What Is An NFT?

NFT stands for “non-fungible token.” NFTs are unique digital assets. They exist in a variety of industries from digital art and virtual real estate to collectibles, gaming and all kinds of other things. Any type of media can be “minted” or “tokenized” and turned into an NFT: art, trading cards, ebooks, gifs, video clips, audio clips, tweets — anything. Once tokenized, these assets can be bought, sold and traded using cryptocurrency.

Fungible Vs. Non-Fungible

Fungible means interchangeable. A $5 bill is fungible because two separate $5 bills hold the exact same value, and so for all intents and purposes, they are the same. On the other hand two issue #1 Spider-Man comic books may present the same to the outside world, but they are definitely not interchangeable. Even if they look almost identical, there are distinguishing factors that tell them apart — the coloring, staple positions, and the sharpness of their corners.

An NFT is a digital certificate representing a one-of-a-kind asset, just like a one-of-a-kind baseball card. Even if two assets appear identical, the metadata on the non-fungible token provides a stamp of authenticity that allows us to tell them apart.

How Do NFTs Work?

It starts with a piece of content. This could be a photo, a drawing, a video clip… whatever. It can be an original, like a drawing or doodle you make yourself, or something already in existence, like a video clip.

That piece of content is then “minted” on the blockchain — in other words, it is turned into an NFT. A blockchain is an official ledger shared by thousands of computers, in this case storing a record of NFT ownership and transaction history. Most NFTs are part of the Ethereum blockchain.

Once you officially create an NFT, it now lives in your digital wallet. Technically, nothing is stopping anyone from downloading or replicating your NFT from the internet…we drag and drop gifs and memes all the time — BUT the blockchain always confirms and proves your ownership of the original and authentic NFT.

A common comparison is the Mona Lisa. You cpuld purchase a print of the Mona Lisa for about $15 that would look just like the real Mona Lisa, but the one-and-only Mona Lisa exists only at the Louvre. In the same way, your one-and-only NFT exists on the blockchain, and no copy, however exact, holds the same value, and never can.

You can choose to place your NFT up for sale if you wish, especially if they go up in value, which many do (and of course, many don’t; it’s an investment like any other). There are several NFT marketplaces like OpenSea and Rarible. Within these marketplaces, buyers can either place bids or purchase your NFT for a listed price.

Alternatively, you could choose to buy and collect NFTs that you like or deem to be valuable, like Pokemon, sports cards, comic books, or rare coins. If you think an NFT will appreciate in value over time, you might even hang onto it and decide to flip it down the line.

The Value of NFTs

The value of NFTs comes from three things: utility, access and social currency. If you understand the concept behind membership cards, rewards on credit cards, tickets to VIP access-only events, you understand NFTs. If you’ve ever purchased skins or other virtual items for your video games, you understand NFTs. The reason you wanted that item was to be a utility in a world that you cared about, or to have the clout and bragging rights amongst your friends and others. NFTs are going to extend that same utility and “flex” of social currency to everything else.

The reason people are buying NFTs is the same reason people wear clothes with designer logos, drive luxury cars or hang pictures on their wall with important people. It’s the same reason people care about blue checks on Instagram.

Are NFTs A Fad?

No. Just like the Internet wasn’t a “fad” in the mid 1990s when people first became aware of it, and just like social media wasn’t a “fad” in the mid-2000s when people first started using it, NFTs are likely going to change the entire way people buy and sell things on the internet.

What Are Cryptocurrency Wallets?

Cryptocurrency wallets are software used to communicate with blockchain networks to safely access, send and receive crypto funds or assets. The software stores your crypto just like traditional wallets store your cash and credit cards. Unlike fiat money like US Dollars, which you store in a bank, crypto assets are stored on the blockchain. Just like you use a debit card to access your paper money at an ATM, you use your crypto wallet to access your crypto on the public ledger. The crypto wallet does not actually hold physical items — instead, it holds unique digital passwords or “private keys” which allow you to transact on the blockchain.

Crypto wallets come in the form of hard devices (“hardware wallets”), mediums or smartphone applications and help you access records of transaction history that are held on the ledger.

