According to Statista, the number of cryptocurrencies worldwide increased from 2,388 in December 2019 to 10,656 in February 2022 — a growth of about 350%. In order to manage their cryptocurrencies securely, users need a crypto wallet, which allows them to store and protect their digital coins from unauthorised access.
While the concept of the crypto wallet is simple – an account for sending and receiving payments – the technology behind them is more complex and poses challenges for developers. Crypto wallets must efficiently and effectively manage digital keys and cryptocurrency transactions in the blockchain network, all while providing a simple and seamless user experience.
What are the different types of crypto wallet?
Crypto wallets can be divided into different categories. Hardware wallets — similar to a USB stick that stores the token and private key — and paper wallets — a document containing copies of the wallet’s public and private keys — are not covered by this article because they do not have a digital user interface. Instead, we’ll examine the three types of software wallets: online wallets, PC/desktop wallets and mobile wallets.
Digital wallet features
So, which digital features are needed for best-practice crypto wallet development? Here’s an overview:
First and foremost, crypto wallets need to provide a seamless user experience. In the financial sector, the increasing popularity of fintechs and challenger banks has seen increased focus on UX — and customer expectations for financial apps are rising. If the crypto space is to keep up, then the following usability features are essential for crypto wallet development:
Robust User Interface
When producing a high-tech app like a crypto wallet, developers can easily forget that they are ultimately creating an application for non-technical end users. Beyond designing the underlying technology, getting details such as the app design, navigation and user guide right must also be a priority. Developers should always keep in mind that the market for crypto wallets is very saturated; if one app doesn’t work seamlessly, customers will download a different one.
The cryptocurrency market is very volatile and coin prices can fluctuate dramatically. This means that crypto wallet users like to monitor exchange rates much more intently than traditional banking customers. However, without turning into full-time traders, users do not have the time or energy to track prices 24/7. To prevent users from losing track of their coins and keep them engaged, crypto wallets should send updates via push notifications. Let users know when a certain price target is reached, coin prices have noticeably changed, or they have received a payment.
To protect user funds against computer or software malfunctions, developers should enable users to back up their wallets. While users would benefit most from creating a backup on their laptop storage or an SD card, not all will think to do this. Let customers know you care about their funds by proactively integrating secure cloud storage apps like Dropbox or Google Drive into the wallet.
Compatibility with multiple operating systems
In order to appeal to the largest possible number of potential users, developers must design for all operating systems. They should opt for cross-platform mobile app development, as this simplifies the development process and allows for greater flexibility. With it, developers can also reap the benefits of faster development times, lower costs, faster deployment, and continuous management capabilities.
Security is an essential consideration for crypto wallet development. From the user perspective, without the ability to store cryptocurrencies securely, nothing else matters. In order to win user confidence, crypto wallets should offer the same kinds of security features that users would expect from a traditional banking app.
A crypto wallet with two-factor authentication login protects user funds against potential hacks. Besides asking users to confirm their identity when they try to log in, developers should also ask users to confirm login attempts from unknown IP addresses.
Automated logout is essential for a successful crypto wallet. To minimise the risk of others being able to access a user’s account, wallets should automatically log the user out after a period of inactivity, or after they close the app. This is something that traditional banking customers are used to as an industry standard.
Local storage of the private key
Local storage of the private key is another indispensable feature of crypto wallets. Rather than storing private keys on the server, where they can be easily stolen, crypto wallets should automatically store them locally on the user’s end device.
The importance of cryptocurrencies will continue to increase in the coming years — and with it the need for crypto wallets. The NFT boom of recent months will accelerate this shift.
As more developers enter the market with new apps, digital quality will increasingly become the deciding factor influencing wallet downloads. If a crypto wallet is to edge ahead of the competition, implementing the features mentioned in this article should be the bare minimum for crypto wallet development.
To create truly successful crypto wallets, developers need to test extensively for functionality, UX, localisation and accessibility. After all, great features mean nothing if they don’t work properly. Learn how Applause can help you launch digital products your customers love at applause.com.