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Non-fungible token, also known as NFT, is sort of a cryptocurrency token that works as a digital certificate of property right for physical or virtual assets. These tokens are a unique, non-fungible, non-interchangeable digital identifier, hence they are not a payment method. People use them to buy, sell, and trade unique goods, such as: paintings, photographs, texts, music, and videos.
In this article, we will look in detail at how to create a cryptocurrency
wallet to manage these tokes and the development costs of such a product.
How an NFT Wallet works
In a grand sense, an NFT wallet is a standard cryptocurrency wallet that is compatible with basic tokens, like: BTC, ETH and USDT, but it also accepts non-fungible tokens. For instance, ERC-721, ERC-1155, TRC-721, dGoods, BEP-721 and BEP-1155 protocols. Moreover, these wallets usually have additional integrations with NFT marketplaces and DeFi projects that allow them to create, manage, and trade the assets.
The most known NFT wallets are Metamask, Enjin, Math Wallet, Trust Wallet, AlphaWallet. These platforms help to store, buy, and sell NFTs for cryptocurrencies or fiat. They offer a simple and intuitive interface and integration with the following NFT marketplaces: OpenSea, Rarible, Makers Place. There you can create your non-fungible token
and put it up for auction.
NFT Wallet Features
As we mentioned above, the main feature of these platforms is the compatibility with non-fungible tokens protocols. For the rest, everything is similar to standard cryptocurrency wallets:
- Enhanced payment security. The payments in cryptocurrency networks are more secure, since they use the blockchain and smart contracts. This helps to avoid using the intermediaries and uniform control centers that can be easily hacked.
- Faster and cheaper international transaction processing. International transactions take a lot of time (up to 5 business days) since the intermediary bank checks the transaction data, hence delaying the payment and increasing costs. In the cryptocurrency networks, there are no intermediaries. The blockchain validates the transactions and processes it within minutes for a small fee.
- Privacy and anonymity. The encryption technology secures the private user data from stealth and unauthorized access. Even so, someone knows the cryptocurrency address (public key), the identification data still is impossible to reach.
- Transparency. Open source coding is the ground for cryptocurrency wallet software, so every single one can check the security, safety, and working process.
NFT Wallet Security
Today, transactions run by blockchain are the safest method. But, since cryptocurrencies cost a lot, the user data and access keys need decent protection. This is why NFT wallet developers apply various security measures on both, the supplier and customer sides. These security measures are backup, two-factor authentication, multi-signature, complicated passwords, hierarchical deterministic functions, constant updates, and rewards for finding gaps in security.
Here are the results of the security research of popular NFT wallets with the list of main protection functions lead by Hacken
How to develop an NFT Wallet
The development process of an NFT wallet is different from the standard ones since there are additional requirements for security and safety. The thing is that cryptocurrency transactions are anonymous and irreversible, so stolen money can be hardly retrieved. Furthermore, cryptocurrency wallets work on open source code, which brings additional requirements to the safety levels and security measures.
If you want your NFT wallet to work without any risks, it is better to ask for help from a technical partner with decent and appropriate knowledge and experience, such as Merehead. Our company has worked on blockchain fintech and DeFi projects since 2015. We developed simple smart contracts and modern decentralized cryptocurrency exchanges. To study our portfolio and see the terms of cooperation, contact us via email@example.com
or by our phone number +1-206-785-16-88.
The development process of an NFT wallet goes through the following steps:
1. Choosing the wallet type (platform)
The description of bitcoin wallets: advantages, disadvantages, and examples. Source
On the first step of developing your NFT wallet, you will need to determine your main target audience, since it has a great impact on the design, function, technological stack, integrations, etc. Here is the description of the main solutions:
2. Market, audience, and competitors analysis
- Web wallets, for example, MetaMask for Chrome. This software integrates with the browser and helps to store and manage your cryptocurrency assets. Their main advantages are that they work on any computer and are easy to run. But they are extremely vulnerable to hacker attacks, which is a significant drawback.
- Mobile wallets, for instance, MetaMask Mobile, Enjin, and Math Wallet. To run these applications, you just need to install them on your smartphone. They have a simple interface and are a perfect fit for daily use and purchases on the road. They are more secure than browser extensions, but still not as safe as other options. Furthermore, they are under a range of limitations, because of the low hardware speeds of standard smartphones.
- Desktop wallets, such as MyEtherWallet. You will need to install the software on your desktop or laptop. They offer a superb function; and allow mining cryptocurrency (not NFTs, they can not be mined). The security of these wallets depends on how secure the laptop or the desktop device is, where it is installed since the private keys usually are on the same device.
