Week 29 — “You Get A Wallet!” “You Get Another Wallet!” “Everybody Gets A Wallet!”
Last week I wrote about the innovation roadmap that the internet has gone through. Transitioning from a read-only Web 1 to a more social Web 2.0 and finally to ushering in the decentralised evolution of the internet with the Web 3.0 era.
This week I’ll be sharing about the most essential tool that everyone needs in order to access DApps (Decentralised Apps) in the Web3.0 ecosphere.
Web3 apps are not accessible by regular web browsers. Well, in the technical sense, you can enter Web3 sites with just a regular browser, but you can’t really interact with it much, you merely can read and find out more information about the app itself.
The main gateway into accessing such apps come your digital “wallet”.
What is a Wallet?
In the traditional sense, a phyiscal wallet is meant for you to hold all sorts of documents inside it. Your drivers license, your money and other personal information.
A blockchain wallet is similar in that sense, it is a piece of software that stores both your private key and public key. The private key in a wallet is analogous to a special passcode that you place on your phone. Only you know the passcode and it cannot be lost. If you lose the passcode of your phone, there are some ways to retrieve your passcode if that information is stored on a server. But if you do lose your special private key of your wallet, you lose everything in the wallet, there is no way to retrieve it.
The public key on the other hand is a public string of numbers that is displayed when you access any Web3 applications or if you want to send money and documents to a friend. The public key acts an identifier of sorts just like a national ID.
It uses cryptographic processes in order to synchronise the public and private key. Most digital signing platforms use this as part of their signing process as well. I won’t go in-depth into the nuts and bolts behind the technology, all I’m going to say is that you should never let anyone have access to your private key.
How do I set-up my Hosted Wallet?
There are many different types of wallets, but the two main types of wallets that I’ll be touching on are the user-controlled wallets and the hosted wallets.
User-controlled wallets are those that are handled by you as the user. You control the flow of your tokens in and out of the wallet. I will show you how do set up an easy user-controlled wallet how to start using it
Hosted wallets on the other hand are controlled by custodians, these custodians are usually the online exchanges themselves like Binance.
Hosted wallets are incredibly easy to access. These are like your central bank accounts, they are the gateway between your fiat currency (USD,SGD,GBP) and whatever token that you choose to hold. These tokens are crucial to accessing and interacting with Web3 applications.
So far the easiest and most intuitive hosted wallet to set up and use would be Binance Global (you can use my referral link so we both get 10% off for every trade made).
Simply click the link, sign up for an account and make sure you verify your identity in order to be able to increase your trade limit.
Why Binance Global? Well, a couple of reasons.
- The transactional fees that you pay are much lower than most exchanges.
- They boast a daily average transactional volume of $3.88 billion dollars so you can trust that they won’t run out of business anytime soon.
- It is the best access point to the Binance Smart Chain (BSC), which is their own blockchain built on top Ethereum
- You can do a bunch of cowboy crypto stuff because they are regulated in Malta which has super laxed regulation. (That requires a separate article on go into greater detail)
- Security … Well, they’ve held up well so far as a centralised solution.
If you’re feeling particularly risk averse, this is the best wallet for you.
How do I set-up my User-Controlled Wallet?
This is where things get juicier and riskier as well!
In Hosted Wallets, your private keys are handled by the custodian entirely, which presents both boon and bane.
As for User-Controlled Wallets, you have total autonomy over your wallet. That means you have to make sure you keep your private key 100% safe. You can’t just throw it around frivolously, ANYONE with your private key can access your wallet. That means that a nefarious character can do a clean sweep of your wallet and to take out all the tokens in it.
I want you to understand the gravity of this responsibility. If you do not know how to back up your wallet or keep it safe, you may lose all your money AND documents in the wallet (more on that later).
So, for the sake of simplicity I’ll teach you how to set up 2 of the most used wallets: Trust Wallet and Metamask. They are by far the easiest to set up and control.
Trust Wallet is best used on smartphone devices, so please make sure you have the right device with you on hand now.
Step #1 — Download Trust Wallet ONLY on reputable sites. It seems pretty obvious, but this whole crypto space is filled with scams and phishing sites. You have to be discerning and make sure you do your own due diligence.
Step #2 — Launch the app and create a new wallet
Step #3 — Accept the terms of service. By accepting the terms of service, you will have deemed to acknowledge that if you give your recovery phrases (also known as your private key) to a random person or lose it, Trust Wallet is not liable for the harm that may come upon you.
Step #4 — Save the 12 mnemonic phrases somewhere secure, be it on paper or in a password manager. If you lose it, your wallet is gone. If you share the phrases with anyone, they WILL have access to your wallet. DO NOT LOSE THIS OR GIVE IT AWAY.
Step #5 — Verify your recovery phrases and you’re good to go!
Step #6 — Go to settings > security to set up your security layers (biometric and passcode). This is extremely important to ensure that no unauthorised individual accesses your wallet.
Step #6 (iOS users do not have this function) — In order to unlock the DApp browser function (essential for next week’s article)
a) Open Safari Browser and then type in the URL: trust://browser_enable, then tap on Go.
b) Make sure that there is no open tabs on your Safari browser when you type the URL in order to see this screen. A prompt will appear that will ask if you want to Open this page in “Trust”?, tap on Open.
c) Trust wallet will open and you’ll have the browser function available to you!
Metamask is an alternative to Trust Wallet, there is however, more flexibility within the Metamask app compared to Trust Wallet. Metamask is alot less user-friendly compared to Trust Wallet so bear in mind that if you’re new to this, it may be quite overwhelming.
In my opinion, Metamask is best used on Chrome. I’ve downloaded the android app version and frankly, it’s hard to introduce new networks via the android app.
Step #1 — Go to https://metamask.io/download.html and download the Metamask wallet on Chrome.
Step #2 — Click on the Metamask (Fox icon) icon where your extensions are.
Step #3 — Read and agree to the terms and conditions.
Step #4 — Enter your password (so that no random person can transact on your browser) and create your wallet.
Step #5 — You will now see your 12 word mnemonic phrase, please save it somewhere safe
Now you have access to your Metamask wallet! Get into it and start to play around with it, learn how to add new networks into the wallet so that you can look at what other blockchain protocols are doing.
Whether you choose to use hosted wallets or user-controlled wallets, the most important thing you have to be aware about is security. Make sure whenever you’re transacting any tokens that you are not distracted and that you’re completely focused.
At the time of this writing, my friend fell victim to a phishing scam where they requested him to share with the website his 12 word mnemonic phrase. They wiped out all the coins in his wallet. No legitimate crypto website will ever request that, no legitimate person will ever request that. Do not give that information away
Only visit authorised sites and be cognizant about what’s going on in the community by being a part of the community groups.
Next week, we’ll talk more about DApps and what are some of the interesting ones that you can try out! I’ll also teach you how to transfer tokens into your wallet from an exchange.