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Desktop wallets

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Mobile wallets

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Hard wallet is a device allowing to store private keys in a secure offline environment, which makes them safe against online threats. Their cold-storage in-built security systems also protect from any possible malware on your computer that can crawl into a hard wallet when it is connected to the computer.
While initializing the device, a hard wallet generates a seed which it used to create private and public  keys and addresses. The seed is available to user as a backup phrase of 12-24 words allowing to access these addresses from any other compatible wallet). Most wallets also support additional security measures, such as pincode. Private keys are often stored in the device’s protected and cannot be transferred out of it in plaintext.
In order to send funds from a hard wallet one has to connect it to a computer or a mobile via cable (or bluetooth, depending on a model), unlock it with a pin code, and follow instructions from an application of the wallet provider.
Hard wallets can support a big number of cryptocurrencies, their exact list depending on a particular model.
Some of the most famous hard wallets now are:
Trezor - first hardware wallet for Bitcoin launched in 2014 (one of the company’s founders is Marek “Slush” Palatinus, who also created the first Bitcoin  mining pool in 2010). Trezor particularity is that the wallet deletes itself after firmware updates - it is thus necessary to use the seed to restore it.
Ledger - a French company famous for its small and user-friendly Nano S and Nano X models.
KeepKey - device with a big screen allowing additional security. It can also be used as a transaction device for paper wallets, as it is not compulsory to store one's private keys on the device.  It also incorporates an in-wallet exchange.
CoolWallet - bluetooth device recognizing only the smartphone it was paired to. Crypto transactions must be validated on the device.

Hardware wallets

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Paper wallets

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Some blockchains were created to enable cryptocurrencies. Others serve primarily as smart contract platforms, allowing to decentralize digital economy: online platforms, financial flows, collaboration... and of course the nascent Web3 sector.



The number of blockchain use cases is constantly growing, as does its ecosystem.



This is a high level view on what blockchain in practice looks like today. 



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<h2 class="wp-block-heading">Cryptocurrencies </h2>



With <a href="https://d.center/explore/bitcoin" class="ek-link">Bitcoin</a>, the first practical application of the blockchain was currency, or more precisely “P2P electronic cash system”, as described by Satoshi Nakamoto himself. Invented in order to remedy the failing monetary system, the blockchain proved itself to be particularly well suited for such a role, providing an independent, immutable and transparent transaction ledger.&nbsp;



Following Bitcoin, new <a href="https://d.center/explore/cryptocurrencies" class="ek-link">cryptocurrencies</a>-focused blockchains have emerged, trying to ameliorate this or that aspect of the blockchain: transaction throughput like Litecoin, privacy like Monero… 



Some cryptocurrencies have appeared as an extension of a community, like the Doge memecoin.



Other cryptocurrencies, created as tokens (and not native coins), serve as representations of fiat currencies on the blockchain. They are called stablecoins, the biggest ones being USD-pegged Tether and Circle.



<h2 class="wp-block-heading">Smart contract blockchains</h2>



Currency is not the only thing that can profit from the blockchain's decentralization.



Virtually any digital system (hence most of organisation that use them) can benefit from eliminating central authority.



This is achieved through the use of <a href="https://d.center/en/explore/smart-contrats" class="ek-link">smart contracts</a> - autonomous and self-executing programs that run on the blockchain. Smart contracts allow the development of DApps, or decentralized applications, and power the emerging web3 sector.



The first and most popular smart contract platform is Ethereum blockchain, but it has many competitors: Solana, Cosmos, BNB Chain... etc



The difference between a Cryptocurrency blockchain and a Smart contract blockchain is now rather theoretical and can be understood only by questioning the blockchain’s purpose: whether it was conceived to support a currency or to host elaborate smart contracts. Both types of blockchains need a native coin to pay the network nodes for running the protocol, however in cryptocurrencies’ case the native coin is a goal in itself, whereas for smart contract blockchains it is a payment for running smart contracts. 



<h2 class="wp-block-heading">Blockchain use cases</h2>



Almost every traditional economic sector can use blockchain's qualities.



⛓️ Decentralized systems are intrinsically fairer than centralized ones: their transparency and self-executing nature are much better in redistributing value and allowing the users to be true and sole owners of their data. This quality is substantial when it comes to online platforms, be it social media, cloud computing or ride hailing.



⛓️ Blockchain being a transparent and immutable ledger, it is also particularly suitable for data certification purposes.



⛓️ Smart contracts can automate numerous processes, not only increasing the overall cost and time effectiveness, but also providing users with a guarantee that no one can unilaterally change the rules underlying the DApp.&nbsp;This notably enables the new type of trustless collaboration within DAOs, or Decentralized Autonomous Orgnizations.



⛓️ Finally, the blockchain structure allows fast and easy data and values transfer, without any borders or other limitations. This quality is highly appreciated in finance, and many traditional players have already incorporated crypto into their offer: exchange, custody, asset management, asset tokenization... Besides, a crypto-native version of finance, known as the DeFi, is developing very fast.







<h2 class="wp-block-heading">Web3</h2>



Blockchain and cryptoassets can be used both in centralized and decentralized way. 



The exact boundary between the two is not always clear, but usually when the core operations happen on-chain, the value is transparently distributed, and governance decisions are taken by the community, we can speak about <a href="https://d.center/en/explore/web3" class="ek-link">Web3</a>, a new era of the internet where users are in control. 



The most obvious example of web2 using blockchain vs web3 are exchanges: a centralized one like Binance is centrally managed and controls its users' cryptoassets, while a decentralized exchange like Uniswap never gets in the possession of its users' funds and evolves according to its DAO's decisions.



