What Are Decentralized Crypto Wallets?
The pandemic has greatly affected the financial industry. One of the industries that remained stable during this time was cryptocurrency. People who were staying at home for a while had the time to research digital currencies and their benefits. Due to this, many are now buying crypto coins as part of their investment and trying to make them grow.
People became interested and thought of different opportunities to create crypto businesses and join activities related to cryptocurrency. Some use it as an additional payment method for their business or use it for leisure activities like bitcoin gambling. Before you can own a cryptocurrency and do activities from it, you need to have a crypto wallet. This is the primary tool that you need to start receiving and sending crypto.
What is a Decentralized Wallet?
First, you need to understand what a crypto wallet is. It is different from a traditional wallet, but it functions like one. However, it is not used to store your cryptocurrencies. It only stores your public and private keys to access your crypto assets that are recorded in the blockchain.
A decentralized wallet works like a personal wallet. You only have access to it, unlike a centralized wallet. These are stored on your computer without using any third-party services. Before you get into crypto, setting up a decentralized is required, even if you are a beginner.
Functions of a Decentralized Wallet
As you understand the function of the decentralized wallet, you will know how this should be maintained. A decentralized wallet works within blockchain technology. It is used to keep the private and public keys of your wallet.
The public key functions like an account number of a bank account. It is the information shared with other people when you need someone to transfer cryptocurrency. The private key is used to unlock a crypto wallet. It functions like a password for an account. Private keys are required to be kept safe by their owner.
How To Choose a Decentralized Wallet
Before you can choose a wallet to use, you need to identify which blockchain you will be using the wallet for. There are wallets that do not work on a certain blockchain and how you are planning to use it. You might end up setting up a wallet that will not be used.
There are also wallets that do not support different kinds of crypto projects. For example, you want to own an NFT, and you need a wallet to keep it. If you are using MetaMask, you will not be able to display the current NFTs that are stored in the wallet. Unlike in Rainbow Wallet, NFTs that are stored in the wallet can be viewed.
You also need to look at the features 52av of the decentralized wallet that you want to use. Some are integrated with finance applications where you can trade without leaving the wallet. There are also wallets, like MetaMask, that allows its users to swap tokens and SolFlare, which manages the stakes of an account.