Web3 refers to the latest phase of the Internet world. It is centered around self-sovereignty and inclusion. Web3 incorporates decentralized blockchain technology, which aims to bring security and transparency to users as they navigate the Internet. Central to this new iteration of the Internet is a Web3 wallet that stores our private keys, allowing us to access and manage our blockchain-based assets, such as cryptocurrencies and NFTs, in a private and self-custodial fashion.

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In this article, we'll dive deeper into what a Web3 wallet is, then explore its evolution, key features, types, and security considerations.
The evolution of digital wallets
Digital wallets have been around for a long time and have taken many forms. The first generation of digital wallets, which we can call Web1 wallets. With the advent of Web2, digital wallets have become more sophisticated and enable users to manage a wider range of digital assets.
What is a Web3 Wallet?
A Web3 wallet is a software program that stores private keys, which are necessary to access blockchain networks and manage transactions. Unlike traditional wallets, which store physical currency, Web3 wallets store digital assets such as Bitcoin, Algorand, and NFT.
All Web3 wallets store private keys but do so in different ways. A self-custodial (or non-custodial) wallet like Pera Wallet gives us full control over our funds as we hold and control the private keys. Basically, you are your own bank. Web3 wallets store your private keys; The wallet issuer will not be able to see your key. On the other hand, some Web3 wallets are custodial, meaning that a third party, such as an exchange, manages our private keys on our behalf.

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Key Features of Web3 Wallet:
Web3 wallets come with several features that make them valuable tools for interacting with blockchain networks. For example:
Peer-to-Peer: Web3 wallets allow us to send money from one wallet to another through the blockchain network without the need for an intermediary such as a bank or payment platform.
Multiple assets: Web3 wallets can be used with different blockchain networks and applications, making it easy to manage multiple digital assets such as cryptocurrencies and NFTs from a single interface without the need to switch between different wallets.

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Security: Web3 Wallet uses strong encryption to protect private keys from hackers and other third-party threats.
Privacy: Web3 Wallet does not require users to share their personal information with third-party providers.
How Web3 Wallet Works:
Web3 wallets have become increasingly popular as more and more people are becoming interested in blockchain and cryptocurrencies. These wallets are designed to securely store private keys and interact with blockchain networks

Creating and managing private keys:

One of the most important aspects of Web3 wallets is their ability to securely store private keys These keys are generated using complex mathematical algorithms and are used to sign transactions on the blockchain network. When a user creates a Web3 wallet, the wallet generates a pair of keys, a public key and a private key. The public key is used to accept transactions.
Interacting with the blockchain network

Once a Web3 wallet is set up and private keys generated, you can start interacting with blockchain networks. This includes sending and receiving digital assets, as well as interacting with smart contracts.
Web3 wallets can also be opened to accept digital assets. When we accept a transaction, it will be broadcast on the blockchain network and recorded in the public ledger. Our wallet will then update to reflect the new balance.