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Table of Content

How are New Bitcoins Created, and Why There Will be Only 21 Million of Them Ever?

But how are bitcoins created in the first place? What is crypto mining? How do new bitcoins come into circulation?

Interoperability: Bridging the Technological Divide

The Bitcoin Revolution

CBDC vs cryptocurrency: acceptance rate across countries

What is blockchain architecture? How is it different from a traditional database?

The takeaway

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Crypto Wallets - Using a Crypto Wallet to Access Decentralised Applications

December 23, 2024

5 min read

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Source | Crypto Wallets

Key takeaways

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    A Crypto Wallet is a wallet that safely stores your private keys, ensuring you can access your crypto whenever you need.

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    It is important to understand the difference between Wallets , Accounts and Addresses.

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    DApps can be accessed using crypto wallets that hold the key identity and funds of the user.

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    Crypto Wallets are not just useful for fund transfers but also to store your humanised decentralised identity in the web 3.0 ecosystem.

A Crypto Wallet is a wallet that safely stores your private keys, ensuring you can access your crypto whenever you need. Crypto wallets can be used to send and receive cryptocurrencies such as Bitcoin and Ethereum and sign transactions or messages on the blockchain. Developers have built multiple applications on the blockchain that users can access with their crypto wallets. DApps or Decentralised Applications in the web3 world are similar to what Apps or Applications are in the web2 world. Apps in web2 use email IDs, usernames and passwords or social logins to login and identify a user. Similarly, DApps use crypto wallets to login and identify users. While Apps rely solely on centralised databases such as mongoDB and mySQL, DApps use a combination of the L1 blockchain ledger such as Ethereum for transaction data that serves as the decentralised database and centralised databases for other operational data.

We have already explained the different types of wallets in our previous blog What are Hot and Cold Crypto Wallets, and How to Secure My Keys?. In this blog we will focus on wallets built for the general public and how we can use these to access some amazing applications.

Wallet vs Account vs Address

You might get confused between some of these terms which are very similar, however we will simplify this for you.

  • Wallet

    A wallet is a software that allows you create an account or multiple accounts on its supported blockchains and keeps the private key secure. The software additionally allows you to send and receive crypto and view transaction history. Nowadays, wallet softwares, have advanced to allow swapping and bridging of tokens and also directly buying and selling crypto currencies through fiat.

    Examples of Software Wallets are Metamask ,Trust Wallet and Phantom.

    You can create multiple accounts within a wallet.

    💭You often hear people saying “send me your wallet address”. There is nothing called a “wallet address”. Every account within a wallet has an address. The wallet itself does not have any address.

  • Account

    An account is a public-private key pair. The public key becomes the account address. It is like the destination tag for your funds or your Bank Account Number. The private key is required to send funds from the address and used to secure it such that only you have access to your funds.

  • Address

    This is the public key of your account. When you share an Ethereum address, you're sharing an account address. There is no such thing as a wallet address. Eg. 0x7B2d0D3DE9e060D3Cf557f97b9a8c143C9789CE8 is an Ethereum Address.

Exploring DApps with MetaMask

Let’s take a look at some of the DApps and interact with it. Once you have created an account on Metamask, you would have to buy cryptocurrency from an exchange and transfer it to the metamask account. Once you receive your funds, it will show in the ‘Activity’ tab and the balance would be updated with transferred funds.

  • Opensea

    Opensea is an NFT Marketplace. Simply connect your wallet with funds and you are ready to buy and sell NFTs.

    Opensea Home Page - Login with a Crypto WalletOnce you connect your metamask wallet with Opensea, you can place a bid on an NFT or buy an NFT directly by selecting the NFT and signing the transaction with your private key from the wallet.

    Opensea DApp Profile

    After buying NFTs, your profile will show all the NFTs you have collected. Above is an Opensea users profile with the name artification.eth.You can see all the NFT activity thanks to the nature of public blockchains. Remember Domain names that we explained in the blog on Blockchain Explorers ? artification.eth is nothing but the ENS for an address owned by the owner of these NFTs. If you have understood the basics of blockchain you should be able to deduce the Ethereum Address of the owner.

    For more information on how you can create, launch and sell your own NFTs refer to the blog on NFTs

  • Aave

    Aave is a DeFi protocol that allows lending and borrowing. You wish to HODL crypto and while HODLing crypto earn interest on it? You can lend it on AAVE and earn APY (Annual Percentage Yield) on your asset. Do you need money but not want to sell your crypto? You can keep your crypto safely with AAVE smart contracts and borrow stablecoins against it that you can use for your expenses. However, you will need to pay interest on the amount borrowed. This entire lending and borrowing can happen seamlessly on AAVE without the need of any bank account or revealing your identity! To experience the power of DeFi all you need to have is a wallet with crypto funds.

    Accessing AAVE protocol with a wallet

    To borrow all you need to do is supply the collateral in your wallet and you will be able to borrow at the rates shown below

    Borrowing from AAVE using funds from metamask

    We will explore AAVE in depth in the Lending and Borrowing blog. 

    Please check crypto regulations in your country before you use DeFi protocols as they may be subject to heavy taxes.

  • Decentraland

    Decentraland is a 3-D virtual world or a metaverse you can explore using an avatar. You can buy and sell land as NFTs. You open stores and sell various items using the land you bought. The currency used in Decentraland is MANA.

    Similar to any DApp you can login to Decentraland using Metamask.

    Decentraland login with Metamask

You can buy MANA from an exchange and transfer it to your metamask wallet.

With this MANA you can

  • Buy Land
  • Buy rare items for your avatar
  • Buy vehicles as NFTs to travel inside Decentraland
  • Buy real items such as clothes from a virtual store
  • Buy Tickets to virtual concerts and events
  • And many more things that we will leave it to you to explore

Summary

Crypto wallets are the key infrastructure for accessing DApps. Crypto wallets are not just limited to signing into apps and transferring cryptocurrency. They also play an important role in Decentralised Identities. For eg. Gitcoin passport reads your wallet account and gives a human score. A score above 20 confirms that the wallet is owned by a human and not run by a bot. Lastly, there are identity companies such as Idena that ask you to perform tasks to verify that you are a human who owns the wallet. This is an effort to reduce the number of bots that interact with DApps causing unwanted and artificial traffic in the ecosystem.

Disclaimer: The information provided in this blog is based on publicly avail­able information and is intended solely for personal information, awareness, and educational purposes and should not be considered as financial advice or a recommendation for investment decisions. We have attempted to provide ac­curate and factual information, but we cannot guarantee that the data is timely, accurate, or complete. India Crypto Research or any of its representatives will not be liable or responsible for any losses or damages incurred by the Readers as a result of this blog. Readers of this blog should rely on their own investigations and take their own professional advice.

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