What is an Ethereum Wallet

What is an Ethereum Wallet

If you want to hop on the latest crypto trends like NFTs and DeFi, you need a non-custodial Ethereum wallet. Find out what that means and how to get one.

By Katya Michaels

4 min read

The days of complete crypto obscurity seem to be behind us. If you’re curious about crypto, it’s pretty easy to get exposure through familiar apps like Venmo, Robinhood, or any of the big crypto exchanges. This is great for promoting widespread crypto adoption, but many people don’t realize that when you buy crypto on these platforms, they are the ones holding it for you, they establish the rules of how you can use it, and they decide if you can take your crypto elsewhere.

These familiar platforms are convenient, especially for beginners, but if you’re only using these kinds of custodial solutions, you are missing out on the most valuable aspects of cryptocurrency. To jump on the latest and best trends in crypto (umm, NFTs!) you need a non-custodial, client-side, decentralized Ethereum wallet like MEW. What makes an Ethereum wallet different from a basic crypto wallet? So many things:

Token wallet

Ethereum tokens, also referred to as ERC20 tokens, are based on smart contracts and are the building blocks of everything cool in crypto – both the hype stuff and the genuinely useful stuff.

Any project can issue tokens on the Ethereum blockchain and offer them to the community as a form of reward or investment. Getting in early on these projects can be fun, but big exchanges like Coinbase or Binance are not going to support every new token, or if they do, by then the best opportunities offered by the project are gone. That’s where an Ethereum wallet comes in: you can receive and hold any ERC20 token, securely and conveniently, until you decide to sell it or it becomes tradeable on major exchanges.

Ethereum tokens are not the limit. Mainstream media and centralized crypto platforms just now caught up to the immense potential of Ethereum, barely scratching the surface of what’s possible on the network. Meanwhile, Ethereum is already on to the next thing with sidechains – blockchains that are compatible with Ethereum assets and are taking some pressure off Ethereum’s very busy mainnet. Recently, MEW introduced support for two of these chains – Binance Smart Chain and Polygon. New projects release tokens on these networks to take advantage of higher speeds and lower fees, so it’s a great way to make the most of your crypto, but you can only get access to these chains on a non-custodial wallet like MEW.

NFT wallet

First of all, what’s an NFT? Well, you can read all about it here – go ahead and do it now, we’ll wait.

Obviously, NFTs are pretty awesome, but you can't keep an NFT on a big exchange like Coinbase or Binance, and even if you could – would you want to trust them with a precious, unique collectible? A good Ethereum wallet will show all your NFT collection at a glance, let you send it directly to any other address, and support connection to many of the DApp marketplaces where you can sell NFTs. And since client-side Ethereum wallets will support any NFTs that fit the most widely used non-fungible token standard (called ERC771), you can even mint your own tokens and hold them safely in your own wallet.

A special kind of NFT is a blockchain domain, which is a .crypto or .eth address that you can easily say and remember – much like a .com , but on Ethereum. You can get your own blockchain domain and place some content on a corresponding site,which can be navigated by most modern browsers or with a special extension. Not only can others send you crypto right to your domain address (instead of dealing with long strings of letters and numbers), but no one can censor or ‘take down’ your site, because it lives on the decentralized Ethereum network. You can’t buy or hold a blockchain domain on a crypto exchange or on PayPal… Spoiler alert: You need an Ethereum wallet for that.

DeFi wallet

Decentralized finance (DeFi) tools are the hottest thing in crypto right now. Ethereum has the most active developer community of any blockchain, so new DeFi projects are launched constantly, offering great yield opportunities. They won’t be available in your centralized exchange account, but almost all DeFi platforms and decentralized exchanges (DEXs) will work with client-side Ethereum wallets.

It seems there is no limit to what you can do on DeFi these days: make deposits and receive interest, provide liquidity to exchanges and earn yields, stake ETH and other tokens, take out loans, be paid for playing games and participating in communities… The list goes on. And guess what? On all of these platforms, you will be rewarded in tokens and/or NFTs, many of which can’t be held on an exchange or a multi-coin wallet – only on an Ethereum wallet.

Your keys, your crypto, your identity

An Ethereum wallet is more than just a place to hold your coins, or for checking the price 10 times a day. It gives you the freedom to participate, benefit from, and/or make a contribution to a multitude of projects in the Ethereum ecosystem. It serves as your proof of identity on the blockchain, allowing you to connect to all the DApps you want to use on Ethereum – but because it’s non-custodial, you never have to share your email, address, social security number, or even your name. It can help you establish an immutable, uncensorable presence on the new web and control your content, as well as its monetization, with blockchain domains.

Most importantly, an Ethereum wallet gives you the keys and puts you in full control of your coins. No one can freeze or suspend your account. Your crypto is not exposed to the scrutiny of regulators. If the platform where you created your wallet stops working, you can always take your keys to a different platform where they will work just as well. As long as you have your recovery phrase or key, you can take all your assets and DApp interactions with you to a different wallet, browser, or device. It’s the kind of data portability that the big companies like Facebook or Google are just now barely considering, but it already works on Ethereum.

Cryptocurrency can be viewed as just another type of investment – something to diversify your portfolio – and for this purpose, a popular financial app or centralized exchange can be a convenient tool. But the opportunities presented by crypto today are much more extensive and innovative than that, and only an Ethereum wallet will allow you to take advantage of them.To get started, download MEW wallet for iOS or Android and find out what a non-custodial crypto experience is all about.

Content found on MEWtopia is for informational and educational purposes only and should not be construed as legal, investment, or financial advice. Always do your own research.

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