Different categories of cryptocurrency wallets cater to users with different requirements.
A panel held this Wednesday, July 6, at the Blockchain Summit Latam, in Panama addressed the topic of bitcoin and other cryptocurrency wallets and their role in adopting these digital assets. The panel, moderated by Cristóbal Pereira, included Manuel Beaudroit, co-founder and CEO of Belo; Moritz Wietersheim, founder of Specter Wallet; and Liquality developer Bradley Suira.
Manuel Beaudroit, founder and CEO of Belo Wallet, began his participation on the panel by addressing the cryptocurrency offering of wallets and other wallet functions. He noted that, from a cryptocurrency standpoint, developers have a significant moral responsibility to users in selecting which cryptocurrencies will be available in the wallet. The executive is referring to user requests to include coins that achieve great popularity due to their price increases.
Since last year, the executive commented on peaks of high demand from users for coins such as ADA or LUNA to be included in Belo, as well as other popular tokens. However, Belo officials did not vary in their position to maintain the cryptocurrency offer to bitcoin (BTC), ether (ETH), DAI (DAI), USD Coin USDC and Tether (USDT). “With that offering, we are covering 99% of our users’ requirements,” Beaudroit said.
The decision to limit the cryptocurrencies included in the wallet proved wise in light of what happened with the collapses of Terra (LUNA) and the stablecoin UST in early May, which had a negative effect on the entire cryptocurrency market. LUNA lost 99% of its value in three days, while the stablecoin UST depreciated 70% in the same period.
It is also necessary for the wallet to be associated with a convenient means of payment, which serves as a bridge between cryptocurrencies and fiat currencies, the executive pointed out. To this end, Belo distributes a prepaid Mastercard that allows payment in stores from the balance of cryptocurrencies available in the wallet.
Bradley Suira, for his part, explained that the different types of wallets offered to users depend on their requirements. For example, he noted that a user looking for their first wallet requires a simple-to-use product, while a user looking for enterprise solutions will need a solution that involves hardware wallets.
His company, Liquality, offers as an entry point a Chrome browser extension with access to various blockchains. This wallet allows access to Bitcoin, Ethereum Web3, Rootstock, NEAR, Polygon, Binance Smart Chain, and Arbitrum. This access makes it possible to manage multiple cryptocurrencies, such as: BTC, ETH/ERC20, RSK, NEAR, Avalanche and Polygon tokens, with the ability to make atomic exchanges with just one click.
Moritz Wietersheim explained that the focus of the Specter Wallet desktop software is aimed exclusively at bitcoin. Specter requires multi-signature (2 of 3) for sending funds and runs across devices. For example, if you want to send funds to a friend, you must connect 2 of 3 devices to confirm the send. The software works with any hardware wallet, for example, Specter Shield, Cobo, or Trezor cold wallets.
Wietersheim claims that operating only with bitcoin reduces potential attack vectors for users. “The more coins a wallet supports, the greater the chance of bugs in the firmware and software,” the specialist says.
From the different approaches handled by the specialists on this panel, it can be concluded that there is a trade-off between the ease of use of the wallets and the security of the funds. A user who starts with a software portfolio that does not allow self-custody runs the risk that, if that software has a security breach, he may lose his funds. On the other hand, as described above, a hardware wallet is much more secure, although it requires a more experienced user to operate it.