Introduction:

The Web3 industry is developing too fast, and new things appear every day. Therefore, many daily thoughts deserve to be recorded.

Wallet is the entrance to the Web3 world. We use wallets every day, but do we really understand wallets?

If you don’t understand various wallets yourself, how can you dare to put assets in your wallet?

Therefore, in order for us to live longer and go far enough in this industry, please first understand the Web3 wallet in depth.

If you want to truly understand the wallet, you need to first understand many of the underlying technical principles of the blockchain, but this is actually very expensive to learn.

Including myself, I have been making wallet products for two or three years, but many of the concepts I take for granted are often vague and are lost in the light.

Currently, wallet products still have a high threshold for use by many ordinary users. Therefore, this article uses as simple a language as possible to describe the underlying principles of the wallet and help everyone provide strategies for using the wallet.

Let’s not list some obscure concepts here, but try to make an analogy with our common bank cards in traditional finance:

Wallet address = bank Card number

Public key = bank account

Private key = bank card password

Mnemonic phrase = master private key = multiple sub-private keys = multiple bank sub-keys Account password (particle word is another form of private key)

As an analogy to banks in real life, if we want to trade with others, we need the following steps:

(1) Create a bank card account and then set a password

In In the blockchain, we first generate a private key through a random number generator. This private key is the bank card password, and then use the private key to generate a public key. This public key is the bank account, and the public key will generate an address. This The address is the bank card account number.

We can find that this creation process is opposite to that of banks in the real world: the bank first helps you create an account and then lets you set a password.

But just like a bank, even if others know your public key and address (bank account and bank card account number), they cannot obtain your private key (bank card password).

(2) Transfer money to another bank card account

If you want to transfer money to another bank account, you need to know the other party’s bank card number first, and then enter the transfer amount (cannot be greater than your own account amount), then you need to enter the bank card password. After verification, you can initiate the transfer.

Similar to this process, the only difference is that you do not need to tell anyone or any organization your key (that is, the bank card password), you only need to digitally sign with the private key.

In the traditional financial system, the bank stores your bank card password and verifies it when transferring money. This bank is a centralizedintermediary.

But in the blockchain world, your private key is known and saved only by you, and will never appear in any scenario again. You only need an algorithm to prove that you own your own private key.

(3) Report loss of bank account

If your bank card is lost or the bank card password is lost, you can freeze the bank account or prove your identity to the bank. , and you can reset your password.

But in the blockchain world, if your private key is lost, you can never get it back, and no one can freeze your account or change your password.

Here are the various concepts mentioned above:

The wallet can generate or import multiple sets of mnemonics, and one set of mnemonics can Generate a master private key. The master private key can derive multiple sub-private keys on different chains, and each sub-private key generates a fixed address.

However, in order for users to conveniently manage multiple addresses on multiple chains, wallet applications are generally encapsulated into the concept of Account, that is, the first addresses generated on each chain are collected as Account 1, the second address generated on each chain are aggregated as account 2, and are aggregated in order of sub-private key derivation.

In short, wallets and accounts are product concepts, concepts created for the convenience of users; while mnemonics, private keys, and addresses are technical concepts, which are the actual data forms in the blockchain. .

The current trend is to encapsulate concepts such as mnemonics, private keys, addresses, and chains as much as possible in applications, and use concepts that are easy for users to understand, such as accounts.

This is also why the "chain abstraction" narrative appears. It is also to reduce the technical concepts that trouble users when using products. Don't worry about cross-chain, gas fees and other issues, and provide users with a similar experience to Web2 products. .

Actually, there is no money in the wallet, just like the wallet in our real life. The wallet contains more bank cards, keys and other items.

The same is true for the Web3 world, where money is stored on the blockchain. The word wallet specifically refers to the system used to store and manage user keys (i.e. bank card passwords).

Each wallet contains a key management system. In some wallets, the key management system is the only module; while in some wallets, it may have a wider range of functions based on this, such as as a decryptor. The typical representative of the entrance to centralized applications is OKX Web3 Wallet.

If classified according to whether the private key is directly exposed to the network, it can be divided into hot wallet, cold wallet, and warm wallet.

(1) Hot wallet: A hot wallet is an "online wallet", an online wallet that can use Bitcoin on a browser or mobile device.

(2) Cold wallet: A cold wallet is an "offline wallet". By going offline, the private key will never be exposed to the Internet, which can effectively prevent hackers.Customer theft, such as hardware wallets.

(3) Wen Wallet: It is between hot and cold wallets. Similar to hot wallet, Wen Wallet is also connected to the Internet. However, for the sake of security, Wen Wallet has a strict whitelist address. Transfers to addresses outside the whitelist are not allowed.

From the perspective of security level, hot wallet＜warm wallet＜cold wallet.

In fact, asset isolation is the most important thing. You can use the cold, warm, and hot three-tier wallet strategy to divide your wallet into three categories:

(1) Hot wallet (10% assets): Wallets that are frequently used for interaction should not store a large amount of assets. Generally, only assets that meet Gas requirements can be stored.

This wallet can be used to play new projects frequently. Even if it is really fished and causes some damage, at least it will not cause any damage.

(2) Wen Wallet (20% of assets): It is actually an isolated hot wallet. Assets with relatively low interaction frequency can be placed in Wen Wallet.

This wallet is suitable for holding liquid pledged assets, because many projects now are pledged projects. It will be dangerous if these assets are kept in a hot wallet for a long time, so a hot wallet can be isolated as a warm wallet.

The assets in this wallet can also be used at any time, but the frequency of interaction is much lower than in hot wallets, and the risk will be much lower.

(3) Cold wallet (70% assets): It is best to store large amounts of assets coldly in a hardware wallet, and it is best not to interact at all.

Of course, segregating assets in multiple types of wallets actually sacrifices efficiency for security. The best approach is to have a one-stop asset management platform that integrates multiple wallet types.

There is currently no such lightweight layered wallet on the market, but the OKX Web3 wallet is most likely to come out.

Because OKX Web3 Wallet, as a super application, has integrated multiple types of wallets, but it still lacks the interoperability and fund management strategies of multiple types of wallets. It is hoped that in the future, it can truly manage user assets in one stop.

After seeing this, everyone should be able to basically establish an overall understanding of Web3 wallets.

More importantly, do not use unknown wallets casually in daily use, because security is not guaranteed, and do not copy and paste your mnemonic words and private keys at will. Once leaked, you will lose everything. assets.

Now that everyone has come to the Web3 world, you must walk on thin ice every step of the way. Only in this way can you have a chance to get to the other side.