It is impossible for you to fold bitcoin, put it in your wallet and hang the wallet on your jeans. But you can hold the keys to your bitcoin with a crypto wallet. A crypto wallet is a software or device that enables you to store your crypto and transfer tokens. At its core, the wallet consists of two key pairs: private keys and public keys.
Although crypto is new to many, crypto wallets are designed to be user-friendly. Wallets like MetaMask come with a user interface that is intuitive to use.
How Do Crypto Wallets Work?
The blockchain is a public ledger that stores data in blocks. Blocks are where records of transactions are stored. Ironically, crypto is not stored in the wallet in the real sense of it. What is held in your wallet are your private keys. The wallet only allows you to interact with the tokens stored in your wallet. The wallet stores your address and allows you to move your coins.
Besides, some wallets have extra features such as swapping between tokens, staking, etc. For some people, sending money to addresses containing long strings of numbers may seem strange at first. But they get used to it. There is also the option of sending tokens with QR codes.
Types of Wallets
Generally, there are two types of wallets: software wallets and hardware wallets. Software wallets are desktop programs or browser extensions that enable users to send, receive and store crypto. Hardware wallets are physical devices. It is a good idea to withdraw crypto from exchanges and save them on a hardware wallet. This is more important if the crypto is worth a huge sum. A hardware wallet of $100 is not too much to store crypto worth thousands of dollars.
Crypto wallets allow individuals to keep their cryptocurrencies and other assets. Getting your first wallet is a huge step towards self-sovereignty. When a young boy gets his first wallet it is a great feeling. A feeling of freedom. In those days, there was a popular wallet with leather. It had bi-fold with metal clips with which you could attach it to your belt. Growing up, having a wallet allows you to do adult things like carrying a membership card or debit card.
Wallets and Personal Branding
Having your own wallet allows you to compile pieces of identity such as your identity card, your favourite sports trading cards, family photos, library card and so on. So, your wallet is dear and personal items where you store your personal effects.
Poolsuite, the company behind one of the most creative NFT projects of 2021, allowed holders of their NFT to add NFTs to mobile wallets. Trevor McFedries was one of the holders who showed his wallet. He was proud to display gift cards from Starbucks and Erewhon. This is a unique aspect of his identity.
Being a popular music star and entrepreneur, fans were excited to see another side of Trevor. The screenshot gave insight into his identity. His love for Starbucks reveals an important part of his lifestyle and identity.
Centralization and Control
Since the UK Government confirmed that people would need to show vaccination passes at domestic events, digital identity has become linked with control. As we move forward, we need some form of digital identification to get access to digital services. Moreover, more public services are delivered on digital platforms.
The government does not necessarily need to be deeply involved. When we opt out of applications that look like user control, we are safe. Already, we have physical wallets with which we hold our fiat currency. In the same vein, in the digital world, we need a wallet.
We have barely scratched the surface on the potential of crypto wallets to enable more composable digital identity. The right mixture of user experience, infrastructure, and community means benefits for the crypto wallet to empower users and manage their digital identity.
This was never possible before now. User experience is the first step toward interacting with web3.0 product serial the wallet is an important piece of a user’s journey into web 3.0. Even though the user interface of today’s wallets is not so sophisticated still is critical point of adoption.
Rapid Adoption and Growth
In 2021 November, Metamask reported that it had over 21 million monthly users. Even though the user interface of Metamask and the user experience is not it is not top notch, still, it is rising in popularity. An increase in the popularity of NFTs has created even more opportunities for new crypto wallets to gain market share. Web3 products are growing as part of our digital interactions and digital identity.
As designers attempt to optimize wallet user experience there are other frontiers that are capable for crypto wallet in decentralized identity even today there are several exciting pieces of web 3.0 architecture that help to enable interesting use cases. For example, ceramic network is a decentralized open-source platform for creating and sharing streams of data clear it helps to solve the problem.
Like a bank account, your crypto wallet is a safe deposit box that only you can control. Software wallets give the benefit of convenience, while hardware wallets are built for security. Investing in a hardware wallet is a good way to take ownership of your private keys (self-custody). The process of learning to use it may take a while, but the added security is worth it.