Online cryptocurrency wallets are also called browser or web wallets. They refer to the hot way of storing cryptocurrencies. These crypto wallets work in the browser just like any other site. The private key for accessing the coins is usually kept by the site owner. For this reason, the choice of an online wallet must be approached with full responsibility and only licensed companies that give real guarantees of the safety of funds must be chosen.
The editorial staff of Btcnewsweb.com analyzed all the pros and cons of such storage of cryptocurrencies. In the article, we will give advice on choosing a wallet and give examples of the most secure resources with a good reputation.
We recommend looking at: all major types of wallets.
How to use an online cryptocurrency wallet
First you need to create an account and verify your email or mobile number. Set a password, be sure to enable two-factor authentication. The system will provide you with data used in the future for authorization.
Cryptocurrency exchanges are also referred to online wallets.
Inside the wallet, as a rule, you can perform the following basic actions:
✅ check the balance in any of the cryptocurrencies that are supported by the site;
✅ send funds by specifying the recipient’s address and (in some wallets) choosing the amount of the commission;
✅ accept funds by generating your wallet address and transferring it to people or companies;
✅ check the transaction history for each specific asset.
This is the main functionality, but usually there are a number of additional options – fast internal currency exchange, investment portfolio management, etc.
Are online wallets safe
It should be understood that when trusting your keys to a server that you do not control, you must be sure of two things:
✅ that the service hashes the private key (that is, it encrypts it in such a way that it can only be decrypted using a password);
✅ the hashing is done correctly to prevent an attacker from decrypting the information.
The company that manages the wallet can pretty easily trick the user at these points. Even if the keys are indeed hashed, then their base is a “tidbit” for attackers. If an error has crept into the encryption, it is fraught with the loss of funds of thousands of users. And even when there are no vulnerabilities on the part of the wallet, there is a chance that your password will be hacked if it is not complex enough.
However, online wallets are perhaps the most popular option for storing cryptocurrency. This is due to the fact that they are very convenient to use. You can send and receive transactions from any device with Internet access; it is enough to create an account in a few minutes and log in to the website or crypto exchange. If you do not store large amounts of money on such resources, set the most complex passwords (preferably with the help of password generators) and carefully choose the site, then this option takes place.
Features and risks
✅ By using a browser wallet, you remain anonymous with respect to third parties that can track your IP address, but you reduce privacy in relation to those who operate the site.
✅ Some services offer instant internal transfers. This allows transactions to be completed without waiting for a lock period.
✅ In addition to the service provider, you need to be confident in your own browser so that third parties are not able to intercept passwords.
✅ Most wallets do not reserve a permanent Bitcoin address for the account holder, but assign a new one for each use. In such cases, you should not post this address with the expectation of permanent use (for example, to collect donations), because there is a risk that it will no longer be active when sending cryptocurrency.
There is also the risk of phishing – tricking the user with malicious software that looks identical to normal software. Malicious sites try to collect user credentials. A phishing site disguises itself as a regular one both in design and in address (for example, c0inbase.com instead of coinbase.com). By entering his password on such a site, a person gives all the data to access a real wallet.
We recommend using hardware wallets for storing cryptocurrencies: Ledger, Trezor, etc. This method belongs to the cold and the safest.
Best online wallets
The sites listed below inspire confidence, since they have been successfully operating for several years and have established themselves as safe and convenient cryptocurrency wallets.
The Blockchain online wallet can be called the most popular in the world – there are more than 50,000,000 accounts in the system. It is easy to use and has a good track record for asset safety. The user is given full control over the tools and the ability to recreate and use backups.
Blockchain makes it possible to exchange currencies such as Bitcoin, Stellar, Ethereum, USD Digital, Bitcoin Cash with low commissions. Operations are available in 30+ countries around the world, and on the site you can choose any of 25 supported languages, including Russian.
Coinbase is not only a wallet, but also an exchange with 50+ currency pairs. Differs in the maximum simplicity of the interface and all operations – suitable for those who are just starting to get acquainted with bitcoin, and also want to quickly transfer fiat money to cryptocurrency and vice versa. The commissions are quite loyal, besides, as the volume of transactions increases, a discount is provided.
The wallet can be used in conjunction with decentralized applications, and addresses can be added to the contact list by giving them names. The ability to store currencies BTC, ETC, BCH, ETH, LTC, as well as various ERC-20 tokens is available. Keys are securely protected using Secure Enclave technology and biometric authentication.
BitGo is a multi-currency wallet with multi-signature, multi-user controls and state-of-the-art security measures that meet industry standards. It is aimed at both private users and institutional investors who prefer this way of storing digital assets.
The main feature of the wallet is that there are three parties – one has the right to initiate transactions on the account, the second controls the policies and confirms the accounts, the third is needed for accounting, taxation and auditing. To increase the level of security, the administrator can create various policies that in one way or another restrict the ability to transfer coins to or from the wallet.
Hybrid online cryptocurrency wallets
An example of a hybrid wallet is Strong Coin.
Features of this approach:
✅ The user can export private keys from the wallet to use them to work with another Bitcoin client or wallet; and if you make backups, then access to funds will not go anywhere, even if the hybrid wallet itself stops working.
✅ User keys are stored encrypted on the server.
✅ One address belongs to one user. Therefore, if you return the coins to the sender’s address, most likely he will receive them and the funds will not be lost.
✅ You can always look at your account balance in the blockchain and make sure that the program displays it correctly.
✅ Without backing up or exporting keys, the security of a hybrid wallet is not superior to a regular online wallet.
Much depends on the user’s browser, it is also susceptible to attacks. Most modern browsers don’t work very well with cryptography.
Advantages and Disadvantages of Web Wallets
✅ The ability to access from any device with Internet access.
✅ Ease of learning.
✅ Get started quickly – just create an account.
❌ Relatively low security.
❌ The need to trust your keys to third parties.
❌ The ability to crack a password by an intruder.
❌ There are many unreliable projects in the industry.
Questions and answers
What is an online cryptocurrency wallet?
A web service that runs through a browser and allows you to manage your digital assets.
What are the main advantages of web wallets?
They are chosen for maximum convenience and simplicity. This is a suitable option for beginners or those who are not going to keep large amounts of money.
What are the disadvantages of browser wallets?
The security is much lower than cold storage (no internet connection). Hacker attacks also take place, and you need to trust the developers of the service.
Where are private keys stored and how is access done?
Keys are stored on the servers of the provider company in encrypted form. Access is only possible by providing a client ID and password. Some platforms, such as BitGo, use multi-signature technology – transactions are made only after confirmation by three parties.
Which browser bitcoin wallets are the most reliable?
Blockchain, Coinbase, BitGo, Guarda, Coinfy wallets have a good reputation.
How to choose a reliable online wallet and minimize risks?
First of all, you should choose proven services with a long term of work and a large number of reviews. It is highly desirable to have European or American licenses for financial activities.