NFTs, or Non-Fungible Tokens as commonly known, are pieces of information that represent ownership over something unique and verifiable in a decentralized way. Many people are excited about this because NFTs don’t require a centralized issuer to guarantee the validity of ownership. In other words, they’re like scarce digital baseball cards. Start your NFT journey by trading at the most recommended trading platform like NFT Profit.
Fungible means that something is relatively interchangeable with others of the same type. Other types of tokens are not fungible, such as unique works of art like a Picasso painting, where no one else in the world has the same one as you do in their possession. Unlike most cryptocurrencies, which are fungible, these tokens technically represent ownership over unique digital assets that are specific to an individual or entity.
These tokens are therefore used to represent items of real-world value, such as ownership of rare digital collectables like video game characters or real estate. The ERC-721 token standard (the technical standard used for NFTs) was introduced in 2017 by a creator to enable developers to design and deploy their custom ERC-721 tokens. Although NFTs wallets are currently the hottest topic on the internet, many people are unaware of the technicality and mechanism of non-fungible tokens. So, let’s discuss what NFT wallets are and here listed is a detailed comparison of different types of NFT wallets.
What are NFTs?
Unlike other cryptocurrencies, which are directly tied to the value of their native tokens, NFTs are not tied to any specific token. Instead, to own something that an NFT represents, you must purchase the right to use that digital asset on the blockchain.
The market price consumers determine the value of an NFT are willing to pay. The most accurate way to estimate a possible market price is by aggregating all publicly known information about the asset and its associated utility into one comprehensive figure, such as its total supply or circulating supply.
What are NFT wallets?
Even though NFTs can be used for all digital assets, they are not as widely accepted or simple to acquire as other digital tokens. To keep NFTs in your wallet, you must store the private keys associated with that specific token. If a token is listed on an exchange, then the exchange acts as the sole owner of those tokens and manages any process required for you to withdraw them to your private wallet.
The most convenient way of storing your NFTs is by using a “wallet” that supports ERC-721 tokens. A good example is the Metamask wallet, which allows users to send and receive their NFTs from their mobile device or desktop.
What is Metamask?
Metamask is a Chrome browser plugin that enables users to access their Ethereum accounts from the internet. Metamask was launched in 2015 and has become one of the most popular offerings among Ethereum users. The Metamask Wallet allows you to manage your Ethereum accounts and NFTs. The Ethereum team first implemented the ERC-721 protocol via the CryptoKitties project. Therefore, to use wallets that support ERC-721 tokens, you need to install an Ethereum client like Metamask capable of connecting to these new wallets.
What are the different types of NFT wallets?
Hot and cold storage are two types of wallets that usually allow people to store their digital assets. Hot storage refers to wallets allowing users to trade digital assets with sheer accessibility and convenience. On the other hand, cold storage refers to wallets that are not connected to the internet and must have their private keys exported before people can use them.
One cold storage wallet is the hardware wallet, a physical device that accesses your funds. The crypto assets held within hardware wallets cannot be stolen if you lose them or if it gets stolen, as these hardware devices store your private keys offline.
Since these digital assets are generally easier to trade than everyday currency, it makes sense that storing them within a hot wallet is considerably accessible. As a result, different types of wallets that enable people to hold or use their NFTs in various ways, from mobile apps to full-blown desktop wallets, are in the market.
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