A crypto wallet plays a crucial role in crypto exchanges. A cryptocurrency exchange platform is nothing without a cryptocurrency wallet. It is one of the features of a cryptocurrency exchange. Some crypto trading platforms are functioning without wallet provision. So they hire a secure wallet feature privately from a third-party crypto wallet service provider.
For providing such a crypto wallet service, thecryptocurrency exchange owner has to pay fees for the third-party. Also, they need to pay some percentages with a commission for every transaction done by the user through the wallet. So there will be some loss while paying fees for a third party. So it’s better to integrate a crypto wallet into your exchange. Also, there are other reasons to enable a crypto wallet in your exchange.
In this blog, let us figure out what is a crypto wallet and reasons to integrate the crypto wallet into your exchange.
Crypto Wallet and its Types
As I already mentioned at the beginning of the blog, the crypto wallet plays an essential role in crypto exchange platforms. Also, without a crypto wallet having a crypto exchange is useless. A crypto wallet is completely used to store, receive, and transfer digital currencies in a hassle-free manner. You can transfer all major cryptos such as ethereum, bitcoin, and the list goes on. It monitors your crypto balance and transactions. Without a wallet, the user can not store the cryptos. So it plays a significant role in crypto trading platforms
The Crypto wallet has both the private keys and the public keys to access crypto transactions. Private keys are very essential and it acts as a password to perform secure transactions. whereas public keys act as an address that is directly connected to the user wallet balance. In the crypto wallet, there are main types of storage types. such as a hot and cold wallet. The hot wallet is an online wallet. So you can access it only through the internet. Investors and businesses prefer hot wallets for faster crypto transactions.
Whereas cold wallets are completely offline wallet storage. Here you can monitor your crypto balance without the internet. So startups and entrepreneurs prefer cold wallets for secure crypto transactions. There are five main types of crypto wallets. They are
- Mobile wallet
- Desktop wallet
- Hardware wallet
- Paper wallet
- Web wallet
To know more in-depth details about thetypes of crypto walletscheck here
Now, let us see.
- Security
A Crypto wallet is basically developed using blockchain technology. So it provides fast and secure transactions. Wallet transactions are more safe and private. Each transaction is approved by a digital signature. Also, it works in the combination of both private and public keys.
- No central authority
Cryptocurrency wallets work on a decentralized mechanism. because it is entirely backed by the blockchain network. Many people are coming forward and showing their interest in developing a crypto wallet using blockchain. Because It is not regulated by any government intermediary. So more crypto users are inclined towards the blockchain-based crypto wallets.
- Borderless transactions
A cryptocurrency wallet is a boon to those who are looking to conduct crypto transactions outside. It does not matter where the owner of the crypto wallet is present. Users can complete transactions across various geographies in a hassle-free manner.
- Easy transfer of funds
Cryptocurrency wallets enable the users to transfer the funds easily and conveniently. But traditional online payments of central authorities make it a lengthy process. On the other hand, the crypto wallet makes the third party functions redundant. Also, helps to make the transactions quick and cost-efficient.
- Cost savings
The transaction fees associated with the crypto wallet are quite low. A traditional bank will charge a sizable amount. when it comes time to transfer funds from one country to another. However, blockchain technology provides crypto wallet users with the chance to save their valuable funds on these transactions.
- Limitless
Crypto Wallet and its TypesThere is no limit on the storing and withdrawal of cryptocurrencies in the crypto wallet. Also, it is simple and easy to incorporate the crypto wallet into your exchange.
Additionally, You can avoid scams, cyber-attacks, and other fraudulent activities by using cold wallets. Such as paper wallets and hardware wallets.
Final thoughts
I hope you have understood the reasons to enable the crypto wallet rather than using the third party wallet. Even there are some possibilities of money laundering when you have access to a third-party crypto wallet. So It is always better to look for the crypto exchange that provides an ideal crypto wallet that is integrated with the exchange. Nowadays crypto traders are looking for a crypto exchange that has a secured crypto wallet facility. So, if you have a plan to develop a crypto wallet. Then it is good to use the top-notch crypto wallet and its Typessoftware that helps you to create a wallet easily. but choosing thebest crypto wallet development service providerin the industry is more essential.
ORIGINALLY PUBLISHED AT: Notable Reasons to Integrate a Cryptocurrency wallet into your Crypto Exchange
