If you are diving into crypto space, then obviously, blockchain is the technology that hits you hard. Cryptocurrency transactions are logged on the native blockchain network and are governed by the community peers with a consensus mechanism. You may wonder what makes the blockchain wallet development special for preserving the bitcoin or any other crypto coins! As for experts are concerned, security is the most aspiring feature of blockchain wallets.
In this blog post, let’s have a chitter-chatter on blockchain wallet, its workflow, types, and mandatory features!
What is the blockchain wallet?- A glimpse without the jargon before diving into blockchain wallet development!
A blockchain wallet is a computer software or application that enables crypto users to preserve and conduct transactions with their cryptocurrencies by interacting with the native blockchain network. Every crypto transaction is recorded on the blockchain network. When it comes to the blockchain wallet, the transaction becomes much more encrypted and secure than other wallets.
To understand the process of cryptocurrency transactions in a blockchain wallet, let’s have a glance at its workflow!
Workflow of blockchain wallet Development
Blockchain is a distributed ledger that logs transactions with timestamps in chronological order. Every cryptocurrency has its native blockchain network to record the transactions. The transactions are stored in data blocks of the blockchain comprising of pre-hash, hash, nounce, and data values. Every transaction is verified and approved by the community peers called miner nodes before adding into the blockchain ledger.
The entire crypto community can access the blockchain network, and hence, the transactions are transparent and traceable. Blockchain is immutable; therefore, transactions once approved can’t be modified. The blockchain wallet transactions are based on two major cryptographic keys: Public and private keys.
Public keys are similar to email addresses, whereas private keys are close to our passcodes. Crypto owners share the blockchain wallet’s public keys to send or receive cryptocurrencies, but not private keys. When the crypto transaction occurs, the blockchain wallet’s private key matches with the public address of the particular cryptocurrency, and then it’s legally signed-off from the ownership. Once the transaction is complete, the crypto balance changes in the sender and recipient wallets.
You have various options of blockchain wallet in the crypto market space to store your crypto coins. Let’s scrutinize the types of blockchain wallets available in the market to preserve the crypto assets!
Types of blockchain wallet Development
Blockchain wallets are customized based on client requirements nowadays. Some of the crypto investors dive into the dedicated bitcoin wallet development, whereas professional crypto traders shower their interests on the multi-cryptocurrency wallet development.
The crypto-traders are fond of building advanced features and functionalities in their multi-currency wallets for ergonomic trading. Long-term crypto investors prefer popular cryptocurrencies like BTC, ETH, Bitcoin Cash, and others. The crypto investors have their interests in cold storage wallets. So, let me take you through various options for building blockchain wallets!
Blockchain wallet apps that are installed and operated on internet-connected devices like mobile, desktop, or even online exchange wallets fall under this category. These types of wallets are vulnerable to security hacks, but the world still loves it for easy accessibility. Crypto traders store small amounts of their assets in these kinds of wallets to perform quick transactions in stores and exchange platforms. However, desktop wallets are considered safer than the web and mobile wallets when it comes to security breaches. But, it’s purely the crypto owner’s responsibility to protect the devices from virus attacks. You can also opt for recovery backup from the professionals on the customized cryptocurrency wallet development to secure your crypto assets.
Blockchain wallet applications that are operated through devices like USB, discs and other hardware with the help of the internet are considered as hardware wallets. The devices can be disconnected from online after usage, which makes it the safest option to store cryptocurrencies. The hardware wallets are available with offline verification techniques, so the crypto owner’s precious funds are secure from the prying eyes.
Blockchain wallets that constitute its public and private keys in the form of QR codes in the physical paper are known as paper wallets. This is the safest of cold wallets. Crypto owners can generate their paper wallets by leveraging the services of third-parties. Paper wallets are highly secure and encrypted with crypto codes. Whenever the crypto owner performs the transaction, the addresses in the paper wallet need to be changed. However, the paper wallet has the least accessibility among blockchain wallets.
By now, you’d have explored the distinct types of blockchain wallets. Let me snipe the mandatory features of the bitcoin wallet to perform elegant transactions in the network!
