A cryptocurrency wallet is software that stores private and public keys and interacts with various blockchain networks to enable users to send and receive digital currencies and keep track of their quantity. Crypto wallet app development is a trendy business, growing in popularity with the adoption of cryptocurrencies.
Desktop crypto wallets are software solutions that need to be installed on a personal computer, laptop or tablet. They come in two types:
+ Full, or thick - These require downloading the entire cryptocurrency blockchain, which can reach several hundred gigabytes. As of November 2018, the bitcoin blockchain is 220 GB. The ethereum blockchain is 670 GB.
+ Thin, or light - These require installation of the distribution kit, which is used for authentication, exchange and transaction accounting. Installation requires 20-100 MB of free space.
Full wallets are more secure because they are synchronized with the cryptocurrency blockchain, which gives more guarantees when storing and transferring coins. However, because of their large size, they cannot be installed on devices with small amounts of ROM. That is why many businesses use a crypto wallet development company to develop light cryptocurrency wallets.
Online services allow storing, buying and transferring cryptocurrency without having to install a wallet on your device. In addition to standard transactions, you can use them to trade on exchanges, calculate commissions using integrated calculators and conduct transactions with banks, online stores and other payment services.
When using online services, one has to trust a third party, since the keys to the account are placed on the service’s servers. In addition, commissions for using such wallets are higher because you have to pay the service, which incurs the expenses for supporting the infrastructure and developing the project.
Mobile cryptocurrency wallets are programs designed to be installed on smartphones and tablets. They are useful for those who use crypto for frequent small transactions or for paying for goods and services in online stores. Such wallets are considered transient because they are not in constant sync with the blockchain and are relatively easy to hack.
Hardware cryptocurrency wallets are gadgets, such as memory sticks, designed for cold storage of keys. It is not convenient to trade and make transactions using them, so they are hardly in demand among ordinary users.
But they are very popular among investors who prefer long-term investments. Investors like hardware cryptocurrency wallets because these gagets can’t be hacked from the outside because they are not connected to the Internet and they have integrated protection against unauthorized access. Because of this, these wallets have the best security parameters.
Keeping accounts and performing transactions in various cryptocurrencies.
Making standard transactions with cryptocurrencies by sending to different wallets and receiving transactions.
Buying and selling cryptocurrencies from the system.
Maintaining fiat wallets and different means of withdrawal to wallets, including bank cards.
Paying for different services from both fiat and cryptocurrency wallets.
Allowing businesses to accept cryptocurrency payments on their websites for their goods and services with the “Pay with cryptocurrency” button on the website. Cryptocurrency received by the businesses can be withdrawn or sold through the system of wallets.
Organizing cryptocurrency purchases/sale transactions between users. Users of the system can put cryptocurrency for sale and make transactions with each other, while the system guarantees that cryptocurrency is sent to the buyer upon the completion of the transaction and transfer of fiat money to the seller’s account.
Using a security system with the ability to set transaction limits and use static and dynamic smart crypto-payment processing rules.
Having user identification settings for managing their limits in order to comply with KYC & AML requirements of the region or country where the system is being implemented.
Having a user-friendly application interface, including functional navigation by service groups, search for services or goods by name, context-sensitive help and check of filling in payment details.
A cryptocurrency wallet is not exactly what we are used to evisioning when we think of a wallet. It’s completely different from a physical wallet or purse, of course.
Your crypto wallet is an encrypted address in the network that stores all of your transaction history and, consequently, the codes that allow you to make transactions. When you make a transaction, the rest of the network only can see the address and the amount of transfer. There are no references to personal data or location. Before starting crypto wallet development, it is worth clarifying the following issues:
First, when developing cryptocurrency wallets, keep in mind the wallet’s security, because this is the main reason for using cryptocurrency as means of payment and preserving the value of money. Wallet security can be increased in the following ways:
Secondly, the use of a wallet should be intuitive, especially if it is designed for ordinary users, not people obsessed with security and anonymity (such people are not afraid of complexity). Thus, a cryptocurrency wallet should be clear for users in how to transfer coins; where to configure security settings, what set of characters serves as an address and what serves as a secret key.
Third, crypto wallet development does not include covering any legal issues. For example, it could happen that SEC classifies Ether as a security. If this happens, it is possible that wallets without support of KYC and AML procedures would be outlawed. Consequently, companies developing crypto wallets need to consider any legal ramifications of their efforts.