Diving Into Blockchain Wallets and Functionality

Introduction: In the wake of this devastating pandemic, traditional ideas and methods are rapidly changing, from education to arts to finances. Unlike previous centuries, we have the privilege of a globalized and digitalized world connected by the internet using which we are witnessing the rise of a new model of financial transaction – Cryptocurrency. Although still in its nascent stage, the idea of computer codes as a legitimate currency has garnered immense popularity with Industry heavyweights weighing in the conversation. Inspiring stories of rags to riches with the help of this technology is circulating all over the internet. 

However, for the uninitiated understanding of the management of this exciting new technology might appear as a daunting task. In this article, we will take a look into the idea of a Blockchain Wallet and how it helps in managing Cryptocurrency. 

• What is a Blockchain Wallet: In the simplest words a Blockchain Wallet is a wallet for cryptocurrencies like Bitcoin and Ethereum. It allows its users to store and manage these currencies, quick and easy transactions and conversion into local currencies. A Blockchain wallet is easily accessible from cell phones, tablets and computers. Blockchain uses a distributed ledger hence offers security beyond the reach of traditional banking practices. The transactions are cryptographically signed including timestamps like a traditional notary. Most importantly since Cryptocurrency operates outside the oversight of any government or corporation, it is swift and efficient in transactions. For further details, check immediateprofit.app

• How does a Blockchain Wallet work: A Blockchain Wallet uses a relatively traditional procedure of a public and a private key. When a Blockchain Wallet is created the user is provided with a private key and a public key that is associated with that particular account. The public key functions are similar to a bank account number. When a transaction is necessary the user provides the public key to the required person who can transfer cryptocurrency into that account. The public key does not allow any kind of access to that particular Wallet.

• The Private Key: A private key functions like a password. The keyholder can use it to access the account and authorize transactions. If the private key is compromised then the account is unsafe and the user can lose all his money stored in that account. This service sounds amazing, but there is a Blockchain Wallet Fee that must be paid. This is known as Dynamic Fee. This is the amount that is charged per transaction. Since only so many transactions are possible within a block by the miners, they usually process the highest transaction first due to financial incentives. However there it is possible to jump the line by paying a certain amount of money that is known as the Priority Fee, which ensures a transaction to be completed within the hour. Developments are arriving in this model with rapid succession hence a model even more user-friendly is expected any day. 

• What are the types of wallets: There are two types of Wallets available. The Hot Wallet and the Cold Wallet. Hot Wallets are used for quick online transactions. The Private Keys for the Hot wallet are stored in the cloud which allows for faster transactions. Cold Wallets are also digital wallets, but the transactions are signed offline and then are disclosed on the internet. In the case of Cold Wallets, the Private Keys are never stored in the cloud. Often they are kept in hardware outside internet access and sometimes even on paper documents. 

Conclusion:

Although the world of Cryptocurrency transactions appears complicated and confusing, Blockchain Wallet services provided by Coinbase and Trezor offer a simpler and user-friendly initiation into this world for the novice. Hope this article clears some of the basic confusions regarding the Blockchain Wallet and provides some confidence to indulge in this exciting new world of Cryptocurrency.