For kick-starter of
crypto space, the entire ecosystem of a crypto transaction is still a mystery.
The crypto transactions are as simple as our mobile banking apps or paytm
wallets. Cryptocurrencies are the virtual currencies that are utilized as a
medium of exchange for trades and goods. The traditional banking system has
been digitalized, and even fiat currencies are becoming seamless due to the
boom of digital payment transactions.
In this post, let’s
discuss how the cryptocurrency works and their types! In this digital era, you
can easily relate the workflow of crypto wallets to the online wallets!
How does the cryptocurrency wallet works?
Cryptocurrencies are
digital currencies and are just seen as figures in the owner’s wallet
portfolio. The crypto transactions happen by legally signing-off the ownership
from one person to another in the blockchain network. When the owner sends
crypto coin to the trading peer, he just transfers the ownership of the coin in
the common, native blockchain network of the community. Just like we do our
land title transfers!
The crypto wallets possess
two significant keys that are mandatory to perform transactions. Public and
Private Keys.
A public key of the
cryptocurrency wallet is similar to user name/ email address. The public key of
the wallet is a combination of alpha and numeric codes. The public key can be
shared with peers to receive crypto coins as we share our email address to
receive emails!
Private keys are
confidential as like our passwords and OTP’s. These are the most significant
key to authorize and perform transactions in your wallet. Hence, you must
maintain private keys with high privacy. Once the private keys are hacked, your
crypto wallet will be in the hands of prying eyes!
You can develop a cryptocurrency wallet with customizations such as multi-factor
authentication, backup, automatic session logout and much more security
features. The crypto space renders several types of wallets for investors.
Let’s peep through it!
Types of Crypto wallet
Crypto wallets can be
majorly categorized as
Hot Wallet(Connected
with internet)
- Mobile wallets
- Desktop wallets
- Web wallets
Cold Wallets (Not
Connected with internet)
- Hardware wallets
- Paper wallets.
Active crypto owners
prefer to hold both hot and cold wallets to store their crypto assets. The
crypto traders hold a minimal of crypto coins in their preferred hot wallet for
accessibility and instant bill payouts, whereas the cold wallets are utilized for
back up purposes. Professionals crypto consultants also appreciate these kinds
of wallet practices!
If you’re fond of
building a multi-cryptocurrency wallet packed with security and functionality
features, do consult a cryptocurrency wallet development company!
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