Wallet wallet on the net, have we got the best one yet?
- a comment by Niall Murray, Director Global Business at SALAMANTEX
While every one of us owns some kind of physical wallet for banknotes, coins, and cards, let’s talk about what digital wallets are and why they will become more and more of an everyday item of use.
Investopedia defines digital wallets as “financial applications that allow you to store funds, make transactions, and track payment histories on devices like phones and tablets”.
This leads us already to the key criteria that characterize good wallets:
1. Usability for payments:
The main purpose of a wallet is to be used for payments. While this seems to be a no-brainer, the reality unfortunately sometimes looks different as it is not always a key priority for wallet providers to ensure that they work smoothly with payment solutions, as our experience taught us.
A wallet is used for safe-keeping means of payment, be it physical fiat money, gift cards or digital assets, such as cryptocurrencies. Therefore, the safety of funds and protection against cyber and hacker attacks is another key criterion of a good digital wallet.
While cryptocurrency and blockchain technology have long been hailed as the future, concerning predominantly millennials and Gen Z. This perspective is now transforming to become more inclusive with the credo “you, your kids and your parents should be able to make payments with a digital wallet in a few simple fast steps”, as Nimiq ambassador Max Burger told us in an interview.
SALAMANTEX Product Manager Selma Halilovic confirmed the above points when discussing real-life expert insights and lessons learned. For payments specifically, the camera function of a wallet is absolutely critical. It needs to be able to scan a QR code and automatically initiate and process the payment of the exact amount to the given recipient address instantly. “Our experience has shown that some wallet providers don’t prioritize the payment capabilities of their apps, with our encouragement to improve wallet features for smooth payment falling on deaf ears. We have to work together to be able to provide the future-forward payment experience and ultimately achieve mass adoption”, Selma says. For the sake of full transparency, interaction between the SALAMANTEX crypto payment software and popular wallets are displayed publicly on https://docs.salamantex.com/docs/.
With new wallets appearing on the market on a daily basis, it is difficult to identify the best one for you. Nevertheless, we did a deep dive and want to shine a little light onto the wallet darkness.
Recently, official public rankings from CNET and money.com have analyzed wallets currently available in 2022. Both sources found that the Coinbase wallet, not to be confused with an account on the Coinbase exchange, is recommended for beginners. This wallet is easy to handle with little to no prior experience and connects seamlessly to a large array of digital assets, while also being extremely secure.
The two expert rankings are also in agreement with Ledger Nano X being one of the best solutions of an offline crypto wallet (a so called „cold wallet“). Your digital wallet on your smartphone is conceived as a daily transaction tool, while the offline version is often kept in addition to safeguard large amounts of digital assets, comparable to how a combination of savings account and carrying cash around.
There are two more wallets, that we would like to showcase in this article as they stand out from the competition for specific reasons:
1. Nimiq wallet:
The NIM cryptocurrency was created as an optimal means of payment in the digital ecosystem. Think of NIM being an acronym of ‘New Internet Money’. The Nimiq wallet especially stands out for its user-friendliness, with everyone being able to install it in less than 30 seconds, needing only web access on a mobile device. With Bitcoin being complementary to the capabilities of NIM, this wallet allows to easily swap between the two currencies.
It is a self-custodial web-based wallet, giving full control and flexibility to the user.
At this point, we have to explain the value of a non-custodial wallet. Rather than your funds being stored on an exchange or payment service provider’s server, the wallet sits on your mobile device and you are in full control, without a third party needed as a middle man. This concept is comparable to the wallet in your pocket versus a bank account with a bank. This full control also brings a level of responsibility as you alone are in charge of not losing your wallet, i.e. the passwords and keys to your digital wallet. Another big advantage of this wallet is that it is free-of-charge. “Beware of service and other hidden fees with some apps,” as SALAMANTEX Product Manager Selma Halilovic warned during an interview.
2. G-Coin® wallet:
A common pain point in crypto payments is providing a thorough KYC (know your customer) and AML (anti money laundering) process which ensures full compliance with local and global regulations while also remaining convenient for customers.
The G-Coin team has found a secure way to integrate privacy-first, frictionless KYC into their wallet through a tiered gamified process. The more personal data a customer provides, the more services they can access. With this process, customers who only make small transactions only have to go through the minimal amount of KYC. This data can then be used to smoothly handle AML processes without having to manually fill in forms for large purchases.
For example, in Austrian law, any purchase over 10k Euro must be accompanied by such a KYC document to be able to trace the origin of funds, ensuring their legality. In other countries the threshold is as low as EUR 1,000. With G-Coin’s KYC, this additional check is only required of users who meet these standards, not everyone.
The G-Coin wallet is actively working on expanding its features and geographical reach, it is definitely one to try out!
Now that we have covered all the basics surrounding digital wallets, let’s wrap up with the most crucial advice: make sure you don’t lose the keys to your digital wallet! If you lose your digital wallet’s private key, you lose the funds in it. While this seems to be an obvious advice, history has shown that it does indeed happen.
Ideally, you keep your keys safe in both a digital non-hackable and a physical location.