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What is a crypto wallet?

What is a crypto wallet?

What is a crypto wallet?

A crypto wallet is a program that helps you buy, sell, and store your cryptocurrency and (in many cases) your NFTs. Think of it as your address on the blockchain— you can send and receive items from it, it stores your items, and you want to keep it locked and safe. In this article, we’ll walk through the types of crypto wallets and how to set one up.

Types of crypto wallets

Custodial vs. non-custodial

There are two types of crypto wallets: custodial (“hosted”) and non-custodial wallets. Custodial wallets are managed by a third party company, whereas a non-custodial wallet is not. Custodial wallets are like keeping your valuables in a storage facility, and non-custodial wallets are like keeping them in your safe at home. Custodial wallets therefore require less responsibility, but are at the mercy of the third party (like, if the storage facility was robbed). Non-custodial wallets give you full control, but also mean you have to be extra careful (like, not losing your key or accidentally throwing away something valuable when you reorganize your closet). 

Software vs. hardware

Non-custodial wallets include software and hardware wallets. 

A software wallet is a program that lives on your computer or on your internet browser. This makes software wallets a great option for quickly and conveniently buying, selling, and transferring NFTs and cryptocurrency. 

A hardware wallet is a physical device that you plug into your computer to use. Because it’s not always connected to your computer or browser, it’s a great option for long-term secure storage, but is a bit less convenient for fast or frequent transactions.

Different wallets support different blockchains, and not all wallets support NFTs. Here are some wallets compatible with OpenSea:

How to set up a crypto wallet

The process of setting up a crypto wallet differs from wallet to wallet, but for this example we’re going to walk through the flow of setting up a Metamask wallet. Metamask is a non-custodial software wallet that’s popular for NFTs.

1. Download the wallet browser extension

Like many wallets, Metamask has a browser extension, an iOS app, and an Android app. You only need the browser extension to get started, so download that.

2. Open the browser extension and follow the prompts

Open the extension once it’s installed. You’ll be prompted to get started. Choose the option to set up a new wallet and follow the prompts.

3. Create and store your seed phrase in a secure location

During the setup process, you’ll be presented with your seed phrase. Store this in a safe place that no one else will be able to access. Never share your seed phrase with anyone.

4. Connect your crypto wallet to OpenSea

Once your wallet is set up, you’re ready to connect it to OpenSea!

How to fund your crypto wallet

Now that your wallet is set up, you can buy NFTs! Although you can buy some NFTs with a credit or debit card using OpenSea, you might need to have cryptocurrency in your wallet for the cases where that’s not an option. 

Every wallet is different, but there are two main ways to fund your crypto wallet:

Adding funds directly to your wallet

Many NFT-compatible wallets support adding cryptocurrency directly into your wallet by using a service such as Moonpay or Wyre. These are integrated into the wallet, and allows you to buy cryptocurrency using a credit or debit card and skip the process of using a crypto exchange. You may be prompted to verify your identity during this process.

Transferring cryptocurrency from a crypto exchange

Another option is to buy cryptocurrency using an exchange like Coinbase, Binance, or FTX. Usually, when you buy cryptocurrency using an exchange, the cryptocurrency will be deposited in a custodial wallet managed by that exchange, most of which are not compatible with NFTs. So in order to fund your crypto wallet that you’ll use for NFTs, you have to transfer the cryptocurrency from the custodial exchange wallet to your other wallet. For example, if you bought ETH using FTX, you’d need to send it from your custodial FTX wallet to your Metamask wallet to buy NFTs using that ETH.

The advantage of this method is that there aren’t the same maximums that there might be when you deposit cryptocurrency directly into your wallet using a service like Moonpay or Wyre.

How to protect your crypto wallet

Just like any other valuables, you’ll want to employ some best practices for keeping your crypto wallet safe. Here are some tips:

  • Don’t reuse passwords: Make sure your crypto wallet password isn’t being used on any of your other accounts.
  • Protect your seed phrase: When you set your wallet up, store your seed phrase somewhere you won’t forget, but isn’t easily accessible by others. Never share your seed phrase with anyone.
  • Don’t click links you don’t recognize: This is especially true if someone sent you a link directly.

Connecting your crypto wallet to OpenSea

Once your crypto wallet is set up, connecting it to OpenSea is easy. Click the wallet icon in the top right corner of the OpenSea site and it’ll walk you through connecting your wallet. From here, you can fill out the rest of your OpenSea profile.

Any time you try to take an action that gets recorded on the blockchain, like purchasing an NFT, you’ll be prompted to connect your wallet and authorize the action. You must have your wallet connected in order to buy, sell, create, or transfer NFTs using OpenSea.

🧠 Q&A

Are all crypto wallets compatible with NFTs?

No. Some crypto wallets only support cryptocurrency. If you’re setting up a wallet that you’ll want to use with NFTs, be sure to double check that the wallet supports NFTs.

What crypto wallets does OpenSea support?

OpenSea supports many crypto wallets for multiple chains. Take a look at the full list of crypto wallets currently supported by OpenSea.

Can I have multiple crypto wallets?

Yes! In fact, many people do. You might need to have different wallets for different blockchains; for example, a Metamask wallet for Ethereum NFTs and a Phantom wallet for Solana NFTs. You might also want to have both a software and a hardware wallet for convenient transactions and secure long-term storage, respectively.

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