As Web3 rises, the roles of "hardware wallets" and "Web3 data centers," which are at the core of decentralized infrastructure, are becoming increasingly important. While each has a different role, they work together to support the security, decentralization, and reliability of the Web3 ecosystem. In this article, we will explain the relationship between these two and their complementary roles.
What is a Hardware Wallet?
A hardware wallet is a dedicated device that securely stores the private keys of cryptocurrencies and digital assets. It has the following features:
- Private key protection : Keep private keys on the device and do not expose them to external networks.
- Offline security : Minimize the risk of hacking by disconnecting from the internet.
- Digital asset management : Supports management of crypto assets such as Bitcoin and Ethereum, as well as Web3 assets such as NFTs and DeFi tokens.
Especially in the Web3 environment, hardware wallets have become an important tool for enabling users to achieve "self-sovereign data management."
What is a Web3 Data Center?
A Web3 data center is a physical or distributed computing infrastructure dedicated to Web3 services. Unlike traditional centralized data centers, Web3 data centers have the following characteristics:
- Hosting decentralized networks : running blockchain nodes, decentralized storage (e.g. IPFS, Filecoin).
- High reliability : Distributed node placement ensures system fault tolerance.
- Pursuing energy efficiency : Supporting efficient data processing for the operation of the blockchain network.
These data centers provide the infrastructure needed to process blockchain transactions and execute smart contracts, building the foundation for Web3.
The relationship between the two
1. Complementing security
- Hardware wallets ensure the security of users' private keys, while Web3 data centers are responsible for securely storing and processing data across the decentralized network.
- The two companies will work together to ensure transactions are approved and recorded, enhancing security from end users to networks.
2. Self-sovereign ID and data management
- Hardware wallets provide a means for users to hold a self-sovereign identity (SSI) that is authenticated and signed by decentralized applications (dApps) and smart contracts hosted in Web3 data centers.
- For example, when accessing a file stored in the decentralized storage network, your hardware wallet provides a signature and the Web3 data center verifies your access permissions.
3. Interoperability of decentralized applications (dApps)
- DApps will be hosted through Web3 data centers and will use hardware wallets to handle user authentication and transactions, creating a completely self-sovereign ecosystem.
4. Verifying and Processing Transactions
- Transactions signed on hardware wallets are then processed through a decentralized network of Web3 data centers, a process essential for DeFi transactions and NFT purchases, for example.
Example use cases
1. Use of DeFi platforms
- Users use hardware wallets to log into DeFi applications and manage their assets.
- Transaction data is processed by blockchain nodes hosted in Web3 data centers and recorded on the blockchain.
2. Decentralized Storage and Hardware Wallets
- If you store important files in decentralized storage such as IPFS or Filecoin, you can use a hardware wallet to encrypt and sign access control.
- The files themselves are stored by Web3 data centers and are accessible via a decentralized network.
3. NFT Market Trading
- NFT transactions are signed using a hardware wallet and the transaction is processed on a blockchain hosted in a Web3 data center.
- This ensures that transactions are transparent and secure.
Future Outlook
The relationship between hardware wallets and Web3 data centers is expected to evolve as the Web3 ecosystem expands. Areas where we expect to see future innovation include:
- Introduction of quantum-resistant security technology : Potential to be adopted in both hardware wallets and Web3 data centers.
- Leveraging zero-knowledge proofs : Validating transactions while preserving user privacy.
- Customizable decentralized infrastructure : Individuals and businesses can build their own Web3 data centers and integrate them with hardware wallets.