The rise of NFTs (Non-Fungible Tokens) has transformed the collectible industry and it is now easier than ever to invest in these high-value digital assets, with the potential to make big money. However, because of the nature of NFTs, not many investors know what to look for when buying an NFT or how to make an NFT project popular. They also find it confusing how to store these digital assets and what steps to take to keep their NFT secure. All these reasons can be a serious bottleneck that may hinder the wide adaptation of NFTs among general people.
To help potential investors, we already have detailed guides on what to look for when buying an NFT and how to make an NFT project popular. But in this article, we will discuss everything you need to know about NFT wallets and recommend some of the best wallets currently available on the market. So without further ado, let’s get started.
What is an NFT wallet?
Much like your physical wallet, an NFT wallet stores your digital assets and allows you to manage, and trade your NFTs with others. Once you have purchased an NFT, you must keep it safe on a digital platform. NFT wallets come with mobile app and web versions, which makes it easier to manage your digital assets on the go. On top of that, NFT wallets are based on blockchain technology, which allows NFT transactions to go through in a decentralized manner, without intervention from a centralized authority like a bank or other financial agencies.
So, if you have ever considered investing in NFTs, choosing the right wallet is the very first step. You want to choose a wallet that is secured, easy to use and preferably supports the ERC-721 token standard, which is the most common standard for NFTs on the Ethereum blockchain.
Now there are several popular options on the market that support these features, but the most common NFT wallet includes MetaMask, MyEtherWallet, and Coinbase Wallet. In our guide today, we will focus on MetaMask as it has the biggest user base out of all NFT wallets currently available on the market.
How to select an NFT wallet?
Selecting an NFT wallet that is most suitable for you will depend on several factors, including security, user interface, and compatibility with the blockchain on which the NFT was minted.
Here are some steps you can take to choose an NFT wallet:
Your NFT wallet is solely responsible for the security and integrity of your NFT collection, so it is important to consider the security aspect of your NFT wallet when choosing the right one. Thankfully, most of the popular NFT wallets are completely safe and come with many advanced security features to help protect your digital assets. However, there are many scams where users are lured into sharing sensitive information which compromises the security of the wallet, so always be careful when sharing sensitive information with others.
When setting up your NFT wallet for the first time, you will get a security key, keep it safe, as this key will be required to sign in to your account or transfer funds to another account. Losing this key will make your NFT worthless.
Check if the NFT wallet you are considering is compatible with the blockchain on which the NFT was minted. For example, if the NFT is on the Ethereum blockchain, ensure that the wallet supports Ethereum. You should not have to worry about compatibility issues if you choose a popular NFT wallet as they come with support for all major blockchains.
An NFT wallet that is hard to navigate may not be ideal for a newbie or first-time investor. So, when considering an NFT wallet, find the one which is easier to navigate. A good user interface can help you manage your NFTs and transactions more efficiently.
Consider the reputation of the wallet provider. Look for wallets that have been around for a while and have a good track record. You can also look for online reviews to see if the wallet you select has a good track record.
Consider the additional features provided by the wallet, such as integration with other DeFi applications, transaction history, and support for different cryptocurrencies.
Types of NFT wallet
NFT wallets usually come in two variants, one called a software wallet and the other a hardware wallet. They both have their own pros and cons and the one best for you will depend on your specific situation.
Software-based NFT wallet
Also known as hot-wallet, Software-based NFT wallets are often considered an entry point in your NFT investing. These wallets are hoisted on other websites and you create an account on these websites to access their service. Software-based NFT wallets are easy to use and can be accessed instantly, but all your private keys remain available online which can be a security threat. Consider using a software wallet if you are new to NFT investing or do not plan to hold the digital asset for an extended period of time. Popular software-based NFT wallets include MetaMask, Rainbow Wallet, Coinbase, and others.
Hardware-based NFT wallet
Also known as a cold wallet, Hardware-based NFT wallets are the more secure and often more expensive type of wallets. Hardware-based NFT wallets are designed to be secured and isolated from the internet connection. This makes it impossible for hackers to exploit the wallet, even during security breaches. You can not easily access your Hardware-based NFT wallet and it has to be plugged into a computer to access your digital assets. We only recommend Hardware-based NFT wallets for more experienced investors who have a significant investment in the NFT market. For common folks, a Software-based NFT wallet is more easily accessible and will serve the same purpose.
There are plenty of NFT wallets in the market that you can give a try but in our own research, we found Metamak and Coinbase to have the best overall rating when it comes to Software-based NFT wallets. They are both easy to get started and considered completely safe in the community.
But if you are looking for a hardware-based solution, the Ledger Nano X series may provide you with the best value. However, this is just our recommendation and it is highly recommended to do your own research to find which NFT wallet is best for you.
We also recommend our article – NFT as a tool to prove the authenticity of physical products. Read and find out more about the NFT.