9 December 2022
Today, blockchain technology allows cryptocurrency-backed payments alongside any other online payment method. Cryptocurrencies are not controlled by governments, banks, and corporations. It makes them an alternative to traditional financial instruments.
If you ask, “How do I create a cryptocurrency wallet?” you will find the answers in our guide to crypto wallet development.
| Cryptocurrency is any form of currency that uses blockchain technology and is not under control by any authority. This task is spread across all users of a specific digital coin worldwide. Blockchain is essential to such assets because it maintains autonomous operation processing and authentication. |
What Is a Cryptocurrency Wallet?
All coins and tokens are kept in a specific place called a “crypto wallet.” It also serves as a perfect place to hold private keys that help everyone access digital funds. Users can exchange crypto with each other. These passwords prove evidence that you keep your assets and allow you to send payments and get paid safely.
According to Statista, over 82 million people have registered in a crypto wallet app for Bitcoin, Ethereum, Tether, and other coins or tokens.
Cryptocurrency Wallet Development: Wallet Types
There are two main configurations: a custodial (centralized) or a non-custodial (decentralized) solution. Let’s analyze them more in-depth.
1. Custodial wallets are designed to store passwords and crypto coins safely. A third-party organization that created such storage provides maintenance. Custodial solutions have two prominent advantages: easy password recovery via identity confirmation and a low price for every transaction. However, such a wallet requires a stable internet connection.
2. Non-custodial wallets guarantee full control over your funds. You can manage all activities at any convenient time. And most importantly, every transaction requires authorization from your passwords.
Before reviewing how to create a cryptocurrency wallet, here’s a bit more about their types from the development perspective.
Types of Crypto Wallets
First, you need to decide on a type of wallet. There are two main configurations: a custodial (centralized) or a non-custodial (decentralized) solution. Let’s analyze them more in-depth.
Custodial wallets are designed to store passwords and crypto coins safely. Moreover, a third-party organization that created such storage provides maintenance. Custodial solutions have two prominent advantages: easy password recovery via identity confirmation and the low price of every transaction. However, such a wallet requires a stable internet connection.
Non-custodial wallets guarantee full control over your funds. So, you may manage all activities at any convenient time. And most importantly, every transaction requires authorization from your passwords. Still, you should remember a seed phrase (12-24 word string) that provides you with access to your wallet for digital assets. If you lose the mnemonic phrase, you lose your cryptocurrency forever.
Before reviewing how to build a crypto wallet, let’s talk about the main types of such solutions.
Web Applications
These are web apps or websites to access your crypto assets. You can use an application in the browser, so no additional software is required. Further, most online wallets also store private keys that open access to manage your crypto.
Mobile Applications
All you need is to download and install an app. It allows you to conduct any operations with crypto. In many cases, a mobile application generates QR codes for fast buy&sell activities. But they require more security to protect crypto wallets from malware and viruses. Security experts recommend using multi-factor authentication and backing up your private keys to prevent stealing your assets.
Desktop Applications
This type of software requires installation on your computer. In contrast to some online solutions, a desktop app allows you to control your cryptocurrencies fully, but you should remember ground security rules (e.g., using antivirus).
Hardware Devices
In this case, a specific USB drive safely stores private keys. You need to connect it to a PC or laptop to manage your assets. It is the only way to access your funds and protect them from being hacked by cybercriminals. As a result, a hardware wallet is one of the most protected ways of holding coins and tokens.
Paper Wallets
As the name suggests, it is a piece of paper with printed QR codes: a wallet address and a private key. You should scan these codes to send or receive crypto tokens.
If we talk about crypto wallet development services, people mostly choose them for creating digital apps. They run on a PC, laptop, or phone and allow users to store coins, make payments, and transact digital assets with other users.
Millions of users use wallet apps to hold cryptocurrencies that have been bought on exchanges or mined through a mining pool. Learn more about a secured pool developed by Rocketech.
Creating a Wallet App: Essential Features
If you add some quality instruments and technologies, your wallet becomes straightforward and reliable for users. Here’s the list of features every cryptocurrency wallet developer considers fundamental.
Authorization
As for thinking about how to develop a cryptocurrency wallet, authorization became one of the vital aspects. It entails two-factor authentication (2FA) when registering and Google Authenticator as an extra layer of security.
Multi-Currency Support
As for now, many companies aim to get into a global market. And cryptocurrency apps are perfect for providing all trading operations.
Push Notifications
Digital wallets can send pop-up messages about price fluctuations, achievements, technical glitches, etc. It allows users to follow updates on their account activity.
