One of the first steps you take into the world of non-fungible token trading is creating a crypto wallet. So, this makes learning how to set up a crypto wallet absolutely crucial!
A crypto wallet is – as the name suggests – literally a crypto wallet to carry your cryptocurrency and other digital assets! Of course, this includes your NFTs too! You can think of them as online bank accounts, but without the middle man. You are in direct control of all your transaction in and out of your wallet at all times. All you gotta do is set it up!
So, this is what we’re here to do. In this guide, you will learn how to set up a crypto wallet, how they work, and which to use. We’re going to provide you with a comprehensive yet straightforward guide to kickstart your crypto journey.
HOW TO SET UP A CRYPTO WALLET
Before we dive right into how to set up a crypto wallet, there are a few basics you need to know. In other words, there are a few factors that you should consider before choosing a wallet. This includes:
– What type of wallet do you want to use?
– The type of cryptocurrency and digital assets you want to store on this wallet
– On what platforms do you want to connect this wallet?
– Which blockchain do these platforms operate on and does your wallet support that?
– Is there a mobile app version?
– What about security?
– Do you plan on buying NFTs or is this just for cryptocurrency exchange?
Lots of questions and factors that go into choosing a wallet before you learn how to set up a crypto wallet. For this particular case, we’re going to assume that you’re setting up the wallet for the purpose of NFT investment. But, once you’ve got all your answers, the entire process becomes a whole lot smoother.
Custodial vs. Non-Custodial Wallets
Also, a great part of learning how to set up a crypto wallet is choosing a custodial or non-custodial wallet. The main difference between these two types of wallets is the person holding your private keys for you.
Custodial Crypto Wallet:
With a custodial crypto wallet – aka hosted wallets – someone else manages your private keys and your crypto assets. In other words, you set up a crypto wallet with cryptocurrency exchange platforms (like Binance). They set up the wallet on your behalf – kinda like an actual bank.
Pros: with a custodial wallet, your private keys are always protected from loss because of the recovery or seed phrase. They also offer two-factor authentication (2FA) for more security!
Cons: You are not completely in charge of your wallet and you need to prove your identity
Non-Custodial Crypto Wallet:
A non-custodial crypto wallet is a wallet that you are completely in charge of. It is not hosted on any particular crypto exchange platform. Also, it does not require that you provide any form of identification.
Pros: You are completely in charge of your transactions and do not need to provide identification
Cons: If you lose access to your wallet, no one can help you recover that account. You also can not use fiat currencies for transactions with custodial wallets.
Non-Custodial Crypto Wallet
Custodial Crypto Wallet
You are completely in charge of your cryptocurrency
The cryptocurrency exchange platform controls our funds
No KYC during onboarding
KYC during onboarding and off-ramping
Lost private key means lost funds
Lost private keys can still be recovered
|You pay all network fees||
A percentage of fees is covered
How to Set Up a Crypto Wallet?
And now, on to the most important section: how to set up a crypto wallet? At this point, you’ve probably made all the decisions to make, and you’re ready to get into action. So, here’s how to set up a crypto wallet in a few easy steps:
– Find the platform that you trust (for custodial wallets) OR download the app/browser extension (for non-custodial wallets)
– Set up your account by providing your email address, ID, and creating a password (custodial wallet). OR, create an account, and get your private key (non-custodial wallet)
– Start adding cryptocurrency to your wallet by buying cryptocurrencies using fiat currency (custodial wallet). OR, (for non-custodial wallets) send coins and tokens from another wallet – including a custodial one – to your non-custodial one.
Best Wallets for Beginners
Finally, now that you know how to set up a crypto wallet, you have to choose one to get started. There are countless great crypto wallets out there. But, if you’re just starting out, you need to start with reliable and user-friendly wallets. So, here’s a list of the best and beginner-friendly crypto wallets out there:
– Trust Wallet
– Coinbase Wallet
– Ledger Nano X