“Bitcoin,” “blockchain” and “cryptocurrencies” are the buzzwords of today that fascinate the finance industry and online trade around the world. Though not everyone can clearly define these terms, explain the difference between them or understand the essence of the phenomenon, there’s an increasing demand for the bitcoin wallet app development. The topic is definitely worthy of our close attention. Let’s try to figure everything out in our article.
Cryptocurrency vs. Bitcoin vs. Blockchain
Before we get to the part where we explain how to build a Bitcoin wallet app, it’s necessary to provide definitions of the main terms.
This is a virtual currency or electronic money. Virtual currencies are not issued by a central bank or other authorities, meaning that they don’t have a single control center. Governments have different approaches to the regulation of cryptocurrencies: in some countries, they are banned, others try to draft legislation regarding virtual money.
Cryptocurrencies are difficult to counterfeit because they use encryption techniques for security. By now, a number of cryptocurrencies have been created, e.g. Bitcoin, Litecoin, Namecoin, PPCoin, etc.
This is the first and the most widespread digital medium of exchange globally. Bitcoin was released as open-source software. An electronic payment system, it offers easy online transactions without intermediaries and facilitates instant payments with minimal processing fees. The currency is not regulated by central authorities. Bitcoins are created during the mining process.
This is the technology used for cryptocurrency transactions. Blockchain is designed like a public ledger for digital payment systems. No intermediaries are needed for the blockchain functioning.
Originally, it was created as the accounting technique for Bitcoin. Today, using the blockchain technology, you can code various documents and perform transactions with all cryptocurrencies.
The essence of the technology is the following: every transaction is verified and recorded; transactions are combined into blocks; every new block is joined to the previous one, creating a chronological chain. The blockchain can thus be determined as a network or a database as well. All computers connected to this network are called nodes. Each node automatically gets a copy of the blockchain.
Thus, every transaction ever executed can be verified by the community. The chain enables to find out facts about assets of a particular address at any point in the past. The records are indelible and can’t be changed, so participants can trace all transactions without centralized control.
Read also: The Guide to Developing a Mobile Banking App
What Is a Bitcoin Wallet?
No cryptocurrency can be used without a special software program. Such а program is called a digital wallet. It is connected to the blockchains and helps perform operations. Most virtual currencies have their own independent wallets, but some of them use adopted programs.
While a physical wallet stores real money, a bitcoin wallet keeps relevant information about security keys that are used to get access to bitcoin addresses and carry out transactions. There may be four types of bitcoin wallets.
Advantages and Challenges
Why do so many people want to build a crypto wallet today? The hype about cryptocurrencies, bitcoins in particular, is justified by a range of benefits they provide. Online businesses can definitely make a profit if they create applications or integrate bitcoin as a payment option in mobile app s.
The main advantages are:
- Security — each transaction is approved by a digital signature; then it is processed and inserted into the blockchain; information fixed in the chain system can’t be changed
- Decentralization — the system supersedes a single financial institution or government; it is more reliable and can withstand hack attacks as there is no central point of failure
- Simplification — there are no geographical borders and time limits for virtual money, so transactions can be processed faster and 24/7; processes are not complicated due to a single public ledger if compared to multiple ledgers of banking systems; it’s particularly beneficial for cross-border trades
- Anonymity — all information and actions are encrypted; knowing the wallet address, it’s impossible to find information about the exact wallet it is connected to and the recipient
- Cost savings — transaction fees are greatly reduced due to automation and fewer human errors, the elimination of third-parties and cheaper maintenance of electronic ledgers
Still, there are numerous roadblocks for mainstream blockchain and bitcoin adoption.
The main challenges are:
- Regulation — the legal status of cryptocurrencies and the blockchain technology varies significantly in different countries
- Initial costs — blockchain promises long-term cost savings, but its adoption requires high initial price
- Integration with legacy systems — to move to a blockchain-based system, a company should either completely reconstruct its existing system, or integrate it with the blockchain solution; both processes may take much time, assets and expertise
- Energy consumption — blockchain networks require substantial amounts of computer power to function; it may be a deterrent to many companies
- Security and privacy — since the network is publicly visible, it creates a number of concerns for governments and corporations that want to protect their critical data
- Public perception — the society is not ready for mainstream blockchains as the majority of people are not aware of the technology and its potential benefits
Basic Bitcoin Wallet App Features
A bitcoin wallet for mobile apps, as well as other similar wallets, should include a set of main features.
This is a login form where you should provide a password to access your wallet.
There you can control your balance, send and receive bitcoins, and check the record of transactions.
