Digital currencies are productive alternatives to traditional financial instruments for storing and managing money. The crypto market has seen a remarkable increase in the number of cryptos from just 66 in 2013 to over 10,000 in 2023. A cryptocurrency wallet is a unique solution for users to store, access and use their digital currencies for trading and investment purposes. As the market demand for these wallets increases, it is vital to understand the basics of developing a crypto wallet application.
Cryptocurrency wallet development
Cryptocurrency wallets can be defined as a software program or hardware device that allows users to store, transfer and receive cryptocurrencies. Like a bank account for fiat currencies, crypto wallets are crucial to making digital assets practically usable for people and organizations.
A crypto wallet allows users to check how much cryptocurrency they own and maintain their account balance. In addition, these wallets are essential to connect and interact with other Web3 apps.
It is common knowledge that cryptocurrencies are stored on a blockchain network as a public key address. Using the public key address, any crypto user can send and receive digital assets. However, crypto wallet apps allow users to manage the associated private encryption keys to access these public addresses and initiate a transaction.
The two main types of crypto wallets are software (hot) and hardware (cold) wallets. Software wallets can be used to securely store cryptocurrency online, while hardware wallets allow users to store their digital assets offline on a physical hardware device such as a USB drive.
Based on centralized or decentralized wallet options, users can choose from custodial wallets and non-custodial wallets. In the case of custodial wallets, a third party takes custody of the private keys of the wallet on behalf of users. In the non-custodial wallets, the owner of the wallet keeps his private keys and his money. The most mentioned cryptocurrency wallets are MetaMask, Coinbase, Exodus, Trust, ZenGo.
Steps on how to create a Crypto Wallet app
Before creating a crypto wallet app, developers should choose features that can be included in these wallets and accelerate their market adoption. Some mandatory features required in the crypto wallet include but are not limited to: a user login option, a bank account or credit/debit card profile, real-time crypto prices and charts, QR codes for transactions, push notifications and advanced security options.
The process of developing a crypto wallet app is divided into five general steps:
- Come up with a valid business idea
The development of any crypto wallet app starts with a business idea. While the crypto industry is reaching new heights every day, it is still in its infancy. While navigating the crypto space, users encounter various issues and challenges. These hurdles challenge developers to search for solutions, ultimately resulting in intensive research and product idea generation.
Conducting competitive research helps find products that have already solved a crypto user’s problem. In this case, one should study that product and propose innovative ways to make it more advanced and attractive.
- Choose credible development partners
Once the strong potential of the crypto wallet app is established, the next step is to realize it with the help of reliable development partners. The best course of action is to choose a reliable software development agency made up of experts from various fields.
These partners take care of every aspect of the product idea from start to finish, from discovery to maintenance. Product managers, project managers, UX/UI designers, developers and testers are some of the specialists whose involvement is very crucial for the development of a crypto wallet app.
- Create an interactive prototype
After selecting the wallet provider, the focus should shift to designing an attractive prototype, which is practically a virtual representation of the wallet app. In this basic working version, all screens are designed and connected to each other for the test users to explore while the developer can identify areas that need improvement.
The main reason for developing a prototype before creating a Minimum Viable Product (MVP) design is because blockchain-related coding is expensive. On the other hand, prototype development costs less and provides a way to strike the perfect balance between features and UX for the crypto wallet.
- Develop and test an MVP
The next big step in the process of creating a cryptocurrency wallet app is developing the MVP design and testing it. At this stage, the app developer and his team have to make important decisions, such as selecting the type of wallet (custodial or non-custodial) and the platforms (apps, web) on which the users are likely to use the app.
- Release and Maintenance of The Wallet
The last step of the crypto wallet app development process is the public release. As with most mobile applications, the wallet app must be uploaded to the App Store or Google Play. In addition, the app must be connected to live blockchains depending on the supported coins.