Real-Time Updates
Any user can check an actual currency price. That is why anyone may use digital crypto solutions for operating with hundreds of coins in different modes.
Paper Wallet Import
You can quickly scan the QR code through the Android or iOS app, connect the password from your paper wallet, and use it for making transactions.
In-App Operations
The most helpful feature is performing fast and secure operations. You can send crypto or get paid in digital coins almost immediately.
Creating a Cryptocurrency Wallet: What Affects the Development Cost
The final cost of the crypto wallet development depends on four core aspects.
Creating a crypto wallet is a long-term investment as a business can earn from the commission on transactions, currency conversions, and advertising.
Development Model
There are two main development models: White Label and fully-customized wallet.
A White Label has a ready back-end and customizable front-end parts of the application. It considerably simplifies the deployment and initial launch of a crypto product. Businesses and individual users choose White Label apps for a lower development cost, accessibility, and reduced time to market.
A White Label crypto wallet supports high-end features:
- Seed phrase for quick access and recovery (from 12 to 24 words);
- Multisignature as an additional security level to authorize operations;
- Support of hundreds of digital coins and tokens;
- Scanner for easy import of paper wallets;
- Fast in-app transactions;
- Automatic logout for greater protection of your data and funds;
- 2FA via password and phone, e-mail, or Google Authenticator;
- Support of both computers and smartphones;
- An automatic update of coin prices and calculation of conversion rates.
Creating a fully-customized solution from scratch allows companies and startups to implement unique features tailored specifically to their business needs.
Features
This aspect plays a crucial role in calculating the final budget for creating digital storage. The more features you plan to implement, the higher the cost.
A White Label wallet has a list of predefined features. It means that the budget will be larger or smaller than the preliminary cost set by the development team, depending on the level of customization you need.
In contrast, a built-from-scratch cryptocurrency wallet has no fixed cost. In this case, a team of developers will set an initial price which may differ once you decide on your features.
Number of Supported Crypto Assets
Each digital asset requires a specific time for integration into your wallet. The more coins or tokens that need to be supported by your solution, the larger budget it would require.
Consensus Mechanism
A consensus mechanism (also consensus algorithm or consensus protocol) allows cryptocurrencies and distributed systems to work together. Moreover, it helps prevent blockchain from certain cyberattacks (for instance, a 51% attack). Blockchain supports many types of consensus mechanisms: Proof-of-Stake (PoS), Delegated Proof-of-Stake, Proof-of-Work (PoW), Proof-of-Elapsed-Time (PoET), etc.
Size of the Development Team
It is the last prominent aspect when talking about creating a wallet app. You should choose among three types of teams: small, mid-size, and large. Let’s look at the provisional costs for each of them:
- $200,000–$1,500,000 (for a large team >500 specialists);
- $25,000–$200,000 (for a mid-sized company of 100–500 experts);
- $2,000–$25,000 (for a small team of 10–100 employees).
Estimated Cost
You may choose a software development company from any country. But experts advise you to turn your attention further east, to dedicated teams from Eastern Europe. They can create high-end crypto wallet apps at an affordable price.
There is the average hourly rate for every group of employees and the average time to create a wallet application (accordingly to Accelerance and Upwork):
| Department | Average rate, $ | Average time, hr |
| Business Analyst | 50 | 120 |
| Backend | 45 | 220 |
| Android | 45 | 710 |
| iOS | 45 | 620 |
| Web/Desktop | 40 | 175 |
| Design | 45 | 155 |
| Project Management/QA | 50 | 100 |
| Blockchain | 45 | 220 |
Let’s look at an approximate calculation for a mid-sized team. It is based on the data mentioned above:
| Business Analyst | $6,000 |
| Backend | $10,000 |
| Android | $32,000 |
| iOS | $28,000 |
| Web/Desktop | $7,000 |
| Design | $7,000 |
| Project Management/QA | $5,000 |
| Blockchain | $10,000 |
| Total | $105,000 |
As a result, the approximate budget to create a crypto wallet app will be about $105,000 based on the most widespread features. However, you will know the final cost after hiring a development team.
Conclusion
Creating a crypto wallet is a long-term investment as a business can earn commissions for transactions, currency conversions, and advertising.
At Rocketech, we guide businesses throughout the entire development process — from the discovery phase to product launch and further scaling. Fintech and crypto solutions are among our 12 market expertise domains we handpicked and keep mastering with every project. Contact us to learn more and get an estimate.