Let’s explore the concept of “Wallet” in the NFT space and the types of wallets available and find out which one better suits your needs.
First, what’s a wallet?
In simple words, a wallet is an app that allows users to securely store digital assets, including crypto and NFTs.
On the more technical end of things, wallets store private keys like passwords that keep assets safe and accessible to each user.
A key is essentially a string of random letters and numbers, and each public key (that is, the address of your wallet) can verify one private key. In turn, each private key can produce a message that only a given public key can verify. Everyone can know your public key, but that doesn’t give others any control over your wallet.
Types of wallets
There are two main types of wallets:
Custodial Wallet
A custodial wallet is a wallet in which the private keys are held by a third party, which has complete control over the user’s assets and makes sure they are safe. To make transactions, custodians ask users for their express permission.
Free Wallet, Binance, BitMex, Bitgo, and Blockchain.com are some famous examples of custodial wallets.
Non-custodial wallet
With a non-custodial wallet, the user holds the associated private key and has complete control of the assets. Users also get to decide on transaction fees (they can choose to pay a bit more to have the transaction processed faster). There’s no third party involved.
Electrum, Exodus, Nano X, Trezon One, Zengo, and Wasabi are only a few of the many non-custodial wallets available.
Is one better or safer than the other for NFTs?
Both custodial and non-custodial wallets have some benefits and drawbacks.
Non-custodial wallets give users complete control over their assets and allow them to choose the type of transaction fee. However, in the case of non-custodial wallets, users need to ensure they don’t lose or forget their private key. Also, non-custodial wallets are not very user-friendly, so they can be a bit intimidating for beginners and newbies.
Custodial wallets, in turn, are usually a lot more user-friendly and are super easy to set up, and users do not need to remember their private keys. But the biggest pitfall of custodial wallets is the lack of direct control over the assets. In fact, there’s a famous expression regarding this issue in the cryptosphere: “Not your keys, not your coins.”
In the end, it comes down to security versus convenience. If you want a more secure solution with greater control over your NFTs, you should go for a non-custodial wallet. But if you’re more concerned with ease of use, a custodial wallet might be better for you.
Either way, always make sure you do proper research and make an informed decision. The safety of your NFTs might depend on it!