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What is a Crypto wallet?

What is a cryptocurrency wallet?

A Crypto wallet is basically a device or software that stores your passwords (private keys) for cryptocurrency transactions.
 Cryptocurrency wallet comes in multiple forms including hardware, software, etc. to make digital transactions easy and secure.
 Apart from handling transactions, this wallet also serves purposes such as encrypting information and implementing smart contracts.
 
What is a Crypto wallet?

 

How do cryptocurrency wallets work?

Unlike regular wallets, cryptocurrency wallets contain private keys that are used to access your funds on the blockchain.
 When you create a wallet, an automatic public key is generated that you can give to anyone to get the money. 
However, the private keys are similar to the passwords that only a cryptocurrency wallet account holder uses when a person wants to send cryptocurrency to another party. 
Private keys are essential to keep your money intact and if you lose them somehow, you lose your money as well. 
Since it is easy to compromise with the account if the other person obtains this key, it is always advisable to use a trusted wallet provider.

What should you look for in crypto wallet apps?

One of the best crypto wallet apps has these enhanced features which must be included if you also want the crypto wallet app to work at full efficiency.
1. Support multiple cryptocurrencies
Many cryptocurrencies have been added on a daily basis and their values ​​also change from time to time.
 In order to meet user requirements and provide an end-to-end solution to store all their cryptocurrencies, the app must support popular and popular cryptocurrencies.
2. QR code scanner
Facilitate scanning of wallet address and public keys automatically with QR code scanner. Instead of typing public key characters, QR codes can be simply scanned to speed up cryptocurrency trading and transactions. This feature eliminates the possibility of missing any character while typing the long address.
3. User License
Wallet applications are vulnerable to security attacks which is why it is necessary to improve user authentication for crypto wallet applications. This can easily be done using two-factor or multi-factor authentication that many unencrypted applications do not provide.
4.   Send notifications
Push notifications are the means by which customers can learn about the prices of their digital currency. It keeps users updated on the success and failure of any crypto transactions.

5. Block-based transactions

Blockchain technology allows users to trade digital currencies using crypto applications in a tamper-proof manner. Customers can see their entire transaction history as these completed transactions pass through the blockchain network.
6. Optional session logout
This feature improves the security of your app by automatically logging the user out after a specified period of time. This prevents unauthorized access to your application when it is not in use.
7. Import paper wallet
Paper wallets are used to store bitcoins offline. The Crypto wallet app you create should allow scanning QR codes for crypto transactions.

8. Manage Familiar Addresses

This feature makes the transaction process easier and smoother by simplifying the management of frequently used addresses
These are some of the basic features one should incorporate when creating a crypto wallet. Now that you know what your crypto wallet application should be, you should also have knowledge of the types of crypto wallets.

What are some basic types of crypto wallet?

A crypto wallet is generated from public and private keys and can be categorized based on storage location and method.

hot wallet

A cryptocurrency wallet that is used to send and receive cryptocurrencies and allows displaying the number of tokens available for use is a hot wallet.
Hot wallets store private keys that are used to access the currency. These wallets are mainly applications connected to the network and infrastructure of cryptocurrency.
This is why they are also known as “software wallets” as well.
Some of the best examples of hot wallets are:
  • Coinbase . wallet
  • MetaMask
  • edge of wallet

Hot Wallet Features:

  • The hot wallet provides ease of use as trading can be done at any time due to the availability of the online wallet.
  • Faster Transfer
  • Cheaper compared to cold wallets
  • Gets a promotion easily
Cons of Hot Wallet:
  • It is advisable not to overstock in a hot wallet due to security concerns.
  •  Vulnerable to theft
  • Funds are not secured if wallet exchange is closed

cold wallet

Cold wallets are offline digital wallets (cold wallets) that store private keys on a hardware i.e. USB drive.
These offline wallets carry out transactions offline which are later disclosed on the internet. As these wallets don’t trade online, they are known to provide higher security than hot wallets.

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