Unlike most traditional currencies, Bitcoin, Ethereum, Ripple etc. are a digital currency. Since these cryptocurrencies do not have any physical shape or form, therefore the approach to such currencies is different, they can be stored anywhere.
Here all the transactions are done on a blockchain network and the entire ecosystem is decentralized. If you want to store a token or trade different cryptocurrencies you need Cryptocurrency Wallet Development without which the transaction will not take place. In addition, if you want to actively participate in ICOs, then you require your own crypto wallets as you are prohibited to invest in ICO’s through your exchange account.
“Bitcoin is just one example of something that uses a blockchain. Cryptocurrencies are just one example of decentralized technologies. And now that the Internet is big enough and diverse enough, I think we will see different flavors of decentralized technologies and blockchains. I think decentralized networks will be the next huge wave in technology. The blockchain allows our smart devices to speak to each other better and faster.”
– Melanie Swan, Founder of the Institute for Blockchain Studies
The main purpose of decentralized currency was to give the masses the power to control and manage their own money. Having control of your keys means having total control of your coins and nobody else can take this right from you. Exchanges on traditional platforms like banks are third-party service providers whom you trust blindly, however, there is always a risk of exchange shutting down or being hacked.
Hence, it is advised to start your own cryptocurrency wallet to avoid such risks.
How Are the Transactions Done with Crypto Wallets?
The user prompts the private keys in order to access the public Bitcoin address and further sign for the transactions that are supposed to be securely stored. A combination of the recipient’s public key and the users private key is what makes a Cryptocurrency transaction feasible. However, to carry out such transactions, the parties require crypto wallets that come in several different forms catering for different requirements. These wallets vary in terms of safety and security, convenience, accessibility etc.
What can users do with a crypto wallet?
- Trade cryptocurrency
- Monitor crypto balance and keep a vigil on the history of transactions
- Check Conversion Rates
- Check Exchange Rates
- QR-codes for Instant Transactions
- Address Book for quick and easy access to frequently used addresses
- Merchant Services— accept preferred cryptocurrency in a POS system and make in-app purchase possible
- Push Notifications
- Simple Recovery
What exactly is a cryptocurrency wallet?
A cryptocurrency wallet is basically a digital wallet in the true sense, which can be accessed from anywhere and doesn’t have a physical presence. The crypto wallet is basically a software program used to store public and private keys. These digital wallets are put to use in order to initiate interaction with various blockchains, and also to send and receive digital currencies.
Different Types of Cryptocurrency Wallets
There are many several types of digital wallets, and each of them provides ways to store and access digital currencies. Cryptocurrency Wallet Development can be categorized into three: software, hardware and paper wallets.
Software wallets— They usually run on desktops and mobile platforms and offer immediate transfers to your local currency along with multisig support. They a decentralized exchange, secure chats, along with seamless integrations.
Desktop Wallets—Created by Satoshi Nakamoto himself, these Desktop Wallets need a lot of storage space on powerful computers. They bring a high level of cybersecurity making it a strong middle ground for the most enthusiastic crypto enthusiasts.
Mobile wallets—are basically the apps running on smartphones and are often compact because of the phone memory limitations. These wallets are majorly used by retailers who accept cryptocurrency.
Paper wallets—these are printed document that contains public and private keys. In order to transfer a preferred currency to your paper wallet, you will have to transfer the funds from your software wallet to the public address mentioned on your paper wallet. For withdrawing cryptocurrency from paper wallets, you will have to transfer it to software wallet by entering private keys or scanning QR code.
Online wallets— these are the most convenient wallets as they run in the cloud network and can be accessed from any location. The fact that they can be accessed from any location makes them very convenient, but as your private keys are controlled by a third party, they are vulnerable to hacking attacks.
Hardware wallets—contrary to software wallets, hardware wallets make use of hardware device to store private keys offline, prompting the transactions to be done using a USB key. The process of using hardware wallets is extremely simple, simply connect the wallet to the computer, enter a pin and carry on with the transactions.
In coming days, we can expect more blockchain startups for different domains such as payment structures, banking, and finance, legal documentation, intellectual property etc. As people get smarter, you as a businessman mustn’t become ignorant towards embracing change and start accepting the blockchain technology and its impact. Without further ado, let us discuss most important use cases of Cryptocurrency Wallet Development that are useful for businesses in different industries:
Use Case 1: Global Compatibility & Reliability
Using a simple ledger device or a wallet, it is as easy as pie to send cryptocurrency to any Ethereum address, provided that it is saved in your crypto wallet. Blockchain allows you to get rid of commissions and days of wait to make successful transactions—the public blockchains are globally secure and for businesses capital and time investment in this technology are minuscule. With Ethereum and smart contracts, once the program is on the blockchain, then it is secured and verified by thousands of people across the blockchain network and once it is deployed it becomes indestructible and unhackable.
Use Case 2: Complete Automation of Financial Bureaucracy
Since all the transactions are stored in the blockchain network, if company X having crypto assets identifies itself with the IRS as the owner of particular address (suppose XYZ), the IRS gains the right to calculate all the profits, losses, and tax obligations of each participant in this system. This does not require the need for any third-party bookkeeping or accounting services, hence the user gains Complete Automation of Financial Bureaucracy.
In a blockchain network, the transaction is mathematically provable without a need for receipts, the stamps serve well as a proof that you have paid money in terms of cryptocurrency. Your transaction ID will be sufficient for the IRS to verify and the Ethereum Blockchain can be accessed. With a blockchain wallet, nothing is superficial as its 100% automatable to infallibility and individuals can trade without being concerned about financial management.
Use Case 3: Easy Entry in The Global Crypto Market
Conducting an international money transfer using blockchain technology is easier as compared to the traditional high street banks which offer costly services and take up to five days. Also, they take a slice of cake for themselves in doing so in the form of fund security or sub-optimal exchange rates. The commission’s banks collect surpasses the GDP of many countries– the blockchain eliminates these charges and middle-men in the money transfer network, thereby allowing businesses to save big in terms of time, manpower and finances.
With Cryptocurrency Wallet Development, it becomes possible to remit directly out any international Ethereum address or exchange, as the blockchain technology brings a whole new world of financial opportunities. However, to gain access to these blockchain services, it is essential to have a crypto wallet which you can rent online or if you have your own ICO to be launched, then you should consider developing your own.
Use Case 4: Protection towards Cyber Theft and Scams
No matter if you choose a wallet for remittance or getting your own crypto wallet developed, your crypto wealth is only safe if your private key is generated securely and it remains a secret.
Fraud is a major drain on any business, as a matter of fact, credit card theft costs merchants an astonishing amount of $190 billion annually. Cryptocurrencies, however, not only offer businesses a reliable protection from financial threats but also from identity theft since everything is decentralized and every transaction gets stored in the crypto wallet. Unnoticed fraud intended transactions also become impossible to execute, and those in the blockchain network, in general, can’t spend more than what they have.
Given the lack of regulatory frameworks on crypto exchange platforms as well as the infancy of the cryptocurrency industry, the best practice to adopt is by keeping your cryptocurrency safe in a web wallet and have total control of your coins. Cryptocurrency gives you the power to have absolute control over your money. Considering the fact that a number of cryptocurrencies like Bitcoin, Ethereum, Ripple etc. have been increasing in value, it is essential to start your own cryptocurrency wallet. Choose a wallet that suits your requirements and stay ahead in the cut-throat digital environment, get in touch with a blockchain development company that can understand your specific needs and bespoke solutions.