What is most commonly used by ordinary users in the blockchain?
Of course, it’s exchanges and wallets. Exchanges are typically used for buying and selling, while wallets are used to store digital currency assets that are not currently being traded or to interact with various decentralized exchanges, swaps, lending platforms, and more.
Today, we will provide a detailed explanation of blockchain wallets. However, we won’t just list knowledge points as many online sources do. Our goal is to provide in-depth explanations, so you can fully understand the specific implications of these concepts. We’ll also introduce relevant information about the FAB public chain to help you better understand it. We want you not only to make money but most importantly to understand how to keep your digital assets safe and to avoid any potential losses or asset theft by enhancing your foundational knowledge.
What is a Blockchain Wallet?
We won’t go into the complex concepts and history of wallets in the blockchain. Instead, we’ll focus on what most concerns you:
A blockchain wallet is a software program or hardware device used for storing cryptographic assets. Examples of software programs include eXchangily wallet, Pay.Cool wallet, TP Wallet, MetaMask wallet, imToken, and others, while hardware devices like Trezor and Arculus are known.
The first application of blockchain was the blockchain wallet. Most wallets now create a separate blockchain space for each user in a decentralized manner. Blockchain wallets serve as gateways to various ecosystem applications and connect you to various DApps. Wallets have become the primary tools for users to directly participate in the blockchain.
Essentially, a decentralized wallet is like a bank account. It has an account number (public key), a password (private key), or a mnemonic phrase. You can think of it this way:
Wallet Public Key = Bank Account Number
Wallet Private Key = Bank Account Number + Bank Account Password
Wallet Mnemonic Phrase = Bank Account Number + Bank Account Password
A blockchain wallet is a digital wallet that allows users to store and manage cryptocurrencies such as BTC, ETH, and more.
Blockchain wallets, provided by the blockchain, are electronic wallets that allow individuals to store and transfer cryptographic assets.
Blockchain wallets charge dynamic fees; in other words, transaction costs can vary depending on factors such as transaction size and the blockchain where the digital assets are settled in.
Dividing Wallets
Due to the wide variety of cryptocurrencies, there are various types of blockchain wallets:
1. Ownership of Private Key (Mnemonic Phrase):
a. Non-Custodial Wallets: Private keys are owned by the users themselves, and usually open source code. These are decentralized wallets, and all transactions are traceable on the blockchain. Examples include eXchangily wallets, Pay.Cool wallet, BiSwap wallet, MetaMask wallet, and more. In these wallets, your assets are always under your control, but be cautious when downloading wallets to avoid exposing your private keys and mnemonic phrases to fake applications.
b. Custodial Wallets: Private keys are held by third-party wallet operators. Transactions between users on these wallets may not be recorded on the blockchain. This includes wallets provided by centralized exchanges like Binance, Coinbase, and more. In such wallets, you don’t have control over your assets, and operators can limit your withdrawals or even freeze your accounts and wallets. Your assets are merely digital entries in these wallets.
2. Storage of Private Key (Mnemonic Phrase):
a. Software Wallets: These are wallet software programs that can be run on your local computer, browser, or mobile app. They don’t require users to purchase additional hardware. Examples include eXchangily wallet, Pay.Cool wallet, TP Wallet, and others.
b. Hardware Wallets: These are hardware wallets, typically referred to as cold wallets. Users need to purchase dedicated hardware devices to use them. Examples include Trezor, Arculus, and more. But you need to trust the software runs on the hardware by using your own judgment. If it is not open source code, you are using it on your own risk. When the hardware got lost or broken, you usually can’t recover your crypto assets.
3. Network Accessibility:
a. Cold Wallets: Also known as “offline wallets,” they ensure that private keys never touch the internet, effectively preventing hackers from stealing them. Types of cold wallets include hardware wallets, paper wallets (private keys written on paper or etched on metal), and brain wallets (private keys memorized by the user). If you never connect your eXchangily wallets or your Pay.Cool wallet to the internet after the creation, you can use them as cold wallets.
b. Hot Wallets: Hot wallets are essentially “online wallets.” They are connected to the internet and are used in web browsers or mobile devices.
4. Degree of Decentralization:
a. Full Node Wallets: These wallets synchronize all data on the blockchain and can be relatively storage-intensive. They are typically desktop wallets used by many miners.
b. Light Node Wallets: As full node wallets can be cumbersome, light node wallets rely on other full nodes on the network. They generally offer a more user-friendly experience, making them a popular choice for newcomers to the blockchain world. They are less resource-intensive and take up less space on your device.
5. Support for Single or Multiple Cryptocurrencies:
a. Single-Currency Wallets: These wallets support only one type of cryptocurrency on a single blockchain. Such as the wallets only hold ERC20 tokens.
b. Multi-Currency Wallets: These wallets support multiple types of cryptocurrencies, such as eXchangily wallets and Pay.Cool wallets.
It’s important to note that mnemonic phrases and private keys are equally important. The loss, leaking or misplace of either can result in a loss of assets.
FAB Public Chain-Based eXchangily Wallet
As an open source decentralized wallet, eXchangily Wallet supports multiple cryptocurrencies across all major blockchains:
- Users control their own mnemonic phrases, and transactions take place on the blockchain (on-chain wallet).
- Mnemonic phrases are encrypted and stored locally on your device (phone or computer). eXchangily Wallet does not store your private key or mnemonic phrase.
- Because mnemonic phrases are stored locally, eXchangily Wallet is considered a non-custodial wallet. You have complete control over your assets, and no one can restrict your wallet’s usage.
- eXchangily Wallet supports storage of multiple cryptocurrencies across all major blockchains. Currently, it is compatible with nine different popular blockchains, with more to come.
Like other wallets, eXchangily Wallet serves as the entry point to the entire FAB ecosystem, including blockchain gaming , decentralized marketplaces, NFTs marketplace , payment platforms, KYC on the exchange, and more. It’s important to emphasize that users must control their own mnemonic phrases, and hold the custody of their own assets. If the mnemonic phrases are lost or stolen, it can result in a loss of assets, and eXchangily Wallet cannot help to recover them or your assets.
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