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> **Disclaimer: This is NOT Financial Advice (NFA)**
_These lessons serve as a guide for what to look for in web3, but they should not be considered a definitive solution. Please do your research and diligence before making any significant purchases or taking action._

#### What is a web3 wallet?
A web3 wallet, also known as a “digital wallet,” is your key to the world of web3.

It allows you to access dApps, DeFi, and store your digital assets like NFTs and cryptocurrencies. 

There are two types of web3 wallets: custodial and non-custodial. In the following lessons, we’ll be talking about non-custodial wallets.

But let’s quickly look at the differences between the two first.


What are web3 Wallets?

### Non-custodial vs custodial
When you buy cryptocurrencies on an exchange like Binance, Coinbase, or Robinhood, you have the option to leave your assets there, which basically means that they are under the exchange’s custody. 

If this sounds confusing, think of a custodial wallet like your bank account, since they look after your financial assets from being lost or stolen.  

The term “custodial” essentially means that companies own your private key and are responsible for safeguarding your funds. As long as you comply with their regulations, they will do their best to safeguard your assets.

Meanwhile, a non-custodial wallet is like a physical wallet that you carry around with you. You have complete control over it and decide which assets you store in it and when to use it. But this also means that if someone steals it or if you lose your wallet, there’s no one to help you. You’re the only one responsible for it.

In web3, we often talk about connecting wallets to sites and apps and warn you about scams and fake links. In this context, it’s important to note that we are referring to non-custodial wallets. 

While this might seem daunting, it's similar to deciding how much cash you want to carry around with you in your physical wallet. In web3, you can choose how much you'd like to add to your wallet, or even use an empty wallet to safely explore various cryptos or collections. 

You have the freedom to curate your wallet to suit your need, whether it’s a wallet with your valuable digital assets that you never connect to any site, a wallet with some crypto assets for browsing new collections, or a curated wallet with your favorite art pieces.

The choice is yours, and you have the power to keep your digital assets safely and wisely.  

### Hot and Cold: Wallets for Every Occasion 
There are different types of non-custodial wallets available, just like there are different types of physical wallet brands. 

Here are four examples:
- MetaMask
- Coinbase Wallet
- Trust Wallet
- Ledger

Some may be browser-based and come in the form of software that you can download on your laptop or phone, others are pieces of hardware. 

So let’s talk about the differences between hot vs. cold non-custodial wallets. 

Any wallet you connect to a website, dApp, or any internet-enabled connection is a hot wallet. On the other hand, cold wallets are those that have never had an active connection to any web3 site or dApp, either currently or in the past.

To make it clear, both browser-based or hardware wallets can be either cold or hot wallets. It ultimately depends on whether you connected your wallet to any sites.

The image below shows what a hot wallet might look like:

![image1.png](https://wow-studio-foundation-cms-staging-public.s3.amazonaws.com/image1_3f3c904096.png)

This wallet (MetaMask) is connected to various web3 websites and dApps, increasing its security risk. 

> **A Friendly Reminder: Hardware Wallets Do NOT Mean Cold Wallets**

As we mentioned earlier, there are two main types of non-custodial wallets: software and hardware wallets.

One major difference between them is the level of connectivity. Software wallets are typically accessed through your browser, and they are always connected to the internet. So you don’t exactly have the flexibility to “turn off” or disconnect the wallet.

Hardware wallets look like USBs, as shown in the image below. The wallet can only be accessed when you have connected the device to a computer and provides an extra layer of security. 

The hardware wallet pictured below is from a company called Ledger, and we recently teamed up with them to create our own WoW x Ledger collaboration!

![image2.jpg](https://wow-studio-foundation-cms-staging-public.s3.amazonaws.com/image2_7d98bf8870.jpg)

In general, hardware wallets are often considered the safest option because they are not connected to the internet. 

But this is not always true! 😲

It’s important to note that any wallet, including hardware wallets, can still be vulnerable to attacks if it is connected to a malicious website. 

You can do your best to ensure the security of your digital assets by keeping your cold wallet disconnected from any web3 dApp or site. Hardware wallets help with this by requiring the additional step of physically plugging it into a computer.

It’s also a good idea to use a burner wallet when browsing around new collections – one that doesn’t have your valuable assets!

#### Emotional Markets
That brings us to one of our last points before opening a wallet: the emotional validity of markets and managing your money. Like anywhere in the world, losing or gaining money can come with extreme fluctuations in lifestyle, emotions, and behavior. One minute when you’re doing well, things can feel great. But the minute you encounter a scam, a hack, or lose your assets, it can feel troublesome. 

Know that by being online, everyone is vulnerable to exploits and not everyone navigates web3 in the same way. It’s not always easy, but do your best to explore with caution.Avoid giveaways or fishy DMs when possible, and only put as much into your wallet as you feel comfortable with.

If your assets are ever tampered with, please contact the platforms where you encountered an issue and always report fishy behavior or links. 
 
It’s always better to be safe than sorry.


Types of Wallets

Your wallet will be like your own personal playground to experiment and jump around different collections already out there. Whether you’re into art, gaming, music, or socializing, there’s something from everyone in web3. 

So, are you ready to join the fun by setting up your own wallet?

Feel free to pick a non-custodial wallet of your choice, but to keep things simple, we will guide you in setting up a Metamask wallet, which is widely used by millions of users worldwide. 

