Can I have multiple cryptocurrency wallets?

wallet image

Ever wondered if it is practical to have multiple cryptocurrency wallets or if it is even possible?

Yes, it is possible to have multiple cryptocurrency wallets. However, having more cryptocurrency wallets means more work for a user.

If a user has multiple wallets, he needs to make more backups. He needs 1 backup of his wallet phrase for each wallet. This step is crucial because if he loses the wallet phrase, he loses control over his funds on the blockchain. Only the right key has access to certain funds on the blockchain.

In addition to that, I doubt that the use of different wallets for the same cryptocurrency is useful.

A user can generate unlimited addresses and therefore, a user could use different addresses for different actions. For instance, he could use a different address for different trading partners or exchanges. Furthermore, he could label the addresses according to the trading partners.

Is a computer capable of running multiple cryptocurrency wallets

Yes, however, some difficulties arrive when a computer runs different cryptocurrency wallets.

First, the device needs more storage. For instance, the Bitcoin blockchain alone is over 220GB big (source statista.com). Having another blockchain could lead to a storage problem. If you would manage an Ethereum and Bitcoin wallet, you would need storage of approximately 300GB (Ethereums blockchain is currently 180GB).

Imagine handling multiple coins that have a blockchain size like this. However, these two coins, Bitcoin and Ethereum, are (currently) the biggest cryptocurrencies. Therefore, they have big blockchain. There are some altcoins (alternative coins), that only have a blockchain size of 10GB, or 50GB or even less.

This calculation was just a simulation of how much storage someone would need if he would run an Ethereum and a Bitcoin node. However, the blockchain is always growing, because more blocks are added to the blockchain. If a device would manage even more cryptocurrency wallets, he would just increase the amount of storage he would need in addition to the existing blockchain size.

RAM is another factor that should be considered when a device should run multiple cryptocurrency wallets. Some wallets have a higher RAM usage.

Why?

First, if you sync up a wallet, a lot of blocks are downloaded from the network and are cached in the RAM. Later, they are stored in the storage of a device.

Second, depending on how many users use a coin, the Mempool could be bigger of a crypto wallet. The Mempool is a collection of all unconfirmed transactions. After a block is mined, a bunch of transactions goes from the Mempool to the blockchain.

Depending on how much transactions are ongoing on the network, the Mempool could be bigger or smaller. Therefore, the usage of RAM could fluctuate.

Some setup options could be included to limit the Mempool. The parameter is called ‘maxmempooltx’. You could start your wallet with an option like this ‘maxmempooltx=50000’, meaning the Mempool is limited to 50.000 transactions (Guide to Limit Mempool size).

Multi-wallets

A multi-wallet could be used if a user wants to trade multiple coins but needs one central place where he can manage all his coins.

A multi-wallet is a light wallet, meaning the wallet references to a node that has the blockchain stored. Therefore, users who use a multi-wallet don’t need to download the blockchain to their device and could instantly start interacting with the blockchain.

In addition to that, most Multi-wallets have interesting features, such as a in-built exchange or a portfolio overview.

Exodus

Exodus wallet tab

Exodus is one of these multi-wallets. The software is free and you have full control over your wallet phrase. After you made your first deposit to the wallet, you can back up your wallet phrase.

Exodus exchange tab

A user could trade directly on Exodus to any coin/token that Exodus supports. The trades are handled by ShapeShift. It is a third-party platform, where users could directly trade between currencies at a fixed price. The Exodus wallet makes trading even easier. Users just have to type the amount they want to trade in the input box and the wallet will automatically tell you how much other coins you would get.

The portfolio overview gives a user a quick overview of how much value his coins currently have. In addition to that, this site also gives a user a 30-day trend chart where he could see the performance of a coin.

The prices and charts come directly from coinmarketcap.com. There is also the option to change this to cryptocompare.com in the developer menu under ‘Developer/Prices’.

However, multi-wallets don’t offer as many features as normal wallets. The main intention of a mutli-wallet is different: They want to give the user the option to manage a bunch of cryptocurrencies in one wallet. However, if a user wants to use a certain feature, for example, Proof of Stake, he needs a full node.

This process requires a computer that is connected with the network and has the blockchain fully synced up. Therefore, the user needs his wallet. A multi-wallet would not be able to do that.

Imagine downloading 50+ blockchains before you could start using a multi-wallet. This wouldn’t be useful and a user would most of the time don’t even have the storage to store all the blockchains.

Further Readings:

Why most cryptocurrency projects fail

Maximilian Groß

I'm a software engineer. I'm the owner of FireStake.com and know the crypto space since 2016. Furthermore, I share everything I learn about crypto on this blog.

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