Month: July 2022

What is a cryptocurrency wallet?

A crypto wallet is a device, medium, or application that allows you to securely store and manage your cryptocurrencies in accordance with the best principles of the blockchain network, namely security, anonymity, and decentralization. Despite the fact that there are already several popular and secure solutions on the market, companies are often faced with the need to create an individual cryptocurrency wallet for users. 

How do crypto wallets work? 

A blockchain is a public ledger where data is stored in what is known as “blocks”. This is a record of all transactions, balances stored at any given address, and information about who owns the key to these balances. Cryptocurrency is not stored “in” a wallet as such. The coins exist on the blockchain and the wallet software allows you to interact with the balances stored on that blockchain. 

The wallet itself stores the addresses and allows its owners to move coins to another location, as well as allowing others to see the balance stored at any given address. When sending a cryptocurrency transaction, always make sure you are sending it to a wallet address with the same cryptocurrency type. For example, if you send Bitcoin (BTC) to a Bitcoin Cash (BCH) address, those funds are lost forever.

Although every wallet is different, here are the general steps involved in sending or receiving funds with a crypto wallet:

• In order to receive funds, you need to obtain an address (also known as a public key) from your wallet. Find the “Generate Address” function in your wallet, click on it, then copy the alphanumeric address or QR code and share it with the person who wants to send you crypto.
• To send funds, you need a receiving wallet address. Find the “Send” feature in your wallet and enter the wallet address you are going to send coins. Select the amount of cryptocurrency you would like to send and click on “Confirm”. Consider sending a small test transaction before sending large amounts of crypto. Please note that sending coins requires a fee to be paid to miners in exchange for processing the transaction.

Why develop a cryptocurrency wallet

• Wallets are easy to install on multiple platforms and operating systems. It should fit well with the device you are using.
• Security measures are taken by securing the wallet with a PIN and a strong password. Hence, there is no chance for hackers or phishing attacks when a transaction is being processed between two parties.
• Cryptocurrency wallets are protected by state regulations and laws. Consequently, users’ funds cannot be frozen due to actions taken by any authorities. The system is fully decentralized and does not have a single point of failure.
• Funds can be transferred instantly and users don’t need to go through any kind of verification. Compared to other traditional methods such as bank transfers or wire transfers, the transaction fees are very low.
• It’s inflation-protected. Therefore, the value of user funds will not change under any circumstances, since there is no increase or decrease. This results in greater confidence and trust when making online payments.
• Users can have full access to their transaction history at any time and use it 24/7 to transfer funds to any user wallet address.

Types of cryptocurrency wallets

With blockchain app development, you can develop any type of cryptocurrency wallet. Based on what users are planning to do with cryptocurrencies, there are various options for crypto wallets that you can launch in the market.

For example, many long-term crypto investors plan to hold a wallet for a long period of time. That is why they can choose a wallet with excellent security features. On the other hand, users who actively trade cryptocurrencies can count on convenience and speed. Depending on whether a wallet can be connected to the Internet or not, it is divided into cold and hot crypto wallets.

Cold Wallet

These are also called hardware wallets. They store your keys offline on a device that is not connected to the Internet. Many popular cold storage wallets look like a USB stick. Sometimes paper wallets – with your public and private keys printed on a piece of paper – are also used as cold storage.

Many crypto proponents see cold storage as the best option for protecting your digital assets. Because they are not connected to the network, these wallets are considered the most difficult to hack. But they can be easily lost or misplaced.

Hot Wallet

These are software wallets. They are more convenient to use, but slightly less secure than cold wallets. You can access the hot wallet by downloading the program to your desktop or smartphone app. There are various types of hot wallets:

1. Desktop Wallets

Desktop wallets are designed to be used on a desktop or laptop computer. They can be accessed from the computer they were originally installed on. Desktop wallets are considered safe unless your computer is attacked by a virus. Some examples of desktop wallets include Bitcoin Core, Bitcoin Knots, MultiBit, Armory, and Electrum.

2. Mobile Wallets

Mobile wallets usually have the same functionality as desktop wallets. But they make it easier to process payments in physical stores by scanning QR codes using Touch-to-Pay and NFC (Near Field Communication). Bitcoin Wallet and Hive Android are a few examples of mobile wallets

3. Web Wallets

Web wallets make it easy to access cryptocurrencies from anywhere — any browser, mobile device, etc. They run in the cloud. They are very convenient to use because private keys are stored online. However, they sometimes become vulnerable to hacker attacks because they are indirectly controlled by a third party.

