October 1, 2022 | Updated on March 5, 2023
You may have heard of cryptocurrency wallets but perhaps have not come across one in real life. Then you learn that they are actually browser extensions. This seems to make sense. Until you hear about hardware wallets, seed phrases, public addresses, private keys, and all of the other web3 jargon that comes along with it.
All this can feel quite overwhelming for someone who is just trying to find a way to collect NFTs.
But have no fear! This guide will take you through how to set up a cryptocurrency wallet step-by-step so that you may have greater confidence entering into the world of digital art collecting.
What is a cryptocurrency wallet?
A cryptocurrency wallet is a software program that enables blockchain transactions and allows you to store, send, and receive digital currencies. Just as you need an e-wallet like PayPal to store and send US Dollars (fiat money), you need a crypto wallet to store and send cryptocurrencies and NFTs. Because most NFT platforms require users to connect their wallets on their websites, it is necessary to set one up in order to begin purchasing NFTs.
There are many types of crypto wallets and each has various pros and cons. Because there are so many out there, we have chosen to explain the two most popular and user-friendly wallets to help get you started: MetaMask and Coinbase Wallet.
What is a wallet address?
A wallet address (also called a “public key” or “public address”) is like your bank account number or email address. It's a string of characters (usually starting with "0x") that represents where your NFTs and cryptocurrencies are stored.
Your wallet address is what you use to purchase, trade, and engage with blockchain (decentralized) platforms. In order to collect your first NFT, you need to provide the platform of your choice with your wallet address first by connecting your wallet to its website. Think of it like a bank routing number: a unique identifier that allows other accounts to send your account money, but doesn’t give them access to your account directly.
What is a private key?
A private key is like the password to your bank account. It's a long string of characters that grants you access to your wallet, your cryptocurrency, and your NFTs.
Just as you would never give out your password to your banking account or the pin number to your checking account, you should never share your private key. In fact, it's best to keep your private key in a safe place like an encrypted file, or written on a piece of paper and stored in a very safe place.
What is a seed phrase?
A seed phrase (sometimes also called a 'mnemonic phrase' or 'recovery phrase') is a set of 12-24 words that you can use to restore your crypto wallet.
If you lose your phone or computer, or if your wallet becomes compromised, you can use your seed phrase to restore your wallet and access your cryptocurrency on another device.
For this reason, it's very important to keep your seed phrase in a safe place, like an encrypted file, or even write it on a piece of paper and store it in a safety deposit box.
Note that the seed phrase is merely a more password-friendly version of your private key. When the 12 or 24 words are entered in the exact order, your private key is deciphered and access is granted to your funds.
Setting up your first cryptocurrency wallet
Now that you understand the basics of crypto wallets, it's time to set up your first wallet.
We'll be using MetaMask and Coinbase Wallet as examples for this guide. Both wallets are non-custodial. This means that there is no centralized entity holding or controlling your assets. You are the sole owner of your assets and are completely responsible for what happens to them.
How to set up a MetaMask wallet
MetaMask is a browser extension that can be used on Google Chrome, Mozilla Firefox, Opera, and Brave.
- Go to https://metamask.io/ and click 'Download'.
- The website will automatically detect your browser. Just click “Install MetaMask”.
- Click “Add Extension”, and MetaMask will be added to your browser.
- Once MetaMask is installed, click the MetaMask icon in your browser.
- Accept the terms and enter a strong password. This will be used to encrypt your MetaMask account on-device. Note: this is not your private key or seed phase.
- Write down your seed phrase in a safe place, and click “I've copied it somewhere safe”, or download it as an encrypted file.
- Congratulations! You've created a new MetaMask wallet.
How to set up Coinbase Wallet
Coinbase Wallet is a mobile app that can be used on iOS and Android.
- Go to https://coinbase.com/wallet/ and download the Coinbase Wallet app.
- Open the app and tap “Create new wallet”.
- Next, enter a username. This will allow other Coinbase Wallet users to send assets to you without the hassle of exchanging a long public address. You can choose to make this public or remain private.
- Tap “Back up manually” and write down your seed phrase in a safe place, or click on "Back up to the cloud".
- Next, create a passcode to access the wallet on your device.
- Congratulations! You've created a new Coinbase Wallet.
Funding your wallet with crypto
Once you've set up your wallet, the next step is to fund it with cryptocurrency. If you have not purchased any cryptocurrency yet, you can purchase some with fiat currency (e.g., USD, EUR, GBP) using an on-ramp solution like MoonPay. You will need to verify your identity before using MoonPay’s services.
With MoonPay, you can fund your crypto wallets, like MetaMask or Coinbase Wallet, with ETH in four simple steps:
- Enter the amount of ETH that you wish to purchase (or enter the amount of fiat currency that you’d prefer to spend in exchange of ETH).
- Enter your wallet address (double-check to ensure there are no errors).
- Verify your email address and basic information.
- Confirm and execute your ETH purchase.
MoonPay allows you to purchase crypto using your preferred payment method, including Visa, Mastercard, Google Pay, and bank transfer in more than 145 countries.
When your crypto wallet is fully funded, you are all set to purchase any NFTs that you wish to collect!
In this guide, we've covered the basics of cryptocurrency wallets, how to set up MetaMask and Coinbase Wallet, and how to fund your wallet with crypto.
Now that you have a better understanding of how wallets work, you're ready to start using them to buy, store, and manage your cryptocurrency and NFTs.
If you’re new to the world of NFTs and need help navigating this ever-changing space, below is a list of useful resources:
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