Crypto wallets can protect your personal data

Disclosure: The views and opinions expressed here are solely those of the author and do not necessarily represent the views and opinions of crypto.news editorial.

As part of the technologically advanced world, fintech is evolving. Its growth is mainly driven by certain sectors, including digital wallets. They have become very popular in recent years and reach very high download numbers every year.

But I believe they can be much more than just a place to deposit your cryptocurrencies. In the age of digitalization, they can also represent a reliable tool for digital identity. Digital wallets have the potential to store necessary data that will enable faster verifications and deliver different types of services much more quickly and securely than we are used to.

Let’s delve deeper into this topic and consider the potentials of this type of digital wallet use.

The traditional approach needs to be revised

Nowadays, the internet contains a lot of different information about us. This may include names, birthdays, addresses, emails and other personal data. Every time we sign up for a site we leave a digital footprint that spans giants like Google, Facebook and others. And these companies are not standing still; They actively exploit our data and monetize it through ads and other means. They have power over us because their algorithms shape our digital experience.

Sounds annoying, right? The thought that a large company probably knows everything about you is scary. But that’s not all. These companies cannot always be completely sure that their data will not be leaked. In fact, they encounter violations very frequently; Facebook, for example, is notorious for constant hacks and data theft.

Given this, it becomes clear that the situation needs to be changed. Here digital wallets can represent a much safer and more private alternative for storing your data.

How can we use crypto wallets as digital identities?

Digital wallets are based on blockchain technology, so they are inherently secure and almost impossible to hack. They use public and private key encryption, where the public key is your wallet’s address and the private key is your password. By doing this, they ensure that private data cannot be accessed by anyone other than the owner.

With such an approach, you do not need to give your data to different sites. Digital wallets can help change this and only send one-time verifications without the need to provide unnecessary data. Thanks to these, users can gain better control over their personal information, protect privacy and increase trust in digital interactions. Additionally, crypto wallets can facilitate seamless access across platforms.

Practical change can be scaled up

Imagine creating a new social media account without having to create a new password and enter tons of data. Everything will be done using your crypto wallet; You don’t have to remember passwords or worry about getting hacked.

Another area where digital wallets need improvement is medical records. Instead of having multiple documents containing doctor visits and other relevant data, digital wallets can keep them in one place and allow you and your doctor to access them. This can be a strategic solution considering that your medical data is confidential information.

Government services also mean shuffling through endless paperwork containing lots of private data. For example, if you need to issue a new document, it will be much easier to verify your identity using a digital wallet instead of a stack of papers.

But it’s not as easy as it seems

It’s no surprise that every technology application comes with its own set of hurdles. Although the potential of digital wallets is huge, we are no closer to leveraging them yet. One of the main limitations is regulatory issues. The primary goal of every government is to protect its citizens, and when new technologies emerge they need to figure out how to competently regulate them.

Another issue that should not be taken lightly is the human factor. People are often very reluctant to change and adapt to it more slowly than we think. It’s even worse when something complex and confusing arises in the markets. Therefore, if we want to bring digital wallets to the masses, we need to make them as easy to use as possible.

Security also remains an issue. While digital wallets are a much safer alternative, if someone steals your private key, you run the risk of losing all the data stored in your wallet. Multi-factor authentication or biometrics are important points to consider to prevent such situations.

Finally, there is a big problem in establishing universal standards. For digital wallets to be effective and truly work, they must be functional on various platforms around the world. Creating these universal standards will certainly take a lot of time and effort.

What’s next?

The future of crypto wallets looks bright as a place to store not only cryptocurrencies but also important personal data. Using them can be a much safer and more private way to store data. Despite the difficulties I have mentioned, the integration of a similar technology has become increasingly realistic.

Akshin Jangirov

Akshin Dzhangirov is a serial entrepreneur, business leader and philanthropist. With his many years of expertise and deep understanding of investment, innovation and fintech trends, Akshin has been involved in the creation of more than 100 successful projects operating in 50 countries around the world. Akshin started his entrepreneurial journey with major projects in the field of social networks and video games, including Nexters, which has been traded on the Nasdaq stock exchange since 2021. Today, Akshin focuses on innovative tools that are changing the financial infrastructure around the world, including the global financial infrastructure. Mercuryo, a fintech payment platform used by more than 200 leading crypto market companies, and 8B.World service, which provides cross-border payment services in 42 developing countries.