By:| 3 min read | 19/10/2018
The ability to securely store digital assets is essential for Bitcoin. But, most secure cryptocurrency wallets are based on desktop computers or other bulky hardware. While these wallets help secure our cryptocurrency balances from being manipulated by others, they become impractical when it comes to transporting our currency and making sure we have access to funds on the go. Which is why it’s vital that the way we store our digital currency becomes easier to use, to encourage mass adoption. For instance, mobile wallets that allow you to access cryptocurrency from your phone/tablet are becoming more popular. They allow for a quick and convenient way to pay for stuff securely.
HOW DO DIGITAL WALLETS WORK?
Digital wallets literally store your cryptocurrency like a physical wallet stores cash. Cryptocurrencies don’t physically exist; all that exists are records of transactions on the blockchain kind of like an old accounting ledger book. This means that your digital cryptocurrency wallets aren’t a tiny digital vault holding your coins, but rather more like a unique key that lets you access your cryptocurrency wherever you go – kind of like how your password lets you log into Gmail no matter where you are.
Each wallet has two keys, a ‘Private key’ and a ‘Public key’. The public key is kind of like your home address – people can use it to send you mail (or in this case Bitcoin transactions). The private key, however, is more like the key to the front door of your home. It’s reserved for the owner, it lets you inside and gives you full control of the property. By utilizing this Public/Private key system, your wallet is able to secure digital assets by keeping track of transactions.
SO WHAT MAKES MOBILE WALLETS SO SPECIAL?
To run a cryptocurrency wallet, we used to need to download a copy of the entire blockchain on to our computers and be fully connected to the internet at all times. This is a costly endeavor that made having your own cryptocurrency wallet prohibitive for most people. Mobile wallets allow you to access your crypto on the go, without the need to download the entire blockchain. They do this by having the blockchain running on a remote server and allowing you to use your key to only access your wallet remotely. Many mobile wallets also come equipped with near-field communication features, which allows them to exchange funds with nearby devices, or use tap payment systems. This could completely transform the way transactions occur from day to day for the average person.
The scarcity of cryptocurrency depends on the blockchain ledger, but its security is heavily dependent on the wallets we use to store these coins. This creates a high demand for easy to use yet secure digital wallet applications. Ease of access and convenience are essential for producing a more attractive alternative for the average consumer, so cryptographic breakthroughs in this space can go a long way. Future breakthroughs in wallet technology will certainly pave the way for how blockchain technology is implemented in the modern world.