- Hardware wallets, for example, Ledger and Trezor. These are physical flashcards that can be connected to a computer, laptop, or tablet. These NFT wallets help to complete the transaction without discovering the private keys because they are on the flash drive and never leave it. This makes hardware cryptocurrency wallets the safest solution. However, they are harder to use.
Oftentimes, it is worth doing research on the market, target audience, and competitors, before developing any software project. The research will help you to understand, which product your users expect to see (design, functions, integrations), which solutions are popular and successful at the moment and which are not. You can use this data to develop an NFT wallet that will fit the needs of your users and will gain them income.
Depending on the type and deepness of the analyses, we can outline these research methods:
- Top-level report. The surface scan of the market, target audience, competitors from the open data (marketing research, statistics, reports). This analysis will give a basic understanding of the sector and the needs of the users.
- Complete market report. Decent and deep research will help to understand the needs and behavior patterns of the users, reasons for the success and failure of the competitors. This type of analysis helps to understand the prospects of a niche. Also, it helps to develop an NFT wallet with a functional and design that the users will appreciate.
- Detailed market analysis of a product. The deepest way of analyzing that will give all the data a complete market report provides and the details and information on present trends, their influence on the market, audience, and competitors.
3. Choosing the main functions of an NFT wallet
This function will help your users to register and fill in the form with their wallet access keys. Many wallets use an email address or phone number for registration. Also, users need to provide little information about them, so the transaction privacy and personal data are safe from hacking attempts. However, oftentimes you will need to add two-factor Google authentication and a mnemonic device to restore access to the wallet.
In such networks as Bitcoin, Ethereum, and BSC you can not cancel a wrong or unauthorized transaction, and the counterparty can be hardly found, hence the users do not have any chance to retrieve the money if they were stolen. This is why your software should be protected from hackers, fishing, and user mistakes.
Here are some functions that you can apply to enhance the protection of your NFT wallet, except cryptography and code testing:
Managing the crypto assets (balance).
- Two-factor authentication. This function is easy to implement since Google offers services that allow you to verify the users via mobile number, email address, QR codes, PIN codes Touch or Face ID.
- Mnemonic phrase of 12 words. This one helps to retrieve access if the cryptocurrency wallet gets deleted or when the users want to switch the wallet.
- Automatic exit from the system. This is a useful and vital instrument, if the mobile phone was lost or stolen, the system will ask for a username and password each time a user wants to log in. You can also add the feature of automatic exit if the app is idle for more than five or ten minutes. The next security level will ask for a special password to verify the transaction. The password can be static or randomly generated, and then sent via SMS and email.
- Bounty company for hunting errors. You can reward people for finding gaps in the security of your wallet. The reward should be significant and depend on the importance of the found vulnerability.
- Encrypting the internet connection. Your NFT wallet must encrypt all the sent data and ask for encryption of the received data.
- Rates, coefficient of conversion. Since the users will use your wallet to buy and sell NFT for the cryptocurrency of fiat currency, they should know the current Bitcoin, Ethereum, or another coin price. Furthermore, they will need the coefficient of conversion with fees and commissions included. In addition, the users should have the option to track the recent rates and coefficients.
This is very functional that is responsible for buying and selling NFTs and other cryptocurrencies. Here are the necessary features for asset management:
QR codes for fast transactions.
- Viewing the balance, transaction history, counterparties list.
- Buying and selling NFTs and other assets according to the current rates, by bank cards, PayPal, and other payment instruments.
- Sending and receiving NFTs and other assets.
This function is not necessary, but many users appreciate it since it allows avoiding fatal errors while entering the public keys to perform the transaction. Here you will need to develop the generator of random QR codes and a scanner.
This is one more solution to save people from entering public keys, which will make recurring transactions even faster, for example, paying for subscriptions. The QR codes and this feature are not necessary, but people love it, and they are easy to develop, so almost every cryptocurrency wallet has it.
If you want your wallet to work with non-fungible tokens, it should support the: ERC721, ERC1155, Composables, dGoods, NFT Cosmos, TRC-721, BEP-721, BEP-1155, and others. It would be even better if your wallet allows users to create their NFT assets.
This is a very useful feature that will notify your users about important events: transaction verification, new messages, application updates, depositswithdrawals, suspicious activity, etc.
4. NFT Wallet Design
An example of a design. Source
The next step in starting an NFT wallet is the design and user interface. Usually, this process starts from a template, where you outline the features of the wallet and user streams. Next, the designers create prototypes and mockups. If those prototypes are approved, the programmers start to work with them.
5. Choosing the technological stack
Possible backend architecture of an NFT wallet. Source
Now, as we discussed the design and function of your NFT wallet, we need to check the technical part of the software development