The cryptocurrency sector is at its peak of popularity, so many companies and startups consider creating applications to operate with it. The total cryptocurrency market cap is striking in its volumes, while the high volatility of cryptocurrencies makes these assets attractive to investors and traders worldwide. The lack of strict regulation stimulates users to pay attention to the security of their assets. Here a crypto wallet comes to aid.
If you want to have your own cryptocurrency, you will need a place to store it. Hot and cold wallets are used to protect cryptocurrency funds. In this article, you’ll learn about different types of wallets and their main features. You will have crypto wallets explained and receive an understanding of how to create a crypto wallet app yourself.
What Is Crypto Wallet?
A crypto wallet is an application where you can safely keep cryptocurrency, as well as related transaction records. A crypto wallet is not an asset repository, but rather provides users with access to their cryptocurrency stored on the blockchain.
The wallet allows users to buy, sell and credit digital assets, so there are no intermediaries in transactions. It contains a security key or a private recovery phase that enhances asset security.
How Does a Crypto Wallet Work?
The application is installed on a smartphone via the Apple App Store or Google Play. Wallets can also be in the form of a desktop or web application, a browser extension, or even a physical form.
After registration, the user will be able to send and receive cryptocurrency from other people. Operations for sending and receiving are actually transactions of information, the cryptocurrency itself does not move. One participant of the transaction transfers to another the right to own a certain amount of crypto.
The crypto wallet makes transactions using public and private keys. The public key is your wallet address. This address can be safely shared with it as an analog of the PIN code to your bank card. It must be securely stored, recorded, and not disclosed to avoid hacking of the wallet and theft of funds.
What are the Different Kinds of Crypto Wallets?
We have already mentioned that there are different types of wallets. Let’s look at each of them.
Cold Wallets VS Hot Wallets
There are two types of crypto wallets: hot and cold (they are also called online and hardware wallets). Hot wallets are digital, software-based wallets, while cold ones are something like flash drives. Both types are used to keep your cryptocurrencies safe, but they differ in functionality and reasons for use.
We will give some examples of wallets of different types, but you should remember that one wallet can have several versions, for example, a web version and a browser extension or a desktop, web, and mobile application at the same time.
- Desktop Wallet — a program for PC. With its help, you get access to the blockchain. Popular examples include MetaMask and Exodus wallet.
- Mobile Wallet — an application for a smartphone or tablet. It is convenient to use it for frequent transactions and payments for purchases and services. Grapherex Crypto Solutions include an advanced mobile wallet app.
- Web/Online Wallet — a service used by those who don’t want to install the application on a smartphone or computer. Web versions of wallets are easy to use and do not take up space in the device memory. Common examples are Coinbase and BitPay.
- Paper Wallet — a printed document that specifies public and private keys, a seed phrase, a QR code, as well as other encrypted data.
- Hardware Wallet — a physical gadget for storing keys. Such devices are popular among long-term investors. The most famous hardware wallets are Ledger Nano and Trezor.
Core Features of a Crypto Wallet Application
- Authorization is required to connect the user to the blockchain network
- Session duration required for security purposes
- QR Code Scanner is necessary to simplify and speed up access to your assets
- Multi-currency support is required to increase the number of opportunities for the user
- Integrity required to synchronize your wallets on different devices
- Push Notifications are necessary to notify the user about transactions
- Commissions are necessary for the system to operate
How to Develop a Crypto Wallet in 7 Steps:
- Start with business planning and technical analysis
- Consider the budget
- Pay attention to the UI & UX
- Develop your application
- Test your app before the launch
- Deploy a crypto wallet app
- Provide users with all necessary support
Security in Cryptocurrency Wallet App Development
Overall, the creation of applications for storage and operations with cryptocurrencies is caused by market needs. The main demand arises due to the fact that holders and users of cryptocurrencies want to protect their funds. During the development of your application, you should pay special attention to the testing stage to prevent potential errors in the software. As a role model, you can use the Grapherex wallet.