Buying cryptocurrency has never been easier, but learning how to store it properly and safely takes a lot more work.
Cryptocurrency wallets are like online bank accounts for your cryptocurrencies, but with a few key differences: cryptocurrency wallets aren’t backed by government escrow systems, they only hold cryptocurrencies (no regular money here), and more importantly, you’re in control of your means. Time. Noncustodial is the term for cryptocurrency wallets like MetaMask, Rainbow Wallet, or Trust Wallet that are separate from the accounts you may have on cryptocurrency exchanges.
These wallets are key to the decentralized web and serve as the primary way to interact with decentralized financial protocols such as credit protocols, decentralized exchanges, or non-fungible token (NFT) markets. Crypto wallets are so central to decentralized finance that some people on Twitter or Discord refer solely to their crypto wallet addresses — anyone who introduces themselves with a username that begins with “0x” is referring to their Ethereum address.
What is a crypto wallet for?
Unless you’re running a huge company controlling so much cryptocurrency that you require the watchful eye of a specialized custodian – a third party that looks after your crypto for you – you’re looking for a non-custodial wallet. These are, as noted, wallets to which only you control the keys. You may have read the proverb, “not your keys, not your crypto.” This phrase is normally used and stresses the importance of looking after your own crypto.
How to choose a crypto wallet
Different blockchains require different wallets. MetaMask, one of the most famous wallets, helps just a handful of networks, including Ethereum, Polygon (MATIC), and Avalanche (the common denominator is that these chains all support the Ethereum Virtual Machine (EVM)). MetaMask does not support Bitcoin or Solana, however, there are a number of other changes including Trust Wallet that do help Bitcoin.
How to set up a crypto wallet
download the app on your phone and install the browser extension. Then, MetaMask will ask you to select a password to the app, name your wallet, then write down your secret phrase (and then get you to check that you have done so). And that’s it! You can then utilize your wallet to send or receive funds.
To find out your address, connect the name of your wallet and MetaMask will copy it to your clipboard. Different wallets have near-identical setup processes.
What about hardware wallets?
The above is a summary of popular web wallets, also known as “hot wallets” because you require an internet connection to utilize them. Hardware wallets, known as “cold wallets,” are physical devices like thumb drives that you plug into your computer and only link to the internet when docked. This makes them more secure, although they are a bit awkward to use. Popular brands include Trezor and Ledger. Unlike hot wallets, you have to buy these hardware wallets from the official retailer offered. Buying them second-hand or from an unreliable vendor is incredibly risky as the devices may be faulty, tampered with, or contain malware.