Custodial vs. Non-Custodial Wallets

When it comes to storing your crypto, you have two options: custodial or non-custodial wallets.

Custodial Wallets

Many people make their first crypto purchases on centralized exchanges. These are online marketplaces where you can buy, sell and store a variety of cryptocurrencies. Many of you may have heard of Coinbase, one of the most popular centralized exchanges and a good option for beginners. Exchanges like Coinbase are known as “custodians” because they have custody over your cryptocurrency. In other words, when you make purchases with the Coinbase app, Coinbase holds your crypto for you in its own “custodial” or “hosted” wallet. This way, Coinbase acts as a third-party with ownership of your private keys, and you are trusting the platform with the responsibility of keeping your crypto safe and secure.

Custodial wallets are a convenient gateway into the crypto world. It’s as simple as signing up for a Coinbase account with your email address, verifying your identity with a photo ID, choosing a password and linking your credit card or bank account to start buying.

For now, if you want to be able to purchase NFTs, you’ll need to have what is called a non-custodial wallet.

Non-custodial Wallets

For full control over your crypto assets, a non-custodial wallet is your best option (Metamask is a non-custodial wallet). With these wallets, there is no third-party involved and you are the owner of your own private keys. While this is ideal for security, it also comes with great responsibility. More on the importance of private keys in just a bit.

Let’s say you have a Coinbase account but you now want full control over your crypto. You can transfer your crypto holdings from Coinbase into your own non-custodial wallet. This is especially helpful for those of you looking to store large amounts of crypto, or for people looking to purchase NFTs. Since NFTs exist mostly on the Ethereum blockchain, you would need to purchase Ether on Coinbase and then transfer it to your non-custodial wallet, which you would then use to buy an NFT from online marketplaces such as NiftyGateway, OpenSea, Rarible, etc, or here at A2Heroes. You can also buy Ether directly using a non-custodial wallet like MetaMask.

The MetaMask is what we recommends here at A2Heroes. It’s a very easy to use and well-supported non-custodial wallet system.

How Do Wallets Work?

Every cryptocurrency wallet functions using public keys and private keys. These keys work in tandem to make secure and verifiable cryptocurrency transactions on a blockchain.

Public Keys and Addresses

First, you have your public key. Think of this address like an email address — you can share it anywhere, safely. Whoever knows your address can send you crypto. An Ethereum address will always start with 0x and then a string of 40 alphanumeric characters. It may also appear as a scannable QR code.

Private Keys & Seed Phrases

Next, you have your private key. Every public key is mathematically linked to a private key in a unique key pairing. A private key — which appears as a string of alphanumeric characters — is used to digitally sign a transaction to authenticate your transactions on the blockchain. One private key can generate several wallet addresses. Consider your private keys as just that: private! Think of your private key as the password to your online banking. Only you should know it.

Lastly, you have your seed phrase. This is a group of 12 or 24 words usually generated within the wallet software that can be used to derive your private key. Further, your private key can be used to derive your public key — however, it is important to note that your public key cannot be used to recover your private key or seed phrase. Therefore, guard your private keys and seed phrases with your life!

The great thing about your seed phrase is you can use it to “restore” your wallet any time you want, to any new system you want. As long as you have your seed phrase, you’ll never lose your crypto.

Why You Should Always Protect Your Private Keys and Seed Phrase.

It sounds dramatic, but we cannot stress this enough. Private keys and seed phrases must NEVER be shared with anyone or left susceptible to discovery or theft. Think of a private key like a password or better yet, a PIN number — whoever has it has access to your crypto assets. Why is this so important? Unlike traditional money, stolen crypto is lost forever. There is no bank to call and report the theft; not even the government can help you recover lost or stolen assets. For this reason, when you create a crypto wallet and receive your private key and/or seed phrase, be sure to store it offline in a secret, safe location only accessible to you. Never store your keys in online notebooks unencrypted, or type into any website.

Types of Cryptocurrency Wallets

There are a few types of crypto wallets.

Software Wallets – Hot storage

Software wallets are considered to be “hot storage,” a term referring to any wallet that has been directly connected to the internet. Software wallets can be further broken down into several wallet types — web, mobile and desktop.

