NFTs are a type of digital asset that can be managed alongside other forms of digital currency, allowing users to buy, sell, exchange, and manage their assets within various apps.

Many are also considering investing in NFTs, and it is easy to see why. NFT sales totalled $2.82 billion in the first half of 2025.

However, before starting with NFTs, you’ll need something to store your crypto and the digital assets you acquire in the crypto space. 

Cryptocurrency wallets are essential tools for storing and managing various digital assets, including NFTs and cryptocurrencies, and can include advanced options like multisignature wallets for enhanced security.

This is where NFT wallets come in.

NFT wallets enable users to view and manage all their crypto holdings, including both NFTs and cryptocurrencies, in a single location.

You’ll need a wallet not only to buy, sell, or trade crypto and NFTs, but also to store and keep them safe from NFT scams.

What is an NFT wallet?

An NFT wallet is a digital wallet that stores NFTs and cryptocurrencies in a single location. Online wallets are a type of digital wallet that stores private keys on internet-connected servers, offering convenience but also introducing additional security risks. The wallet can receive additional digital assets sent to the wallet holder, in addition to purchasing other digital assets.

The considerable increase in NFT purchases over the past few years (see trading volumes above) has led to the further development of NFT wallet functionality for storing NFTs after minting or purchasing. 

Interestingly, an NFT wallet does not have the assets in a digital version of a particular bank account. Instead, NFT wallets provide true ownership of digital assets, as users have sole control over their private keys and assets without relying on third parties.

To summarise, an NFT wallet is a physical device or computer program that enables users to store and transfer digital assets, such as non-fungible tokens and cryptocurrencies. Some NFT wallets also allow users to buy, sell, or swap assets directly through integrated exchange features.

How do NFT wallets work?

Being a technological product, NFT wallets involve a bit of technical NFT vocabulary. However, the way they work is relatively straightforward.

In short, when you create an NFT wallet, it automatically generates a series of words known as a ‘seed phrase’ (also known as a ‘recovery phrase’). These are often referred to as ‘seed phrases’ when discussing multiple wallets. The wallet uses the seed phrase to create a set of private keys.

Wallet holders should never share their seed phrase or private keys with anyone, as this would allow them to access the assets in the wallet, making the wallet holder vulnerable to NFT fraud.

Understanding how a crypto wallet works is like thinking of it as a password manager for your digital assets. The seed phrase serves as the master password for the wallet, allowing the holder to access their cryptocurrency wallet. If the holder deletes their cryptocurrency wallet, they can recreate it and access all their funds using the seed phrase.

However, suppose a holder loses or forgets their seed phrase. In that case, they will lose access to the wallet and all the assets it contains forever. If a wallet is lost or stolen, the assets are typically unrecoverable due to the irreversible nature of blockchain transactions. There have been numerous examples of NFT wallet holders forgetting their private keys and thus being unable to access millions of dollars’ worth of cryptocurrency.

Private keys are like passwords.

They allow wallet holders to access and manage the specific items in their wallets. Specifically, the private key allows holders to sign transactions, ensuring that only the rightful owner can authorise transfers. The blockchain network will then verify each transaction to ensure its authenticity and integrity.

Types of NFT wallets

There are three basic types of crypto wallets: software and hardware wallets and a vault. Paper and hardware wallets are popular options for those seeking to store their assets offline on a physical medium.

Hardware wallet, also known as a ‘cold wallet’

A hardware wallet is a physical device similar to a USB stick that you might use to store files from your computer. Except that, in this case, you are keeping your crypto and NFTs.

Well-known cold wallets include and . Ledger Stax is a modern hardware wallet featuring a large touchscreen and a visually appealing, user-friendly design, making it easy to manage multiple assets securely. Ledger Nano is another leading hardware wallet, popular for its robust security features and support for a wide range of cryptocurrencies.

To access the data and assets stored on this cold wallet, users will need to physically plug the device into their computer.

The cold wallet will keep digital currencies and NFT assets instead of being stored online within a server. Because hardware wallets are not connected to a server, they are often considered to be in ‘cold storage’, thus the term cold wallets.

Another form of cold storage is the paper wallet. A paper wallet involves generating and printing or writing your private and public keys on paper, keeping them completely offline. Paper wallets are immune to online threats and hacking, but they come with risks such as being easily lost, damaged, or stolen. Properly storing paper wallets in a secure location is crucial, as losing the paper means losing access to your assets.

Moreover, even when cold wallets are connected online, the assets stored on the device are almost impossible to steal.

Cold wallet transaction signings are finalised with private keys in-device and then posted to the network via an internet connection. Since private keys never leave the device, malware can’t obtain the information needed to falsify a signature.

Software wallet, also known as a ‘hot wallet’

A software wallet is an application or computer program that can be downloaded and installed on a desktop or mobile device. Known software wallets include MetaMask, Rainbow Wallet and Coinbase Wallet. Typically, software wallets are far more convenient and accessed quicker than hardware wallets because the NFT wallets’ private keys are stored online.

As the NFT wallet remains connected to the internet, unlike hardware wallets that are considered ‘cold’ — software wallets are considered ‘hot.’ Many NFT marketplaces require users to use a hot wallet to facilitate transactions, making this type of wallet the primary choice for quick and easy trading. Hot wallets are also commonly used to buy and sell crypto directly on exchanges and NFT marketplaces.

However, as hot wallets are always connected online and to a server, they are more vulnerable to scams and attacks, including phishing attacks, making them less secure than cold wallets.

