What Is a Software Wallet?
A software wallet, also known as a wallet app, is an application that enables users to hold, send, and receive cryptocurrencies.
While blockchains technically store cryptocurrencies on-chain, software wallets provide a user-friendly interface for users to interact with the blockchain.
Software wallets are typically categorized as web, desktop, or mobile wallets.
Like other types of crypto wallets, software wallets are generally non-custodial, meaning no central platform or third party controls the cryptocurrencies stored in the wallet.
Only the wallet user can manage and transfer funds using private keys.
Exploring Software Wallets
Software wallets can be installed on various devices and are encrypted, requiring a password to access the user’s coins.
Many software wallets are also connected to cryptocurrency exchanges, and some even support non-custodial decentralized exchanges that utilize automated market makers (AMMs) or atomic swaps for cryptocurrency trading.
The advantages of software wallets include their accessibility and convenience for buying, exchanging, selling, and sending cryptocurrencies.
They often support multiple crypto assets, making them suitable as multi-coin wallets.
Accessibility and Security
Software wallets are user-friendly and can be easily used on desktops, tablets, and mobile devices.
They are also typically free, unlike hardware wallets that offer higher security but require a purchase.
Software wallets store the user’s private keys securely and usually require the user to safeguard a seed phrase, a series of 12 or 24 randomly generated words.