A cryptocurrency wallet is an app that allows crypto users to store, send, and receive their digital assets. It stores public and private keys that drive transactions and each key has its own functions to perform.
Let us comprehend public and private keys in detail.
Difference between private and public key
The easiest way to understand the concept of private and public keys in a blockchain wallet is through an email account.
For instance, you and your friend have an email account and you wish to share correspondence with each other. The two things associated with an account are email address and password. For sending an email, the sender requires an email address of the receiver. However, the sender can only know the email address of the receiver; he or she does not have the authority to look into or gain access to the receiver’s account. This is because the sender only knows the email address of the receiver, not the password to access the account. Cryptocurrency wallets also work on the same mechanism.
The email address works as the public address or public key of the crypto wallet. It can be shared with anyone but no one can access the address without the password (or private key in case of a crypto wallet).
A private key is the actual password of the account. Whosoever has the password of the blockchain wallet can access the wallet. Thus, the private key should not be shared with anyone in any case. If you lose your wallet’s private key, you are at risk losing your crypto assets, too.
Thus, as long as you keep your private key safe and prevent it from falling in the wrong hands, you are safe. A blockchain wallet application development company integrates all necessary security features into the wallet, to enhance the security of the wallet.
Functions of blockchain wallet
A blockchain wallet works like any other digital wallet; the only difference is that it stores crypto assets and not fiat currencies. Let us gain an insight into some of its functions.
The transfer of cryptocurrencies is not bounded by geographical locations. In cross-border fiat payments, a huge transaction fee is charged to process the transaction and the process is time-consuming. However, blockchain wallets enable cost-efficient and quick cross-border transactions.
Blockchain technology is completely decentralized in nature. There is no central authority to control the processes. All the limitations of a fiat financial system, like financial scams, trust, and more are eliminated.
A very minimal fee is associated with blockchain wallets. They save a large amount of money from going into the hands of middlemen.
Cold wallets VS Hot wallets
Crypto wallets are broadly categorized into two types – hot wallets and cold wallets. Hot wallets are those that are connected to the internet. They are a good option for crypto users looking for faster and easier transactions.
On the other hand, cold wallets are more like vaults. They are not connected to the internet, which makes them more secure than hot wallets.
Blockchain technology is revolutionizing nearly every industry, including the finance industry. Blockchain wallets provide a safe haven for crypto users to send, receive, and store their digital assets.
If you are planning to develop blockchain wallet, Antier can help. We provide a highly-secure white label cryptocurrency wallet – underpinned by multi-layer security and market-leading features. Our white label solution – that can be launched into the market in just 21 days. Additionally, we can build a customized wallet for you from scratch.
Schedule a free demo of our white label crypto wallet or connect with our subject matter experts to share your needs for a custom wallet.