Beginners Guide to Wallets & Transactions
Signing and Setting Up
I’ve been getting some repetitive questions that I hadn’t anticipated getting, so this post is set up to go into further detail and to provide some answers along this topic.
The question I keep getting is “What wallet should I use?” This question is incomplete by itself and unanswerable, so this post is instead to help all readers understand what the correct question is, and provide a few answers to that question, and also to provide the framework for how you can answer this question for yourself.
This free post includes an affiliate link for Ledger Hardware wallets. It pays me a 10% commission if you click it and purchase a device within 24 hours. If that bothers you but you still want A Ledger Device, then buy it later, its not a big deal. If you want to use another hardware wallet, great, use it, its not a big deal to me.
Consider this post an extension of the Beginners Guide to Crypto.
A Definition list for the abbreviations, words, and terms that I use.
This post is also directed to beginners, and is free, so that you can share it with others who may have very similar questions on the matter. If you are already directly interacting with protocols, signing transactions, using dApps, this post is not for you, it is instead something you can share with people that haven’t quite figured that out just yet.
Table of Contents
Taking Custody
Software Wallets
Browser Extensions
Mobile Apps
Multi-Chain Wallets
Hardware Wallets
1. Taking Custody
In the beginners guide to crypto, taking custody was described, but very specific instructions were not given. I simply stated the basics of creating a wallet, what a seed phrase was and how to treat it (with extreme security), and how to find your wallet address.
We’re going to go into more specifics here, and we’re going to start with what a basic transaction from a centralized exchange to a non-custodial wallet looks like. So, this is assuming you followed all of the steps in section 4 of the beginners guide to crypto. So you have a non-custodial wallet set up with the address ready to go. You want to get your crypto off of a 3rd party exchange, and on to your wallet.
The 3rd party exchange you are using should have a section on the site to make a “Withdrawal.” If you can’t find it, ask customer support as it can be a bit difficult to find on some exchanges. I am not customer support, do not ask me where the withdraw button is on whichever exchange you are using. In general, CExes will either make you select the token first and then click withdraw, or they will have a section on their site for withdrawal and you select the token afterwards. The following screenshot is from my account on OKCoin, where I am going to effect a withdrawal on the STX blockchain.
Withdrawal method is usually not something you have to pay attention to as you will be making an on-chain withdrawal. On-chain means that it will be executed by the public ledger for the blockchain you are withdrawing. The withdrawal network is going to be whichever L1 token you are withdrawing. If you are withdrawing a L2 token, you will be selecting the L1 network that the L2 you are withdrawing was built on. You can take your time if you are uncertain, go to the sub-reddit for the token you are withdrawing, ask for confirmation there that you are attempting to withdraw to the correct network. There are a lot of resources on the internet to confirm this before you make a withdrawal and you should be comfortable asking on sub-reddits, or joining discord channels for the tokens you are invested in. Ultimately these are the informational networks you will depend on for the time being to educate yourself in this space. People often ask me where I go to pick up this information, and the answer is always that there isn’t anywhere. You have to use these informational networks to your advantage and ask questions yourself.
Anyways, next we’ll look at what sorts of information you need to input and be wary of when making transactions. First, is your wallet address. Make damn sure that it’s completely accurate, I usually double or triple check the wallet address just to confirm I haven’t gone crazy whenever I am making transactions to a wallet. This wallet address is on the STX network, so it always starts with SPWA. Next is the amount you are sending, be aware that this amount is not in dollars, it is in the token. You need to be sure of how much it is you intend to send. Of note, whenever I am sending to a new address that I have never sent to before, I send a test amount first usually of 1-5% of the total amount. This is just in case you have been given the wrong address, or the address itself is not functioning. This is also good practice for when you are new to this in general. Best to lose a few hundred dollars if a mistake has been made then to lose tens of thousands. Blockchain is permanent, there are no refunds, you don’t get anything back. Your own level of diligence and care is what will determine your success. The final variable here is the network fee, this is the cost charged for the transaction. On PoW (Proof of Work) networks where a decentralized distributed network of private GPU’s are validating the network, the amount you pay is what is given to these computers (miners) in exchange for their work. These miners will prioritize transactions with higher network fees when the network is congested, and when its not congested they will usually just take whatever they can get. On PoS (Proof of Stake) networks where transaction validators are less decentralized the transaction fees are not determined by you, but instead determined by the network and you just have to pay whatever the fee is at that moment. PoS networks are usually cheaper, and usually faster, but under high load and congestion can be more expensive than PoW networks.
If I were to continue with the transaction (I can’t because I only have dust on the exchange), I would receive confirmation from the exchange, and typically they should provide you with a link to the transaction on a blockchain explorer so you can view the status of the transaction. A blockchain explorer is a website that posts copies of the transactions that have occurred on the blockchain in real time. Below is an example of what you might see when viewing a transaction on a blockchain explorer. Typically you’ll see when it’s pending, when it’s made it’s initial confirmation, and when it’s made its final confirmation. Typically transactions must be confirmed in consecutive blocks after the initial transaction block before its fully confirmed.