Now, let’s talk more about how to create a cryptocurrency wallet app, and what technologies you’ll need.

Cryptocurrency wallet tech stack

Different teams select technologies based on their experience. Therefore, it is entirely possible to work with different technology stacks to create crypto wallets. At the same time, these crypto projects will require an underlying blockchain. Here is an example of a tech stack for a crypto wallet.

Mobile apps

It’s pretty straightforward: Kotlin for Android, Swift for iOS. These proprietary programming languages, backed by Google and Apple, offer the most advanced toolkits for creating mobile crypto wallets for iPhone and Android smartphones.

Web

React and Node.js are modern web development tools with many tools available in the market. If you want a cross-platform crypto wallet that will work on mobile phones and desktop browsers, you can choose React Native or Flutter to reuse some “mobile” code for a web app.

Server-side specifics

You need Kubernetes and Docker to build a scalable architecture; Golang and Solidity (at least) for developing smart contracts (in case your wallet will be connecting to a Defi app); and then Python, Ruby, or any other programming language that will serve to create the internal administration portal.

This is really a basic description of the technology stack for cryptocurrency wallet development. Take this as another incentive to work with your development partner if they have some experience with these technologies.

Basic features of a crypto wallet app

Your cryptocurrency wallet application should offer advanced features in conjunction with your business logic requirements. Here are the main features that you should include in your crypto wallet application.

Authorization

Given the popularity and value of cryptocurrencies, wallet apps are subject to a variety of security attacks. That’s why it’s always better to improve the user authentication of the crypto wallet app with two-factor or multi-factor authentication (2FA or MFA). Two-factor or multi-factor authentication provides an additional layer of security not found in many conventional non-crypto applications. This is important to make your username and password for your wallet even more secure.

QR scanner

The QR code scanner feature enhances the speed, convenience, ease, and security of your transactions in the cryptocurrency wallet app. If your cryptocurrency wallet app has an integration with a QR code scanner, it can make it easier to automatically scan wallet addresses and public keys. It enhances cryptocurrency transactions with just one click.

So instead of typing all the long characters of the public key one by one, the user of the app can scan the QR code and the scanner will capture the information. It is a safe and secure way to make crypto transactions. This feature is preferred because app users will have to enter long wallet address characters in the absence of this feature, which greatly increases the chances of multiple characters being missed or incorrectly entered.

Different cryptocurrencies

Your wallet needs to support more than one cryptocurrency. This is due to the fact that many different currencies are added from time to time, and their value is constantly changing. Thus, you would not want to have many other wallets to store your crypto. Therefore, your cryptocurrency wallet application should allow you to seamlessly transact in different currencies.

Paper wallet import

Your application should allow users to scan a paper wallet with a QR code to send and receive money in cryptocurrencies.

Push notifications

Push notifications are an important feature by which your users can always be alerted and notified about crypto transactions. With this feature, the users of your cryptocurrency application will be notified of the price of their digital money, the successes as well as the failures of any transactions, etc. This feature can ensure that the notifications of all transactions in your account are completed in real-time.

Latest conversion rates

No cryptocurrency wallet app is complete without access to and calculation of transaction fees based on constantly changing conversion rates. This is because the crypto wallet application allows the user to make money transactions between multiple modes.

Blockchain-based transactions

Blockchain technology, on which your cryptocurrency app development should be based, is a game-changer. Thanks to this technology, your users will be able to transfer and receive digital currencies through your cryptographic application in a completely safe and fast way. Moreover, they can view their available balance and all transaction history. This is due to the fact that all transactions made are transferred to the blockchain network.

Familiar address management

This feature makes the entire transaction process smoother, faster, and more convenient by giving your users the ability to manage all of their commonly used addresses.

Payment gateways

A payment gateway integrated into your application will help users buy or sell their digital assets in an efficient manner.

Optional session exit

This is a great feature for your app’s security measures. With this, your users, if they are inactive, will be automatically logged out after a certain amount of time, and they will need to re-login if they want to use the application.

How to make a cryptocurrency wallet?

