Can you use your domain name as a digital wallet address? Hint, the answer is yes. Read this article to find out what you need to know about digital wallets.
Keyword(s): digital wallets
As digitization continues to connect us, we’re discovering more ways to interact and share data with one another. Increasingly, that means fewer in-person exchanges and more contactless ones.
The digital wallet is a prime example. In its simplest sense, this is a tool that stores your payment information (such as your credit card and debit card numbers) on your portable device. If you’ve ever paid for something with your smartphone or smartwatch, then you’ve seen it in action.
Can digital wallets interface with your domain name? If so, how does it work and how will it shape future transactions? Let’s take a look at the connections to know.
What Is a Digital Wallet?
A digital wallet is also known as an e-wallet. It’s any type of software program, service, or device that allows you to perform a payment electronically.
With this setup in place, you don’t have to lug around cash or plastic cards in your wallet. In fact, you don’t even need a physical wallet at all. You can complete your payment with a simple tap or scan of your phone.
While most digital wallets designed to hold credit and debit card data, that’s not all they can store. You can also find ones that will keep digital versions of many important records, such as:
- Gift cards
- Store loyalty cards
- Membership cards
- Promotions and coupons
- Event tickets
- Plane tickets
Digital Wallet Technologies
Not all digital wallets are alike. Depending on their design, they can use different types of technologies to facilitate transactions. Let’s take a look at some of the most common types.
Magnetic Secure Transmission
When you use a digital wallet with Magnetic Secure Transmission (MST), the data exchange occurs via a magnetic strip. It’s similar to one you’d find on the back of a credit card.
When you tap the strip, a signal travels to the card reader on the payment terminal. Samsung Pay is an example of an MST. An advantage of this solution is that it works at almost any type of terminal, even ones that haven’t been set up to support contactless payments.
Near Field Communication
As its name implies, Near Field Communication (NFC) is a type of system that requires two devices to be close to one another. Both Apple Pay and Google Pay utilize NFC technology.
Rather than tapping your phone and scanning a strip, you just need to make sure your device is close to the terminal, and follow the instructions on your smart screen. As long as the card reader is set up to accept NFC payments, it’s quick and easy.
QR Codes
Some digital wallets require a QR code to process a payment. These are codes designed to work with the camera on your smart device.
PayPal’s all-in-one payment app is one example.
If you want to purchase an item in a brick-and-mortar store using PayPal, you’ll simply log into your account with your device. If the seller has a specific code to present, you can scan it with the app. If they need your QR code, you can tap “Show to Pay” to complete the transaction.
Closed Digital Wallets
The technologies above allow you to use your digital wallet to make a purchase at a variety of establishments. In addition, there are also “closed” digital wallets that only work at one specific store.
For example, you can load money onto your Starbucks app. Then, you can use those funds exclusively to pay for your morning java.
Cryptocurrency Wallets
What if instead of cash, you want to use a digital wallet to store, manage, trade, or spend your cryptocurrency?
In that case, you would need a cryptocurrency wallet. This is a type of e-wallet designed to specifically support digital coins. You can use this platform to remotely manage all of your crypto assets, including Bitcoin and Ether.
While your actual crypto holdings live on the blockchain, a crypto wallet allows you to store your account passwords, or private keys. Without these keys, you can’t access your digital money or make a transaction, so it’s important to keep them safe.
Note that while the term “bitcoin wallet” is used in a general sense to describe these technologies, there is also a branded Bitcoin Wallet offered by the actual Blockchain company.
Most cryptocurrency wallets are free to set up, and you can complete the entire process online. Once you provide an email address and create a password, you can verify the account and start using your wallet.
When you do, you’ll receive a unique Wallet ID. In the crypto world, this is akin to your bank account number. You can access your e-wallet by logging into your crypto platform or mobile app.
A Closer Look at Blockchain Wallet Technology
There’s a lot going on behind the scenes when you use a blockchain wallet. Let’s take a look at the processes that drive this technology.
Buying Crypto Assets
Say you want to use your crypto wallet to pay for a certain amount of bitcoin, or another type of crypto asset.
Once you initiate that transaction, your e-wallet will create an address for it. You can send the address to the third party selling the asset. Or, you can convert it into a QR code and send it that way.
You’ll get a different address each time you make a request.
Sending Crypto Assets
You can also use your e-wallet to send crypto assets. When someone wants to purchase them they’ll send you their associated address, and you’ll follow the instructions to complete the transaction.
This back-and-forth exchange capability is similar to the PayPal model. To send or receive funds that way, you’ll log into your PayPal account, enter the recipient’s e-mail address and the amount of money you want to send.
Then, PayPal will serve as the intermediary go-between that facilitates that online transfer. The money leaves your account and enters theirs, and you never have to visit a bank or other financial institution to do so. A crypto wallet follows the same basic idea.
Exchanging Crypto Assets
You can also use your bitcoin wallet to exchange crypto assets. This is a process known as “swapping”.