So lets say you have purchased $NEAR and want to send it to your wallet. You can view it’s performance on its blockchain explorer. The average block takes 1.22 seconds to solve as I am writing this. If the blockchain requires 10 subsequent confirmations before the transactions is confirmed. Then you will have to wait for 11 blocks to be solved on the ledger before your transaction is considered valid. This means that your transaction would take 13.4695 seconds to complete after the CEx submits the transaction on your behalf. Thats 1 block for the initial transaction, and 10 blocks for the confirmation transactions.
Once this has fully cleared the blockchain, the assets should be in your wallet. Of note, quite a few CExes take a long while to submit withdrawal requests, so while the blockchain itself may only take a few seconds to complete the transaction, the CEx might wait 5 or 10 minutes or even more before submitting the transaction for withdrawal. You need to be aware of this and temper your expectations for that. Some CExes are quicker than others. For instance, my experience on Crypto.com has been that they typically process withdrawal requests in less than 1 minute. When you are making a transaction from one non-custodial wallet to another, or signing transactions with a smart contract address, you will only have to wait for the blockchain to complete your transaction, so most everything should take seconds once you are out of the CEx.
Take note of the following fact. When you want to make a transaction back to a CEx, you need to double check the CEx to make sure that they do not also require a Memo to be input in order to route the funds to the correct account. Usually you want to double check on the CEx for deposit information before trying to send a transaction to the CEx. For instance, on OKCoin, when I go to the deposit page and choose a network, I am prompted to be aware that a Memo must also be input to the transaction to avoid losing my deposit. When you are sending assets to a Centralized Exchange, to take profits or for some other purpose, be sure to confirm on the CEx, before you start the transaction.
2. Software Wallets
One question I get way too often both on here and on Instagram is “Which wallet should I use?” I don’t like it when people ask me this question because its not the right question. The first question you need to ask is, which token am I trying to store? Then you need to find which wallet file is compatible with your token. And yes, we’re talking about the wallet file (software) we are not talking about hardware devices yet. For BTC, there are numerous different wallet files you can use, I gave an example of one in the beginners guide to crypto. For Ethereum, and L2 tokens built on Ethereum, Metamask is the choice. Beyond that, you are going to have to do some research based on the token you want to store. I am happy to create a list here, and will edit it based on comments received, but I would ask for you all to refrain from asking me which wallet to use, and to instead start tapping informational networks to answer these questions. Search engine questions like “Which wallet do I use with ATOM network” will likely give you bad answers. Unfortunately there are a lot of people competing to get you to click on their webpage and then click on their affiliate links. So people game SEO (Search Engine Optimization) to make their sites pop up at the top of results of questions like this so that you read their blog post reviewing a hardware wallet and then click on their link to buy one so they can get commission. One or two websites like this can easily clear $2k-$5k a month in net profit if properly optimized, so you can’t escape this facet of search engines, and youtube videos.
You have to go to where the degenerates are and ask them questions. To a lesser extent you’ll find a small handful of degens on the sub-reddit for your token. Maybe they have a FAQ there which will tell you which wallet is most compatible with dApps on that blockchain. Maybe they don’t and you make a thread asking. Or maybe the sub-reddit is inactive, and you go to the official website for that blockchain because often the developers will keep a link to the most updated and compatible wallets on the home page. Or maybe that information isn’t on the official website, so you try to find the official Discord or Telegram chat for that blockchain and you ask in there. If you can’t find those either, then you should probably take a pause and leave the tokens on the centralized exchange. Active blockchains that are worth withdrawing to will have some form of community somewhere you can talk to. If they don’t or its unreasonably difficult to find, then you should be reconsidering your investment choice as it may not be an active blockchain.
Below is a list of L1 blockchains and links to a functional wallet. I don’t know wallets for every single one of these so some will be blank, feel free to comment with wallets and links if you know of functional wallets, or if any of these are no longer relevant. Please remember that this list exists and come here in the future instead of asking me. I don’t use every single chain and am only familiar with the ones that I do use or have used in the past.
ETH - Metamask
BNB
NEAR - Official NEAR Wallet
ATOM - Cosmostation
SOL - Phantom
DOT
AVAX - Metamask
LUNA
ALGO - Official ALGO wallet
LTC
XTZ - Umami
TRON
ADA - Daedalus
EGLD - Maiar
XMR
KSM
HBAR
ICX - Hana Browser Extension or MyIconWallet
ZIL
IOTA
NANO
FIL
VET - Sync or VeChainThor Mobile Wallet
THETA
XRP
ONE - Harmony Chrome Browser Extension
CRO
DOGE
TLOS
FTM - Metamask
MATIC - Metamask
You may notice that Metamask repeats a lot here. You can switch which network Metamask is functioning on, and you can add more networks to it. It’s important that you add additional networks to Metamask, and confirm that you have the right network selected and then confirm the withdrawal address, as you don’t want to send non ERC-20 tokens to an ERC-20 address. I have not paid enough attention to see if you can burn (destroy) tokens in this way with meetamask, which is why I recommend exercising caution here. It’s possible that this isn’t an actual concern, but its better that you confirm the network, and confirm the address after you have switched networks when using metamask just to be certain.
