Five Essential Things You Should Know When Creating a Wallet

Conventionally, physical wallets were used to contain tender cash (aka fiat currency). The growing popularity of digital banking led to an increasing use of digital wallets. Likewise, cryptocurrencies are held into digital wallets. 

Here’s a basic timeline on the evolution of wallets:

Physical wallets > Digital wallets > Mobile wallets > Crypto wallets

5 essential points that highlight what you should know before creating and using a crypto wallet. 

#1 The convenience of an online wallet

Many find digital wallets convenient since they are lighter weight, and more durable and secure. Today, about 71% of merchants globally accept digital payments enabled by digital wallets. As a result, users can easily purchase goods online and in-person.

#2 Difference between a digital wallet and a crypto wallet, and why you can have both

Regular digital wallets, such as Paypal, Apple Pay, Venmo, and more, are different from crypto or blockchain wallets. Traditional wallets hold dollars (fiat currencies) and are ultimately controlled by the companies who provide access to those wallets as long as users continue paying for their services and transaction fees. 

Crypto wallets on the other hand and in general are completely controlled by the users, who can still have access to their wallet with or without paying recurring fees to the wallet provider. However, a fee must be paid every-time a transaction is processed.

There do exist crypto wallets that are provided by companies such as Paypal and Venmo, permitting features such as buying and storing cryptocurrencies, without giving users full control over their cryptocurrencies. These types of crypto wallets are called “custodial” wallets, and are designed to make it more convenient for beginner crypto users who might find it too complicated to manage their non-custodial (full control) wallet.

#3 Where you can use Digital Wallets vs. Crypto Wallets

By 2024, it is estimated that mobile payments will reach $3 trillion globally. This trend is aided by the growing use of smartphones. You can use digital wallets in almost every store you visit and online websites, including Walmart (Walmart Pay), Starbucks (Google Pay), convenience stores, and more.

On the other hand, Crypto wallets, such as OPOLO, Mycelium, and Coinbase are used to store any of the more than 10,000 cryptocurrencies currently available. Crypto wallets automatically keep a record of how much cryptocurrencies you have on a blockchain. They are secured by an encryption mechanism that features a private key to lock-in or send your cryptos, and a public address that can be shared to receive cryptos. Private keys should never be shared! Some crypto wallets are app-based while some are web-based and others are hardware-based. Crypto wallets can be used at brick-and-mortar merchants, online exchanges and websites accepting crypto payments, such as Innov-Edu, an online learning platform, by InnovFin Consulting Inc. Just like regular money, they can be used to make donations, investments or pay salaries.

#4 Which Cryptocurrencies you can store in your crypto wallet

Many crypto wallets store one, a few or many more cryptocurrencies such as Bitcoin, Ethereum, MATIC, and NEAR. For instance, Metamask is one of the most used crypto wallets for Ethereum and MATIC. Innov-Edu also uses Metamask to store IEDU tokens, which are offered to users upon signing up, and as they complete courses on the learning platform. Metamask can also be used to store, trade and exchange NFTs from the Innov-Edu’s NFT Marketplace, with a smooth and easy to follow tutorial for guidance.

#5 Which wallet I should use or choose?

Choosing your first crypto wallet may be a challenge to some, as there are multiple to choose from, each with their perks. If you know which cryptocurrency you want to hold the most, then the best method would be to research a wallet suitable for that cryptocurrency. E.g. If you want to hold Ethereum, consider an Ethereum compatible wallet, for Bitcoin, a Bitcoin compatible wallet, and so forth. Other considerations include your level of knowledge and understanding of cryptocurrencies and blockchain (whether you want to use a beginner wallet for a start), the price and fees of the crypto wallet, and the platform you want to use it on (web, mobile, or hardware for maximum security).

In conclusion, things to consider when opening a wallet should be first and foremost, whether you are in need of its features. If you only need to use dollars, then traditional digital wallets are your best bet. If you wish to dabble in crypto then crypto wallets are a must. At one end of the spectrum, custodial crypto wallets are the easiest to use. At the other end of the spectrum, hardware or hard crypto wallet are the most complex but also most secure wallets. If you are a beginner crypto user, then start with a basic, free crypto wallet and use it often until gaining a good level of familiarity before investing in a crypto wallet.

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***This article is not meant to offer any investment or trading advice. The author of this article is not an investment or financial advisor***

Sources

Dossett, J. (2022, April 2). Best bitcoin and crypto wallets for April 2022. CNET. Retrieved April 12, 2022, from https://www.cnet.com/personal-finance/crypto/the-best-bitcoin-and-crypto-wallets/ 

EmizenTech, M. (2022, January 21). Mobile Payment Statistics & Facts 2022 for Marketers. Tech Blog | Mobile App, eCommerce, Salesforce Insights. Retrieved April 12, 2022, from https://www.emizentech.com/blog/mobile-payment-statistics-facts.html 

Homepage – Innov-edu. Innov-Edu, Innovative Learning Platform. (2021, October 14). Retrieved April 12, 2022, from https://innov-edu.ca/ 

Innov-Edu NFT Marketplace. (2022). Retrieved April 12, 2022, from https://www.marketplace.innov-edu.ca/ 

InnovFin Consulting – innovative technologies and solutions. InnovFin. (2022). Retrieved April 12, 2022, from https://www.innovfin.ca/en/Home/ 

Lake, R. (2021, May 24). Mobile payments: Who accepts them and should you use them? The Balance. Retrieved April 12, 2022, from https://www.thebalance.com/who-accepts-mobile-payments-4777407 

Top 5 best ethereum wallet [2022] with highlights & additional features. upGrad blog. (2022, March 29). Retrieved April 12, 2022, from https://www.upgrad.com/blog/best-ethereum-wallet/


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