Vaults

Sometimes, crypto users’ money is in different places. This is similar to why we keep some cash in a bank account and a savings account. Similarly, cryptocurrency holders can organise funds into other wallets or store their crypto assets in a vault, like Gnosis, one of the most popular vaults. Some vaults function as multisignature cryptocurrency wallets, offering enhanced security for treasury management and escrow services. Multisignature wallets provide increased security by requiring multiple signatures to authorise transactions, which reduces the risk of unauthorised access.

A vault can receive cryptocurrency and digital assets, such as standard NFT wallets. Still, adding optional security steps can also prevent stored assets from being immediately withdrawn.

• Users can invite trusted individuals to co-sign withdrawals, which requires them to approve the transaction before the user can complete it.
• Vaults also undergo a secure approval and withdrawal process after creation. Unapproved vault withdrawals will be cancelled within 24 hours.

Users should securely back up their vault access using seed phrases to ensure recovery in case of device loss.

Which NFT wallet to choose? Which is best for me?

A hot wallet is a suitable option for minting and shorter-term trades. However, crypto and NFT holders should use a cold wallet to store their most valuable assets for enhanced security.

MetaMask is a well-known hot wallet used to manage NFT transactions, and it’s ideal for beginners looking to set up their first software wallet. MetaMask and other wallets, such as Coinbase Wallet and Rainbow Wallet, connect to a mobile or desktop web browser, allowing users to log in and facilitate transactions on NFT marketplaces and platforms.

If you’re interested in hardware wallets, then Ledger and Trezor are two solid brands you can trust. For vaults, our community prefers Gnosis.

We asked our community which do they use, and the consensus was the following:

“Three wallets are best practice, a hot wallet for minting (buying NFTs), a cold wallet for buying and selling on OpeaSea, and a vault that uses signing with keys in separate locations.”

Regardless of which NFT wallet a user chooses, they must follow the instructions to set up the wallet, physically write down the seed recovery phrase, and store it in a secure location. Storing backup information offline on a physical medium, such as a paper wallet or hardware device, ensures your private keys are stored offline and provides additional protection against online threats.

What do NFT platforms use?

Presently, we are witnessing a massive revolution in the world of technology, with an increasing number of our assets being stored online, known as the metaverse.

Subsequently, the demand to securely access and store our online digital presence and assets necessitates the use of an NFT wallet. Therefore, acquiring the basics, such as an NFT wallet, is crucial for achieving the best in this emerging metaverse.

Several NFT marketplaces, such as Nifty Gateway, enable users to purchase and sell their NFTs using traditional fiat payment methods. Other marketplaces, like OpenSea and SuperRare, insist that users buy, trade, and sell NFTs using a cryptocurrency, making a hot wallet necessary to use their sites. (Although OpenSea supports fiat payments via a MoonPay integration).

The Ethereum blockchain and its native ETH cryptocurrency is the leading blockchain ecosystem used for facilitating NFT transactions. Trading platforms like Coinbase and Binance enable users to purchase cryptocurrencies, such as Ether, using a credit card or debit card linked to a bank account, making them more accessible to everyday users. These platforms also function as exchanges, sometimes acting as custodians for users’ digital assets by storing private keys in custodial cold storage.

However, Ethereum isn’t the only blockchain network where NFT sales happen. Considering the Ethereum network’s high transaction costs and its higher environmental impact, crypto-artists and NFT enthusiasts have continued to seek new blockchain ecosystems in which to create and trade NFTs. Many NFT wallets now support multiple blockchain networks, enabling users to manage their assets across various platforms and blockchains.

However, if you’re still a beginner, it is probably best to stick to Ethereum, as it is seen as the one-stop shop for NFTs and one of the most popular cryptocurrencies and blockchains. Additionally, as it’s the most trusted, and due to its more expensive gas fees, fewer scams are occurring on the network. If assets are not adequately secured, they can be stolen from compromised wallets or exchanges.

Setting up your NFT wallet

Getting started with an NFT wallet is a straightforward process that unlocks the ability to store, send, and receive NFTs. Begin by choosing a reputable crypto wallet that supports NFTs, such as MetaMask or Coinbase Wallet.

Once you’ve selected your wallet, follow the setup instructions to create a new account, which will generate a unique pair of public and private keys. Your public key acts as your wallet address for receiving tokens, while your private key is the only way to access and control your NFTs.

It’s crucial to store your private key in a safe place—consider using a hardware wallet for added security or a secure note-taking app that is not connected to the internet. Never share your private key with anyone. After your wallet is set up, you’re ready to explore NFT marketplaces like OpenSea or Rarible, where you can buy, sell, and trade NFTs as you begin your crypto journey.

Managing your private keys

Properly managing your private keys is essential for maintaining control and security over your crypto assets and digital assets.

Your private key is a unique code that grants access to your wallet, and losing it means you could permanently lose access to your funds.

To safeguard your private keys, consider using a hardware wallet, which keeps your private keys offline in cold storage, providing robust protection against online attacks.

If you prefer a software wallet, make sure it offers strong security features such as encryption and two-factor authentication. Always keep your private keys and recovery phrase (also known as a seed phrase) in a secure location, separate from your internet-connected devices. This recovery phrase is your backup—if you ever lose access to your wallet, you can restore it using the seed phrase.

By taking these security measures and keeping your private keys offline whenever possible, you significantly reduce the risk of unauthorized access and ensure you maintain full control over your crypto assets.