This is a convenient service to track the price of cryptocurrencies.
QR Code Scanner
Since a bitcoin address is a set of characters (from 27 to 34), it requires time and patience from a person to type it manually. A QR code scanner simplifies the process of passing and obtaining the address. The QR code can also contain some other information.
Paper Wallet Import
Apart from digital wallets, you can create your own bitcoin wallet made of paper or plastic. A paper wallet contains public and private keys printed together. To use them in your digital version, you need the function of paper wallet import.
With this function, you will receive alerts on all transactions you perform and on any changes that happen (e.g. if the bitcoin price changes).
Frequently Used Addresses
The app should provide a possibility of quick access to the most used addresses, grouping them in a separate list.
Personal financial data need the highest level of protection. A bitcoin wallet must have an embedded security system with the opportunity to set a password and a PIN.
How to Create a Bitcoin Wallet App
Now, let’s discuss how to make a bitcoin wallet application. As with the development of any digital solution, there are two options: you can use ready-made templates and a set of tools to create an app, customizing it to your needs, or develop a native wallet that will perfectly suit your requirements from scratch.
1. Out-of-the-Box Wallet App Creation
A number of standard open-source libraries are available in the market. They can be used as the foundation for your future application. A standard library provides the necessary functionality, adjusts the wallet to the blockchain and carries out financial trades.
The most popular libraries are:
- Chain-java — a Java library for accessing the blockchain via chain.com
- Blockchain — provides a range of free APIs; works on platforms such as Android, iOS, Windows, Linux, MacOS; supports languages such as Python, Java, Ruby, etc.
- Coinbase — a cross-platform library; supports Android and iOS platforms; works with Java, Ruby, Python, etc.; allows all major operations with cryptocurrencies through one API
Stages of the cryptocurrency wallet app development :
- Installation — download an API from the appropriate website
- Creation — tap the relevant button in the menu to create a new wallet
- Setting up — provide the name of your wallet, and set up permissions for outgoing and incoming transactions
- Integration — choose third-party programs you will need (e.g. to check balance or generate the address) and integrate them with your wallet
2. Bitcoin Wallet App Development From Scratch
Another option is not to use ready-made templates but to create a native solution from the ground up. Since the Bitcoin code is open and free, you can find all standards and make an independent app according to your personal preferences and business needs. Such development is more difficult and expensive, as it requires more time, efforts and expertise. Nevertheless, a custom application is always more valuable as it perfectly suits all the needs.
Custom cryptocurrency wallet development stages:
- Analysis — decide on the features that should be in your wallet and choose the app type (a mobile bitcoin iOS wallet application ; a mobile bitcoin wallet app for Android ; a web/desktop apps) depending on your goals
- Backend development — write the code, integrate with the database, create libraries and APIs
- Design — create the interface
- Quality assurance — perform a set of tests to eliminate bugs in your app
Bitcoin Wallet Development Cost
As for the cost, it depends on many factors: components you want to include in your app; involved tools and technologies; the number of team members; hourly rates; duration of the development process, etc.
In general, each stage of the development process takes a certain share of the total cost:
Backend — 12%
Design — 9%
Testing — 5%
Android — 36%
iOS — 31%
Web/desktop — 6%
The approximate estimation is given in the table (considering the hourly rate is $50).
The cost may, therefore, range from $70,000 to $90,000.
Integrating Bitcoin as a Payment Option
In case you want to use Bitcoin as a method of payment, but don’t want to deal with virtual money, there’s a great alternative to creating your own application. You can accept cryptocurrency as a payment method with the help of various payment service providers (PSPs). They assure easy dealing with virtual money by converting it to conventional currency and transferring it directly to your bank account. As a result, you are not involved in the exchange rate fluctuations while extending payment options for your clients.
Popular Services to Integrate Bitcoin Payments Into Apps
These are top payment services that help businesses start accepting bitcoins and incorporate cryptocurrency payments into their business models.
Blockchain technology and cryptocurrencies are gaining popularity due to the advantages they provide. Businesses become more flexible integrating a payment method that works in 24/7 mode 365 days a year, performs cross-border operations with fewer fees, creates a worldwide customer base, and ensures freedom and security. No wonder there is an increasing demand for blockchain and bitcoin-based services now.
If you are in search of an outsourcing company to develop an application for any purposes, don’t hesitate to contact SaM Solutions’ specialists and learn more about our expertise. Our team has substantial experience in creating mobile and cross-platform apps. SaM Solutions is a reliable partner that offers custom app development and other services.