The digital assets’ platform Blockchain.com has seen a 40.9% increase in wallets compared to November 2020.
The wallets that Blockchain.com offers are non-custodial wallets, meaning that the company does not have access to users’ funds. An interesting point to note is that the code for their wallets is open-source. One can create an e-wallet with Blockchain.com for free, by providing an e-mail address and password. Once the account is verified, and the wallet created, the user is given a 32-bit alphanumeric wallet address. The wallet can be accessed via the Blockchain.com website, or through an application on a mobile device.
Wallet holders can view the balance of all held cryptocurrencies, and the most recent transactions. Users have a wide range of wallets to choose from. Blockchain.com offers Tether, Paxos, Stellar, Bitcoin Cash, Ethereum, and bitcoin wallets.
Increases in hot wallet creation increase security risk
Spikes in wallet creations often happen when crypto prices are rising. Take, for example, the period between 2017 and 2018, where there was the highest growth in wallet creations followed bitcoin reaching a then all-time high of $20000. The number of wallets grew 44.79% from November 2018 to November 2019, and between 2017 and 2018, the highest recorded growth rate in wallets was 62.3%. Wallet hacks are not uncommon, and upsurges in wallet creation must be accompanied by heightened security on the part of the wallet provider.
Hot wallets have been hacked, such as that of Japanese crypto exchange Liquid, and Bilaxy hot wallet. Wallet security is very important; if a person’s wallet gets compromised, the user could lose control over their assets. Some of the ways a wallet can be secured are by backing up the wallet, keeping the software updated, and adding extra security measures such as two-factor authentication and identity verification.
What is a crypto wallet?
Crypto wallets are digital storage spaces for digital assets that allow one to store, send and receive cryptocurrencies. There are two types of wallets, i.e. hot wallets and cold wallets. Hot wallets are hosted on internet-enabled devices, which, while cold wallets exist on hardware devices that enable storage of assets offline, with the assets only accessible through physical possession, private keys, and a passkey.
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