When you’re ready to initiate it, you’ll receive a quote that shows how much you can expect to receive for your assets based on the latest exchange rate. That this rate can change based on how long it takes for the transactions to populate on each currency’s blockchain, which is usually a few hours.
Using Domain Names as Digital Wallet Addresses
Traditionally, digital wallet addresses (specifically crypto ones) have been long, complex, and difficult to remember.
You need them to start and complete a digital transaction, but they’ve been decidedly less than user-friendly. Thankfully, there are naming services, like Ethereum Name Service (ENS), that solve this problem.
Think of ENS as the crypto equivalent of the Domain Name Service (DNS). It takes long strings of incomprehensible data and transforms them into easy-to-read addresses. Instead of random numbers and letters, you get to use simple words instead.
When it first launched, ENS issued users their own pseudo-domains, based on. ETH addresses that mapped to their unique wallet address. Then, they expanded a little by integrating with XYZ domains.
This meant that anyone with a registered. XYZ domain could tie that domain to their cryptocurrency wallet. While that opened the door somewhat, it wasn’t as comprehensive as it could be.
That changed in August 2021.
That month, ENS fully integrated with DNS. This meant that users could connect any second level domain to the service, opening up an entire world of possibilities.
If you already have a domain name for your business, then you can use that to connect to ENS. Or, you can register a new domain name to connect to your crypto wallet.
Choosing a Domain Name For Your Digital Wallet
This integration ushered in a new era of creativity when it comes to digital wallets. If you’re going to use this domain to access your crypto funds, then why not make it memorable and clever?
From .MONEY to .EXCHANGE, there are a variety of finance-related top-level domains (TLDs) that would be appropriate for a crypto wallet. Alternatively, you could choose a domain that represents the focus of your business, or your geographic location. You can even choose domains based on your hobbies or personal interests!
Another great option is the .LINK domain. Think about it: Your crypto wallet links your business or personal site to your digital coins. This domain is easy to remember, serves a purpose, and sends a message — all at the same time.
Importing Your Domain
Once you purchase your domain name, your next step is to import it onto the ENS. Once that’s complete, you’ll be able to use your domain to send and receive Ethereum, as well as other digital assets like Dogecoin.
The importing process takes fewer than 10 steps and once it’s done, you can start using the system right away. ENS wrote an in-depth blog post describing exactly what to do, but here are the high-level highlights:
- Connect your crypto wallet to the ENS Manager App
- Enter the domain name you want to import in the Search box
- Enable Domain Name System Security Extensions (DNSSEC) for your domain
- Set a TXT record for your domain in the ENS “Custom Records” section
- Refresh the ENS Manager App to ensure records propagate
- Register the domain name on the ENS
- Manage the ENS records for your name
- Create a reverse record
The reverse record will designate your ENS name to serve as the cross-platform web3 username for your Ethereum account. Once you set it up and confirm it on the Ethereum network, you should be able to access and use it across all decentralized apps (dapps).
Benefits of Using Domain Names as Wallet Addresses
Why should you consider using a domain name to access your crypto wallet? Let’s review a few perks to making the switch.
Easier, Quicker Accessibility
We take for granted how easy it is to copy/paste or type in the name of a website, like Google.com. While that step might seem simple and straightforward, that domain name is linked to a complex IP address on the server where it resides.
Thanks to domain names, we don’t have to worry about memorizing that address. Google would see a lot less traffic if we did!
When wallet addresses are replaced by domain names, the same simplification occurs. As a result of this expanded usability, we can expect to see an uptick in interest around digital currencies.
The payment process is no longer seen as a confusing step reserved for tech wizards. Instead, it’s more attractive to everyday users who may have been interested in the crypto investing, but always saw it as unobtainable.
Less Opportunity for User Error
Ethereum addresses are a maximum of 42 characters long, while Bitcoin addresses can be between 26 and 35 characters.
Imaging having to key in all of those numbers and letters every time you wanted to access your account. There’s a good chance that you’d transpose a zero with the letter “O” on at least one occasion!
When you use your domain name instead, that risk of user error is much lower. You can rest assured that you’ll have instant access to your funds any time that you need them.
Create a Digital Persona
When you engage in a crypto transaction, transparency and data security are key. You want to make sure you’re interfacing with a legitimate party on the other end, and they require the same assurance of authenticity.
A domain name is the equivalent of your online persona. It tells everyone what you’re about and exactly where your focus lies. When it’s linked to your crypto wallet, it’s much easier to identify yourself and gauge the validity of others.
Expanding Digital Wallets With Domains
Moving forward, there’s a strong chance that contactless transactions will become even more prevalent than they are now. This is especially true of cryptocurrency, which experts predict will be the way we sell and purchase most goods in the impending metaverse.
By connecting your domain names to your digital wallets, you can stay one step ahead of the game. You’ll be able to log into your wallet, access your assets, and use them as required, all without memorizing a lengthy address.
This opens up the world of crypto, and puts you in the digital transaction driver’s seat. What will you choose as your domain? Sign up for an account today to get started!