What Is Blockchain Wallet?

blockchain wallet

With the rapid development of the 4.0 revolution, many types of e-wallets have been born, of which Blockchain wallet is one of the most secure and most commonly used at the present time. So, what is the Blockchain wallet? What types of Blockchain wallets are there? Let’s find out details with CoinMinutes through the article below.

What Is Blockchain Wallet?

Blockchain Wallet is a cryptocurrency wallet platform – established based on the blockchain network system. This is a cryptocurrency wallet platform designed to be accessed on a website or mobile application platform. It makes it easy and secure for users to trade cryptocurrencies, through a clear, intuitive user interface.

What Is Blockchain Wallet Used For?

Blockchain wallets are used to manage, secure, and use your cryptocurrencies such as Bitcoin, Ethereum, or other blockchain-based digital assets (NFTs).

The blockchain wallet supports four coins: Ethereum, Bitcoin, Bitcoin Cash, and most recently stellar coin (XLM).

Users can send, receive, and store ETH, BTC, BCH, and XLM on the blockchain very quickly and conveniently. This type of wallet is also rated the best among the e-wallets on the market by the user and investor community.

Currently, blockchain wallets not only support website platforms but also mobile devices running IOS and Android operating systems that can be downloaded to use. Their functions will be similar for different platforms.

How a Blockchain Wallet Works?

To understand how a blockchain wallet works, you need to understand its components:

Components of a full Blockchain wallet include:

  • Address: Also known as the Public Key used for receiving cryptocurrency. It is a randomly generated string of letters and numbers, similar to a bank account number. The sender needs to know the recipient’s wallet address to transfer money.

Wallet addresses will have different structures depending on different networks. For example, Terra Blockchain will have a starting wallet address of Terra; Binance Smart Chain will have a starting wallet address of BTC, the wallet address is a random string.

  • Private Key: Similar to a password to access a bank account. It is the only, most important key that helps users access the Blockchain wallet as well as secure their account.

The private key is set completely randomly and cannot be changed. In case of losing or forgetting the Private Key, the user is considered to have lost their Blockchain wallet forever.

  • Passphrase: Also a form of Private Key, Passphrase is made up of 12-24 random English characters used to encode information. Depending on the decoding mechanism of individual wallets, Passphrase gives different wallet addresses.

Simply put, a Blockchain Wallet doesn’t actually hold your cryptocurrency. Your cryptocurrency resides on the blockchain itself, a blockchain wallet is simply a way to secure it, using digital keys that control access to the cryptocurrency you own.

Blockchain Wallet Features

Below are the features of Blockchain Wallet that you need to know:

Log in with your wallet ID

To be able to log in to a Blockchain wallet account, the information that users must have includes: wallet ID, password, and need to complete any two-factor authentication.

Check wallet balance

Users can control their wallet balance by looking at the top of the e-wallet and viewing the balance on the dashboard. Users can also convert the balance in the wallet to the selected currency by clicking on the cryptocurrency value, and then the actual equivalent value of the cryptocurrency will be displayed on the screen. types of currency units.

Send and receive cryptocurrency

To send money to other users using your Blockchain Wallet, users will need to have information about the wallet address or have the QR code of the recipient of the money. On the contrary, users can only receive money if the sender already has an address or has your QR code.

Use the transaction feed

Account owners can review information about the most recently performed transactions on the main screen. If you want to check the entire transaction feed, users will just need to click on the corresponding asset in the wallet menu.

Blockchain Wallet Types

Hot Wallets 

A hot wallet is an online wallet through which cryptocurrencies can be circulated, sent, and received very quickly. The most common form of hot wallet is a software wallet. There are 3 popular types of software wallets: web wallets, desktop wallets, and mobile wallets:

Web wallets

Although convenient to use, the level of security and safety is not high. Users will provide their Private Key for a third party to manage on their behalf and not actually control their money.

Types of software wallets commonly used on the market:

  • Exchange wallet: Binance, Houbi,…
  • Wallet works as an extension: Metamask, Terra Station,..
  • Wallets are created on hosting service websites: Coinbase Wallet,…

Desktop Wallets

This type of wallet is like software, can be downloaded on a computer and operated. Users can manage their Private Key so security is higher but it is less convenient. The user’s wallet and assets can also be lost when the computer fails. Some wallets can be installed on personal computers/laptops such as Exodus, Electrum…

Mobile wallets

Also works like a Desktop wallet but can be logged in on smartphone devices. Some commonly used mobile wallets include Trust Wallet, Terra Station Wallet, and Bitcoin Wallet…

Cold Wallets

Cold wallets are offline digital wallets where transactions are signed offline and then shared to the online platform. They are not maintained in the cloud but instead are kept offline to ensure greater security. When there is no Internet connection, you can still receive money from others, just like a bank account. There are two popular types of cold wallets: hardware wallets and paper wallets:

Hardware Wallets

This type of wallet allows users to store Private Keys on physical devices such as USB. Usually used for long-term storage so it is not convenient for quick transactions. Hardware wallets are the wallets with the highest security and safety, but the price is quite high.

Paper Wallets

Paper wallets usually contain Public keys and Private keys printed as QR codes on a piece of paper. Some paper wallet creation services allow users to download QR codes and use them when they want to trade cryptocurrency.

Blockchain Wallet Fees

First, you need to understand that blockchain will not charge users fees. In case you withdraw money from a blockchain wallet, you will have to pay a fee to the miner for the purpose of confirming the transaction on the network (network fee) or miner fee.

This means that when users deposit money into the blockchain, they will not incur any fees.

Blockchain Wallet Security

Blockchain wallet is integrated with 3 levels of account security. Furthermore, it has a 12-character lock feature in case the worst happens.

But you also understand that no e-wallet is absolutely safe. Blockchain wallets are essentially hot wallets, so there will be risks that are difficult to avoid.

Therefore, to ensure the best safety of the wallet, users can perform the following operations:

  • Enable 2FA for the wallet login account.
  • Enable 2FA for the wallet registration email for the account to log in to the wallet.
  • Make sure your laptop/computer or phone/iPad is not infected with trojans or viruses.
  • Restrict access to unsafe websites.
  • Good security of email used for registration.

Conclusion

Above is an article about things you need to know about blockchain wallets that Coinminutes has compiled. Hopefully, the article has brought useful information to help you choose the appropriate blockchain wallet and trading platform.

Table of Contents

Share This Article:

Twitter
Facebook
LinkedIn
Chi Do
Chi Do
Chi Do is a content writer at CoinMinutes, responsible for creating most of the content on the website, including news related to Bitcoin (BTC), Ethereum (ETH), Blockchain, Decentralized Finance (DeFi), and more. With a keen interest in cryptocurrencies since the 2020s, Chi has acquired extensive experience and knowledge in this field. Chi holds a Bachelor's degree in communication from Academy of Journalism and Communication in Vietnam.

Related Post