How To Safely Store Your NFTs and Cryptocurrency
As the momentum surrounding Non-Fungible Tokens (NFTs), cryptocurrency, and blockchain technology grows, so does the number of new artists, creatives, and collectors who are adopting the technology into their lives.
Unfortunately, many new users are unaware of how to safely store their digital assets.
People new to NFTs and cryptocurrency should be aware of a few factors that can help to ensure their assets are safe, and ensure they do not lose their funds.
What is a wallet?
Digital assets like Bitcoin, Ethereum, and NFTs are stored in wallets, which contain your private keys, the address that actually stores your digital currency.
Private keys are essential to securing your assets and should never be shared with anyone. Public keys are created to be shared with the public, it’s important to understand the difference between these two types of keys and make sure you are only sharing public keys.
Wallets are places to store your private keys safely. However, some wallets are safer than others.
At the beginning of cryptocurrency, ‘full wallets’ like bitcoin-core were the only wallets available.
This type of wallet requires that you download the entire blockchain in order for them to function properly. At the time of writing this article the entire bitcoin blockchain is 360GB, so downloading all of that is not exactly user-friendly.
Luckily most digital currencies offer what is called a ‘Lite Client,’ which means it is a wallet with full functionality without the burden of downloading the entire blockchain.
There are also many second-party wallets available that allow you to store multiple currencies in one wallet. The issue here is that the developers of the wallet decide which currencies they will support, meaning you may need many wallets if you have a diverse portfolio.
Although these wallets are convenient, it is important to remember that because they are on your desktop, which is connected to the internet they are open to attack.
There are many ways in which a hacker could theoretically access your password, and get access to your funds. In short, they are not 100% safe.
Mobile wallets are essentially mobile versions of the desktop wallet, with the same conveniences and drawbacks.
It is recommended that mobile wallets be treated like a wallet you would hold your cash in. You may put some pocket money into your wallet, but you wouldn’t carry your life savings around in your back pocket.
Online wallets allow you to access your digital assets conveniently in your browser. Wallets like Metamask, are one of the most popular wallets available.
Browser-based wallets are a very simple way to control your funds and give you a lot of flexibility because you can access your funds from any web-enabled computer.
Additionally, many browser-based wallets allow you to store your private keys on your computer which gives you a better level of security.
Similar to mobile wallets, it is important to be aware that the convenience is great, but there is not as much security.
In order to truly secure your cryptocurrency, it is recommended that you get a hardware wallet, a device that stores your private keys inside it. They can be removed from your computer and stored somewhere safe.
Storing your keys in a hardware wallet is considered storing them ‘offline.’ This creates another layer of security that is overall safer than storing the keys online, in your desktop, browser, or mobile phone.
This added level of security comes at a cost, there is a fee for a hardware wallet. However, if you are seriously getting into NFTs and cryptocurrency, this is a worthwhile investment because, unlike traditional banks, if your funds get stolen, there is no one to complain to and get your money back.
Many browser-based wallets like Metamask easily integrate with your hardware wallet, which allows you both flexibility and security.
Last but not least is the paper wallet. There are several sites and programs that will generate a new private and public address for your funds, as well as a QR code, which you can then print onto paper and store somewhere safe.
Paper wallets are safe from hackers because your funds and private keys are not stored anywhere digitally.
The problem with paper wallets is that a piece of paper can be easily destroyed or lost.
What wallet is best for you?
We at Musee Dezentral thought it was important to address some issues surrounding safe practices for storing your digital assets, but this is by no means a comprehensive guide.
Deciding which wallet you choose is up to you, we suggest you do your own research. Just remember that each wallet type has different levels of security and flexibility, with hardware wallets and paper wallets being the safest.