Cryptocurrency is the term that has transformed from a niche to an overnight sensation. In simple terms, cryptocurrency is a virtual, digital currency that is created and stored in the blockchain, secured through cryptography, and designed to work as a medium of exchange. But one cannot trade cryptocurrencies without using a Crypto wallet.
A cryptocurrency wallet is an application that stores cryptocurrencies. The crypto wallet allows an investor to loan, buy, sell, or keep logs of cryptocurrencies in their portfolios. Undoubtedly, there are several crypto wallets available in the market. But most of the cryptocurrency wallets support Ethereum or Bitcoin, while some of the users want a custom solution that fits their requirements. So, now is the best time to jump into cryptocurrency wallet app development.
In this blog, we will cover the basic concepts of the cryptocurrency wallet app, features it should have, technologies used and development costs to give you a better understanding before you hire developers.
Types of Crypto Wallets
Before we provide you with the list of crypto wallets types, you should consider whether you want to create a centralized or decentralized wallet, commonly referred to as custodial and non-custodial crypto wallets.
In the custodial or centralized crypto wallet, a third-party organization holds your private keys and secure your funds. There’s never a problem with lost passwords, you can always restore them after identity confirmation. Moreover, the transaction fees on custodial crypto wallets are lower. To use custodial crypto wallets, you need a stable network connection, otherwise, you will have a hard time managing funds.
On the other hand, in non-custodial crypto wallets, you have 100% control over your private keys and funds. Non-custodial or decentralized wallets allow you to easily monitor and control activities. And the best part is for any transaction to take place, authorization from your private keys is critical. You can access a non-custodial wallet without an internet connection and manage funds anytime. But things to keep in mind while going ahead with non-custodial wallets is that you will get a mnemonic phrase of around 12-24 words that should be written and kept safe, it will help you access your wallet again. If you lose the phrase, you are going to lose your funds as well.
Read: Escrow Payment Solutions
Once you have decided whether you want to create a custodial or non-custodial wallet, it’s time to decide on which platform you want your wallet.
- Desktop Wallets: Desktop wallets can be installed on your desktop like any other software and allow you to store crypto there. These wallets work on all operating systems including Linux, Windows, and macOS.
- Online Wallets: Online wallets are web-based, hence, they are stored in the cloud and require unique keys to operate. Online wallets are best for users who cannot access their PC but want to handle or view their accounts. A major downside of online wallets is they are prone to hacking.
- Mobile Wallets: Mobile wallets are a blend of desktop and online wallets. As the name suggests, mobile wallets can be installed on the smartphone as an application and enable users to access their crypto from anywhere.
- Hardware Wallets: Hardware wallets are the most secure way to trade and manage cryptocurrencies because the copy of data is stored on a hardware device like a USB. Hardware wallets are the perfect choice for users who do not buy or sell crypto actively.
Features of Crypto Wallet
Some of the features that a Crypto Wallet App must contain are as follows:
- Registration/Sign-in System: This is the first and foremost thing to have in a crypto wallet, the ability to sign in.
- OTC trading facility: Over-the-counter or OTC trading in the crypto wallet makes the trading of cryptocurrency private as the trading is done directly between two parties. OTC trade can be crypto-to-crypto or fiat-to-crypto.
- Multi-Sig: Multi-signature or multi-sig feature in a wallet makes it more secure and reduces the risk of fund misuse as it requires multiple private key signatures for transaction authentication.
- KYC verification: With KYC, you can verify and authenticate the identity of the user through their official documents like passport or government-issued identification. KYC in the crypto wallet is perfect for ensuring the security of the user's funds.
- Privacy: In the case of non-custodial wallets, users will get complete control of their data. The user gets a private key converted into a 12-word mnemonic phrase ensuring improved privacy.
- Options to Sell/Buy Crypto Securely: Users can easily buy any cryptocurrency with a credit card over a secured transaction and they can also sell the crypto from the wallet and the amount will be credited to their credit card near-instantly.
- In-chat transactions: The in-chat transaction feature in the crypto wallet makes it easier for a user to exchange their cryptocurrencies without needing the services of an exchange platform.
- Cross-platform compatibility: With the flexible and secured infrastructure, a wallet can be made cross-platform compatible, making it easier for a user to access their portfolio from any device.
- Automated Denial of Duplicate Payment: An automated detection and denial of duplicate transactions in the crypto wallet are must-haves for higher security.
- API connections for Crypto Exchange: If the wallet is connected to leading crypto exchanging platforms in the market through API, then it becomes efficient for users to buy or sell their crypto assets without leaving the platform.
- Multi-Asset Storage: A crypto wallet must support multiple tokens according to the user's needs.
- Easy Portfolio Management: Enabling users to completely easily manage their portfolios and instantly view their transactions is another plus point in a crypto wallet.
Technologies for Crypto Wallet Development
Now that we have a basic understanding of cryptocurrency wallet apps, it’s time to know the technology stacks that can be used for its development.
Databases that can be used for storage include PostgreSQL, MySQL, Cassandra, BigchainDB, AWS Quantum Ledger Database (QLDB), etc. For testing and debugging purposes, you can review codes, static code analysis, unit testing, and single-user performance testing.
Estimated Cost for Crypto Wallet App Development
The estimated cost for the development of a crypto wallet app depends on several factors, like the size of the company, complexity of the application, size of the crypto wallet, and its design. But to give you an approximate range it will be somewhere around $85k to $95k based on the features you might wish to add to the wallet.