For companies wanting to offer their customers the ability to own, trade, and trace different coins and tokens in a fast and reliable way, blockchain’s rapid growth can prove a developmental challenge.
The number of blockchains is steadily increasing with new protocols becoming renowned with alarming speed, such as Matic, Solana, Terra, etc.
Add to that the growing number of digital assets such as NFTs and, of course, cryptocurrencies. According to a Statista report, at the beginning of 2022, there were more than 10,000 different cryptocurrencies — a stark rise from just 66 in 2013.
Yet, in the grand scheme of things, the blockchain is still very much in its infancy and as such, there are plenty of developments yet to happen. That does make for exciting times ahead but it can also make things extremely difficult when it comes to building and managing crypto wallets.
As we mentioned, there are multiple blockchain protocols with more appearing every day. The best known are Bitcoin, Ethereum, Ripple, Solana, and Hyperledger. Although they are all blockchains using similar blockchain technology and practices, they are separate entities.
Blockchains are also rather “anti-social” by nature. By that we mean, that the majority of blockchains don’t talk to each other.
For example, Ethereum and Hyperledger Fabric have completely different communication networks and protocols. A node on the Ethereum network will not and cannot broadcast to the Hyperledger Fabric network directly.
This lack of interoperability can be severely limiting when it comes to buying, selling, and trading across blockchains.
Not only do blockchains have their own communication channels, their protocols can have completely different purposes.
For example, Bitcoin and Ethereum are both public blockchains, they both have their own native cryptocurrencies, (Bitcoin and Ether), and both chains are used for cryptocurrency transfer.
But where they differ is that the Bitcoin blockchain is only used as a medium of exchange and a store of value, whereas Ethereum is a platform facilitating smart contracts and an ecosystem of dApps fueled by its own currency.
Depending on what a user wishes to do on the blockchain, buy, sell, trade in crypto, purchase an NFT, or build a decentralized application, will determine what blockchain they use.
But as the blockchain ecosystem continues to flourish, users don’t want to be limited to just one blockchain or cryptocurrency. The only option left to companies offering crypto wallets is to provide their users with a blockchain agnostic crypto wallet.
In computing, a solution or software that is described as “agnostic” can receive and process data in different formats or from multiple sources. So, a crypto wallet that is blockchain agnostic can accept and manage different cryptocurrencies and digital assets of all sorts— no matter what blockchain they are built on.
For businesses, having the ability to provide freedom of choice and the flexibility to seamlessly switch between blockchains is essential in such a fast-moving and competitive market.
A blockchain agnostic wallet means users won’t need to search for different platforms in order to manage their various digital assets. It allows businesses to offer the highest service without the need for additional technology.
However, there is just one challenge for businesses - developing your own blockchain agnostic wallet means considerable time, money, and effort.
As we mentioned earlier, each blockchain has its own network of nodes. The nodes act like servers which are involved in the verification and validation of transactions, and maintaining the integrity of the blockchain.
We’ve established that users need a crypto wallet that allows them to interact with more than one blockchain. To do that, you’ll need to run full nodes for each blockchain. This can be hugely expensive, time and energy-intensive, and comes with a whole world of technical pain.
A full node for just one blockchain can take weeks to sync and if there is any disruption to the network, it will need to start from scratch. You’re not only looking at costly downtime, but expensive energy bills.
Other problems you may face when self-running nodes can include extra internet charges for excess bandwidth use, slowing down normal business network traffic, and detrimentally affecting user experience.
Read more: Blockchain Nodes Explained
Nodes not only require operational expertise but also protocol specific knowledge, robust cybersecurity practices and constant maintenance. This requires a particular set of skills which are hard to find and harder to afford.
The skills gap isn’t just limited to running blockchain nodes. There is a considerable amount of time, money and effort that goes into developing your own in-house blockchain agnostic crypto wallet. All you really will be doing is simply adding years to your go-to-market time and thousands of dollars to your budget.
The solution to all of these challenges and implement a blockchain agnostic wallet easily is to use a Wallet as a Service provider.
Wallet as a Service (WaaS) is a wallet infrastructure solution offered by Crypto APIs that enables businesses, institutions and developers, in the decentralized fintech ecosystem to build secure and scalable digital wallets.
By integrating with a WaaS provider, enterprises can connect to blockchain infrastructure and access blockchain platforms without the need of setting up their own nodes.
At Crypto APIs, we provide a Wallet as a Service that features Multi-Party Computation (MPC) and Threshold Signature Scheme (TSS) to ensure a flexible digital wallet with the most advanced authorization methods and highest level of security.
This means adding new coins or support for tokens in a specific protocol is as easy as adding one parameter to your configurations. The Crypto APIs’ WaaS supports more than 15 of the top blockchain networks and is continuously adding new protocols, layers, standards and tokens as they emerge.
Being blockchain agnostic also means that our crypto wallet is more adaptable to sudden changes in the blockchain ecosystem, such as technological advances or blockchain forks.
This flexibility built into the MPC digital wallet means it adapts easily to internal factors just as well as external.
Growth changes within your business such as hardware modification, increased number of employees, or creating new/revoking old key shares— our MPC-based WaaS is designed to accommodate them all without affecting your ability to access and transfer digital assets.
Say your business has to control or host the key management on your side or on your users' side for some reason (hardware wallets, Custody companies, non-custodial wallets, etc.), with Crypto APIs you can choose your preferred key management solution and still use our unified endpoints for Blockchain Data, Blockchain Events, Fees Recommendations, and broadcast signed transactions.
All our unified endpoints come in one integration which not only makes onboarding easy, but the centralized logging also increases visibility and provides more consistency to developers.
Find out more about our blockchain agnostic MPC-WaaS here.