PFT WALLET GUIDE
Choosing a wallet requires balancing convenience with security. Each wallet type—hardware, software, hot, or cold—has distinct benefits and risks, and may be suited for different use cases.
If you are brand new to PFT and don’t yet have a local discord or python wallet set up yet please see this guide: https://chatgpt.com/g/g-EBnZpjz4L-post-fiat-installation-helper
#1 tip if you’re new to this:
Send a small test transaction first if you’re sending crypto anywhere to make sure you input the correct and desired address and understand the process all the way through.
Remember once it’s sent, it’s sent. Better to burn 10 PFT by mistake than 10,000.
#2 tip if you’re new to this:
Never buy a second-hand cold wallet or even a “new one” if it’s not direct from the manufacturer/distributor. Malicious scripts and malware can be embedded into most wallets prior to your purchase. For those who store a large percentage of their net worth in crypto, you definitely want to split your tokens between multiple hardware wallets for redundancy. Control your own keys and keep them off of exchanges.
Why not just use coinbase? It’s backed by the FDIC? When things really get wild, the fdic doesn’t have enough money to back or secure funds for everyone. More importantly, FDIC insurance generally applies only to cash held in a US bank and does not cover crypto assets in the case of an exchange bankruptcy or compromise.
A major factor when choosing a wallet is if you want a custodial or non-custodial wallet. A custodial wallet means a third party holds your funds, typically on an account they manage on the XRP Ledger. A custodial wallet can be thought of like a bank, where you're trusting another entity to keep your money secure. Many centralized exchanges offer custodial wallets, so when you create an account with them and use their app, you don't technically have an account on the ledger.
For day-to-day payments, this may be preferable, since these types of wallets are user-friendly: if you forget your password, you can typically have it reset. Also, if you don't have an individual XRP Ledger account, the ledger's reserve requirement doesn't apply to you. The custodian acts as a buffer to any issues you run into on the XRP Ledger, and may offer support or assistance if you're not sure how to do something.
A non-custodial wallet, such as Xaman, is one where you have the secret keys to your account.
This means you're ultimately responsible for managing the security of your account. Caution: If you lose your keys, you are locked out of your account and there are no recovery options.
Non-custodial wallets allow more freedom. Since you're interacting directly with the XRP Ledger yourself, you can handle any type of transaction you want without anyone restricting your options. Non-custodial wallets also don't require you to trust an institution with your money, which can insulate you from market factors outside your control.
Users of both custodial and non-custodial wallets have to protect themselves from malicious users who might try to steal their funds. With a custodial wallet, you have to manage your login and password to the app or site; with a non-custodial wallet, you have to manage your secret keys to your ledger account. In both cases, the wallet provider's own security practices are also important to protect you from vulnerabilities.
Hardware vs Software wallets
Hardware wallets are physical devices that store your private/secret keys. The main benefit of using hardware wallets is that you can secure your information by disconnecting it from the internet when it's not in use; hardware wallets totally isolate your keys from computers or smartphones and reduce the risk surface of your private keys.
Software wallets are entirely digital. While this makes them easier to use, it also makes them the less secure method of the two, but they usually come with additional features that enhance your experience. Ultimately, the decision between the two will come down to your comfort level and how important ease-of-use is to you.
Hot vs Cold wallets: