A digital wallet is the most common gateway for accessing the blockchain system
Wallets (Platform)
- Desktop: Feature rich, offers control and anonymity
- Mobile: Most popular, simple and easy to use
- Web: Wallet on server owned by 3rd party, easy to use
- Hardware Signing Key
Wallets (Anonymity)
- Full node: Validates history of entire blockchain, uses significant resources
- Lightweight client: Connects to full node for info, stores wallet locally
- API clients: Connects to network using API, wallet local or managed by 3rd party
Full nodes are also called peers. Lightweight and API wallets are clients
Clients depend on one or more peer for receiving valid data
Wallets (Control)
- Custodial: Keys managed by user
- Noncustodial: Wallet and funds managed by 3rd party
Noncustodial wallets provide Recovery Codes. They are also called Seeds
It is an input that is used to generate the wallet keys
Using recovery code to recover account does not restore transaction metadata
Some wallets provide an additional backup feature that backs up the metadata
Many bitcoin transactions are made using off-chain technologies
Transactions made using this technology are not stored on the blockchain (privacy)