A Hot Take on Crypto “Hot Wallets”
May 11, 2022
Read Time 3 MIN
First thing’s first: what exactly is a crypto wallet? For a full explanation, read this blog: What is a Crypto Wallet?
The short answer is that a crypto wallet acts as a method for proving ownership of cryptocurrencies on the blockchain, and includes tools that allow you to transact in the various digital asset marketplaces.
There are two types of crypto wallets: hot and cold. In short, a hot wallet is connected to the blockchain via the internet, whereas a cold wallet is a form of hardware that is completely disconnected from the internet. We’ll focus on hot wallets here.
Think of a hot crypto wallet as the one you use to make daily transactions. Perhaps you use it to transfer crypto to a friend or to buy artwork or other digital assets. Specific to assets on the Ethereum blockchain, I tend to stick with the following three “hot” crypto wallets:
- Trust Wallet
Why Use Trust Wallet?
All three wallets are extremely easy to set up. With Trust Wallet, I also like the overall interface and the ease of creating additional wallets within the app. The NFT portion of the wallet gives you a small display of NFTs owned, and also provides the option to connect with many decentralized applications (dApps) via Wallet Connect.
A dApp is an application built on a decentralized network (like Ethereum) and has the easy-to-use interface you would expect from any normal app you use on your phone or tablet. Since COVID began, we’ve grown accustomed to using QR codes for reading restaurant menus. But QR codes are also a way for your wallet to connect with dApps so that you can transact when needed. For example, to connect your Trust Wallet with Opensea.io, simply visit the wallet you wish to use, connect via Wallet Connect and your mobile device will transform into a “remote control” for signing and confirming transactions you make while browsing through the website.
Why Use Metamask?
Metamask offers many of the same features as Trust Wallet. The Metamask browser is one feature that is particularly handy. Sometimes you don’t have access to your home PC, and the Metamask app has a built-in browser that allows you to surf the internet, just as you would with any other browser interface. The browser also allows you to connect directly with the sites you’re visiting.
Additionally, for when you do have access to your personal computer, Metamask.io has a powerful Chrome Extension that makes it easy to connect with hardware devices or cold storage wallets such as Ledger Nano X.
Why Use Both Trust and Metamask?
For a few reasons:
- For certain transactions, one app may be more preferred than the other. For example, if you’re travelling with only your mobile device and wish to claim an NFT airdrop (i.e., a free NFT from a project you follow), Metamask may be preferred.
- Sometimes apps act up and the application fails. It’s helpful to have a back-up wallet ready to go if you are in a time crunch.
- Having two hot wallets with the same address (remember, “hot” = connected to the Internet) means you have a back-up for your 12-Seed words* (private key).
*Public service announcement: You should have your seed phrase backed up in a secure location and never take a photo of them with your mobile device.
Why Use Rainbow.me?
This is one of the better wallet apps to become familiar with. It has much of the same functionality as the above wallets, but also includes one really important and nifty feature: you can paste the public address of any wallet into the interface and see what that person owns, including recent transactions!
Remember, since Ethereum is built using distributed ledger technology (i.e., a database that is consensually shared and synchronized across multiple sites), all transactions on the Ethereum network are viewable, including owned assets and transactions of a particular address. In some cases, I use this app to simply follow other crypto enthusiasts to see what they buy and own without even needing to create or utilize the actual wallet feature.
This wallet has an iOS app and a general website at www.Rainbow.me. Feel free to give it a try.
Lastly, if you were lucky enough to receive an airdrop of the VanEck Community NFT, then simply paste your public wallet address into Rainbow.me to get a closer look at your NFT and its respective traits.
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Van Eck Associates Corporation
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