The crypto space is full of innovations, and there is always something new to talk about that makes indulging in crypto easier. One such new product is the Mercury Wallet.
The wallet allows you to send and swap Bitcoin instantly, and that too without any transaction fees. Unlike other wallets, this one uses a layer-3 statechain protocol that enables off-chain transfer and settlement of Bitcoin outputs that remain under the full custody of the owner at all times.
However, if you have not heard about the crypto wallet yet, I welcome you to this Mercury Wallet review, where I will explain every bit of it.
What Is Mercury Wallet?
Mercury is one of the new Bitcoin wallets out there. It is based on the new Bitcoin layer-2 scaling technology, and it uses the concept of statechains.
This allows the wallet to enjoy BTC deposits (UTXOs) without any transaction fees. As the funds get transferred securely between owners without requiring an on-chain transaction.
As a result, being the owner, you will be able to transfer full custody of an amount of Bitcoin to anyone instantly. This increases private and prevents any miner fees.
Mercury wallet uses this concept of UTXO, which is the fundamental object that defines value and ownership in a cryptocurrency such as Bitcoin. The UTXO is identified using a transaction ID or TxID and the output index number or n.
The simplest function of the Mercury wallet system is to allow the transfer of the ownership of individual UTXos controlled by a single key from one party to another without an on-chain. Instead of using on-chain, SE facilitates this change of ownership but has no way to seize or freeze the output.
How To Get Started With Mercury Wallet?
Using Mercury Wallet is fairly easy. It is available for both Mac and Windows computers. However, it does not have a mobile app like most other crypto wallets. Also, it does not support a huge number of coins but only Bitcoin.
But yes, the wallet helps you to transfer and store your funds anonymously, and it is pretty straightforward to use. To get started with the wallet, you can follow these steps:
- First, download Mercury Wallet from its official website and install it on your Desktop.
- Once installed, launch the wallet, and you should see three options: Create a new wallet, restore from seed/backup and Load the existing wallet. Click on Create new wallet > Continue.
- On the next screen, you will find some general information. Like copy and keep your 12 seed phrase somewhere safe and some other information. Simply confirm your consent and click on continue.
- Next, give your wallet a name and create an 8 character password and click on Create button.
- On the next screen, it will show you the wallet seed phrase. So note down the seed for recovery purposes.
- Once you are done confirming your seed phrase, you are all set to use your Mercury wallet.
- Now that your crypto wallet is created to start using it, you will need to create a statechain. For this, click on the Deposit button from the wallet’s dashboard.
- Next, choose the value of BTC that you would like to deposit from the existing values or by entering a custom value and click on continue.
- This will generate a Bitcoin deposit address. So you have to copy the deposit address and send your funds to the address.
- Once deposited, you are all set to swap your statecoins with other users using Mercury wallet.
What Is Statechain & Statecoin In Mercury Wallet?
Unlike other crypto wallets, Mercury wallets are based on the statechain and statecoin concepts. So you might be wondering what these two terms are.
Well let me quickly explain both of them to you:
- Statechain: A statechain is a cryptographic structure that consists of a chain of digital signatures transferring ownership of a specific statecoin between owners. Just like the blockchain, statechain cannot be changed or edited, and it works as proof that the statecoin has not been used twice.
- Statecoin: A statecoin represents a specific amount of Bitcoin that has been deposited to an address where the corresponding private key is split between the depositor and the Mercury server (or ‘statechain entity’). Also, the depositor party holds a time-locked backup transaction. So they can claim their funds back after a specified lock time period. Moreover, the private key of the statecoin is never known to anyone. Also, both the owner and statechain entities must cooperate to sign a transaction.
What are swaps?
On Mercury Wallet, there is also this concept of swapping. Swapping can be used to increase your privacy. As it allows your equally valued statecoins to be swapped with other anonymous users via a blinded swap protocol.
The mercury wallet automatically performs swapping with other anonymous users. And all you have to do is join a swap group via the Mercury swap conductor. Also, the Mercury wallet offers you information related to the privacy status of each statecoin in the wallet.
To join a swap group, you can click on the Swap button from the wallet’s dashboard and click on the Join group to swap your statecoins with other users on the Mercury wallet.
Can Mercury Wallet Seize My Bitcoins?
No Mercury wallet won’t seize your funds, or you will not lose your funds if a transaction doesn’t go through. Instead, in the Mercury protocol, the Mercury server securely deletes private key shares via Intel SGX based HSM.
Mercury wallet never has control over deposits. Also, it cannot complete or free funds. Also, in case the Mercury server disappears, or the transaction doesn’t go through, then the original owner has to wait until the lock time period is over. And they will be able to regain full control over their funds.
How is a statecoin transferred to a new owner?
There is a pretty simple process that Mercury wallet follows to transfer statecoins from one owner to another. At first, the recipient of the statecoin generates a statecoin address which Bech32 encoded public key with an SC prefix.
The sender is required to enter the address into their wallet, which cooperates with the Mercury server to generate an encoded transfer message.
The transfer message includes a signed backup transaction that states the cryptographic proof of the previous ownership and the new ownership and a blinded key transfer value. The recipient then verifies the transfer message in their wallet, and the transfer is completed with the server.
Also, the private key share gets updated. So only the receiver’s new private key share can be used for signing valid transactions with the server. And the private keys of the previous owner become invalid.
So that was all for Mercury Wallet. This wallet might be the next thing in the space of Bitcoin wallets as it is based on the concepts of Statechain.
Plus, it is one of the few wallets that enable off-chain transactions. However, I hope the wallet adds support for other coins too in the near future.
Anyway, now go ahead and give the wallet a try and see how it is working for you. Also, if you are stuck on anything, feel free to drop a comment below.
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