Blockchain Wallet: All You Need To Know
Updated: Jul 13, 2021
In the digital age, Blockchain proved to be the safest and most effective solution to manage cryptocurrencies. Arguably one of the great innovations in modern finance, Blockchain makes payment gateways faster and more secure for the users.
Blockchain Wallet is the most secure and fastest solution, making payment systems much easier than ever before.
Image source: freepik.com
What is Blockchain Wallet?
It’s a digital wallet that allows users to make numerous transactions using various kinds of cryptocurrencies, like Bitcoin, Ethereum, etc., and is used to exchange funds conveniently. Among the advantages of blockchain wallet is that you’re able to instantly send and receive money, wherever you are in the world. Within seconds, the funds you send through this wallet are available for the receiver in any part of the world. It’s very similar to using PayPal or Stripe (and many other gateways) but uses cryptocurrencies instead of traditional money.
There are various gateways available to manage your cryptocurrency, but Blockchain Wallet is the safest and most popular solution for sending, receiving, exchanging, and storing your cryptocurrencies.
Below is all the information you need to know about the Blockchain Wallet, covering all the questions you may have as a beginner cryptocurrency owner.
Why do we need Blockchain Wallets?
Users face several problems with traditional banking systems when making any transactions. First of all, transactions are too slow, often taking up to a week; while the central point of failure is that any transaction has to pass through go-betweens, like a bank. Another downside is that traditional banking systems are easy to jeopardize, manipulate, or corrupt as keeping track of all user accounts and balances isn’t easy to do. These risks are minimized when using Blockchain wallets by its use of advanced algorithms and innovative technologies.
In contrast to the traditional banking system, a Blockchain Wallet is a decentralized system which means it’s a digital entity and isn’t owned by any bank or government. This makes Blockchain Wallet transaction pass within seconds –without government or bank fees.
How does Blockchain Wallet work?
Everything that’s connected to blockchain is digital as it is a decentralized system –which means there’s no need to physically visit any branch to open your Blockchain Wallet. Once you’ve created your Blockchain Wallet, a unique master seed is formed –which is now the core of your specific wallet and is used to obtain every individual bitcoin address that you’ll use to send and request bitcoin. Access to your wallet is encrypted so that not even the Blockchain gateway has access to your balance and transaction, ONLY you.
One of the primary reasons why Blockchain is so secure is the gateway doesn't store your cryptocurrency, but simply provides you with the software to store all of your cryptocurrencies by yourself. Once you’ve created the wallet, it gets encrypted (along with your password) on your device. For a more rigid security, Blockchain doesn’t just work with passwords. The encryption serves as a decryption key so you can unlock and lock your Blockchain Wallet -making it impossible for other people to access your Blockchain Wallet.
Decrypting your wallet is so convenient that you only need to enter your unique Wallet ID and password. The backup of your encrypted wallet is downloadable using the Blockchain API on your browser before safely decrypting it on your device.
If you wish to change the wallet provider, or in case you lost your password, you should use your Backup Phrase (made up of 12 random words). It’s an encoded version of your master seed and is exclusive for your Wallet. You can access your own Backup Phrase to recover access to any wallet software you might be using.
Helpful Tip: Go to your Security Center (where you’ll find your 12-word Backup Phrase) after you’ve created your wallet. Write this phrase down somewhere safe where you won’t lose it and it's not accessible to others.
Image source: unsplash.com
How to use Blockchain Wallet?
It’s easy, quick, and free to create a Blockchain Wallet. All you need is a valid email address and a secure password. Once you’ve created your unique wallet, you’ll have to follow the instructions to verify your identity. This is a crucial, yet simple, process where no one will have access to your wallet except you. To create your Blockchain Wallet, you can either do it in blockchain.com or download the Blockchain Wallet app for iPhone or Android and simply follow the registration steps. Whichever you used to sign up, you’ll have access to your wallet on all your devices which means you can use whatever device you’re comfortable with to create your Blockchain Wallet.
How to log in to your Blockchain Wallet
You only need your unique Wallet ID and your password to access your Blockchain Wallet, and it’s highly recommended for you to enable any 2-step authentications, such as SMS authorization or Google Authenticator.
Navigate to the “General” section of the settings menu to find your unique Wallet ID. It’s a string of random letters and numbers. Be careful to understand and identify the difference between your Wallet Address and Wallet ID as they look similar. Both are a string of random letters and numbers. Note that your Wallet ID shouldn’t be shared to anyone as it serves as a Username (and can’t be used to send/receive the funds).
How to check your balance
Simply go to your dashboard to check your balance. Your current balance can also be seen at the top of your wallet. You can select your preferred currency display by clicking on your cryptocurrency.
Sending & receiving
It’s so quick and easy to send and receive funds. For receiving funds in your Blockchain Wallet, you should share your Wallet Address or your unique QR code with the sender (NOT your Wallet ID). In the same way, you’ll need the recipient’s Wallet Address or unique QR code to send funds from your wallet to another Blockchain Wallet.
It’s also very convenient to check your transactions: simply go to your transaction feed where your entire transaction history is displayed.
How safe is a Blockchain Wallet?
Image Source: unsplash.com
The primary reason why the Blockchain Wallet got so popular with both individuals and businesses around the world is its security. The whole idea of using the Blockchain Wallet is it allows people to share valuable data in a secure, tamper-proof way.
Since hacking one’s account and accessing it illegally can result in losing cryptocurrencies on that account, wallet security is among the most essential considerations for users. To secure users’ funds, Blockchain stores data using high-end software rules and advanced algorithms that makes it almost impossible for hackers to attack/manipulate users’ Blockchain Wallets.
Three levels of security are set in place, guaranteeing that Blockchain Wallet is the safest solution on the market:
Level 1 Security. This prevents Blockchain.com users from losing account access which allows you to verify your email address, set up a password hint, and create a 12-word backup phrase to regain your password securely in case you forgot.
Level 2 Security. This is done by a 2-step SMS authorization. You should link and verify your phone number in order to activate this level of security. This authorization reduces the risk of illegal access to your account by sending you a 1-time password before you can log in to your Blockchain account.
Level 3 Security. This is used to block TOR requests. TOR: a global network of servers that allow users to route their web traffic through multiple computers –which aims to prevent anyone from hacking the origins back to the user. TOR is used legitimately, but it can be used for illegal purposes by anonymously hacking into a digital wallet since a trace wouldn’t be able to identify the original user.
Blockchain Wallet fees
Each cryptocurrency transaction must be registered and added to the global official blockchain system for a transfer to be considered valid and successful. Powerful computer, aka miners, are working to validate transactions and add them to the blockchain. Miners require huge amounts of computing power and energy in order to collect a financial reward.
For this reason, miners have a financial reward to prioritize the validation of transactions that include a higher fee. The exact fee for sending cryptocurrency is calculated by the Blockchain Wallet. Although Blockchain Wallet is a free solution for managing cryptocurrencies, it still has an insignificant fee –much lower than any other traditional bank transaction fee.
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