With a good plan, you can create a cryptocurrency wallet application that can become widely popular. Let’s learn how to do this and develop a cryptographic application.

Step 1. Find time to learn about blockchain and cryptocurrencies

Blockchain technology plays an important part in developing cryptographic applications. If you want to build a cryptocurrency wallet app, you need to first learn about the world of blockchain and cryptocurrencies. Blockchain is a promising and revolutionary technology that makes digital currencies work in the same way that the internet makes email possible.

A blockchain is a chain of blocks where blocks contain digital information (data) and the chain is the cryptographic principle that is used to connect blocks of data. The whole purpose of using it is to provide a secure exchange of valuable data.

Step 2. Emphasis on safety

Security is of paramount importance when building a cryptocurrency wallet application. That’s why you need to make sure that your cryptocurrency application has first-class security. You may want to consider adding additional layers of security to your crypto wallet application with 2FA – fingerprint, face ID, and hardware authentication. Developers should ensure constant security updates. They need to quickly identify bugs and other security issues and fix them with the latest technology.

3. Research your competitors

It is very important that your cryptocurrency wallet application stands out from the crowd. So it’s important to keep an eye on your competitors. Know what they are doing, and what technologies have been introduced. 

Choose the best crypto wallet app in your market and learn from it. You can check out features to see what unique features you can add to your application. Remember, you must be aware of what’s going on around you if you want to gain a competitive edge over others.

4. Choose your web development vendor

If you don’t have a technical team and don’t know how to create a cryptocurrency wallet app from scratch, you’ll need help from experts. You need to find the right cryptocurrency wallet development company. 

How do you find a crypto wallet app developer who provides high-quality cryptocurrency wallet app development services and knows how to create a cryptocurrency wallet app with all the necessary features? A good option is to choose IT outsourcing in Eastern Europe due to the excellent value for money.

Approach this task with caution, as you need to find a reliable partner who understands innovative technologies and, ideally, has previous experience with crypto wallet development.

I advise you to ask your partners about the best cryptocurrency wallet developers and shortlist vendors who provide cryptocurrency app development services. After communicating with them, you should be able to choose a cryptocurrency wallet application development company that has a perfect balance between quality and price. You can use Request for proposal to make your search more effective.

5. The discovery phase.

Once you’ve decided on a software provider, you can move to the first phase of cryptocurrency wallet app development — the discovery phase. At this stage, business analysis is carried out by a professional to determine the app’s functional characteristics. The results of the business analysis are used to create a cryptocurrency wallet app’s UI/UX design, which will later be used to build the app from scratch.

Thorough planning will allow you to build the best cryptocurrency wallet possible, so don’t skip this stage. It will ensure that you get exactly what you expect, within a predetermined timeframe and budget.

6. Development

This stage is the most time-consuming, as it can take months to develop a cryptocurrency wallet app, and it can take years of continuous development and iteration to build a complex and non-standard cryptocurrency wallet app. However, a company with experienced professionals will be able to provide you with a plan for building a cryptocurrency wallet app.

Software testing services are just as important as the cryptocurrency wallet app development itself. The first thing you should look out for is poor performance, as slow apps tend to scare away users. Testing should be done prior to deploying the project so you don’t have to troubleshoot issues after a cryptocurrency wallet app is launched. Keep this in mind when looking for information on how to create a cryptocurrency wallet app from scratch.

7. Marketing and promotion

Marketing is an important part of building a cryptocurrency wallet app, as, without promotion, no one can find out about your new cryptocurrency wallet app. You can promote your app in a variety of ways, one of which is by advertising on social networks like Instagram and Facebook. Other methods include email marketing, SEO techniques, blogging, and paid advertising.

As you can clearly see, deciding how to create a cryptocurrency wallet app from scratch is not enough, as you also need to keep in mind post-development activities such as promotion and advertising.

8. Ongoing maintenance and support

It’s not enough to know how to make a cryptocurrency wallet app. You also need to know how to organize the ongoing maintenance of your project in order for it to function effectively in the future. Typically, a good web development provider can advise you on this and provide related services.

Final thoughts

All crypto transactions require a crypto wallet. They help users store, gift, exchange, and trade various digital currencies such as Bitcoin, Ripple Ether, etc.

If you want to create a cryptocurrency wallet app but don’t know where to start, contact Mobindustry for a free consultation.