[Edu] what is web3 wallet and crypto wallet different?
Published in
2 min readApr 30, 2024
A web3 wallet is a digital tool that acts like a gateway to the world of Web3. Here’s a breakdown of what it is and what it does:
🔹 What Web3 is about:
Web3 refers to a new vision of the internet where things are more decentralized. This means less reliance on central authorities and more power in the hands of users. Blockchain technology plays a key role in Web3.
👛 What a web3 wallet does:
- Stores digital assets: Similar to a crypto wallet, a web3 wallet can store digital assets like cryptocurrencies. But it goes beyond that.
- Interacts with Web3 applications: This is where web3 wallets shine. They allow you to connect to decentralized applications (dApps) built on blockchains. These dApps can be for things like:
- Decentralized finance (DeFi): Borrow, lend, or trade cryptocurrencies without relying on traditional financial institutions.
- NFT marketplaces: Buy, sell, or trade non-fungible tokens (NFTs), which are unique digital collectibles.
- Play-to-earn games: Earn crypto or NFTs by playing games.
Both web3 wallets and crypto wallets deal with digital assets, but they cater to different purposes within the digital asset landscape. Here’s a breakdown of the key differences:
🔹 Focus:
- Crypto Wallets: Think of these as specialized vaults for your cryptocurrencies (Bitcoin, Ethereum, etc.). Their primary function is to securely store, send, receive, and sometimes even trade these crypto assets.
- Web3 Wallets: These are gateways to the broader Web3 ecosystem. Web3 involves decentralized applications (dApps), DeFi (decentralized finance), and NFTs (non-fungible tokens). A web3 wallet lets you not only manage your crypto but also interact with these Web3 features.
🔸 Functionality:
- Crypto Wallets: Offer a more basic set of functionalities centered around managing cryptocurrencies. They might provide features for buying and selling crypto within the wallet itself, but their core function is crypto-specific.
- Web3 Wallets: Expand beyond just crypto management. They typically allow you to connect to dApps, enabling you to:
- Borrow or lend crypto in DeFi platforms.
- Buy, sell, or trade NFTs in NFT marketplaces.
- Interact with other play-to-earn games or Web3 functionalities.
🔹 Analogy:
- Crypto Wallet: Imagine a secure safety deposit box specifically designed for your precious metals (like gold or silver).
- Web3 Wallet: Think of a multi-purpose key that grants access to your vault (cryptocurrency storage) and allows you to interact with various exhibits (dApps, DeFi, NFTs) within a larger museum (Web3).
