compatibility with other blockchains. According to BitDegree, Enjin is the best NFT wallet for gamers, due to its Ethereum-exclusivity and the fact that it is very simple to use. However, as its sister wallets, it is exclusive to mobile.
With all this in mind, you should be ready to go out there and choose the best wallet to store your cryptocurrencies and NFTs. We’ll see you for our next blog on Avoiding fraud in the NFT market!