Bitcoin Wallets 101
When you exchange your currency of choice into some bitcoins, and you would like an easy and accessible way to store your Bitcoin Address and Key in order to make online purchases or buy things from in-person vendors, the most convenient thing to do is set up a digital wallet for yourself. There are several to choose from, and the list is growing, so we have narrowed down a few that are worth looking into.
Certain wallets are better suited for certain operating systems. So, first things first, determine what system on which you plan on making the majority of your purchases.
iOS - this is Apple’s mobile operating system ( think iPhones and iPads). If you have an iPhone we recommend that you check out Breadwallet. As with most thing oriented to the Apple universe. Breadwallet is simple, clean and intuitive. A complete list of wallet apps for iOS can be found on the iTunes App Store.
Andriod - for all those Google Android lovers out there, Mycellium (see below), may be the way to go. As Google continues to diversify its offerings with the same comprehensive and intelligent approach applied to its world changing search engine, Android app engineers have been willing to invest a lot of skill and time into making apps like Mycellium trustworthy and well-tested. Mycellium has already secured a user base reaching into the hundreds of thousands. A complete list of Android wallt apps can be found on the Google Play Store.
Desktop OS (PC or Mac) - If you live somewhere that has yet to experience an influx of business that offer Bitcoin capability, and you think you will be doing the majority of your purchasing online, you may want to set up a wallet with a site like Electrum (see below). Well established, and with a reputation for being safe and efficient, Electrum is an excellent option.
There are few different options in storage for you to choose from. Each one offers advantages and disadvantages, so it is up to you which one you think is going to be the fit. Here are some things to keep in mind:
External Hardware: This will provide you with the most security. You'll have a private key stored in a protected area offline where it is protected from computer viruses that could steal your bitcoins. But, keep in mind, a hardware wallet is not able to protect you from being tricked by malware into sending Bitcoin to the wrong address. This would occur if the malware on another person’s computer was monitoring for high value transactions and then swapping out the recipient's authentic Bitcoin address for an address controlled by the attacker. In person, or voice address confirmation is always recommended.
Desktop: This digital wallet is stored on your computer as software only accessible to you. But be careful about your computer being infected with malware and putting your funds in harm's way.
Mobile: mobile digital wallet applications are designed to be convenient for making “in-person” daily vendor transactions. It is not recommended to store all of you bitcoins in such a format. Just like you wouldn’t walk around with your life savings in cash in your wallet.
Web: These wallets are hosted by a third party and accessed via the internet. Incredibly convenient and easy to access from any portal offering a secure internet connection. Once again, would you put your entire life savings in a paypal account? Didn’t think so. Common sense is your best friend.
Best Bitcoin Wallets for Online Gambling
Mycelium offers a good amount of features in comparison to many other Bitcoin wallets. Primarily designed to be used on Android operating systems, Mycelium also offers cold storage options in the form of cards and USB devices. The application also has a decentralized Local Trader function which allows user to arrange the exchange of coins with other users in a convenient and secure manner. This feature is incorporated with an end to end encrypted message system and the funds are transferred to each user directly, without the reliance on a third party transaction provider.
Mycelium is also designed as a Hierarchical Deterministic wallet and is embedded the Bit ID protocol to ensure secure authentication. It also has features built-in to allow smooth exchanges with traditional currency, otherwise referred to as fiat money. But one feature that is not present, is an ability for users of the app to easily identify vendors and businesses that accept bitcoins in their nearby vicinity.
But Mycelium does offer some other helpful services. Mycelium Gear is a convenient widget that allows you to receive Bitcoin payments free of charge and it automatically deposits the payments straight into your wallet instead of it holding the payments for you and you then having to go in and manually transfer the payment into your wallet. Their Gear feature also has a Joint Escrow ability which allows both parties to engage in a transaction worry free, while also being able to avoid any jurisdiction headaches. And for business owners, Mycelium Gear has a really useful payroll processing feature that automates payments in a way that allows you to spend roughly 30 seconds initiating payments for your entire employee roster, no matter how large your company is.
Another free product feature Mycelium offers is Swish, which allows restaurateurs to automate their ordering by creating remote points of sale that the customer can use to generate their own orders and have them sent directly to the servers and kitchen. Payment also becomes automated and much more frictionless, while also avoiding billing errors. If services like Mycelium Swish become fully adopted the capability for restaurants to monitor data from all of its transaction would be really helpful from a business perspective. They would be able tell what dishes sell the most and at what times and on what days. Mycelium Swish is also pretty convenient from a customer perspective because there is actually no app download required in order to use it, and it has the capability of accepting payments from any currency including bitcoins.
Another Mycelium feature that is a good example of how bitcoin has sparked a revolution in adaptable Blockchain technology is Mycelium Card.
