A Brief Introduction to Web3 by Shashank Mohan Jain

Author:Shashank Mohan Jain
Language: eng
Format: epub
ISBN: 9781484289754
Publisher: Apress

4.1 Types of Wallets

Some people store their Ethereum holdings in wallets designed for users, while others use cryptocurrency exchanges or other services, such as online marketplaces or loan services, offered by wallets designed for users. Wallets like these are referred to as custodial wallets, and they are distinguished from other wallets by the fact that they store users’ private keys on their behalf. The user does not have direct control over the funds stored in the wallet; rather, the service manages the wallet on behalf of the user. There is a cost associated with this arrangement.

The danger that another party will not fulfill their obligations is known as counterparty risk. This risk is increased when funds are stored with a third party through the use of custodial wallets. The service that stores the private keys runs the risk of being hacked or acting maliciously, for example.

It’s possible that various users would benefit from using one particular wallet over another. There are a plethora of wallets available now for the user to choose from. Most of them use Ethereum or ERC 20 standard–based tokens to access the applications on the blockchain. This access is realized by executing code in the form of a smart contract on the blockchain network. ERC 20 is a set of standards defined for creating tokens on the chain. This allows people to create their own tokens, which then can be used for their own applications if so desired.

There are different kinds of wallets available, as follows:1.

Mobile Wallet – These are mobile applications like the bitcoin.com app, which provides an interface for using the keys for transactions on the blockchain.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.