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Everything You Need To Know About Web3 Wallet

28 November, 2022

According to a report from Emergen Research, the global Web3 market is estimated to reach USD 81.5 billion in 2030. In line with the growing interest in Web3 & blockchain development, many Web3 wallets have hit the tarmac and soon become commonplace. This blog will walk you through a detailed overview of web3 wallets.

What is Web3 Wallet?

Web3 (also called Web3.0) is the latest version of the World Wide Web that incorporates concepts of decentralization, blockchains, and coin-based economy. When it comes to Web3 benefits, people typically talk about its strength of privacy, security, and machine learning to deliver a more personalized experience. And on top of that, this technology allows its end-users to have full control over their data. A Web3 wallet is a digital wallet that enables users to send, received and store cryptocurrency, NFTs, and other digital assets securely, without the need for a 3^rd party’s intervention like your bank.

How Web3 Wallets work?

Although each Web3 wallet can be slightly different among each other, they all serve the same purpose. When creating a Web3 wallet account, users will receive a private key or a seed phrase that can be used to access their wallet. Just like a password or PIN code to access bank accounts, private keys and seed phrases should be kept private. It’s crucial to write down and keep this information somewhere offline in a safe place because users may not be able to retrieve their private keys in some circumstances.

Users can log in to their wallet using the private key to see total assets, receive and send digital assets to other wallets. Some wallets give users the option to connect directly to the blockchain or to a trading platform, making it simple for them to buy cryptocurrencies or other assets.

Types of Web3 Wallet

When we decide to use a Web3 wallet to store digital assets, it is of utmost importance to understand the types of Web3 wallets. There are various ways to secure web3 wallets with different levels of privacy and security.

Hot Wallets

Hot wallets are crypto wallets that are always connected to the internet and crypto network. Hot wallets put users in control of sending, receiving cryptocurrency, and viewing how many tokens are available for use.

– Public and private keys are connected to hot wallets in order to ease transactions and act as security precautions.

– Since hot wallets are connected to the internet, they are postulated to be more prone to hacking and theft than cold storage options.

A hot wallet can be a browser-based wallet, a desktop (software) wallet, or a mobile wallet.

1. Desktop wallets: These are software applications that can be downloaded to a personal computer. They are believed as the most secure hot wallet in place. Guarda wallet, Exodus wallet are some examples of desktop wallets.
2. Web wallets: These are browser-based wallets, basically installed on cloud servers, enabling users to access their wallets from a browser interface such as Google Chrome, or Safari. As a result, users don’t need to download or install any software. In general, web wallets have all the same functionalities as desktop wallets. Some of web wallets available in the market are Blockchain.com, BitGo, GreenAddress, Coinbase, etc.
3. Mobile wallets: These hot wallets work the same as desktop wallets but with mobile interfaces. Some mobile wallets in the market are MetaMask, Trustwallet, Coinbase, BitGo or RobinHood, Copay, BRD, etc.

Cold Wallets

Unlike hot wallets, a cold wallet is a physical device that is used to store digital assets offline, thereby securing the wallet from unauthorized access, cyber hacks, and other vulnerabilities. Without connecting to the Internet except when in use, old wallets are deemed to be a more secure method for individual investors to store their cryptocurrency for the long term. Besides, cold wallets can also be used to store confidential data such as video, photographs, and backup information.

1. Paper Wallets

One kind of cold wallet is a paper wallet. A paper wallet is simply a piece of paper with your printed private key and public key in form of a scannable QR code created by an app. These papers are then stored somewhere secure offline until the next usage. Nowadays, this method of storing wallet credentials isn’t often used, yet it’s still a possible way. However, you must carefully research paper wallet generators to make sure you opt for a reliable one.

2. Hardware Wallets

Most often, hardware wallets typically come to mind when people think about cold cryptocurrency wallets. A hardware wallet works by storing your private keys in an external, physical device such as a USB thumb drive or a Bluetooth device. Therefore, only when users are ready to use it, they will connect their hardware wallet to a PC via cables or Bluetooth, which are considered the safest method, hack-proof, and less susceptible to malicious attacks.

Along with its security, one considerable advantage of using a hardware wallet is that they are compact, mostly looking like ordinary flash drives.

Moreover, although a PIN code or a private key is required to access the wallet, there’s also a backup option with a seed phrase to recover or re-generate your private key, in case you forget it. Hence, it’s critical to keep the seed phrase safe somewhere offline.

IriKey Hardware Wallet

To save users a lot of hassles of keeping private keys safe, IriKey hardware wallet from IriTech utilizes iris recognition technology to lock/unlock the private keys & seed phrases for you. There is no need to write down and safeguard the seed phrase. Instead, there will be the “locked seed” which can be stored anywhere most convenient to the user such as email, cloud, HDD, USB drive, SD card, etc. In the rare chance hackers gain access to the locked seed, they still cannot retrieve the original seed or private keys without the live irises of the owner. The iris-liveness detection technology of IriTech makes sure that only wallet owners can have access to the wallet. Furthermore, with IriKey hardware wallet, you can effortlessly back up and recover seed phrases for lost/broken devices using the owner’s irises.