This cards come equipped with their own display and keypad feature and are able to be used even without access to WiFi. It has a rechargeable battery and is essentially a tiny computer held in a plastic card shaped enclosure.
Mycelium card uses digital tokens that a backed by an issuing institution, almost like digital paper notes, instead of being only confined to cryptocurrencies. This allows a way for fiat and traditional banking to decentralize and utilize much less frictionless transaction operation, which will increase the mainstream adoption rate of the Blockchain and subsequently, cryptocurrencies like Bitcoin. And for Bitcoin users that are interested in cold-storing their digital currency, Mycelium offers Entropy. Mycelium Entropy is a USB that allows users to print paper wallets.
Overall, Mycelium offers a comprehensive range of products that make it a great digital wallet platform to grow into as you discover more ways to incorporate blockchain into your financial management. Mycelium is very forward thinking, so it has a great chance of being a major player in the future as it continues to develop ways to bring digital currency and blockchain to the mainstream financial market.
Electrum offers an advantage of being a lightweight wallet that does not hog up huge amount of storage space on your desktop, nor does it drag down your operating system in order to use it. It is able to achieve this by accessing the blockchain by connecting to it via external servers which are run by fellow Electrum users. The downside of all of this speed and computing conveniences that Electrum is not nearly as private as some other digital wallet options.
In order to combat this weakness in privacy, Electrum is integrated with Tails operating system, or otherwise referred to as Tor. Tor preserves users privacy and anonymity by circumventing most operating systems means of tracking and identifying users while interacting with the internet. Users use Tor in lieu of pre-installed operating systems and instead use the OS from a DVD, USB, or a SD card which can be used on any computer, which make privacy and security a more portable experience.
Electrum is one of several services that have been directly integrated with Tor, along email, an office suite, and instant messaging. But given the need for Tor to remain portable via USB, it need to incorporate a lightweight digital wallet that is less than 4Gb in size, which is why Electrum was a good fit for the solution. The Tor incorporation is not a complete privacy solution when it comes to Bitcoin management but, it does make this lightweight tool more feasible.
Electrum also offers cold storage options, by using it to create a private key and a public key via an offline computer. Then the master key is uploaded to a computer that does have access to the internet. The offline computer continues to securely authorize transactions, and the online computer is connected in order to receive payments.
Electrum offers the ability for you to recover your funds with a secret passphrase, if you lose your key. And even though Electrum does utilize servers in order to remain lightweight, they are also decentralized, which does help avoid the downtime that can occur when using servers. They are also introducing an Android version of Electrum that offers the same combination of lightweight convenience with security as it does on its proprietary personal computer application.
Breadwallet was originally designed to only be use on iOS. According to the digital wallet’s creators, this was in order to take advance of the reduced threat of malware being an issue. Apple is very protective of its native platform and hardware-encrypts its filesystem. This starting point of securing on iOS devices assured Breadwallet creators that there would already be a level of protection for user who may lose their devices.
Another attractive feature of Breadwallet is that it is also decentralized like Bitcoin. The app connects directly to the Bitcoin blockchain, unlike many mobile digital wallet apps that are just web portal skins or simply reliant on running through a central server. This protects users from hacking that could occurs on systems that use a centralized server, and also avoids server downtime. Developer Aaron Voisine was able to accomplish this by building his simplified payment verification system, or SPV, from scratch via the back end.
Breadwallet is also a 'hierarchical deterministic' digital wallet, also known as a BIP32 HD. This means that all of a user's public and private addresses can be access with one unique passphrase which can then be used to restore the accounts on other devices if needs be. So that way, if your iPhone accidentally falls in the toilet, you haven’t also just flush down the drain all of the bitcoins you had stored on it. Just don’t ever forget that passphrase.
Aaron Voison said that he and his team wanted to create Breadwallet with accessibility and security in mind.They envisioned a "beautiful, convenient user experience that is also as secure as possible for people who have zero understanding of computer security." But he does warn that you should not use Breadwallet, or any digital wallet on an iOS devices that has been jailbroken, "You're going to get robbed because you think you know more than you actually do. Any jailbreak app has total control of your phone and your wallet. I understand the temptation to use it with a little bit of money, but you will get lazy because it will be convenient to use right up until it isn't."
Breadwallet’s concerns about maintaining the highest level of security had kept them from introducing a version of the app compatible with Andriod for quite some time. change this past July 21, 2016 when they announce that they had found a way to maintain the level of security they had come to demand on iOS on Android as well. It is only compatible with Andriod 6.0 or higher which now has full disk encryption. Their team built it from scratch again, over the course of a year, in order for Breadwallet to be efficient and secure on the new Android devices. Still, when it comes to those die hard iPhone users, Breadwallet is still a reliable favorite among the Bitcoin Generation.