Everything an Entrepreneur Needs to Know About Cryptocurrency Wallet before Developing One

As opposed to most traditional physical currencies in the world today, Bitcoin, Ethereum, Dogecoin etc. are digital currencies. These currencies do not have any physical bearing, shape, or form, and are, therefore, very different in their approach. While traditional currency is present in a physical form and stored in a wallet, the cryptocurrency requires a digital device to store it.

Cryptocurrency and Blockchain – Making Sense of the Two Mutually Exclusive Terms

In the simplest of terms, Blockchain is the technology that enables the existence of cryptocurrencies. It is the technology backing all the cryptocurrencies available in the market today. It is a decentralized ledger that can store the records of every peer-to-peer transaction and get every interaction verified by the participants. This technology eliminates the need for a central clearing authority to confirm any transaction. It has many other applications beyond cryptocurrency as well, but this is by far the most important one.

Bitcoin is the best known example of a blockchain based cryptocurrency that introduced the world to this concept. A cryptocurrency is nothing but a medium of exchange – just like any other physical currency in the world (like Dollar, Euro, Rupee, etc.). It is created and stored electronically. However, the difference is that it is purely digital and relies on encryption techniques to control the creation, exchange, and transfer of the monetary units.

The decentralized currency was launched with the agenda of handing people the power to control and manage their money.

Cryptocurrency Wallet Development Services

The blockchain-based transactions rely on an ecosystem, which is completely decentralized. A cryptocurrency wallet development company is indispensable in this system as it facilitates the process through the creation of a digital platform where the cryptocurrency tokens are stored or traded through.

How Do Crypto Wallets Facilitate Transactions?

Cryptocurrency wallet development companies create a digital platform that stores and facilitates exchange and transfer of digital currency. A user prompts the private keys in the wallet to access the cryptocurrency address and further carry out transactions that are securely stored. The cryptocurrency transactions are made possible through a combination of the recipient’s public key and the user’s private key. Cryptocurrency wallets are available in several different forms and users select the best that suits their requirements. The wallets vary in factors like level of safety and security, convenience, accessibility, etc.

What are Various Capabilities of a Cryptocurrency Wallet?

A cryptocurrency wallet can be used as a solution to a number of common problems of a cryptocurrency user. These include (but are not limited to):

• Trading cryptocurrency – the most important task performed by the cryptocurrency wallet.
• Monitor crypto balance and keep a record of the history of transactions – a cryptocurrency wallet helps maintain records and keeps things in order.
• Check Conversion Rates – cryptocurrency wallets provide information of this as well.
• Check Exchange Rates – the user is able to access information of the latest exchange rates.
• QR-codes for Instant Transactions – Cryptocurrency wallets facilitate instant transactions.
• Address Book for quick and easy access to frequently used addresses – a cryptocurrency wallet is able to hold data (up to a certain amount) that helps the user save important addresses and transaction routes.
• Merchant Services — a cryptocurrency wallet can accept preferred cryptocurrency in a POS system and make in-app purchase possible
• Push Notifications – cryptocurrency wallets allow users to get push notifications of important information.
• Simple Recovery – there is a provision to restore a lost password or wallet by following a simple process.

Cryptocurrency Wallets and Their Types

A cryptocurrency wallet is basically a digital wallet – it can be accessed from anywhere in the world as long as there is an internet connection available. It does not have a physical presence. A crypto wallet development company uses a software program to store public and private keys. The crypto wallets are used to initiate interaction with various blockchains during a transaction, and at the same time, to send and receive digital currencies.

Different Types of Cryptocurrency Wallets

Cryptocurrency wallets are not all same; they come in several different types. Each of these digital wallets offer different ways to store and access digital currencies. Cryptocurrency Wallets can roughly be categorized into three types: software, hardware and paper wallets.

Software wallets — The software cryptocurrency wallets usually run on desktops and mobile platforms by virtue of a complex code. They offer immediate transfers from one wallet to the other and even local currency along with multi-sign support. These wallets enable a decentralized exchange, offer secure chat option, and provide a seamless integration throughout the process.

Desktop Wallets — The Desktop Wallets have very specific requirements. They need ample amount of storage space on extremely powerful computers. Desktop wallets bring a high level of cybersecurity to the system and make for an excellent option for most crypto enthusiasts.

Mobile wallets — The mobile wallets basically refer to the compact apps that run on smartphones. Such crypto wallets are usually favoured by retailers who accept cryptocurrency.

Paper wallets — The paper crypto wallets are, as their name suggests, printed documents that contain public as well as private keys. In order to transfer a preferred currency to a particular paper wallet, the user needs to transfer the funds from his software wallet to the public address mentioned on his paper wallet. Similarly, when it comes to withdrawing cryptocurrency from paper wallets, he needs tofirst transfer it to the software wallet by entering private keys or by scanning QR code.

Online wallets — The online crypto wallets are sometimes regarded as the most convenient types of crypto wallets. These wallets run on the cloud network and are easily accessed from any location all over the world. However, despite them being extremely convenient, they are not as popular because they areprone to hacking attacks.

Hardware wallets — As compared to the software wallets, a hardware wallet makes use of hardware devices to store private keys in an offline manner. The transactions carried out through these wallets involve using a USB key. The hardware wallets are popular with cryptocurrency development companies as they are extremely simple to use. The user needs to simply connect the wallet to a computer, enter the pin, and carry out the transaction.

As businesses become smarter, cryptocurrency wallets are becoming the need of the hour today. The cryptocurrency industry is still in its infancy and people need to keep their cryptocurrency safe in a reliable wallet so that they can have total control over it. As a number of cryptocurrencies are emerging and growing in value, a cryptocurrency wallet that fulfils a user’s every requirement and offers bespoke solutions is what is required.

Vin Boris is a Social Media Marketer and Content Writer at SteemExperts.com, a Blockchain and Steem currency based development, consulting firm.