Custodial vs Non Custodial vs Browser Based Wallet

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: bitmover on November 14, 2019, 05:13:38 AM

Only a few smart people have the open mind to try to understand it and buy a hardware wallet BEFORE buying their first satoshis.

Sure, but there are plenty of free, open source, lightweight mobile and desktop wallets to choose from. You don't need to use a web wallet just because it's free. I'd argue they are a bad choice for newbies since newbies don't understand the risks they are taking but using one.

Quote from: bitmover on November 14, 2019, 05:13:38 AM

For example, it is much safer to use a web wallet than to carry cash in your wallet in Brazil.

So carry $30 worth of BTC on a mobile wallet and keep the rest in cold storage or at the very least at home on a desktop wallet. That's still not a good reason to use a web wallet.

Quote from: NeuroticFish on November 14, 2019, 05:38:41 AM

The fake "Electrum 4.0" has proven all this much better than we'd like to admit.

Sure, but people also have their web wallet logins phished every day. There is no way to protect against the user doing something stupid, regardless of the type of wallet.

NeuroticFish

legendary

Activity: 3668

Merit: 6382

Looking for campaign manager? Contact icopress!

Quote from: bitmover on November 14, 2019, 05:13:38 AM

For example, it is much safer to use a web wallet than to carry cash in your wallet in Brazil. I am carrying about $30 bucks in my wallet. I understand the risks, but it is worth. I won't become a poor guy if I lose $30, but it is very convenient to have some cash at hand. The same goes with a web wallet.

Exactly. Under certain amount of money, web wallets are "okay". If they "steal" your money, in a way or another, it's no biggie.
And under certain amounts people are also careless with their wallets, no matter how good the software is. And under certain amounts it's not worth it to buy hardware wallet.
The fake "Electrum 4.0" has proven all this much better than we'd like to admit.

bitmover

legendary

Activity: 2352

Merit: 6089

bitcoindata.science

Quote from: o_e_l_e_o on November 14, 2019, 02:48:54 AM

I mean, I wouldn't touch any of these services either, but I don't see the point in trusting any web wallet. There is simply no reason to. There are 101 things that could go wrong and restrict your access to your coins, or even make you lose your coins altogether, which aren't a concern when using your own wallet. The biggest "feature" that I often see people talking about is how you can log in to them from any device, which is in fact a massive security risk, since the device or connection you are using could be monitoring your keystrokes or traffic without your knowledge. Although hardware wallets are currently the best option in terms of the trade off between security, portability, and ease of use, even a simple software mobile wallet is better than a web wallet.

i agree about the security. Web wallets are not good and hardware wallets are the way to go.
I use a mobile, a browser and a hardware wallet. ofc 99% of my funds are in my hardware wallet.

But it is good have web wallets available, there are some reasons to use one.
Easy to use, good for adoption, good for newbies, etc...

I don't know how things go where you live, but here people are very affraid to lose their money and, in general, are very suspicious about bitcoin. They believe it will go to 0 at any time, that it is a great ponzi scheme etc....

Only a few smart people have the open mind to try to understand it and buy a hardware wallet BEFORE buying their first satoshis. Most of the people out there use a web wallet or a mobile wallet first, because they are easier to use and more convenient. I think there is no problem to use one if you understand the risks involved, and the service is clear about that.

For example, it is much safer to use a web wallet than to carry cash in your wallet in Brazil. I am carrying about $30 bucks in my wallet. I understand the risks, but it is worth. I won't become a poor guy if I lose $30, but it is very convenient to have some cash at hand. The same goes with a web wallet.

Polina_21

member

Activity: 80

Merit: 39

Already there is thread on this topic which gives a complete details about Custodial and Non-custodial exchange and its examples - Custodial vs. Non Custodial Wallets - "Not your keys, not your coin" Explained. by @YourNeko. You can read this topic to know more about Custodial and Non-custodial exchange.

Quote from: RapTarX on November 13, 2019, 08:34:39 AM

Browser Based Wallet
These are some sort of application which is compatible with your browser. You will hold the credential like private key/seed key etc. You are the controller of your fund. For example- Metamask.