Browser Extensions
On a computer, most wallets function as a browser extension. This attaches itself to Chrome, Firefox, Brave, or another internet browser and allows you to connect your wallet to the website a dApp is functioning on. Sometimes when you set up a wallet like this, you won’t always get a wallet file, in which case it is imperative for you to make sure your seed phrases are written down somewhere secure in case your PC gets wiped or you have an issue with your computers hard-drive.
Mobile apps
Many wallets have a mobile app that functions just the same as the browser extension. You can recover the same wallet file to multiple places and devices with the seed phrases, or recovery phrases. In this way you could have access to your crypto wallet from both a phone/tablet, and a PC. Typically the mobile app for a wallet has a built in browser that you can use to access dApp websites instead of using the browser on your mobile device. This is necessary as often the browser on your mobile device will not allow you to connect a wallet through it.
Multi-Chain Wallets
I’ll start off by saying that I’m not a fan of multi-chain wallets like Trust wallet or Exodus, as they are typically lacking in features for smart contract interaction or they aren’t supported right away when a new dApp launches, and can oftentimes not be eligible for airdrops. However, they are non-custodial and are options for people that want only one interface to interact with, and only one seed phrase/private key to manage. So I’ve provided links to them for people that have that preference. But I do not use these software wallets and in general don’t recommend them if your intention is to be a degenerate like me. If you just want to buy and hold with the ability to send and receive, these are suitable options.
3. Hardware Wallets
Many of you have probably heard a lot about hardware wallets like Ledger (Affiliate Link), or Trezor, etc.
These exist primarily to provide additional security to you the user. Normally when executing a transaction from a software wallet or mobile app, you would be prompted to sign it either with the password you created when you imported the wallet to that device, or with a pin code. Sometimes it’s as simple as just pressing confirm after getting through a lock screen.
A hardware wallet simply adds additional layers of security. Say you downloaded some malware to your computer that you normally sign crypto transactions from. This malware might be able to key-log your password and then attempt to execute a crypto transaction from your wallet. Well, a hardware wallet requires an additional confirmation before signing a transaction. You have to press a physical button on the device itself in order to execute a transaction. So a virus or malware can try all it wants to make your wallet sign a fraudulent transaction to drain your funds but it will be unable to do so unless you physically approve the transaction that is displayed on the screen of the device.
Hardware wallets also have additional security functionalities that can be used in the case of a physical theft or home invasion if someone knows you have crypto. It can essentially partition your assets so that some are not visible nor accessible when someone uses the 24 seed phrases associated with your device. It adds a 25th word to your seed phrases for full access. So if someone has broken in and has a gun to your head trying to get your seed phrases, you could give them the 24 phrases, and they could gain access to say 10% of your assets, while the remaining 90% remain completely hidden. To the thief it might look like you were just poorer than they thought you were but they still got something out of you, kind of like how some people think about having a decoy safe to stop robbers from searching further for their real stash of wealth at home.
Hardware wallets function a bit different than software wallets. You have to download an app to the ledger for each chain that you want to add. Brand new chains are typically not supported right away as the developers of that blockchain would have to develop integration with Ledger first. Once you have your wallet set up on ledger, you can recover it to a software wallet if you wish to have access to that same wallet address from additional devices. However, this would defeat the purpose of having a ledger, so I would instead just recommend using it the way it is designed. You can pair the device to your phone with a secured app so as to use the dApps on your phone while still having to perform the physical confirmation for each transaction.
Another downside to a hardware wallet, is that they don’t always function with dApps right away, so if you are going to be a degenerate, it’s best to have a “hot” wallet that is a software wallet you use for dApps and DeFi, and a hardware wallet that you send your profits to and keep the bulk of your assets on. Combined with some of the security tips I provided in the VPN Guide, you can have a fairly secure crypto set-up that is fairly resilient to outside attacks.
4. Conclusion
In this post we have reviewed exactly how to make a transaction from a Centralized Exchange to a private wallet address. We have also reviewed Software wallets including the 3 types of software wallets and how/where they function. Finally we reviewed the purpose and function of a hardware wallet.
Combined with the Beginners Guide to crypto, this should be enough to get most people started. It’s important for you to also remember that there are information networks for you to take advantage of through Sub-reddits, Telegram, Discord and other pseudonymous chat networks, as well as checking on the official website for the blockchain you are interested in.
As covered before, you really can’t trust social media, youtube, or search engine results because these are often skewed by the profit motive of those sharing information. There is simply too much money that can be made by either selling eyes to people that are selling products, or by getting people to click through to e-commerce websites. Often people are not forthcoming about when they are doing this and how they may be financially incentivized to be sharing some information while not sharing others. This is why I will always tell you directly if you clicking on something will profit me in any way or form. There will also never be any affiliate links on content you have paid for here.
If you have any questions about the information that has been shared here, or you would like to contribute some additional software wallet information for people, please leave a comment here.
Well done. I will share this with a friend.
Suggestion to buy the ledger nano x if you plan more apps on it