I know I promised a simple explanation of two things in last week's blog: a crypto digital wallet and a SMART contract. Well, things get messy sometimes. The more I research a SMART contract, the harder it is for me to come up with an easy explanation. So, I need another week to continue down the rabbit hole of SMART contracts. I should be ready next week to give you my oversimplified explanation!
I feel more comfortable talking about a crypto digital wallet. A digital wallet is really exactly what it sounds like...a wallet that is digital. In order to take advantage of web 3.0 possibilities, everyone will eventually have their own digital wallet. Think of your life today without the internet and how hard that would be. This is how we will feel about digital wallets 25 years from now. The official definition from cryptocurrency facts if: "A cryptocurrency wallet is a secure digital wallet used to store, send, and receive digital currencies like Bitcoin and tokens."
It is important to note that a crypto wallet will be used for more than just cryptocurrencies. You can also store your NFT's and other digital assets in them.
I have two digital wallets that I created over the past three weeks. I wanted to get one and actually use it so I could learn more about its usefulness. Here is what I learned.
When you sign up for a digital wallet (I got mine through MetaMask and Coinomi)they do not ask you for any personally identifying information. This reflects the decentralized philosophy undergirding the blockchain where privacy is baked into the system. Not giving your personal information is slightly disconcerting. How far we have come since the late 1990s when giving your personal information on the internet was a big deal.
When you sign up, they will give you either a twelve or twenty-four random word key that you use to unlock your wallet. This key is used to connect your wallet to different apps and to withdraw your assets. There are examples where people have lost their keys and can't access their wallets. Here is a story of a guy who has two more tries to access his wallet where there is 220 MILLION dollars in Bitcoin waiting for him! Bottom line, make a paper copy of your key, and don't lose it!
Your digital wallet will be used to securely pay for goods and services on web 3.0 through different cryptocurrencies.
Your digital wallet communicates with the blockchain to send and receive assets. The blockchain verifies that you have the assets you claim while at the same time verifying that the person you are dealing with has the assets they claim. Once both are confirmed, the transaction is completed and a new "block" is created on the chain.
Next week I will give my explanation for a SMART contract and how it may be used in education. As with any new technology, the usefulness of the blockchain and all related services and programs is emerging as the technology improves. My goal is to understand as much about this as I can so I can help schools take advantage of the possibilities.