A blockchain wallet allows the user to transfer digital currencies and convert them back into local currency.
In general, a blockchain wallet is a digital wallet that allows users to store, manage and trade their digital currencies.
Blockchain wallet is also the name of a specific wallet service company called Blockchain Company. This wallet is a type of electronic wallet that allows people to store and transfer digital currencies.
Blockchain wallet users can manage their balance of Bitcoin, Ether and other crypto assets.
Blockchain wallets charge users dynamic fees, meaning that transaction fees may vary based on factors such as transaction size.
The blockchain wallet has several security features to prevent theft of cryptocurrencies, including by internal company employees.
We will check out together:
- Blockchain Wallet Basics
- How does a blockchain wallet work?
- Blockchain wallet fees
- Blockchain wallet security
Blockchain Wallet Basics
Electronic wallets allow people to store digital currencies and other digital assets. The blockchain wallet also allows users to manage the balance of various digital currencies, such as the famous Bitcoin and Ether, as well as Stellar, Tether and Pexos standard.
Creating an e-wallet with a blockchain wallet is free and the account opening process is done online. Individuals must provide the email address and password used to manage the account, and the system will send an automated email to the user to verify the account.
When a wallet is created, the user is provided with a unique wallet ID, similar to a unique bank account number. Wallet holders can access their e-wallet by logging into the blockchain website or by downloading its smartphone application.
The blockchain wallet interface shows the current wallet balance for crypto assets and the user’s latest transactions. Users can also access price charts and view the value of funds in their chosen local currency. There is also an educational guidance section on the site that shares cryptocurrency news and facts.
How does a blockchain wallet work?
Users can send a request for a specified amount of Bitcoin or other crypto assets to another party and the system will generate a unique address that can be sent to a third party or converted into a quick response code or QR code.
A QR code is similar to a barcode that stores financial information and is read by a digital device.
Each time a user makes a request, a unique address is generated. Users can also send crypto assets when someone provides them with a unique address.
The process of sending and receiving cryptocurrencies is similar to sending or receiving funds through PayPal, where digital currency is used instead of regular currencies.
PayPal is an online payment provider that acts as an intermediary between customers and their banks and credit cards by facilitating online transfers through financial institutions.
Users can also exchange Bitcoin for other crypto-assets and vice versa, which is called crypto-swapping. This method is an easy way to move digital currencies without losing the security of your blockchain wallet.
Users are shown a quote that shows how much cryptocurrency they will receive based on the current exchange rate, which changes depending on how long it takes the user to complete the transaction.
Crypto exchanges usually take a few hours during which transactions are added to each cryptocurrency’s blockchain. However, if the exchange takes more than six hours, users should contact customer support.
The blockchain wallet only allows the exchange of six crypto assets: Bitcoin, Ethereum, Bitcoin Cash, Stellar Lumen, Tether, Digital Dollar, Wrapped-DGLD.
Users can also buy or sell cryptocurrency through the Buy Crypto interface in the blockchain wallet.
Buying and selling services are not available in all locations. To make a purchase, users can transfer money from the bank, use a credit or debit card, or use the cash balance in the electronic wallet.
The daily purchase limit is $25,000 and the weekly purchase limit is $100,000, as well as the minimum purchase order is $5 and the maximum purchase order is $25,000.
Blockchain wallet fees
However, it is important to note that blockchain wallets use a process called dynamic fees, which means that the fees charged for each transaction may vary based on various factors.
Both the size of the transaction and the network conditions at the time of the transaction may greatly affect the fee amount. Powerful computers called miners can only confirm a certain number of transactions in each block.
Miners usually process transactions with the highest fees first because it is financially beneficial for them.
Blockchain wallets offer the possibility of setting priority fees, which may potentially reduce the transaction confirmation time to one transaction hour.
Also, in this wallet, it is possible to set a normal fee, which is cheaper, but the processing time of the transaction will probably take more than an hour.
Customers can also set the fees as they wish. However, if the customer sets a fee that is too low, the transfer or completion of the transaction may be delayed or rejected.
Blockchain wallet security
Wallet security is one of the most important considerations for users, because hacked and stolen accounts lead to the loss of control over users’ assets.
Blockchain wallets have several different levels of security to protect users’ funds from any potential attacker, including the company itself.
Passwords
Blockchain wallet accounts, like other digital services, require passwords to protect users. However, Blockchain does not store the user’s password and cannot reset the password if it is lost.
This method does not allow internal employees of the company to steal digital currencies. If the user forgets or loses their password, the account can only be restored with the recovery phrase.
Recovery phrase
The recovery phrase is a random string of English words that has the same function as a password. If the user loses access to his phone or device, he can recover his wallet containing any type of digital currency with the help of this recovery phrase.
The blockchain company does not store users’ recovery phrases like passwords. These terms follow industry standards, meaning wallets can be recovered even if the company goes out of business.
Optional Security Methods
In addition to the safeguards listed above, there are several optional security measures that are not required but may help improve the security of user wallets against external attacks.
To reduce the risk of phishing attacks (or password theft), the blockchain wallet allows users to use two-step authentication or IP whitelisting to prevent unfamiliar devices from logging in.
It is also possible to block access through the Tor network, thus preventing potential hackers who may use this network to hide their IP address.