What's Next With Crypto Wallets?

Updated: Jul 21, 2021

Featuring digital wallet, Cent Finance

Most people, when looking to get into crypto will start by either asking someone they know who’s already in it what to do or will Google something along the lines of ‚ ‘How to buy crypto’. Most of the results will link to sponsored content and lists of centralised exchanges. Some will be more reputable exchanges, other listings will be ads for less reputable sites where there is nothing resembling any assurance that any crypto stored on or sent to those sites will ever be seen again.

As someone new to crypto – and therefore not likely to have what is relative insider knowledge of which exchange to trust – and which to avoid at all costs. Data from CoinGecko lists 473 crypto exchanges. A cursory glance at even the top 10% by trust score indicates more than a few which the majority of people in the crypto space would certainly not trust, some with legal ongoings and at least one which is considered to be a known scam.

As someone new to crypto, how is one supposed to know which to trust? It can be easy to fall for glossy marketing and big promises.

User experience in crypto is notoriously bad. Almost the better the exchange is, the worse the user experience, as the better ones will ask for proof of ID and other details before allowing you to onboard. It can take days, is generally the opposite of easy, and is hardly risk-free either. What happens if the exchange gets hacked – a fate that’s happened to more than a lot of crypto exchanges and security providers. Then not only do you lose your crypto – again, has happened too often to mention- but also your personal data can be taken by hackers and you might receive a lot of spam emails trying to part users from their crypto by various devious means.

After signing up to an exchange (to buy crypto) you need a wallet, to store crypto in. Most exchanges offer wallets to their users, but as we’ve seen often (the recent Thodex and Quadriga exit scams are just two of the better documented fraudulent crypto exchange exits) this isn’t always safe. Other solutions are storing your crypto offline in a hard wallet (like a physical USB stick) but for these, you are responsible for your own crypto.

If you lose your private key, you lose access to your crypto. Again, there have been more than a few cases of hardware devices storing crypto lost, broken beyond repair, or inadvertently thrown away, only for their owners to then see how much Bitcoin has since gone up in value and want their crypto back. One man in Wales has offered his local government over £50 million to dig up his local landfill where he believes his hard drive containing considerably more than that in Bitcoin- at today’s value- is stored (source).

Beyond exchanges, wallets come in either:

  • Custodial - where another entity controls the private keys to your crypto or non-custodial- where the user does.

  • Non-custodial - more secure providing you can find a secure and safe way to remember and store your private keys. Some chose to store these on paper in a safe, so they can’t be tracked digitally, or memorise them and destroy all evidence. This is great until you get a disease or neurological disorder and now have no recollection of where your bitcoin is stored or what your private keys are, or where they’re stored. It happens.

The crypto wallet with a good user experience and guaranteed safety has yet to be invented. The opportunity for a good crypto wallet offering both easy-to-use interface is huge. It’s been long said that the first company that comes up with a crypto wallet that’s easier or as easy to use as something like WhatsApp will do very well. Current crypto wallets fall down at one of either: user experience (almost universally horrible), cost of transactions, or safety (lack thereof).

The rise in DeFi (decentralised finance) means that people now don’t just want to get into crypto but also want to take advantage of some of the (not risk-free) passive income potential offered by some of the DeFi projects.

Some options now offered with DeFi:

  • You can lend your ETH, DAI, WBTC and receive interest payments on platforms like Aave or Compound

  • Get flash loans

  • You can leverage your positions using crypto as collateral on platforms like Instadapp

  • You can earn a savings rate on stablecoins on Curve or Mstable

  • You can use your NFTs - rare digital artwork like Cryptokitties, Axie Infinity

  • Artwork from Knownorgin or SuperRare - as collateral for a loan

  • You can borrow against your crypto to invest in other projects, if you don’t want to sell

As of April 2021, there was over $9 billion Ether locked up in staking alone.

DeFi is already providing ways to earn yields, get flash loans, create synthetics and many more services are being added every day, but those getting into DeFi have predominantly been existing crypto investors, just getting started in DeFi hasn’t been easy or accessible to most people. Trying to take advantage of the opportunities DeFi has to offer is even more challenging.

The drive to DeFi has been driven partly by the current low-interest environment leading people in search of better returns on a risk-adjusted basis than what’s being offered in other asset classes or sectors, partly by growing distrust in banks and governments due to the economic environment and money printing, not helped by the pandemic.

New crypto and DeFi wallet Cent makes it easy & simple for users to get set up with DeFi within a few minutes, to get started with yield farming, staking, and trading.

The Cent Wallet aims to be as easy to use as possible with a heavy focus being on good UX. It is a true DeFi wallet because it is based on the following features, considered integral to DeFi focused wallets:

  • Non-custodial – meaning that users can be confident that even if Cent Finance disappears, their crypto doesn’t.

  • Key-based - users retain access to their public/private key pair and can instantaneously move their assets out of Cent by punching in their private key in a different wallet. Cent provides users with a cloud backup option in a high-security module on AWS

  • Accessible - entire onboarding process can be completed within 60 seconds with the only information required being first/last name and email.

  • Compatible/Easy Desktop Integrations – Cent is available both on Android and iOS and on mobile and desktop

  • Environmentally Conscious – Cent uses Wrapped BTC, not BTC, where WBTC uses far less energy than traditional Bitcoin, a point Elon Musk perhaps forgot to mention in recent Tweets.

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