Bitcoin Wallets BY DAVID BARNES | BITCOIN CO. LTD.
Dec 15, 2015
What is a Bitcoin wallet?
A broad definition:A method of storing bitcoins
Without any form of walletyour bitcoin will be lost forever
General Types of Bitcoin Wallet Desktop/Mobile application wallets
Full client wallets ‘Lite’ client wallets
Web-based wallets Hosted wallets Client-side wallets
Offline wallets Brain wallets Paper wallets Hardware wallets
Desktop/Mobile WalletsFull node wallet - “Bitcoin Core” (Satoshi Client) Original Bitcoin wallet Download the entire blockchain Share the blockchain with others Other application: Armory
Pros Cons
Independent Assist in running the Bitcoin network Dependable API
Slow initial load Disk/Bandwidth usage
Downloads: https://bitcoin.org/en/download https://bitcoinarmory.com/
Desktop/Mobile WalletsLite ClientsOnly download a small amount of relevant data
2 Methods1. Download from a centralized server or group of servers
Electrum (http://electrum.org) Mycelium Bitcoin Wallet (Google Play Store)
2. Download directly from full client nodes (SPV) Multibit “Bitcoin Wallet” for android
Desktop/Mobile WalletsLite ClientsPros Cons
Fast setup Low disk usage Low bandwidth usage
Less reliable data
Dave Recommends Electrum for Desktop Mycelium for Android
Web-based WalletsHosted Wallets A provider holds your Bitcoins for you Allow you access to your Bitcoins upon request
Pros Cons
Generally easy to use No installation required May offer account limits & account
security settings May be more security aware than you
Reliant completely on 3rd party High risk of hacking or dishonest
provider Possible to freeze your account
Examples: https://coinbase.com https://circle.com
Web-based WalletsClient-side wallets Javascript based wallet All cryptographic functions occurs client-side in your browser
Pros Cons
Generally easy to use No installation required May offer account limits * Allow you to backup/transfer your
keys
Partially reliant on 3rd party Risk of using a compromised wallet
webpage May be insecure if saved
history/bookmarks
Examples: https://blockchain.info https://greenaddress.it
https://rushwallet.com
Offline wallets / Cold StorageBrain wallets1. Remember your private key directly
5Kjvg8WD11vbwbpJectFGe3EjbNNRzRh4UXiK4oK42yc1pGFmY5Difficult to remember
2. Use a random passphrase to generate a private key“frequency woman poverty engine standard creature cruel safe”Easy to remember
Pros Cons
Can never be stolen Can be transported where ever you go
May forget it Must use with another wallet for sending
Reference: https://brainwallet.github.io/ https://keybase.io/warp
Offline wallets / Cold StoragePaper wallets Generate a key private and write in down Keep the paper in a safe place and never let others look at it
Pros Cons
As safe as the location you store the paper Easy to store No memory required Can be given to other people Can keep multiple copies
May be stolen/lost/destroyed Must use with another wallet for sending
Examples: https:// brainwallet.github.io https:// bitaddress.org
Offline wallets / Cold StorageHardware Wallet Any computer or device running a wallet application
that is not connected to the internet
Pros Cons
As safe as the location your device Impossible to hack during the sending
process Safer and more convenient to send
transactions compared to other offline wallets
May be stolen/lost/destroyed Must use with another wallet for sending Cost money
Other Cool StuffDeterministic wallets Wallets that have the ability to generate an infinite number of addresses based on a single
“seed” phrase Can backup all your different addresses with a single sentence Wallets with deterministic ability include:
Electrum Armory Greenaddress
Other Cool StuffMultisig addresses Transactions must be signed using multiple keys Can use a combination of different wallet methods to sign a transaction Can be signed in totally different location Wallets with multisig ability include:
Bitcoin Core Greenaddress