Do You Understand How a Blockchain Wallet Works?

A blockchain wallet allows users to manage and store their bitcoin and ether digitally. Cryptocurrency wallets are provided by Blockchain Wallet, created by Peter Smith and Nicholas Cary. With a blockchain wallet, users can transfer cryptocurrencies and convert them back into their local currency.

Do You Understand How a Blockchain Wallet Works

What is a Blockchain Wallet?

Individuals can store cryptocurrencies in e-wallets. The Blockchain Wallet app allows users to manage the balances of two cryptocurrencies: bitcoins and ethers. With Blockchain Wallet, you can set up an electronic wallet for free, and you can do this online. To create an account, individuals must provide an email address and password, and the system will automatically notify them via an automated email asking them to verify their account.

When the wallet is created, the user receives a Wallet ID, a unique identifier, similar to a bank account number. E-wallet users can log into the Blockchain website or download a mobile application to access their e-wallet.

A user’s current wallet balance and their most recent transactions are displayed in Blockchain Wallet. Clicking on the cryptocurrency balance will show the value of the funds in the fiat or local currency of the user.

Blockchain Wallet Payment Process

By sending a request to another party for a specific amount of bitcoin or ether, the system creates a unique and new address that can be sent to a third party or even converted into a Quick Response code. Like a barcode, a QR code stores financial information and can be read by a digital device.

Each time a request is made, a unique address is generated. Those who have access to a unique address can send bitcoins or ether to each other. Similar to sending or receiving money through PayPal, sending and receiving cryptocurrency is possible.

The PayPal website is an online payment systems provider that facilitates the transfer of funds between customers’ banks and credit cards by enabling online transfer through financial institutions.

Bitcoin can be exchanged for ether (or vice versa) as well. The user is provided a quote for the amount they’ll receive according to the current exchange rate. Since each currency’s blockchain takes some time to update, exchanges do not appear instantly in the wallet.

You can also buy or sell bitcoin through the interface powered by an exchange partner like Coinify or SFOX. The exchange rate is guaranteed for a limited time. To make a purchase, a user can either transfer funds from a bank account or use a credit or debit card.

Blockchain Wallet Fees

Transfers by bank incur a small fee, and bitcoins may not be received for a few days. Whenever you use either a debit or credit card, there will be instant access to bitcoin but incurs a more significant convenience fee. Services for buying and selling are not available in all locations.

But it’s important to note that Blockchain Wallet charges transaction fees based on a dynamic process when the fee will vary depending on several factors. The fee size is affected by both the transaction size and the network conditions at the transaction time.

High-powered computers called miners can process only a limited number of transactions per block. Usually, miners process the most lucrative transactions first because they are financially advantaged.

Wallets like blockchain offer priority fees, which may result in the transaction being processed within an hour. Additionally, you can pay a regular fee, but it will take longer to complete the transaction. The customer may customize the fees as well. The customer could be rejected if the fee is set too low.

Blockchain Wallet Security

For users, wallet security is crucial, as having one’s account illegally accessed can lead to the loss of bitcoin and ether. The Blockchain Wallet offers three levels of protection:

Level 1

Level 1 Security prevents users from losing access to their accounts. By setting up a password hint (Blockchain doesn’t store the password), users can verify their email address and create a 12-word backup recovery phrase.

Level 2

Level 2 Security is designed to prevent unauthorized access to the wallet. It includes linking a phone number to the account to receive a one-time password when the account is logged into and creating two-step authentication.

Level 3

Users of Level 3 Security can block TOR requests. If you don’t know, TOR happens to be a global network of servers that allow users to route their web traffic through many computers to prevent anyone from tracing the origins back to the user. Despite TOR’s legitimate uses, it can be abused for nefarious purposes by hacking into a digital wallet anonymously since a trace cannot identify the user.