With New Exchange Features, Wallets Aren’t Just for Storing Bitcoin Anymore

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Bitcoin wallets play an essential role in facilitating every user’s interactions with the blockchain. They can connect to full nodes, store public and private keys, sign transactions and ultimately make it easy to store, send and receive bitcoin. In a nutshell, these software applications complete complex cryptographic functions under a friendly disguise: They offer an easy point-and-click (or touchscreen) experience that everybody who’s ever managed a credit card balance can understand.

However, this functional simplicity is being challenged by a new trend that many wallet developers seem to be following: integrating exchange features to facilitate inter-currency trading and possibly increase liquidity. 

There are three main categories of such additions:

Wallets which allow users to buy bitcoin with their credit cards; Wallets which allow trades between BTC and altcoins; Wallets which allow the conversion of mainchain bitcoins and altcoins to Lightning Network satoshis (a third party-reliant precursor to atomic swaps).

In order to better understand this functional trend, Bitcoin Magazine has contacted representatives from five popular BTC (and possibly multi-coin) wallets: Edge, Blockchain, BRD, Blue Wallet and Guarda. All of the respondents have received the same questions, and, fascinatingly, the exchange features have been implemented in different ways to serve varied purposes. 

Edge Wallet and Third-Party Exchanges 

In the quest to facilitate bitcoin trades, Edge wallet has chosen an interesting approach: Instead of building a centralized proprietary service or relying on a single third-party partner, the platform offers multiple options. Users’ transactions are assigned to the best available trade at the time on exchanges such as ShapeShift, Changelly, Wyre and Simplex. Furthermore, a direct link to Bitrefill is provided so users are able to buy various gift cards with bitcoin.

“By integrating with third-party exchanges, users can acquire and trade cryptocurrency without the risk of leaving their funds with a third party. Users can also search for the best price across multiple exchange partners,“ said Edge CEO and co-founder Paul Puey.

In a nutshell, Edge has added its exchange functions as a way of creating an “all-in-one” experience which suits newbies and minimizes risk through a selection of reputable services. If transferring funds to an exchange like Coinbase and withdrawing your fiat or bitcoin can take a long time (especially if the initial KYC verification process is involved), then dealing with Changelly or buying some BTC from Simplex is a lot faster and requires fewer signups.

Puey highlighted Edge’s noncustodial nature as a competitive feature. 

“The foundation of Edge and an advantage that sets us apart from other wallets is our key management,” he said. “Edge is a non-custodial wallet that allows users to control their own funds in a highly secured manner. Another advantage with Edge is that users now have a better way to transact without having to leave the wallet to access exchange functionalities.”

The wallet seems to be increasingly popular thanks to these features, as the CEO pointed to a 100 percent growth in user base from one quarter to the next, even in the face of the 2018 bear market. 

Blockchain Wallet, Swap and the Pit

Blockchain is one of the oldest wallet solutions on the market, with a company history that began as early as 2011 and a long-standing reputation in the field of block explorers. Unlike Edge, it seeks to build an ecosystem of its own, with proprietary applications which are integrated in the main wallet.

As a multi-cryptocurrency wallet, Blockchain has added Swap, a feature which allows users to trade between BTC, ETH, BCH and XLM, at prices close to the market valuation. According to Head of Strategy and General Manager Xen Baynham-Herd, “Swap allows users to exchange assets on-chain while maintaining complete control of their private keys.”

As with Edge, users don’t have to leave the wallet’s interface when they want to trade between their cryptocurrencies, and the interface is simple enough to be accessible to newbies. According

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