And about the Browser based wallet, it can be catagorized under Non-custodial wallets where you own the keys of your wallet.

coupable

hero member

Activity: 2338

Merit: 757

Top-tier crypto casino and sportsbook

Quote from: bitmover on November 13, 2019, 06:45:46 PM

May I ask, what wallet are you using? I don't get how a veteran member like you, almost 3 years in cryptocurrency, is stilll using a wallet without private keys.

Did i mention in any of my previous posts that i use wallets without private keys ?
Am here since 2015 but this doesn't strictly mean that am a blockchain expert for bitcoin. Like most of you, i used blockchain.com for a long time before migrating to electrum «desktop» and mycelium/bither «android». Now am officially using electrum for mobile and desktop. With all those wallets, am always interrested to save my seed or private_keys for every new wallet.
Last year, ”maybe”, i tried to migrate my wallet from Bitpay to Wassabi willing to test the CoinJoin option, but the seed i got from bitpay wallet doesn't work with wassabi. This is how i concluded that seed words are not related to private_keys (as i explained above). [I had tested many other wallets for bitcoin]
Almost 4 years here, but i admit that am not an expert and am still learning. Does there any problem with this? Did you see old accounts in Yobit signature or stake.com signature? You will have great fun reading their accumulated bullshits oer the years they are here . I didn't ever think that i might be judged by the age of my profile . Am not an expert , but am not a Dumb too , right?

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: bitmover on November 13, 2019, 06:41:23 PM

I believe that they have no access to the users private keys.

That's kind of my point. You believe they have no access to your private keys. But the only thing you have to go on is what their website says, and it's hardly going to say "We store all your keys in plain text". You are trusting a third party on their unproven word that they don't have access to your keys. Why take the risk when it's just as easy and much safer to set up your own wallet and hold your own keys?

Quote from: bitmover on November 13, 2019, 06:41:23 PM

I think that most of the wallets out there are worse: coinbase, bitpie, bither, etc.

I mean, I wouldn't touch any of these services either, but I don't see the point in trusting any web wallet. There is simply no reason to. There are 101 things that could go wrong and restrict your access to your coins, or even make you lose your coins altogether, which aren't a concern when using your own wallet. The biggest "feature" that I often see people talking about is how you can log in to them from any device, which is in fact a massive security risk, since the device or connection you are using could be monitoring your keystrokes or traffic without your knowledge. Although hardware wallets are currently the best option in terms of the trade off between security, portability, and ease of use, even a simple software mobile wallet is better than a web wallet.

nc50lc

legendary

Activity: 2618

Merit: 6452

Self-proclaimed Genius

Quote from: Findingnemo on November 14, 2019, 01:19:32 AM

Quote from: BitMaxz on November 13, 2019, 05:26:08 PM

-snip-

It will work;
@both of you: but it didn't in the linked topic because it was mentioned that the balance was held by an "imported address" which wont be restored by the SEED.
It was somehow resolved by OP after saying "transferred" which either meant "imported, swept the prv key or sent the bitcoins".

Quote from: Findingnemo

Moving the funds is safe but for a wallet with huge amount,they might think about the fees.

There's no relation between the fees and the amount being sent, it's the number of available UTXO when used together in a transaction.

Additionally, if the user somehow created two "wallet names" in the settings,
he can restore the second account by changing the derivation path from m/44'/0'/0' to m/44'/0'/1' "1" for the next account and onward.
The only problem is those old SEEDs which were just a backup of the log-in details.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Quote from: BitMaxz on November 13, 2019, 05:26:08 PM

Quote from: Findingnemo on November 13, 2019, 03:01:11 PM

As I said I am not sure,but after reading How to move from Blockchain.info to Electrum? thread I think yes we can able to import using the recovery seeds on other wallets too.

I think it won't work I never heard someone success recovering their wallet by using the seeds from blockchain to Electrum.

