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In the rapidly evolving world of cryptocurrencies and blockchain technology, various types of wallets have emerged to cater to the diverse needs of users. This article delves into the key differences and features of HD wallets, custodial wallets, and multi-chain wallets, providing you with a comprehensive understanding of each type.
We’ll also introduce SuperEx’s HD Wallet, which was launched on September 8, 2022, for their entire platform, including both web and mobile app users.
HD Wallets
The concept of Hierarchical Deterministic Wallets (HD wallets) dates back to 2012, when it was first proposed in Bitcoin’s 32nd improvement proposal (abbreviated as BIP-32). HD wallets contain keys derived in a tree-like structure, allowing the keys to generate a series of child keys, each of which can generate a series of grandchild keys, and so on, with limited derivation. In simple terms, an HD wallet is a wallet where users can generate an unlimited number of usable Bitcoin addresses, and only need to manage one private key.
In order to meet the diverse needs of users and to create a multi-scenario, multi-application, multi-dimensional trading environment, the SuperEx platform launched HD wallet authorization on September 8, 2022, for the entire platform (web + APP). After the launch, users can log in to the SuperEx platform and trade over 1,000 trading pairs directly through wallet authorization without the need for a mobile phone number or email verification. All users who use HD wallets to log in will store their own private keys, giving them full control over their assets.
The Advantages of an HD Wallet
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A. Security
Transaction Security
Digital asset security has always been a top concern for users in the industry, and SuperEx’s commitment to asset security is a core and vital credit indicator. So far, SuperEx’s robust risk control system has maintained a 100% security indicator for digital assets.
With HD wallet authorization, an additional user-controlled security lock is added to SuperEx’s risk control system. After the update, users utilizing HD wallets store their crypto assets within the wallet, allowing for transfers without complex addresses and verification. As users maintain control of their HD wallet’s private keys, assets are managed solely by the users, ensuring true safety and security.
Storage Security
When using an HD wallet, you are the only person with access to the wallet’s private keys, which helps avoid situations of large-scale crypto assets being stored in exchange accounts. This allows users to manage their assets independently, ensuring safety and security.
B. Convenience
C. Easy Expansion
The updated HD wallet allows for the derivation of any number of sub-accounts (or sub-keys) from the master key, providing infinite expansion. Users only need to manage one master private key to centrally manage their account’s cryptocurrency.
Simultaneously, the HD wallet supports rapid creation of multi-chain addresses, allowing users to quickly generate multiple public chain wallets, making multi-chain asset management more convenient.
Custodial Wallets
As the name suggests, a custodial wallet is where users entrust their private keys and digital assets to other institutions for management. Essentially, it securely manages and stores assets through a centralized approach, which goes against the decentralization pursued by blockchain.
Custodial wallets excel in convenience. Cryptocurrencies stored in custodial wallets can be accessed anytime, anywhere. Transfers and transactions between custodial accounts do not require fees or miner fees, and transactions are fast and low-cost. Users also do not need to worry about forgetting private keys and mnemonic phrases, greatly reducing the risk of losing assets due to personal errors.
The biggest risk lies in whether the third party you entrust with your assets is trustworthy. Note that in traditional financial markets, asset custody is subject to regulation, while there are not many regulated blockchain asset custody institutions.
The Advantages of a Custodial Wallet
Multi-chain Wallets
A multi-chain wallet refers to a wallet tool that can manage assets on multiple blockchains. This concept can be considered a derivative of HD wallets, and it originated from Bitcoin’s 44th improvement proposal (abbreviated as BIP-44). Common multi-chain wallets now support at least BTC, ETH, and EOS.
In contrast to multi-chain wallets are single-chain wallets, which are specifically designed and developed for a particular public chain platform, with strong professionalism and specificity. However, as the number of public chains increases, many users hold crypto assets on multiple public chains, making the use of single-chain wallets very cumbersome.
Multi-chain wallets emerged in response to this need. Since they have to support multiple public chain digital assets simultaneously, different main chains usually adopt different technical solutions, making the development of multi-chain wallets more difficult and labor-intensive.
The Advantages of a Multi-Chain Wallet
Conclusion
As the crypto asset market expands, the multi-chain future of blockchain becomes increasingly realistic. As a result, we may have more urgent and better opportunities to develop infrastructure, protocols, and tools that can support multiple mainnet assets and ecosystems. This will truly enable the integration and interoperability of web3.