Cryptocurrencies and Digital Wallets

Jun 08, 2016 | by VienS
Cryptocurrencies and Digital Wallets

Cryptocurrencies are getting more and more popular nowadays, because they completely anonymous, do not require special knowledge for their use, and available nearly anywhere. Multitudes of banks all over the world accept cryptocurrencies, and most of Forex brokers use them to refill their accounts and for traders’ money withdrawal. The very first and the most popular cryptocurrency is Bitcoin (BTC), and all other cryptocurrencies are compared to Bitcoin and only after it – to fiat money. Therefore, when people mention cryptocurrencies, they usually mean Bitcoin.

Initially working with cryptocurrencies required installation of specialized software, but today one can access his/her personal wallet using a specialized wallet client program, or online. Special devices called Hardware Bitcoin Wallets were developed, but there are not so many of them, and they are useful only for people who operate with large amounts of cryptocurrencies. The end user prefers online wallets as the most convenient ones providing quick and easy access to a person’s funds from any type of device equipped with Browser.

Online Wallets

Bitcoin online wallets can be divided into two main categories: true wallets and "pseudo" wallets.

"Pseudo" wallets

In spite of the fact, that pseudo wallets provide a user with address, the funds stored in such wallets do not actually belong to a user, though they can be used for personal goals. Usually email address and password are required to get access to a pseudo wallet but sometimes your mobile number will be used for the same purposes. Some pseudo wallets require partial or complete identification, that is, to operate with them you will need to provide your personal data. Such approach is somehow contradicting with intrinsic philosophy of cryptocurrency, completely anonymous by default.

The second significant disadvantage of pseudo wallets are minimal limits usually established by such services. If the amount transferred to your wallet is less than a minimum indicated by the service, it will not be credited to your wallet. Cryptonator, as well as wallets provided by cryptocurrency exchangers, like Exmo, are examples of pseudo wallets. In some cases, for instance in btcbank.com.ua, operations with Bitcoin require user’s bank details, and transactions with Bitcoins lose their anonymity whatsover.

True Online Wallets

True online bitcoin wallets allow you to operate with cryptocurrency without limitations and free of charge, except for a small commission for money transfer. The most popular and convenient online wallets are shown below:

Blockchain

Blockchain is the most popular and easy to use service of Bitcoin online wallets. The service has a strong multi-language support and displays your balance in Bitcoins and many other currencies at the rate of the exchange.

The keys are server-stored, and after the login/password pair entry, a user will get a full access to his/her wallet. Login is system-assigned, but the user creates a password himself. With every change of your network, browser or PC you will need to confirm your access by email.

The new version, recommended to previous users and used by new users by default, offers a variety of settings to ensure security, including text messages to your mobile, 2-step authorization and the second, additional password.

The service also allows customers to set the amount of transaction commission by themselves. Mobile apps for Android and iPhone are available.

Coinbase

Easy to use and safe wallet for cryptocurrencies. To sign up you provide your email address, but nearly each entry needs to be confirmed. Your entry confirmation link will be sent to your email address.

Coinbase provides a high security level for their wallets, though backup of private keys is not available here. Сoinbase users can buy and sell Bitcoins and to transfer cryptocurrency to user’s bank accounts. However, it should be noted, that not all users are allowed to use all available options. User options depend on his/her country of residence, though it will not be a problem to send your own coins to any user.

In order to transfer your coins to your bank card you will need to connect your Coinbase account with your bank account and make a payment to company’s account to confirm your bank details. For other purposes you will not need to provide your personal data, so anonymity of the coins use is ensured.

Mobile apps for Android and iOs are available.

Strongcoin

This online Bitcoin wallet service is rather easy to use but not so popular. It has only two language options, English and German, which is not always convenient for users from other countries.

Stroncoin was one of the first online wallet services ever. Nowadays they don’t do that much to enhance security of the service, and it only requests to provide email address and password to enable access to your wallet. As an additional protection measure, a user will need to select a picture from their gallery, used as one-time password.

No mobile versions are available for this wallet. Backup copy of private keys can be created only in the form of printout from a PDF file.

Block.io

Block.io is one of the new online wallet services. This multicurrency service offers you wallets for 3 cryptocurrencies once you register your account. So together with a Bitcoin wallet, a user will get Litecoin and Dogecoin wallets as well.

No mobile versions of the wallets are available, though the service is actively developing. The keys storage is provided by the service. Backup copies are not provided and this service looks more like "pseudo "wallet service.

Bitgo.com

This Bitcoin online wallet requires mandatory 2-factor authorization for all users. Developers insist that this approach ensures enhanced security and better protection of users’ money, but for many users it just makes things more complicated. In addition, for each operation two signatures are required. But the service does not have full access to users’ wallets, so without participation of a wallet owner not transactions are possible.

Greenaddress

Greenaddress wallet is simple and convenient to use, with multi-language support (interface in a dozen languages). The service is one of the newest and robustly developing. After registration with GreenAddress services, your device initialization with PIN-code is required and for all subsequent entries, a user may use only the PIN. Such approach reduces the security of wallets to some extent.

The service is very easy to use. It has a wide range of security settings and informs about any activities going on in your wallet. There are established transaction limits, when exceeded they will require 2-factor authorization and confirmation.

Coinessa

One of the new services, created mainly for Ukrainian users. After registration, the service is connected to email address and mobile phone number.

Coinessa users can buy, sell, receive and transfer Bitcoins, but confirmation of your personal data is required in order to buy and sell. It is too early to say if the service is secure enough or convenient to use.

Xapo

Xapo is probably the most secure online wallet, in return, the service user will not have much anonymity. According to Xapo, the funds are stored on servers without connection to Internet, and many banks would envy the level of security provided. However, such type of security approach doesn’t match well with any idea of assets turnover, so most probably this statement is more an advertising trick than a real thing. More important is the fact that Xapo completely de-anonymizes its users, who need to provide their personal data and to confirm their ID with actual ID scans. And a user’s mobile phone number is required to enable any transaction.

Get up to 30% lifetime commission

Refer your friends to MagicBitcoin and receive up to 30% commission all of their fees.

All commission payments are added to your MagicBitcoin account balance which can be withdrawn at any time, once it is at least 500000 satoshi.

View referral details