We talk about cryptocurrencies a lot, and we often mention that after the transaction is completed, the person should transfer the assets to a digital wallet, so they can keep their money safe and secure.
A wallet can be a digital solution, or a physical card or hard drive you own. We can say that they are almost a digital version of your real wallet, because you keep money on them, and you use it to make payments.
People who are crypto enthusiasts often use some of the popular services like Crypterium, which is something like PayPal or similar services are for fiat currencies. But, we must mention that digital wallets aren’t necessarily tied to cryptocurrencies, because there is a lot more than that.
But, what do you need to know about them? Why are they important, and how they are changing the payment habits of the people? Here we are to explain some of these things:
1. There are three giants that hold the largest share of the market
As you might expect, these include PayPal, Google, and Amazon. There are many more of them, according to the needs of the market, because these services are not available everywhere in the world.
Therefore, there are alternatives that are equally good, and that serve a large enough number of customers so that it can be said that they can compete with these giants. But we cannot deny the fact that these three companies define the market and trends.
Even when it comes to cryptocurrencies, digital wallets also follow the trends established by the traditional financial system. However, even though these are just three big companies, their influence is undeniable.
2. They are a software solution
Basically, they are based on web platforms or applications that you can use instead of your physical wallet. In some cases, you can order and use a payment card or other type of payment token.
But when we say digital wallet, we mean the software solution that is offered to you as an option for collecting and storing the money you earn through international agreements (for example, freelancers), or for international transactions expressed in cryptocurrencies, to be able to later convert them into local currency. It is up to you whether you will use the application or the website or you will also have the physical form of the wallet.
3. There are several types of digital wallets
The closed type is intended for users of a certain service and the company that provides this service also issues cards or applications, which are verified with data that is valid only in a limited number of cases.
The semi-closed type is intended for several approved services or stores, which have a direct agreement with the issuer. This is an interesting solution, although it can be quite limited.
The open type of digital wallet is intended for general use and you can use it similarly to your most common payment card, as long as you do not violate the terms and conditions required by the issuer.
4. Most of them are safe
Knowing that they are mostly supported by global financial platforms, we can conclude that most of the available digital wallets are completely safe to use. It is best to always choose a company with a reputation and integrity, to make sure that they will manage your finances properly and that personal data will always be protected and will never be misused. The reputation that these services have is very important so that you can make the right and safest choice.
5. Support a number of services that the user needs
If you are just storing your money as a saving, somewhere you cannot access it, then what is the purpose of using digital wallets? Without at least one service, they are completely worthless, so we can see these companies offering a range of customer service.
Of course, payment and shopping are at the top, because we use the money primarily for that. But did you know that the card you receive is also a service? With it, you can pay and even do it without entering a PIN.
Over time, as a loyal customer, you get a number of benefits, a small number of freebies, or a coupon that you can use to make a purchase or an annual membership fee.
In limited cases, they can also be a means of verifying your identity if you do not have an ID card with you. So, services make digital wallets what they are and what we want them to be.
6. They make the cryptocurrencies available for use
It is virtually impossible to make a blockchain transaction to your primary payment card. The financial system is not ready for this way of working, so part of the digital wallets are becoming available for the crypto market.
Many people are already investing, mining, and exchanging cryptocurrencies, whether it is Bitcoin or someone else. Thanks to these services, crypto money is more accessible for use than ever before.
As you can see for yourself, this is a concept that is well known to us, but which revolutionizes the way financial companies operate. People today have a variety of options available, which they can even choose from – and this is a privilege that few have ever had.
Whether you use digital wallets for payment, savings, online shopping, or investing, the fact is that your parents or older siblings could not. This concept, as we have said, is well known, but it becomes feasible in practice nowadays, when people are more open to experimenting and playing outside the safe zone.
Bitcoin and other cryptocurrencies are available to us immediately, and transactions are completed in less than a few hours. Usually, international transactions take at least one day to process. But if we accept the technology and what it offers, we will face much more practical and elegant solutions, which open a number of other possibilities for financial management in the future.