“Wallet” is a term that is widely recognised and understood, however as of recent we have seen new banks that are digital, wallets that are digital and crytpo-specific wallets. This shift in dynamics between our real world and digital worlds are not defined as of yet and their potential most certainly has not been realised.
E-Money
Before we discuss digital wallets, we will begin by looking at some technologies that are progressin consumer adoption, specifically e-money. E-money or digital banking is a breakthrough from fintech. Services available through technological means. When specifically analising E-money there is one significant player that is defining the market, Revolut. Revolut are one of the first banks to cover 30 countries and plans to extend its reach further. (PR Newswire, 2022)
On revolut you can send money digitally to friends, split bills, recall transactions, borrow and do everything a normal bank can and more. Revolut encourage investing and allow people to buy crypto currencies directly from the app. In 2022 Revolut added Elrond (EGLD) to its offer of stocks available on the app. Revoluts missions is an inclusive global financial system. (PR Newswire, 2022)
These visions have similarities with the decentralised web 3.0
Digital Wallets
A digital wallet allows you to make faster and easier transactions. Credit cards, loyalty cards and other information can be stored on your phone and communicate with point of sale machines that can debit or credit. (What Is The Difference Between A Crypto Wallet And A Digital Wallet?, no date)
Apple wallet and Google wallet are good examples of this as well as Revolut, one of the many features available to its customers. These wallets are becoming increasingly popular to store crypto currencies.
Digital wallets have additional security, often heavy encryption that is far superior to chip and pin cards making them more secure. In addition to this if crypto currencies are stored or traded through the wallet users must validate their identity typically through blockchain technologies. (What Is The Difference Between A Crypto Wallet And A Digital Wallet?, no date)
Crypto Wallets
A crypto wallet is an interface that stores your pass keys that contain your cryptocurrencies on the blockchain. Originally when trading cryptocurrencies you need to enter pass keys for identification purposes, crypto wallets do this for you.
You do not hold cryptocurrency like you do monetary bank notes. Crypto currency is held within the blockchain, the ledger denotes how many cryptocurrencies you have. Slightly similarly to Revolut, once you have your friends account number you can send funds to them with little alidation as its within the same ecosystem. However this is different to the banking system where you may send a transfer, this needs to be validated by your bank, then transferred to the recipients bank who then allow the transfer to take place.
There are 3 distinctive wallets
Software Wallets – these are essentially applications for desktop of mobile devices and can make fast transactions using NFC chips or QR codes.
Hardware Wallets – hard wallets are similar to usb devices and you physically need to insert your wallet and enter the pass key to access it
Paper Wallets – are where the owners physically write their keys and data on paper a store it securely.
Crypto currencies are highlight targeted items by hackers and caution is advised. While its recommended to have a strong password and two-factor authentication its recommended that you use a cold wallet, a wallet disconnected from the internet, to store your currencies for the more security.
