Blockchain & Cryptocurrency Glossary

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Decentralized Wallet

1 min read
Pronunciation
[dee-sen-truh-lized woll-it]
Analogy
Like walking into a bank branch and conducting transactions yourself rather than through an app server.
Definition
Non-custodial wallet that interacts directly peer-to-peer with blockchain nodes, without centralized servers.
Key Points Intro
Decentralized wallets offer:
Key Points

P2P connectivity: Direct node RPC or DHT discovery.

Censorship resistance: No central endpoint dependency.

Privacy: Reduced metadata leakage.

Resilience: Operates despite server outages.

Example
Wallets like Trust Summit use libp2p to connect to Ethereum nodes in a decentralized mesh.
Technical Deep Dive
Implements peer discovery via devp2p or libp2p, runs light-client protocols (LES, ETH1), and handles transaction gossip. No reliance on Infura or centralized RPC.
Security Warning
Peer poisoning can serve false data; use multiple peer sources and validate headers.
Caveat
Slower sync and higher complexity than centralized endpoints.
Related Terms
Lightweight Wallet
SPV Wallet
Full Node Wallet
libp2p

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