This is the sixth installment in an ongoing series breaking down innovations in Web3 for creators and why it matters to writers, course creators, coaches, consultants, and anyone looking to create value on the internet.
Today, I'd like to discuss a topic that you often comes up in association with Bitcoin, Web3, or the blockchain: What crypto wallet should I use?
This is usually one of the first questions a creator will ask themselves when getting started with exploring the brave new world of Web3.
My goal is that hopefully once you've read this article, you'll have a high-level understanding of the various types of crypto wallets (enough to sound reasonably intelligent to your peers). You'll also have a few suggestions of steps you can take to get some direct experience working with crypto wallets quickly and safely.
This will support your ability to begin thinking creatively about how cryptocurrency factors in to the future of your online business, and community building.
So without further adieu ...
What is a crypto wallet?
It's best if you simply think of a crypto wallet as analogous to the wallet you are probably used to carrying around in your pocket. It's simply a place where you store your various cryptocurrencies, and can connect to various Web3 platforms to make transactions. Your crypto wallet allows you to buy, sell, and trade using cryptocurrencies such as Bitcoin, or Ethereum.
Custodial vs noncustodial?
When choosing your first crypto wallet, the first decision you'll need to make is whether to use a custodial or non-custodial wallet. What does this even mean?
Your First Custodial Wallet: Coinbase
A custodial wallet means that someone else is holding your "private keys" for you. The best way of thinking about this is to imagine that they are responsible for managing your account number, routing number, debit card number, and ATM pin (all the important passcodes/phrases that allow you to access your funds). They are also responsible for keeping your funds safe, and to ensure that you don't lose access to them.
By far the most common custodial wallet today is Coinbase. If you are just getting started with cryptocurrency, this would be my recommendation to set this up first.
It is one of the easiest ways to get started buying cryptocurrency, and it comes with the least amount of risk of accidentally making a costly mistake. Coinbase offers both a web and mobile app, and is offers quite a user friendly experience.
Learning-Based Action: Set up your Coinbase account and purchase your first cryptocurrency. Bitcoin and Ethereum are the most well known, however you can do your own research on what you might like to add to your portfolio.
Your First Non-Custodial Wallet: Metamask
Non-custodial wallets, on the other hand, are more decentralized. They do not require any third party to provide security for your holdings. Instead, they rely on cryptography to ensure that only you can access your assets.
The main benefit of a non-custodial wallet is that you own your private keys. That means you control your coins and tokens. There are no third parties, or middlemen involved who could steal from you. However, because these wallets operate outside of traditional banking systems, they may be less familiar to users.
The second benefit of a non-custodial wallet is that these often serve as your Web3 identity, and connect directly to all the new, innovative platforms that are emerging, whereas Coinbase will not.
If you've already dabbled with Coinbase, and are ready to start branching out a bit, Metamask is currently one of the most popular non-custodial wallets, and the one I'd recommend setting up first. Metamask is easy to install, and has an intuitive interface.
I’ve found the easiest way to get started is by installing their chrome extension.
Here’s a brief introduction video to help you get started:
Learning-Based Action: Setup Metamask, and practice sending some funds from Coinbase to your non-custodial wallet. Once you've got that down, consider connecting Metamask to OpenSea and purchasing your first NFT!
What About Hardware Wallets?
Hardware wallets are another option for storing your digital currency. These come in many different forms, but essentially work by securing your private key offline. This prevents hackers from stealing your cryptocurrency while still allowing you to easily spend it online.
Hardware wallets are a more expensive option, and usually only worth considering if you plan on spending a lot of time trading, or storing large amounts of Cryptocurrency as part of an investment strategy. If you are an investor, you can take your coins offline and put them in a "cold wallet" to make them more secure. That way, you are only leaving funds you need to make transactions with online.
Your First Hardware Wallet: Ledger Nano X
The Ledger Nano X is probably the most well known hardware wallet, and is definitely one of the cheapest. It's small, lightweight, and easy to use. It works great for beginners, and even though it costs around $150, it's still considered a premium product.
For a detailed guide on how to set up the Ledger Nano X, check out this video:
In closing, these are three types of crypto wallets you may want to consider if you are starting to explore the exciting world of Web3.
Coinbase and Metamask are the easiest, and best documented paths for getting started. Unless you are planning to store large amounts of crypto for investment purposes, this may be as far as you need to go. As you begin to explore more emerging platforms, you may wish to branch out into using other wallets that over you more flexibility and versatility around where you transact.
Interested in continuing to learn more about Web3 and Crypto topics that relate to running an online business as a coach, consultant, or course creator?
check out these additional links:
Looking to explore this exciting world of blockchain and Web3 in a deeper way, but not quite sure where to start?
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The Invisible College is a school owned by the students where you can learn, build, and create in this exciting new world of Web3.
Joining this organization has been the best decision I've made this year so far for my growth and learning, and I'm excited to see how the organization evolves.
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