07. Web2 to Web3 Day 2: Wallets
Overview
Section titled “Overview”A wallet is the tool that turns the abstract key pair from lesson 01 into something you can actually use: it stores your keys, derives accounts, signs transactions, and connects to dApps. For a developer the wallet is both your everyday test account and the exact thing your users will use, so understanding how it manages keys — and how it can lose them — is essential.
This lesson is long; the assignment is to watch the first hour. That segment covers wallet setup and key management, which is what the notes below focus on.
Key concepts
Section titled “Key concepts”- What a wallet actually is — software (or hardware) that holds your private keys and signs on your behalf. It does not “store your coins”; coins are balances onchain. The wallet stores the keys that control those balances.
- Seed phrase / mnemonic (BIP-39) — the 12- or 24-word backup a wallet shows you at setup. From it, the wallet can regenerate every private key it manages. Whoever has the phrase has the wallet — treat it exactly like the private key it represents.
- HD wallets (one seed, many accounts) — modern wallets are hierarchical deterministic: a single seed phrase deterministically derives a whole tree of accounts (Account 1, Account 2, …). One backup covers all of them.
- Networks and RPC — the wallet points at a network (mainnet, or a testnet like Sepolia) through an RPC endpoint. Switching networks changes which chain your transactions go to; the same account address exists on all of them.
- Testnet ETH — on a testnet you get free, valueless ETH from a faucet to pay gas. This is how you practice sending real transactions without spending real money — the setup you will use in Lab 1.
- Custodial vs. self-custodial — with a self-custodial wallet (MetaMask, a hardware wallet) you hold the keys and bear full responsibility. With a custodial service an exchange holds them for you. This course uses self-custodial wallets.
Common pitfalls
Section titled “Common pitfalls”- Storing the seed phrase digitally where it can leak — a photo, a notes app, a cloud document, a chat. Anyone who reads it owns the wallet.
- Entering your seed phrase into a website. Legitimate dApps never ask for it; that prompt is the classic phishing attack. dApps ask you to connect and sign, not to type your phrase.
- Confusing networks. Sending a transaction on the wrong network, or expecting testnet ETH to have value, are common early mistakes.
- Reusing a seed phrase you generated in a tutorial (or that AI generated) for anything holding real funds.
Check yourself
Section titled “Check yourself”- If a wallet doesn’t store your coins, what does it actually store?
- How can one seed phrase back up many accounts?
- A site asks you to “enter your seed phrase to connect.” What should you do, and why?
Watch the Video
Section titled “Watch the Video”
Web2 to Web3 Day 2: Wallets
Video credit: Austin Griffith