Web Wallets

e.g. MetaMask Chrome extension, Mycrypto.com

Web wallets include both browser extensions and websites, and can be used on most computers with access to the internet. MetaMask browser extension is a great web option generally accepted on all web3 applications. This makes them extremely convenient, however, they are vulnerable to cyber attacks.

Mobile Wallets

e.g. MetaMask Mobile, Rainbow, Argent

Mobile wallets are accessed via smartphone apps. As they are easily downloadable right to your phone or mobile-device, these wallets are great for everyday, on-the-go access and purchases. Just like your computer, you should always keep your phone updated and protected.

Desktop Wallets

e.g. Mycrypto client-side

Desktop wallets are software programs downloaded and installed directly onto your PC or laptop. Private keys are input into this software and never leave the original machine onto which they were downloaded.

While convenient, software or hot wallets are best used only for storing smaller amounts of crypto due to the risk of hackers or viruses.

Cold Storage

On the flip side, “cold storage” wallets store your keys independently of an internet connection, providing higher security and protection.

Hardware Wallets

e.g. Ledger, Trezor

One of the most secure options, hardware wallets are physical devices you can buy that allow you to make transactions without exposing your seed phrase or private keys to the internet. Hardware wallets typically look like a USB or thumb drive which you connect to your computer or laptop when making a transaction, and then remove once finished. Since your private keys are stored on the device itself and not on a computer or online platform, hardware wallets are very hard to exploit.

Paper Wallets

Paper wallets are really just a way to store the private key and public key pair for your account on a piece of paper. They can be a way to store crypto keys you don’t plan to access for a long time, but are generally deemed obsolete in lieu of seed phrases.

How To Set Up MetaMask Wallet On Your Computer

Here is how to create a MetaMask desktop wallet via a Chrome extension. You can also use other browsers such as Firefox and Brave. Whatever you choose, it is very important that you only download from the official MetaMask site.

1. Go to MetaMask.io
2. Click either of the “Download” buttons on the homepage.
3. Click “Install MetaMask for Chrome.” You will be automatically taken to the Google Chrome web store.
4. Click “Add to Chrome” and add the extension. Once installed, you will be able to view the MetaMask fox head icon in the top right corner of your browser by clicking on the puzzle piece icon.
5. Click “Get Started” and choose between importing an existing wallet or setting up a new one. Let’s assume you don’t have an existing wallet and need to create one. Click “Create a Wallet.”
6. Create and confirm a password according to MetaMask’s guideline of 8 characters minimum. Make sure your password is unique and not being used for anything else. Agree to the terms of use and hit “Create.” Congratulations! You are now the owner of a MetaMask wallet! 🎉
7. Once you’ve created your wallet, you will be able to view your seed phrase (the 12 word sequence used to recover and backup your wallet). Remember, this must be hidden and never shared with anyone. Do not take a picture or screenshot of your seed phrase — instead, write it down immediately on a piece of paper and put it in a secret, safe location. Even better, write your seed phrase down on 2-3 pieces of paper and store each paper in a separate secure location (like one in a personal safe and one in a bank safety deposit box). Alternatively, you can download the seed phrase and keep it offline on an encrypted hard drive. Having multiple backups of your seed phrase is good practice just in case one copy is ever lost or destroyed. After documenting your seed phrase, click “Next.”
8. Confirm your seed phrase by clicking on the correct words in the correct order of your 12 word sequence and click “Confirm.”
9. Click “All Done.”
10. Optional – you can leave your new account as “account 1” or choose to rename it.

You can now access your MetaMask wallet via the fox icon in your browser and begin purchasing and receiving crypto. If you already have Ether in your Coinbase, you can use your brand new Ethereum address (the long number at the top of your wallet page starting with 0x…) to transfer them over into your MetaMask wallet. If you don’t have a Coinbase account, you can buy Ether directly through MetaMask in some countries and states, however, Coinbase is the best overall way to get Ether into your MetaMask wallet at the moment. If you don’t like Coinbase or live in a country where it’s not available, you can use another major exchange like Binance or Mandala.

How To Set Up A Metamask Wallet On Mobile

MetaMask also offers a mobile wallet option for both ios and Android. Here are the steps to use MetaMask on your phone if you’ve already set up the desktop extension:

1. Download the MetaMask app to your smartphone (App Store for iPhone or Google Play Store for Android).
2. Click “Get Started”
3. Click “Sync with MetaMask extension”
4. Open your MetaMask desktop extension, go to Settings > Advanced, Click on “Sync with Mobile” and enter your password.
5. Using your phone’s camera, scan the QR code to start syncing.

Now you will be able to access your MetaMask account from either your desktop or your phone. If you do not have the desktop extension and wish to create your first MetaMask account on mobile, follow the same steps above, but click “Create a new wallet” instead of “Sync with MetaMask extension.” Then, follow the rest of the prompts to choose your password and see and confirm your seed phrase.

If you prefer to keep your crypto in cold storage, you can easily connect a hardware wallet like Ledger or Trezor to MetaMask. This gives you the security of a hardware wallet with the ability to connect with any MetaMask/web3 enabled sites.

How To Fund Your New Wallet With Ether

When you initiate a purchase on Coinbase, the platform uses what is called an ACH bank transfer system for payments with your bank account. This means that Coinbase will take minimally five days to actually complete your transaction and make your Ether available in your account. Therefore, if you’re interested in transferring Ether purchased on Coinbase into your MetaMask, we highly recommend you get set up NOW so you won’t experience any delays.

Better yet, you may want to avoid the ACH transfer delays altogether, with the option to wire money from your bank into your Coinbase wallet. Defer to your bank for their specific wire transferring process if you choose to expedite your deposits using a wire transfer.

Always use good judgement. Never invest more than you can afford to lose. The price of ETH may rise or fall (a lot!) depending on the day or even the time of day that you make a purchase. Be aware of this.

For A2Heroes, we recommend having at least .75 to 1 ETH, or more, in your wallet to cover purchases and “gas” fees which are the additional costs of performing transactions on the Ethereum network. But again, it’s your money so do what’s right for you.

Now, you’ve downloaded the Coinbase app and you’re all set up and ready to buy:

1. Open your Coinbase app.
2. From the homescreen, click the blue button with arrows at the bottom of the screen. Then, select “Buy” from the dropdown menu. This will open up a list of different crypto assets offered by Coinbase for buying and selling. (Alternatively, you can navigate to the “Prices” tab from the homescreen, click the crypto asset of your choice, and click “Trade.”)
3. Click on the option for Ethereum (ETH) — be sure to note the current trading price listed on the right hand side.
4. On the next screen, decide how much ETH you want to buy and enter in the amount. You can also denominate your purchase in ETH. After deciding on your desired amount, click the blue “Preview buy” button.
5. On the “Order Preview” screen, review all of the information. You’ll see the amount of ETH you’re preparing to purchase as well as the price. Note that the trading price can go up or down before you’ve finalized your purchase. You’ll also see your preferred payment method, the fee that Coinbase takes for the transaction and finally, the total amount you will be charged.
6. If all of this information looks good to you, click the blue “Buy now” button to purchase your ETH. You will be brought to a confirmation page and an additional confirmation will be sent to your email address.

How To Send Ether To Your MetaMask Wallet

1. In your MetaMask app, find your public address. This is a long number starting with 0x listed underneath your account name. Tap on this number to copy it to your clipboard.
2. Go back into your Coinbase app and navigate to the “Portfolio” tab on the bottom of your screen. From there, click on “Ethereum” and click on your “ETH Wallet.”
3. Click on the send icon on the right hand side of the screen.
4. Decide how much ETH you would like to send to your MetaMask address. You can choose a portion or send the max amount available. *We recommend sending a very small amount as a test transaction to ensure that the funds are received in your MetaMask. Sending a small test transaction out before adding large amounts of funds to ensure you have successfully created a wallet you can operate is a good idea. Also, please note that before sending any value to a wallet, it’s recommended to test your seed recovery phrase and ensure you have the same address after recovery before adding any value to a wallet from an exchange like Coinbase.
5. In the “To” bar, paste the address you copied from MetaMask, add a note (optional) and hit “Preview send.”
6. Finalize, and done.