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01 Definition of wallet
Web3 wallet is a tool for managing cryptocurrency assets, interacting with decentralized applications (DApps), and conducting cryptocurrency transactions. Unlike traditional centralized wallets, Web3 wallets focus more on users' control over their digital assets and privacy protection. They are usually open source and non-custodial. Users have private keys and mnemonics and have full control over their assets and identities.
To put it simply, when you use the Internet, you may be used to using online banking or apps like Alipay to manage your currency, but in the blockchain world, we have a tool called a Web3 wallet. This is a digital wallet, but it is a little different from the traditional wallets you use in your daily life. Let's use a few figurative metaphors to illustrate the difference between Web3 wallets and traditional wallets:
For example, your traditional wallet contains cash, bank cards, and ID cards, while your Web3 wallet contains digital currencies (such as Bitcoin, Ethereum, etc.) and your identity information on the blockchain network.
Traditional banks may have many centralized links when managing your funds, such as the bank's back-end database. But Web3 wallets are different. They use cryptography technology to store your digital assets in a distributed blockchain network, and you control your private keys and mnemonics to manage them. This means you have full control over your assets and identity information, and you don't need to trust any centralized institution.
Web3 wallets are not just for storing digital currencies, they also allow you to participate in various applications in the blockchain world. For example, you can use it to trade digital artworks, play blockchain games, participate in decentralized financial projects, etc. You can even use it to prove your digital identity, sign digital contracts, etc.
Convenience: Many Web3 wallets provide easy-to-use interfaces that allow you to easily manage your digital assets and interact with applications on the blockchain. And they usually support mobile and desktop terminals, so you can access your wallet anytime, anywhere.
The use scenarios of Web3 wallets include but are not limited to:
Cryptocurrency transactions: Users can use Web3 wallets to store, send, and receive cryptocurrencies, as well as participate in transactions on decentralized exchanges (DEX).
Participate in decentralized finance (DeFi): Users can use Web3 wallets to participate in various DeFi projects, such as lending, liquidity mining, stablecoin issuance, etc.
Participate in decentralized applications (DApps): Users can use Web3 wallets to interact with various DApps, such as digital collectibles trading, game play, social media, etc.
Digital identity authentication: Users can use Web3 wallets to manage their digital identities, sign digital contracts, participate in voting, etc.
02 Wallet Classification
From the perspective of classification, Web3 wallets can be divided into the following two categories:
Hot Wallets:
Definition: A hot wallet is a wallet that is connected to the Internet online, usually hosted by a third party, and can be accessed and traded by users at any time.
Features:
Providing convenient access and fast trade execution.
Commonly used in platforms such as exchanges, web wallets and mobile applications.
Security is relatively low because private keys are stored on the internet and may be vulnerable to cyber attacks.
Examples:
Coinbase Wallet: As a popular cryptocurrency exchange, Coinbase provides an online wallet service that makes it easy for users to trade and manage digital assets.
Trust Wallet: Trust Wallet is a mobile Ethereum wallet application that allows users to easily store, send and receive Ethereum and other ERC-20 tokens.
Cold Wallets:
Definition: A cold wallet is a wallet stored offline, where the private key is not connected to the internet and is usually in physical form.
Features:
Provides greater security as private keys are not vulnerable to cyber attacks.
Suitable for long-term holding or large asset storage, such as hardware wallets or paper wallets.
The wallet needs to be connected to an online device to sign the transaction.
Examples:
Ledger Nano S**: Ledger Nano S is a well-known hardware wallet that supports multiple cryptocurrencies and provides a secure environment for offline storage of private keys.
Paper Wallet: A paper wallet is a form of private key printed on paper. It can be generated in an offline environment and stored in a safe place, such as a safe. (It also needs to be used in an online environment)
Off Topic | Okex Web3.0 Wallet — The Best Wallet
Ouyi Web3 Wallet is a non-custodial, decentralized multi-chain wallet with a built-in cross-chain currency exchange transaction aggregator DEX, a one-stop on-chain investment tool DeFi (Web3 earning currency), a heterogeneous multi-chain aggregation trading platform (supporting Crypto, Ordinals, NFT), and DApp discovery. Through Ouyi Web3 Wallet, you can easily access 1,000+ DApp protocols, which is a true one-stop Web3 entrance. This wallet has the following advantages, such as:
Fully understand the ownership of assets; compared with trading platforms, the withdrawal speed is faster and there is no need to wait for approval;
Use a set of mnemonics to generate a multi-chain wallet, which can manage assets of 60+ mainstream networks such as Ethereum, OKTC, BSC, Polygon, etc., and support multiple mnemonics import and address derivation;
Supported on iOS, Android and web browsers.
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