The Cryptographic Wallet: Explained By Virtual Dan
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The Cryptographic Wallet: Explained By Virtual Dan
It’s 2022 and everyone is talking about NFT’s, cryptocurrencies and the metaverse. I’m sure all the buzz has at least peaked your interest in this new technology. That’s right, new technology as in the printing press, the television or the World Wide Web because that’s exactly how important this technology is becoming. So, what’s the technology behind all this?
I’d like to explain to you one aspect of Web3, a new kind of internet service built using decentralized blockchains, called a crypto wallet. A crypto wallet is essentially a device, physical medium or a program that can be stored as an app on your smartphone. The crypto wallet is what holds and operates everything in Web3.
The crypto wallet is built to be 100% safe from hacking or the illegal removal of any digital items stored in it. One might wonder… “How can it be so secure?” The reason is because cryptography – the science of encrypting and decrypting information – is secured by two things:
A public address (usually a long string of numbers and letters): The public address is half of the wallet’s access. It’s the address you can give out to 3rd parties if you are looking to transact with them in anyway.
A private phrase or secret phrase: This is the passcode that you MUST write down physically and store it in a VERY safe place. Never ever give anyone or any entity access to your secret phrase. This could result in losing all your digital items in a flash.
When you create a new wallet, you will be given your secret phrase that consists of 12 completely random words for example:
1.) Bird 2.) Dog 3.) Horse 4.) Sidewalk 5.) Ice cream 6.) Hot Dog 7.) Hamburger 8.) Ball 9.) Street 10.) Kick 11.) Money 12.) Watch
Hopefully, I didn’t just crack anyone’s secret code with these randomly selected words from my brain, but you’d also need to match up the secret phrase with the public wallet address as well for access to a wallet. See how secure this technology is? Guard your secret phrase with your life and there’s nothing to worry about. Day 1, write down the secret phrase physically and store it in a locked safe.
One other important thing I’d like to mention, you really should be thinking about who is going to inherit your digital assets. This isn’t like your Roth IRA where you name a beneficiary. There’s only one thing needed: the secret passphrase. Your beneficiary should have access to it and ultimately the ability to take ownership of your wallet by using your secret phrase.
Why Are Crypto Wallets Important?
Now that you see how secure a crypto wallet is, hopefully your next question is: “What do I do with this wallet and why do I need it?” The crypto wallet will function as your personal access to all things Web3 like the metaverse or to a digital art exchange. So, the wallet not only stores, sends/receives digital assets it also acts as your vehicle to Web3 decentralized applications.
The metaverse is a new blockchain based virtual world that people from all over the globe can access with only one thing required, a crypto wallet. One would sign into the metaverse with their crypto wallet where you’d gain access to your personalized avatar which is you in the virtual world.
A Growing Community With Many Possibilities
There are several actively growing metaverse communities, such as Decentraland or The Sandbox. The virtual worlds are owned by individuals in a decentralized fashion whereas the worlds are broken up into parcels and each parcel is individually owned and operated. For example, here at FMF365 we launched our very own 3D financial planning office on March 28th, 2022, in the Decentraland metaverse. This is going to be a place where we will host virtual events for fun, Web3 socializing and maybe learning a little personal finance too while we are at it.
Others like Adidas, Nike, Amazon, Sketchers, Absolute Vodka, Miller Lite, Samsung, Atari and a list that is growing by the day have all set-up shop in the metaverse and we are all experimenting on how to best use the metaverse as a new direct avenue for brands/customers to meet in a digital fashion. Habitat for Humanity raised money last week by selling exclusive digital art in exchange for a donation to the 503c organization. I bought one, it’s a bronze home that spins around and can be displayed in NFT frames on a physical wall or it can be used as your Twitter profile picture since it’s an NFT. The proceeds went directly to the helping families get access to affordable housing.
Which Wallet Is Best For Me?
Lastly, you might wonder which wallet is best for you. There’s lots of choices out there, I prefer to stick with the big wallet providers such as Meta Mask, Trust Wallet or CoinBase Wallet. To get a wallet all you need to do is download any of those three and sign up a new wallet. It’s only a few steps and you’ll immediately have access to buying/selling crypto, joining the metaverse or gazing at high end digital art like Beeple’s NFT which sold last year for 69M US dollars.
Party with Virtual Dan in Decentraland!
Later this month, we will be hosting a party where I, Virtual Dan will be teaching some basic personal finance skills that we should all be equipped with. I’ll be doing so in the metaverse at our virtual office building. All you need to do is get yourself a crypto wallet and jump on into the Web3 experience which is rapidly evolving by the day. (More details to come, stay tuned for updates on Twitter!)
“Stop by and see the virtual office at parcel -150,32 in Decentraland! I look forward to seeing you in the virtual world!”