To a hammer, every problem is a nail. The tools and techniques used to solve issues determine how well they’re solved.
Case-in-point: blockchain wallets. In many ways, wallets are a bridge between the complex and interconnected world of cryptocurrency and NFTs. But while they serve a valuable function, associating them with the function of wallets dramatically limits their potential for use in NFTs.
While real-life wallets have been more or less perfected, NFT wallets play in a much more complex sandbox. That’s why NFT artists, enthusiasts, investors, and newbies are best served by a wallet that addresses the early kinks. Here’s what you need to know to get started in the NFT world.
Why You Need a Wallet that Does More than Hold Keys
While NFTs are reaching peak popularity, the truth is there are more than a few technical peculiarities that haven’t been ironed out. From spotty royalty enforcement to asset ownership issues, ease of use problems, and many more, it’s understandable why some are still a bit bearish on this otherwise promising medium.
We believe that wallets are perfectly positioned to solve these longstanding issues. We need to remove roadblocks that make the experience both intimidating and insecure. Instead of performing a narrow task, they should rather act as a bogey to keep users afloat, a free photo album for your artwork, a window to the NFT art world, and a tool to help keep your transactions in order.
Let’s break down those issues one by one and learn how an effective wallet is best positioned to solve them.
When one purchases an NFT in an auction, they’re technically purchasing a small trove of data; private keys that grant access to the associated block of the blockchain.
However, the blockchain itself isn’t an ideal storage medium. Since it’s keeping tabs on every transaction made on it since forever, NFT blocks are often little else than a URL to an asset file.
This begs the question: if all you’re purchasing is a link to a file, does the auction guarantee rights to a file, or are you guaranteed the asset itself?
After all, hosting sites disappear, scatting data and spreading 404 errors like breadcrumbs on a trail.
Of course, solutions have popped up in the crypto community. Cloudinary, for instance, is a third-party asset storage solution. Still, even these sites themselves are subject to closure—no less temporary than a random link. banq, on the other hand, has a holding company that backs it, and an ecosystem of solutions in the works that make it a multi-faceted platform with a variety of revenue sources and applications.
From a user experience standpoint, it makes much more sense for such data to be stored through the wallet, the same application that facilitates purchases and keeps records of all transactions. A service provider whose bottom line depends on the reliability of their financial transactions is more likely to be a better safeguard than a point solution that may not gather enough users to be viable long-term.
- Provides a means of securely storing NFT assets
- Identity verification to ensure seller authenticity
Much like crypto, from which NFTs evolved, the early NFT movement is geared towards a technical enthusiast audience—not as much for artists or art appreciators.
And while Crypto stock is to be calculated, shorted, strategically invested, art is for admiring, discussing. Progression in the crypto world requires iteration and discussion between technologists. Iteration in the art world requires artistic communities, not merely a sufficient number of investors.
For such a melding of commerce, art, and technology to be successful, the NFT movement must have its own means of bringing NFT artwork to the public consciousness. Again, we believe that wallets and NFT apps are the perfect entry points to such social environments, facilitating quick purchases on top of meaningful, peer-to-peer engagement.
- A free means of viewing, admiring, and sharing NFTs with others
- An ability for artists to promote their work within an integrated social ecosystem
Ease of Use
It’s difficult to find empirical data on the subject. Still, it’s well understood that the complexity of NFTs and cryptocurrencies form a stiff barrier to entry for many.
In part, that’s because many are confused about blockchain basics. Most of all, it’s simply overwhelming. You have crypto accessories, wallets, enthusiast sites with conflicting and jargon-ridden advice, and a virtual maze of exchanges, each with wildly different standards, fee structures, and royalty policies.
That’s a lot to deal with.
This confounding infrastructure desperately needs an easy access point for new users and a central point-of-access for veterans. Digital wallets are perfect because they’re closer to the user, reduce complexity (And the number of passwords and seed phrases you have to track), and increase consistency.
This means that wallets are a perfect entry point to exchanges (Some wallets have begun to catch on, providing Dapp browsers for NFT shopping). There’s no better place to mint and purchase NFTs than the wallet that holds your funds and NFT library. What’s more, this arrangement helps retain the decentralized aspect of blockchain while using centrality to improve the user experience.
