There are 580 million crypto users globally as of 2023, says crypto exchange Crypto.com.
As cryptocurrencies become more popular, it is important to develop reliable and fast systems for the management of digital assets. With the increased use of cryptocurrencies, customers need wallets that are secure, efficient, and dependable.
In light of this, Viktoria Dolzhenko, an expert software developer, has vast experience in the development of complex financial systems that meet the needs of modern users. With her career in the development of the necessary financial systems at large companies such as Svyaznoy and the management of innovative blockchain projects at itez, Viktoria has shown her expertise in implementing strong backend systems. Her innovative work on the itez backend, which utilized the .Net framework in a space that was previously dominated by JavaScript, is a perfect example of how she has been able to challenge norms and come up with efficient solutions. In 2022, she received the Digital Leaders Award for her open-source project known as Backworker, which is built on the .NET framework for running scheduled tasks and specializes mostly in fintech products.
Now, Viktoria shares her key principles and practices for designing a secure backend of a cryptocurrency wallet, drawing from her extensive experience and groundbreaking achievements.
The Foundation of a Secure Crypto Wallet
The backend of any cryptocurrency wallet is the core system that helps in processing transactions, storing data safely, and the proper functioning of the cryptocurrency wallet. Security is a critical factor in any wallet since it deals directly with valuable assets. To this end, the architecture must have multiple layers of protection, such as encryption, secure coding, and periodic auditing for security vulnerabilities.
One of the first few security measures that should be adopted during the building of a secure wallet includes proper data encryption when data is at rest and when in transit. This data includes private keys and user data, and they should be well protected using standard encryption techniques. Furthermore, access to this data needs to be controlled, for instance, with the help of multi-factor authentication (MFA) and role-based access controls (RBAC).
“Encryption is not just a box to check when it comes to security; it is about preserving decentralization and user-controlled assets, all of which make cryptocurrencies unique,” Viktoria explains. “Proper encryption ensures that, even in the worst-case scenario, users’ private keys and personal data remain out of reach for malicious actors.”
Again, designing the backend of a crypto wallet requires one to follow certain secure coding standards. This includes input validation, avoiding the use of hardcoded credentials, and protection against SQL injection, cross-site scripting (XSS), and more. During code reviews and by using static code analysis tools, threats that can hinder the productivity of a software application can be detected at an early stage.
“Secure coding is the foundation of a strong system,” Viktoria says. “It is all about preventing conditions that can be detrimental to the functioning of the system and not just about writing code with efficiency. This is especially relevant to cryptocurrency, as any mistake can lead to mass losses.”
However, having strong security measures in place is not just the solution. There is a need for periodic security audits, irrespective of the precautions put in place. These audits also require the services of professionals who can scrutinize the system beyond what developers might not have noticed initially. This is why it is very important to address these concerns immediately to be able to preserve the wallet’s functions and security.
“Security audits are not a one-time job, but a continuous process,” Viktoria adds. “In the realm of blockchain, new threats constantly emerge.”
Efficiency: The Key to High Performance
Security, of course, always comes first, but nothing can make a crypto wallet shine like performance. Users want to process transactions quickly, see the balance on their accounts in real-time, and have a wallet that works seamlessly with other blockchain networks. However, it is not easy to achieve this degree of performance because it requires the backend architecture to be well planned and optimized.
As a result, a high-performance wallet must be able to process a lot of transactions without delays. This can be done by optimizing the transaction processing pipeline, where every transaction is validated, signed, and then broadcast to the network in record time. Introducing parallel processing techniques and carrying them out in a cloud environment will improve the performance and increase the scalability of the system.
Moreover, cryptocurrency wallets must be able to provide real-time balance and every other transaction status of the user. This means that there must be real-time data synchronization with blockchain networks. To this end, it is possible for developers to use event-driven architectures and lightweight messaging protocols that will help in the timely and successful delivery of updates.
“In the crypto world, timing is everything—users expect updates to be delivered in real-time, and any delay, even within a few seconds, can lead to mistrust or even loss of money,” Viktoria emphasizes. “Efficient data synchronization is thus crucial in ensuring the wallet remains a trusted tool when it comes to managing digital assets.”
Furthermore, as the user base of a wallet increases, so does the demand on its backend. So, scalability is essential here to maintain the high performance of the wallet as it processes a large amount of data. This can be done through load balancing, which entails equal distribution of traffic that comes into the network in order that no server gets overloaded. In addition, the use of microservices means that the different parts of the system can be controlled, making it easier to scale individual services as needed.
Case Study: Building the itez Backend on .Net
Viktoria’s work on the itez backend can hardly be forgotten when talking about the intriguing cases of backend development for cryptocurrency wallets. Before now, software developers had relied heavily on JavaScript and TypeScript for the development of blockchains because these programming languages have many libraries for working with different blockchains. But Viktoria decided to build the itez backend with .NET (C#), and it turned out to be a good strategic decision.
“Choosing the .Net framework for blockchain development was not an obvious decision but it was the right one,” Viktoria points out. “C# made it possible to create a backend that effectively meets the requirements of a high-performance cryptocurrency wallet while providing a more maintainable and scalable solution. This helped itez to grow and succeed as an international company with a staff strength of over 80 people, serving clients across multiple countries.”
In conclusion, it is not easy to create a secure and efficient backend for a crypto wallet. Developers need to understand the technical nature of blockchain, comply with legal requirements, and be aware of emerging trends. However, all these challenges can be turned into positives and strengths with the right mindset and approach, just like Viktoria Dolzhenko, who consistently demonstrated her ability to tackle complex projects and deliver results, pushing the boundaries of what is possible with her innovative use of the .Net framework in blockchain development. She was able to focus on encrypting data, coding securely, auditing, and efficient transaction processing in order to create backends that protect users’ assets and provide a seamless experience without compromising or slowing down performance.