In the process of setting up a wallet, you’ll walk away with two things: 
1. A login with a password
2. A Seed phrase – your private key 

Your seed phrase (i.e. a set of 12-24 words) is your most important secret in web3, so it’s super important to keep it safe and secure! 

Don’t lose it, show it to anyone, share it, or take a screenshot or photo. 

Grab a piece of paper and write it down twice, just to be safe! You can hide it away in a secret spot or keep it locked in a special place. 

Your wallet setup may vary or look different depending on your browser. 

With MetaMask, you’ll need to set up the app on your browser. MetaMask has a mobile application offering but we recommend you use it on a browser.

> ⚠️ When downloading MetaMask, always check the URL and ensure it is the right one. 

If you are using the Chrome browser: 
1. Visit https://metamask.io/
2. Hit "Download" in the menu bar.
3. Click “Install MetaMask for Chrome.” You will be directed to the Chrome Web Store.
4. Click “Add to Chrome.”
5. On the pop-up, click “Add extension.”

Once you have added the MetaMask extension to your browser, it will open automatically. To make it easy to access, feel free to pin it to your toolbar by clicking the jigsaw icon in the top-right of the screen and then clicking the pin icon. 

**Pro tip💡:** You can set up a new wallet offline to increase security. Try downloading the wallet app from the app store and then turning off your wifi before setting it up. You'll notice that the set-up process still works without an internet connection.  

Awesome! Now that your wallet is all set up, you're ready to explore the world of web3. Use your wallet to browse different collections and crypto, deposit funds, buy assets like NFTs, and send and receive money.

Lastly, [here’s an article](https://www.gemini.com/cryptopedia/send-and-receive-crypto-bitcoin-transfer#section-send-crypto-and-receive-crypto) that explains how to send and receive money through your web3 wallet.

Let's open a wallet together

We want to help you keep your wallet as safe as possible, so here are some tips to keep in mind:
- Be wary of airdrops sent to your wallet or through DMs. Scammers have been known to hack wallets through these tactics.
- Exercise extreme caution when opening links, even from people you trust. There's always a chance their account may have been compromised.
- Always read through your screen prompt or smart contract blurbs before signing or approving anything. A helpful reminder when you’re first connecting your wallet to a site is to make sure that the message does not involve a transaction fee. If you encounter an unexpected transaction fee, do not sign the transaction and check what site you’re on before proceeding any further.
- Use your own computer. Be wary of keyloggers and software that may be able to track you typing your seed phrase or other passwords.
- Sometimes, interacting with smart contracts can be costly, and you may have to pay “gas fees.” These fees can vary, so be sure to check the actual cost of an item before buying it.
- Be careful about trading assets if you’re using public WiFi. Public WiFi can be risky and make you more vulnerable to attacks as you don't know if anyone or anything is watching your online activity.
- If you’re suspicious of any fishy behavior, report it right away.  


How do I keep my wallet safe?

Here are a few videos that can help teach you about how to avoid scams in the web3 space: 
- Web3 Academy → [Link](https://www.youtube.com/watch?v=w-X4DerVr6I&ab_channel=Web3Academy)
- Mikaela Reyes → [Link](https://www.youtube.com/watch?v=4jci_NmRoMw&ab_channel=MikaelaReyes%28CryptoandWeb3%29)
- Nasdaq & Halborn → [Link](https://www.youtube.com/watch?v=Kc1BiNveiAA&ab_channel=Nasdaq)

Oh, and another quick reminder: if your NFTs or crypto assets are stolen, companies like WoW or others cannot compensate you. Unlike traditional banks, the decentralized nature of web3 means you are solely responsible for your funds and what you do with it. 

This increased level of responsibility is one of the key differences between web2 and web3, but with the right knowledge and caution, you can stay safe and protect your assets. 

Additional resources

wallet.svg

Wallets 

What makes up web3? 

<blockquote>
 Disclaimer: This is NOT Financial Advice (NFA)
 These lessons serve as a guide for what to look for in web3, but they should not be considered a definitive solution. Please do your research and diligence before making any significant purchases or taking action.
</blockquote>
<h4 id="whatisaaclassglossarytermdatatooltipidterm103web3awallet">What is a <a class="glossary-term" data-tooltip-id="term-103">web3</a> wallet?</h4>
A <a class="glossary-term" data-tooltip-id="term-103">web3</a> wallet, also known as a “digital wallet,” is your key to the world of web3.
It allows you to access dApps, DeFi, and store your digital assets like NFTs and cryptocurrencies. 
There are two types of <a class="glossary-term" data-tooltip-id="term-103">web3</a> wallets: <a class="glossary-term" data-tooltip-id="term-120">custodial</a> and non-custodial. In the following lessons, we’ll be talking about <a class="glossary-term" data-tooltip-id="term-111">non-custodial</a> wallets.
But let’s quickly look at the differences between the two first.

> **Disclaimer: This is NOT Financial Advice (NFA)**
_These lessons serve as a guide for what to look for in web3, but they should not be considered a defini...

What are web3 Wallets?

What is a web3 wallet?

Thank you for the feedback! 💜

Crypto

Smart Contracts

NFTs

What are web3 Wallets?

What is a web3 wallet?

Thank you for the feedback! 💜

More related chapters

Crypto

Smart Contracts

NFTs