Crypto Wallets
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Crypto Wallets

Your New Personal Bank Account

A crypto wallet is like a bank account on steroids.

Think about it, any financial service you use, (PayPal, Credit Card, Stripe...) needs to be linked to a bank account. Not just for funding, but for verification.

In crypto, your wallet is what connects you to the DeFi applications that are out.

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Your wallet acts as your log-in for crypto apps. Just like when a website asks you "Would you like to log-in with Facebook / Google"?

Browser wallets, like MetaMask, are popular because they are browser extensions you download, and can be used right on your web browser. Speeds things up!

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An ethereum wallet can only receive and send Ethereum + Ethereum based tokens.

DO NOT SEND BITCOIN OR NON ETHEREUM TOKENS TO METAMASK

Why Ethereum? Ethereum is the home for DeFi apps, so Bitcoin is not compatible within these applications unless its in the form of an ethereum token (Wrapped Bitcoin)

Some Wallet Buzzwords:

  • Cold Storage = an offline wallet, not connected to internet (Ledger)
  • Hot Storage = online wallet, such as MetaMask.
  • Hardware wallet = physical crypto wallet device, like a ledger nano.
  • Ethereum Wallet = Any wallet that is compatible for Ethereum tokens only.
  • Browser Wallet = A wallet in the form of a browser extension. (i.e MetaMask)
  • KYC = Real world verification required to use.
  • Custodial = The wallet providers holds your secret key. (if they get hacked, so do you)
  • Non-Custodial = Your wallet is as safe as you not losing your password / seedphrase.

Your crypto wallet, lets you:

  • Store $$$, Send $$$, Receive $$$
  • Take out instant, permissionless loans (if you have collateral)
  • Deposit crypto currencies into apps that give great interest (Permissionless Savings Account)
  • Buy / Sell / store NFT art on marketplaces.
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Most Popular DeFi Wallets

Wallets:

Physical / Hardware Wallet?

  • There are USB looking physical devices that are made for storing your crypto offline.
  • You can still interact with apps using hardware wallet, by plugging it into your computer while using the app.
  • You are responsible for not loosing your seed phrase / password. Be careful.
  • Yes, they are deemed "more secure" because an offline device can't be hacked.
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⚠️

An ethereum wallet can only receive and send Ethereum + Ethereum based tokens.

DO NOT SEND BITCOIN OR NON ETHEREUM TOKENS TO ETHEREUM WALLETS

Why Ethereum? Ethereum is the home for DeFi apps. Notice how an Android app cannot be moved over to the Apple App store unless it is first configured for Android. For this reason, Bitcoin is not compatible within these applications unless its in the form of an ethereum token (Wrapped Bitcoin).

Takeaways:

  • Most of DeFi is built on Ethereum.
  • If an app is built on Ethereum = only Ethereum tokens are compatible.
  • An Ethereum wallet is not compatible with non Ethereum tokens (like Bitcoin)
  • Cold storage can be more secure, but if you lose your physical device, you lose your crypto.
  • Browser wallets like MetaMask are great for quickly and securely interacting with DeFi apps.

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