<h2 class="wp-block-heading">Blockchain ecosystem</h2>



Blockchain is a collective endeavor, and it needs an extensive ecosystem to function and to serve its purposes. 



Numerous products and services have therefore been developed: <a href="https://d.center/explore/crypto-wallets" class="ek-link">wallets </a>to interact with the blockchain, <a href="https://d.center/explore/crypto-exchanges" class="ek-link">exchanges</a><a href="https://d.center/explore/crypto-exchanges" class="ek-link"> </a>to buy and sell crypto, <a href="https://d.center/en/explore/oracles" class="ek-link">oracles</a> to interact with the real world and feed information to smart contracts, not to mention the miners who maintain the network, or interoperability protocols connecting different blockchains. 



<h2 class="wp-block-heading"> </h2>

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A well-developed ecosystem is crucial for the blockchain: while assuring its maintenance and specific functions it also allows people to easily use cryptocurrencies.



The blockchain is a decentralized method of storing a continuously changing ledger and registering all transactions that compose it. It is a powerful tool that has generated an entire ecosystem around it, assuring that:



<ul class="is-style-checked"><li>the blockchain network is correctly maintained (mining for PoW-based blockchains)</li><li>a user can easily connect to the blockchain, initiate and receive transactions (<a href="https://d.center/explore/crypto-wallets" class="ek-link">wallets</a>)</li><li>a user can exchange a cryptoasset against [tooltip content=" fiduciary money with no intrinsic value backed by and dependent on the government (e.g. dollars or euros) "] fiat money [/tooltip] or another cryptoasset (<a href="https://d.center/explore/crypto-exchanges" class="ek-link">exchanges</a>)</li><li>a user can spend her cryptoassets paying for a real-world product or service not yet available in crypto (crypto payment systems)</li><li>a decentralized application (DApp) working on a blockchain can get real-world information in order to be able to execute its pre-programmed sentence (oracles)</li><li>different blockchains can work together, allowing people to use the most suitable blockchain for each particular purpose and easily switch between them when needed (interoperability protocols)</li></ul>







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With all these directions developing really fast, the blockchain ecosystem becomes yet more efficient and complete, further propelling crypto adoption.

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The wallet is an application that allows to communicate with the blockchain, sending and receiving cryptossets.



The wallet generates and manages users private and public keys and addresses, and uses them to send and receive transactions (see <a href="https://d.center/explore/keys-and-addresses" class="ek-link">Bitcoin keys and addresses)</a>. Sending a transaction requires digitally signing it with a private key, whereas receiving usually means downloading the most recent version of a blockchain and recovering the updated balance .



An important thing to understand is that the wallet does not contain cryptocurrency - the coins are forever inscribed into the blockchain. The wallet’s goal is to manage the keys allowing to unlock and transfer the coins.



There are different types of wallets adapted to different blockchains and varying in security and facility. They can be categorized according to different criteria.







<h2>Wallets by support</h2>



<ul><li>Desktop wallet: application installed on a computer, user owns his keys</li><li>Mobile wallet: application installed on a smartphone, user owns his keys.</li><li>Web wallet (custodian): application accessible via a website, user does not own his keys (controlled by a website owner), but only website access password(s). </li><li>Hardware wallet: physical electronic device that must be connected to a computer or a phone. Users own their keys, which are stored offline (a method called cold wallet). This system of keys management is considered the most secure and is recommended for storing important amounts of crypto.</li><li>Paper wallet: cold storage mechanism, user owns his keys on paper, but needs a hot wallet to interact with a blockchain. </li></ul>







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<h2>Wallets by access to the Internet</h2>



<ul><li>Hot wallet: all the actions required to complete a transaction are made online. The wallet generates and stores private keys, digitally signs transactions using private keys, then broadcasts the signed transaction to the network. However, since the transaction is being signed on a computer connected to the Internet, an attacker may become privy to the private key.</li><li>Cold wallet: transaction initiated online is temporarily transferred to an offline wallet (hardware or an offline software), where it is digitally signed with the private key and only then transmitted to the online network. As the private key does not come into contact with a computer connected online during the signing process, an online hacker would not be able to access the private key used for it.</li></ul>







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<h2>Wallets by new keys generation method</h2>



<ul><li>Non-HD wallets: each new private key is generated regardless of the previous one</li><li>HD wallets: all generated private keys are derived from the “master key”, also called the “seed”. HD stands for “hierarchical deterministic”, which is the most popular method of key derivation.</li></ul>







For being user-friendly and secure, the majority of wallets now are HD, one seed controlling all the keys. If a wallet is destroyed or lost, one can simply get a new one and provide it with the seed: the wallet will reconstruct the keys and give control over related bitcoins.



In order to facilitate the usage of the seed, which is a very big number, a special standard has been introduced. It is called mnemonic and it translates the seed into a string of 12 or 24 words, which are generated during the first HD wallet initialization.











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<h2>Wallets by the way to access the blockchain</h2>



<ul><li>Full-node client: wallets that download all the blockchain and are constantly synchronized with the network. This kind of wallet is used mostly by validators and miners and it requires important memory and bandwidth. It is also the most secure wallet, as it does not imply any third party. Transaction fees can be customizable</li><li>Lightweight client (simple-payment verification or SPV client): the wallet connects to a full node and downloads only block headers. Being faster and less demanding, it is the case for mobile wallets. Transaction fees are suggested as low, medium and high</li></ul>







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There are numerous wallets combining different features according to the user's needs: a hardware cold wallet for more security, a hot mobile lightweight wallet for more facility, a desktop full client wallet for more reliability etc... The wallets also differ by cryptoassets they support.