Read the whole thread from the link you provided the man who looking for help tried it but the result "No balance".
If you have a blockchain wallet and you want to use other wallets better make a new wallet than using the same seed or private keys and then transfer all funds from Blockchain to other wallet like Electrum.

Electrum is more flexible so it is one of the best option to use.

After reading 10th reply in that thread,I can confirm that he succeeded on importing the wallet from Blockchain to electrum.

Quote from: da_zohan on November 05, 2017, 02:39:14 PM

UPDATE: Thats it, thanks! I transferred the BTC form the "imported address" into my wallet. And there they are in Electron.

Moving the funds is safe but for a wallet with huge amount,they might think about the fees.

bitmover

legendary

Activity: 2352

Merit: 6089

bitcoindata.science

Quote from: coupable on November 13, 2019, 02:08:24 PM

The 24 recovery words aren't to use only on blockchain.com wallet? I didn't thought that they can be used in Electrum or ay other wallet.
What does it means "a replica of your original wallet" ?
I have in mind that seed words are related to wallets, it's not related to the private keys which can be used in most wallets , blockchain.com has already this option as a feature. I mean seeds from a wallet can't be used in another wallet, they only help restore the wallet in the same wallet kind.
Am i wrong ?

Completely wrong. Additionally to what o_e_l_e_o said:
The seed is very important. If you are using any wallet which doesn't let you have the seed (those 12/24 words) look for another wallet now.

This is what i was talking about blockchain.com: They are better than so many services out there...

May I ask, what wallet are you using? I don't get how a veteran member like you, almost 3 years in cryptocurrency, is stilll using a wallet without private keys.

bitmover

legendary

Activity: 2352

Merit: 6089

bitcoindata.science

Quote from: o_e_l_e_o on November 13, 2019, 01:52:39 PM

Quote from: coupable on November 13, 2019, 01:28:36 PM

Is it confirmd that this wallet provider has no access to the private keys of my wallet /as a user/

Short answer: No, it is not confirmed (as far as I am aware).

Longer answer: Blockchain.com state that although your wallet is backed up to their servers, it is encrypted on your device using your password before it is sent to their servers (https://www.blockchain.com/learning-portal/how-it-works). They also claim they have no access to your password, and so can't decrypted it. If you trust them, then they would have no access to your seed/private keys/coins, but why take that risk? Blockchain.com are hardly a company with a shiny clean reputation, from (as you correctly point out) terrible customer support through to their support for things like XT, Unlimited and S2X. The whole point of bitcoin is to not have to place your trust in third parties, so why do so here?

I believe that they have no access to the users private keys. They are not a custodial service, like coinbase.

About poor customer support, that's how it is. How could it be different? They offer a FREE service, with thousands, maybe millions of users. Most of those users are completely newbies and don't know what they are doing. It is impossible for this kind of service to give any kind of support.

I think they should state very clearly that they offer no support (which is what they have: no support), and clearly state that the service is risky and nobody should hold large amounts of funds there.

They offer a very easy to use service, newbie friendly, access to private keys, beautiful interface... personally, I think that most of the wallets out there are worse: coinbase, bitpie, bither, etc... I am thankful to them because when I bought my first bitcoin I sent it there and recovered the forks easily, was able to transfer, etc...

Coinbase on the other hand keep calling themselves a wallet, which is a false claim. Coinbase is dishonest. And I don't see as much people here complaining about coinbase as people complain about blockchain.com, which is a much better and honest service imo.

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: coupable on November 13, 2019, 02:08:24 PM

Am i wrong ?

You are wrong, on both points.

Blockchain wallets allow you to extract a 12 word seed phrase, which is in the BIP39 format and compatible with any other BIP39 accepting wallet, including Electrum.

Seed phrases and private keys are very much related. A seed phrase is converted in to a seed, which is used to derive all your private keys. Seed phrases and/or private keys can be imported in to most good wallets.

BitMaxz

legendary

Activity: 3472

Merit: 3217

Playbet.io - Crypto Casino and Sportsbook

Quote from: Findingnemo on November 13, 2019, 03:01:11 PM

As I said I am not sure,but after reading How to move from Blockchain.info to Electrum? thread I think yes we can able to import using the recovery seeds on other wallets too.

