Hot wallets are one of the most essential tools in the crypto world and blockchain technology. Unlike cold wallets, which are offline devices not connected to the internet, such as Trezor or Ledger, hot wallets are managed through an application accessible from your computer or smartphone with an internet connection.
Any wallet allows you to access, send, receive and store cryptocurrencies. However, it is crucial to know its typology and the extended functionalities to determine which ones are the most suitable for your needs. It is also interesting to include the DeFi (Decentralized Finance) wallets: Sonic (formely known as Dfinance), ICPSwap, and InfinitySwap.
Types of Hot Wallets that Exist Today
Variety is a quality of crypto wallets, as evidenced by the different types that exist. The most common types of hot wallets are web wallets, browser extension wallets, and mobile wallets:
As the name suggests, these are website-based online wallets that require you to open a URL to access the wallet. You don’t have to download any specialized software. The Network Nervous System (NNS) and Stoic Wallet are web Wallets, and we can also include in this category the wallets of DeFi platforms, such as Sonic, ICPSwap, and InfinitySwap.
Browser extension wallets
Browser extension wallets are plugins (such as Plug Wallet and Earth Wallet) that you can install in your web browser to increase its functionalities. For instance, Plug Wallet allows you to trade NFTs on the Entrepot Marketplace or even on the NFT Studio Marketplace when available, in addition to logging into many decentralized apps on the Internet Computer.
Mobile wallets are iOS and Android apps that streamline your cryptocurrency transactions from your smartphone or tablet. In this category, we have ICWallet available, and in addition, Earth Wallet will also soon launch a compatible mobile version.
Hot wallets and NFT Support
Non-fungible tokens (NFTs) are digital assets that are exploring new horizons over time. The fundamental idea is that no two are alike. This feature allows a Non-Fungible Token to represent a digital asset or item (game, song, event ticket, artwork, picture, etc.). Therefore, it is possible to prove the authenticity of the asset it represents.
The wallets that support NFTs are Stoic Wallet, Plug Wallet, and Earth Wallet. ICWallet has it under development, and ICPSwap includes it in its roadmap. In addition, some wallets go one step further. NFT Studio has already minted several games as NFT, and they are playable from the Plug Wallet preview window!
Some Hot wallets Allow Minting Tokens
The Internet Computer also offers you the possibility to mint your cryptocurrency in a fast, easy, and low-cost process. For this purpose, you have the "Token Registry" tool in Stoic Wallet, "Mint Token" in ICPSwap, and "Launch Token" in InfinitySwap.
Authentication to Internet Computer dApps
Currently, the wallets that allow you to log in to some of the decentralized Internet Computer apps are:
- Plug Wallet: Dfinance, Metascore, Entrepot, Portal, NFT Studio, Axon, etc.
- Stoic Wallet: Rise of the Magni, ICmoji Origins, Metascore, etc.
These wallets offer an alternative to the Internet Identity for logging in to some Internet Computer applications.
Neurons allow you to participate in governance on the Internet Computer by voting on Network Nervous System (NNS) proposals and earn rewards by staking your ICP.
Therefore, you can manage your neurons in the NNS and Stoic Wallet, but the latter follows DFINITY neurons, so you will not be able to perform your own voting until they develop this property. InfinitySwap will also allow you to manage neurons, but this option is not available at the moment.
Consult the ICP Neuron Calculator to find out the returns you will obtain according to your objectives. The following guide provides a step-by-step explanation of how to stake ICP tokens using the Network Nervous System (NNS).
As seen in the previous section, NNS and Stoic Wallet allow you to stake your ICP in Neurons to get rewards. We will also have other options available to earn rewards without staking your ICP in neurons, which will come from ICPSwap and InfinitySwap. Although these options are not yet available, you will soon be able to stake your ICP in one of their dedicated pools.
On the other hand, Sonic offers the option of earning rewards through farming instead of staking. In short, with staking, you earn a percentage of the same cryptocurrency as a reward, whereas with yield farming, the reward you earn is a different cryptocurrency from the one you have locked in.
Top-up Canisters (add cycles)
Decentralized Internet Computer applications run on canister smart contracts, which consume resources in the form of cycles (gas) for their operation. In simple terms, a unit cycle represents the cost of executing a single canister instruction. Therefore, a developer needs to convert ICPs into cycles to run software on the network.
The wallets that offer the canister top-up service with cycles are Network Nervous System, Stoic Wallet, Plug Wallet, and Sonic.
As an Internet Computer user, you will perform this simple task if you use particular applications such as IC Drive, which allows you to store your files on the blockchain. In addition, even if you are not a developer, you can also deploy new sites on the Internet Computer without writing code using the ICME application.
The tweet below shows the two simple steps you need to follow to Top-up your IC Drive canister with the Stoic Wallet. You can do this with any of the other wallets mentioned in this section.
The Internet Computer offers a comprehensive list of hot wallets with varied typologies and features. Some of these wallets already have thousands of users who use them in their daily operations, such as the Network Nervous System, Stoic Wallet, or Plug Wallet. Even those still in the beta version offer a friendly and useful interface (keep in mind that the first wallet was launched less than six months ago).
Many more features are sure to be added in the coming months, such as multi-language support for some of them, among others.
I enjoyed testing all the various wallets. I hope to fill them!
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