Unless you’ve been living under a rock, chances are you’ve probably heard or even participated in the crypto revolution. Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies have all exploded into popularity in recent years. Far from being a medium of exchange used by individuals on the fringes of society, cryptocurrencies are now regarded as a legitimate investment by many. In fact, a rising number of countries around the world accept Bitcoin and other cryptocurrencies as a medium of exchange. Have a look at what future holds for crypto wallets in this blog.
Decentralization and The Blockchain
As a decentralized currency, cryptos are not issued by any government or monetary authority. It is in fact, distributed by the community itself. Users can choose to exchange fiat currency for cryptos or even mine their own cryptocurrencies.
As cryptos are decentralized, transactions involving cryptocurrencies do not have to pass through the financial system. Instead, the blockchain – an electronic database, stores all details of transactions and any change in ownership.
Transactions recorded on the blockchain are then validated and maintained by the community itself. In the case of Bitcoin, miners gather up transactions in the block and make use of immense processing power to solve and validate these transactions.
Thus ensuring that the blockchain remains in good health and any bad actors are removed.
Democratizing Financial Services
Another reason why cryptocurrencies have taken off in such a big way is due to the fact that the crypto market is unregulated. Meaning that transactions performed from one individual to another are not scrutinized (as far as we know) by a regulatory agency.
Also, because cryptocurrencies operate outside of the financial sector, they allow people from around the world to freely transfer funds from one another. All without having to pay exorbitant fees to financial institutions while being almost instantaneous in some cases.
This allows individuals without access to financial services to connect with the world at large. Therefore encouraging commerce and trade around the world.
Being able to transfer and receive large amounts of funds without the government’s knowledge has definitely raised a few eyebrows. With cryptocurrencies, criminals and other unsavoury individuals will be able to launder and smuggle funds with relative ease.
While cryptocurrencies are able to democratize financial services, its use as a medium of exchange by criminals has not gone unnoticed.
To some, this may seem worrisome, but the fact of the matter is such punitive action only shows us that crypto has the potential to change the world.
All of this is well and good, but the question is – how do you store something that doesn’t exist in the real world?
Enter crypto wallets.
Basically, crypto wallets do not actually store cryptocurrencies. Rather, they provide users with the blockchain address of a particular crypto and the digital signature required to complete a transaction.
1. Hot Wallets
Crypto wallets can be divided into two main categories – hot wallets and cold wallets. A hot wallet is an online service that stores your encryption keys on a server.
Thus giving you easy access to your cryptocurrencies at any time. While convenient, these aren’t the most secure method of storing cryptos.
2. Cold Wallets
Cold wallets store your encryption keys offline – thus making them less convenient but significantly safer. Cold wallets usually come in the form of USB sticks or an external hard drive.
The Future of Crypto Wallets
However, given the ever evolving nature of our world, what does the future hold for crypto wallets?
1. Mainstream Crypto Wallets
As a result of the COVID-19 pandemic, businesses around the world have made the push to accept and receive cashless payments. This gives cryptocurrencies an opening to integrate themselves into the mainstream.
Thanks to their similar infrastructure, it would be child’s play for merchants to begin accepting cashless payments. Hence we may begin to see crypto wallets of all kinds making a mainstream appearance.
2. Social Media Integration
Social media has allowed humanity to better connect with one another on a whole new level. This can be seen in the business sector where there are more than 5 million users operating on Whatsapp business alone. And that number is set to grow with time.
As the adoption rates of cryptocurrencies rise, it will only be natural for crypto wallets to integrate themselves with social media.
Clearly, companies such as Tezro have also realized this. Tezro integrates both crypto wallet functions along with secure messaging functionality.
Thus allowing users to connect with one another securely while making and receiving payments in cryptocurrencies. Additionally, Tezro’s wallet app also provides escrow services to users while allowing for access to their in-house marketplace.
3. Increased Focus on Security
Crypto wallets have and will always be a favourite target for hackers and other cyber criminals. The allure of potentially billions in cryptos is simply too difficult to pass on.
And this is why, we can expect crypto wallets to place an ever increasing focus on tighter security and greater anonymity.
As can be seen, hybrid wallets – wallets that allow users to store cryptos on their desktop while still being able to access it from a smartphone are gradually being introduced.
These wallets offer the best of both worlds but are still not entirely proven. A home computer still needs to be connected to the internet and remotely hacked into.
From providing marginalized or isolated communities with access to financial services to facilitating the seamless transfer of funds, the future of cryptocurrencies is bright indeed.
And the same can be said for crypto wallets. Check out a fully complete list of the best crypto wallets: Top 10 Bitcoin Wallet Apps for 2021.