Additionally, such a wallet ecosystem is the perfect point at which to enforce royalties. The current system, where royalties are enforced by exchanges, each with its own limits, frequently lets royalty enforcement slip through the cracks (especially in the secondary market). This ultimately impairs the platform’s most tremendous promise: its ability to more fairly and consistently fund artists.
- Capability to list, mint, sell and buy NFTS through the wallet
- Cross-chain compatibility across all exchanges
- Rigorous royalty enforcement
Which Wallet Security Method is Best for You?
First and foremost, today’s digital wallets mainly differ in how they secure your private keys. Users looking for wallets will find a slew of options: online wallets, mobile and desktop wallets, paper wallets, and cold storage wallets.
Hot wallets work through software—or the web—and require an on-grid connection. As such, they’re much easier to use and more accessible. However, since they permanently live on the web, they’re more vulnerable to hacking. These are much more attractive to those who make a high volume of NFT transactions.
Cold storage wallets, on the other hand, are considered the most secure. These rely on hardware for data storage, like thumb drives or external hard drives. They begin the transaction online, but the actual digital signature sequence occurs on the physical hardware—making it an offline environment. The resulting data is then sent back to the online network for approval.
This way, your keys are only exposed to the broader internet for the first few moments of the transaction. While hot wallets will continue to be exposed, cold wallets lie dormant like bears sleeping off winter.
Cold wallets are better for storing a large number of assets. Many users keep a small portion of assets in a hot wallet and then transfer the bulk of their assets to cold wallets.However, if you lose your hardware or forget your private keys, you may join the club of blockchain investors who have permanentlylost fortunes as the pile of unclaimed bitcoins continues to rise. So be careful.
banq: Mobile Wallet Tailor-Made to Bring the NFT World to You
Our mobile wallet, banq, was created from the start to enhance and expand the capability of mobile wallets.
With banq, users get a complete NFT and cryptocurrency ecosystem that resolves many ongoing issues in exchanges and other wallets, complete with social features and user analytics, anti-fraud measures for greater security.
banq’s servers also store asset data permanently, enforce royalties automatically at the point of transaction, and enjoy compatibility with all of today’s exchanges.
And unlike most wallets, banq accounts carry all the protections of a bank. FDIC insurance means your deposits are protected for up to $250,000, and flexible financial organization features will let you keep track of your spending.
Tips for Navigating the NFT Scene
As a new space, NFTs can be incredibly confusing for newcomers. At the same time, it offers a sufficiently broad base of legitimate creators and investors to warrant a look at least. If you’re looking to jump on board, take into account the following considerations.
Measure Twice, Cut Once
Some call it the most common mistake in blockchain.
When sending transactions between your wallets, always double-check the address you are sending to is identical to your intended receiver. It’s incredibly difficult, and sometimes impossible, to recover incorrectly sent funds. You’ll have to check with your exchange to learn about their return processes, and fees, if applicable.
Also, be warned that many scams happen when users send funds to addresses they don’t recognize—always know for sure before you hit send.
Get Your Work Officially Registered
There’s a common misconception that NFTs grant artists exclusive copyright. In reality, NFT artists looking to secure their work must register with the U.S. Copyright Office. This is especially important as fraud is relatively commonplace.
Be Aware of How Copyright Law Impacts Your Creations
It’s common to treat NFTs like memes, borrowing imagery, sound, and moving images from other artwork.
But those who incorporate elements of others’ work in their artwork should consider the basics of copyright law. Many are learning about this legal standard the hard way.
One independent game developer sparked outrage when he started selling NFTs based on works he commissioned from other artists many years prior. More broadly, dozens of artists have complained of stolen work appearing in unauthorized NFTs.
What’s an acceptable balance between original and copyrighted elements? Ultimately, copyright law considers the following three factors.
- The similarity between the original work and the newer one
- The degree to which it was altered or transformed
- The market in which the parties operate
Remember the cranberry juice sipping skateboarder vibing to Fleetwood Mac? That TikTok star, Nathan Apodaca, could not get his clip turned into an NFT, as ‘Mac songwriter Stevie Nicks declined to offer permission.
While the video itself was largely original and clearly belonged to Apodaca, the extensive use of the song puts it into a grayer territory in terms of copyright violation.
Be Weary of the Fine Print on Some Platforms
While NFT buyers aren’t given the right to reproduce another artists’ work, the terms and conditions on some platforms may grant themselves broad license to reproduce and distribute copies of the work for sale through their marketplace. Such terms are overwhelmingly non-negotiable.
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