Important Types Of Cryptocurrency Wallet You Should Know #002

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Hello great minds,

It's another beautiful day in this great community and I am here as usual to discuss with you all on issues very important in the crypto world.

The issue of scams in the cryptospace is not a new thing as many has fallen victim.

There are also some that has fallen victim to loss of funds as a result of loss of keys and this is very painful.

Many don't know the difference between a decentralized wallet and a centralized wallet, and some can't different between their examples.

Today, we shall continue our explanation on the various types of cryptocurrency wallet we have, please stay tuned 😊

• EXCHANGE WALLET:

An exchange wallet can be explained to be a digital wallet that is made available by a cryptocurrency exchange platform.

An exchange wallet can also be explained to be a secure online storage app where users can transact, manage, and store their digital assets.

An exchange wallet allows users to store different cryptocurrencies which is supported by the exchange platform alone, this implies that any cryptocurrency not supported by the exchange platform cannot be stored in the wallet.

An exchange wallet is usually integrated into the exchange platform in a way that it will be convenient for the user to manage both the wallet and participate in other activities sponsored by the wallet.

In an exchange wallet, the private keys of a user is usually managed by the exchange platform (most especially for centralized exchanges) and this implies that a user don't have full control over his funds in the wallet.

• LIGHT NODE WALLET:

Light node wallet which is also referred to as a light weight wallet can be explained to be a cryptocurrency wallet that provides an easy way to interact with the blockchain network.

Unlike the full node wallet which we discussed yesterday, the light node wallet does not verify the transaction of the whole blockchain independently instead they depend on external servers to access the blockchain information.

Light node wallet offers a more resource-efficient alternative for users who wish to manage their digital assets without the compulsion to download and manage a full copy of the blockchain.

A light node wallet offers a more user-friendly interface and faster synchronization times.
And this enables users to make financial transactions, view their balance and manage their funds.

The light node wallet usually communicate with external servers to fetch the necessary/needed information of a blockchain.

• SPV WALLET:

Spv wallet which is an acronym for Simplified Payment Verification is a type of cryptocurrency wallet that offers an easier method for verifying transactions on a blockchain.

This type of wallet although applicable to other types of cryptocurrency is commonly used in association with Bitcoin.

When an SPV wallet is associated in a transaction, the wallet makes use of block headers for transaction verification in a blockchain.

This wallet check if a transaction is been recorded in a block and if the block has any linking to the previous blocks, thus confirming transaction validity without the need to verify the full blockchain.

For the performance of this verification, the spv wallet makes use of a technique known as "merkle path verification".

This verification gives the wallet the ability to proof that a transaction is part of the blockchain by providing a cryptographic proof which is called the merkle path.

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CONCLUSION

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I will love to continue this discussion but other duty calls and I will love to take a pause here.

In our next discussion, we shall learn about more cryptocurrency wallet.

Thank you and have a nice day 😊❤️