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Wallet info

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cryptocurrency wallet is a device,[1] physical medium,[2] program or a service which stores the public and/or private keys[3] for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often also offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction (see "bitcoin transaction" image), identification or legally signing a 'document'.

Technology
Private and public key generation

A crypto currency wallet works by a theoretical or random number being generated and used with a length that depends on the algorithm size of the cryptocurrency's technology requirements. The number is then converted to a private key using the specific requirements of the cryptocurrency cryptography algorithm requirement. A public key is then generated from the private key using whichever cryptographic algorithm requirements are required. The private key is utilised by the owner to access and send cryptocurrency and is private to the owner, whereas the public key is to be shared to any third party to receive cryptocurrency.

Up to this stage no computer or electronic device is required and all key pairs can be mathematically derived and written down by hand. The private key and public key pair (known as an address) are not known by the blockchain or anyone else. The blockchain will only record the transaction of the public address when cryptocurrency is sent to it, thus recording in the blockchain ledger the transaction of the public address.

Duplicate private keys

Collision (two or more wallets having the same private key) is theoretically possible, since keys can be generated without being used for transactions, and are therefore offline until recorded in the blockchain ledger. However, this possibility is negated because the theoretical probability of two or more private keys being the same is extremely low. The number of possible wallets in any cryptocurrency cryptography is slightly less than the number of atoms in the universe[citation needed], a number so high that duplicating or hacking a certain key would be inconceivable.[5] [6]

Seed phrases

In modern convention a seed phrase is now utilised which is a random 12 to 24 (or even greater) list of dictionary words which is an unencrypted form of the private key. (Words are easier to memorize than numerals.) When online, exchange and hardware wallets are generated using random numbers, and a seed phrase is asked to be recorded by the user, hence when access to the wallet becomes misplaced, damaged or compromised, the seed phrase can be used to re-access the wallet and associated keys and cryptocurrency en toto[7]

Wallets

A number of technologies known as wallets exist that store the key value pair of private and public key known as wallets. A wallet hosts the details of the key pair making transacting cryptocurrency possible. Multiple methods exist for storing keys or seeds in a wallet. [8]

Crypto wallets vis-à-vis dapp browsers

Dapp browsers are specialized software that sustains new generation decentralized applications. Dapp browsers are considered to be the browsers of Web3 and are the gateway to access the decentralized applications which are working based on blockchain technology. That means all dapp browsers must have a unique code system to unify all the different codes of the dapps.

While crypto wallets are focused on the exchange, purchase, sale of digital assets[9] and support narrowly targeted applications, the browsers support different kinds of applications of various formats, including exchange, games, NFTs marketplaces, etc.[10]

Technical specifications of different browsers may or may not include features such as:
  • Full support for all modern Web2.0 technologies;
  • Built-in Ethereum mainnet/testnet RPC, fully compatible with Web3.0;
  • Built-in Ethereum wallet (using smart contracts);
  • Dapp naming support

Characteristics

In addition to the basic function of storing the keys, a cryptocurrency wallet may also have one or more of the following characteristics.

Simple cryptocurrency wallet




A simple cryptocurrency wallet contains pairs of public and private cryptographic keys. The keys can be used to track ownership, receive or spend 
cryptocurrencies.[11] A public key allows others to make payments to the address derived from it, whereas a private key enables the spending of cryptocurrency from that address.[12]

The cryptocurrency itself is not in the wallet. In the case of bitcoin and cryptocurrencies derived from it, the cryptocurrency is decentrally stored and maintained in a publicly available distributed ledger called the blockchain.[11]

eID wallet




Providing an eID and a diploma and digitally signing the 'application form' with a crypto wallet app.



Some wallets are specifically designed to be compatible with a framework. The European Union is creating an eIDAS compatible European Self-Sovereign Identity Framework (ESSIF) which runs on the European Blockchain Services Infrastructure (EBSI). The EBSI wallet is designed to (securely) provide information, an eID and to sign 'transactions'.[4]

Multisignature wallet

Main article: Multisignature

In contrast to simple cryptocurrency wallets requiring just one party to sign a transaction, multisignature wallets require multiple parties to sign a transaction.[13] Multisignature wallets are designed for increased security.[14]

Smart contract

In the cryptocurrency space, smart contracts are digitally signed in the same way a cryptocurrency transaction is signed. The signing keys are held in a cryptocurrency wallet.

Key derivation

Sequential deterministic wallet

[Image: 200px-Creating-Atala_PRISM-crypto_wallet...phrase.png]



A deterministic wallet seed phrase of a crypto wallet.



A sequential deterministic wallet utilizes a simple method of generating addresses from a known starting string or "seed". This would utilize a [url=https://en.wikipedia.org/wiki/Cryptographic_hash_function]cryptographic hash function, e.g. SHA-256 (seed + n), where n is an ASCII-coded number that starts from 1 and increments as additional keys are needed.[citation needed]

Hierarchical deterministic wallet

The hierarchical deterministic (HD) wallet was publicly described in BIP32.[15][16] As a deterministic wallet, it also derives keys from a single master root seed, but instead of having a single "chain" of keypairs, an HD wallet supports multiple key pair chains.

This allows a single key string to be used to generate an entire tree of key pairs with a stratified structure.[17] The single master string serves as the root of the tree, and the hierarchy scheme allows the private keys generated from a master private key to be themselves master private keys, which can in turn be treated as deterministic wallets in their own right.[18]

BIP39 proposed the use of a set of human-readable words to derive the master private key of a wallet. This mnemonic phrase allows for easier wallet backup and recovery, due to all the keys of a wallet being derivable from a single plaintext string.

Armory deterministic wallet

Bitcoin Armory, an open sourcePython-based, wallet-management application for the Bitcoin network, utilized its own implementation the hierarchical deterministic scheme and served as inspiration for the BIP32 standard.[19]

Non-deterministic wallet
In a non-deterministic wallet, each key is randomly generated on its own accord, and they are not seeded from a common key. Therefore, any backups of the wallet must store each and every single private key used as an address, as well as a buffer of 100 or so future keys that may have already been given out as addresses but not received payments yet.[20][11]: 94 
Quote:bc1qcn0yfg7qdkll9cd86ehkx2q9q3yzzru7qzxdx5  (BTC)


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