Mandatory features of blockchain wallet Development
- Multi-factor authentication
- Transaction history
- Send or receive cryptocurrencies
- Multi-signature approval, if required
- Elegant UI
- Push notifications
- Prevention of duplicate transaction
- Real-time price monitoring
You must opt for these features and functionalities while building a blockchain wallet to enhance the security of your crypto coins. Let me conclude this post by shooting the bullets on the benefits of blockchain wallet development!
Benefits of blockchain wallet Development
- Rapid cross-border transactions
- P2P transaction model without any intermediary
- Reduced transaction charges
- Cryptographically encrypted transactions
- Devoid of central governance, intermediaries
If you’re striving to leverage these benefits by building customized blockchain wallets, our team will then pack the features and functionalities required in the application!
Interesting Facts About The Working Of A Blockchain Wallet
Previously, we studied what a blockchain wallet is, its functionality, types, and what happens in blockchain wallet development.
In this post, we’re going to deep dive into the working of a crypto wallet or bitcoin blockchain wallet and gain insight on diverse aspects.
Why Do We Need A Crypto Wallet?
Any given minute, there are cryptocurrency transactions happening across various parts of the world. These transactions cannot be left to lie in an unsecure system. They need to be kept secure in a reliable and trusted place, hence the use of blockchain wallets.
Since the beginning of the Covid-19 outbreak, the prices of almost all cryptos are gaining momentum. With this sudden surge, the use of wallets has also been increased, and especially, there’s still a demand for bitcoin blockchain wallets.
Besides, a recent report stated that millions of users are utilizing multi-cryptocurrency wallets to make transactions and this is a good sign that people have started understanding the worthiness of cryptos.
People are interested in learning about the functioning of a crypto wallet, especially the backend process. It includes the security measures used to safeguard the transactions, the processing of transactions, location & storage of cryptos, and a lot more.
The Functioning Of A Bitcoin Blockchain Wallet
A crypto wallet generally works on the principle of ‘encryption’ and ‘storage’. The transaction details are stored in a blockchain network. Public and Private keys are the prime factors involved here. The matching of public and private keys is essential for decrypting.
Whoever holds the public and private keys can access the respective wallet. Besides, to prove authenticity of each transaction and aid the user to buy/sell various cryptos, the wallet interacts with multiple blockchains.
The Primary Attributes Of A crypto Wallet
Each wallet has its own central node
When a crypto wallet is created, a master control node is created specifically for it. This node may be called the nucleus of the wallet. It helps to get all the active bitcoin addresses. This aids users to interact with selected wallet addresses they wish and also transfer & request bitcoins.
As said earlier, the user with the private and the public keys only has access to the wallet. The wallet is not a physical form of storage, instead it records the transactions of the user’s crypto transfers. Each wallet is protected by the user’s device itself, probably with a personal password or PIN.
This is a decryption key that allows & blocks access, locks & unlocks the user wallet. The wallet is free from the responsibility of storing the password. Only the user who knows the password can access the wallet.
Each wallet is backed up and stored securely by the wallet server. And what’s more fascinating here is that the backup process is automated. The wallet server provides an additional layer of security to the wallet – a second encryption – to be accurate. This allows safe and secure access to the blockchain wallet from any or all different devices the user wants to use.
A Detailed View On How Transactions Take Place In A Wallet
When a user transfers cryptos to another wallet user, a transaction is initiated. It is then stored in a block that can be viewed online and shared with all participants in the blockchain network. This is the frontend part.
But what’s actually happening in the backend is that the sender is transferring his ownership to the receiver. The crypto’s ownership is transferred to the receiver’s wallet. The authenticity is proved when the receiver’s private key matches the crypto’s public key.
In addition to that, the transaction is validated by all participants on the network. The authenticated transaction is added to an existing chain in a public ledger. This ledger is permanent, immutable, transparent, and acts as a proof of the whole process.
As we can see that there is no actual exchange of currencies. Instead, there are only transactions taking place on the blockchain network. This process does not require any intermediaries. The participants can only validate the transaction and cannot access any user’s personal information.
Blockchain & Bitcoin Wallet Development
Talk to Our Experts