The cryptocurrency marketplace is growing exponentially, with around 8000+ crypto coins in the Coinmarketcap. Soon the cryptocurrencies are ready to hit the mainstream payments in developed countries with their own digital coins. The cryptocurrencies are adorned for their transparency, traceability, decentralized, and security features by the community members. The limited supply of these digital coins makes it highly valuable, volatile, and manageable by the network members. Now, let’s dive into the basics of cryptocurrency and wallet applications.
In this blog post, you will explore the basic butter and jam on cryptocurrencies and their types of wallet applications in the marketspace.
A kick-start on cryptocurrencies!
Cryptocurrencies are digital currencies that are limited in supply, and the entries are recorded on the distributed ledger known as “Blockchain.” Every crypto transaction is verified and approved by the miner nodes of the blockchain network, making the transactions more transparent and secure. The cryptocurrencies interact with the blockchain network through an interface application known as a wallet.
A Multi Cryptocurrency Wallet is an application that can be authenticated by private keys to enable access to perform transactions with the holding crypto assets. The cryptocurrency wallets allow users to send, receive and manage their crypto portfolio by interacting with blockchain network peers. Every crypto wallet consists of two major keys: Public and Private. Public keys are wallet addresses, and private keys are passcodes required for authentication of application. This is all about the basic jargon of the cryptocurrency and wallet application!
Now, let’s dive into the types of cryptocurrency wallets!
Types of cryptocurrency wallets-In broader categories!
You may have heard of mobile, online, desktop, and other hardware wallets in the crypto space. But, in this post, let’s categorize the types of crypto wallets into broader categories!
A custodial wallet is an application that is maintained and managed by central authorities or third-parties. This type of wallet stores the public and private keys in third-party servers. The entities maintaining the crypto wallets can leverage the assets hold on the application anytime. The crypto user holding the custodial wallets do not have complete control over their assets in the application; the managing teams lay limitations. However, these custodial wallets’ major advantage is that these third-parties maintain the privacy of the keys and could easily render backup & recovery support.
Custodial wallets are sub-categorized into
- Online or web wallets
- Exchange wallets
Exchanges render wallet applications for every user to perform trading within the platform. However, exchanges are spotlights on the prying eyes. These exchanges comprise a whole bunch of security teams to encrypt the crypto assets of the community. If you are a novice investor in the crypto space, the custodial wallets would be appropriate for your needs!
A non-custodial wallet is an application that the crypto user completely owns. The crypto user can leverage complete control over the assets without any restrictions. The user completely maintains and manages the public, private keys, and other wallet application information. Hence, these wallets are recommended only for crypto professionals who have basic knowledge of their technical aspects.
The non-custodial wallets are completely private, and hence the loss of private or public keys can not be recovered by any third-parties. Hence, the crypto user must be a technical person to manage the server space and wallet information securely. Some of the cryptocurrency wallet development companies render the crypto professionals with the options of raw private keys and mnemonic seed to set as private keys. Non-custodial wallets are beneficial in the aspects of complete ownership, high-end security, and transactions. However, the user must be alert with the backup and recoveries!
Non-custodial wallets are sub-categorized into
- Mobile wallets
- Desktop wallets
- Hardware wallets
- Paper wallets
Among the non-custodial wallets, mobile applications are the most developed application with immense accessibility for professional traders. Paper and hardware wallets are notable for their security features. Professional crypto traders have the practice of developing customized multi-currency wallets from the development companies, and they seek a software and hardware wallet of their choice!
Hope you could now pick the one scoop for your needs! If you are a novice crypto investor kick-starting your crypto trading, exchange, or web wallets is sufficient till you understand the concepts. Once you master the trading techniques with notable earnings, it’s safe to switch for customized cryptocurrency wallet development with the choice of software & hardware wallet!
Stay connected with our team to explore the crypto market space!