I think it won't work I never heard someone success recovering their wallet by using the seeds from blockchain to Electrum.

Read the whole thread from the link you provided the man who looking for help tried it but the result "No balance".
If you have a blockchain wallet and you want to use other wallets better make a new wallet than using the same seed or private keys and then transfer all funds from Blockchain to other wallet like Electrum.

Electrum is more flexible so it is one of the best option to use.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Quote from: coupable on November 13, 2019, 02:08:24 PM

Quote from: Findingnemo on November 13, 2019, 01:52:43 PM

I guess blockchain.com wallet gives recovery phrase or seeds to users so they can regenerate their exact replica into new wallet if they lost access to original wallet.This seeds also can be used to import their blockchain.com wallet into wallet like electrum using the seeds.

Quote

In the Blockchain wallet, your 12-word recovery phrase is a seed of all the private keys of all the addresses generated within the wallet. This is what allows you to restore access to your funds even if you lose access to your original wallet. Using the recovery phrase will copy over your private keys to a new wallet, essentially creating an exact replica of your original wallet, complete with used addresses and transaction history

The 24 recovery words aren't to use only on blockchain.com wallet? I didn't thought that they can be used in Electrum or ay other wallet.
What does it means "a replica of your original wallet" ?
I have in mind that seed words are related to wallets, it's not related to the private keys which can be used in most wallets , blockchain.com has already this option as a feature. I mean seeds from a wallet can't be used in another wallet, they only help restore the wallet in the same wallet kind.
Am i wrong ?

As I said I am not sure,but after reading How to move from Blockchain.info to Electrum? thread I think yes we can able to import using the recovery seeds on other wallets too.

coupable

hero member

Activity: 2338

Merit: 757

Top-tier crypto casino and sportsbook

Quote from: Findingnemo on November 13, 2019, 01:52:43 PM

I guess blockchain.com wallet gives recovery phrase or seeds to users so they can regenerate their exact replica into new wallet if they lost access to original wallet.This seeds also can be used to import their blockchain.com wallet into wallet like electrum using the seeds.

Quote

In the Blockchain wallet, your 12-word recovery phrase is a seed of all the private keys of all the addresses generated within the wallet. This is what allows you to restore access to your funds even if you lose access to your original wallet. Using the recovery phrase will copy over your private keys to a new wallet, essentially creating an exact replica of your original wallet, complete with used addresses and transaction history

The 24 recovery words aren't to use only on blockchain.com wallet? I didn't thought that they can be used in Electrum or ay other wallet.
What does it means "a replica of your original wallet" ?
I have in mind that seed words are related to wallets, it's not related to the private keys which can be used in most wallets , blockchain.com has already this option as a feature. I mean seeds from a wallet can't be used in another wallet, they only help restore the wallet in the same wallet kind.
Am i wrong ?

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Quote from: coupable on November 13, 2019, 01:28:36 PM

Quote from: o_e_l_e_o on November 13, 2019, 10:23:46 AM

If a web wallet lets you export your seed and your private key, but the wallet provider also has access to that information, then they are still custodial as they can still unilaterally move/transfer/spend/steal your coins, and there is nothing you can do about it.

According to this quote, i want to ask about the example provided in op , blockchain.com . Is it confirmd that this wallet provider has no access to the private keys of my wallet /as a user/ . By visiting the "exchanges" board, majority of topics are about blockchain.com; withdraw problems , fees issues , bad SUPPORT .
In my opinion , if i can use a support service (whatever the matter) in a wallet, then it's not a wallet despite all the garantees.

I guess blockchain.com wallet gives recovery phrase or seeds to users so they can regenerate their exact replica into new wallet if they lost access to original wallet.This seeds also can be used to import their blockchain.com wallet into wallet like electrum using the seeds.

Quote

In the Blockchain wallet, your 12-word recovery phrase is a seed of all the private keys of all the addresses generated within the wallet. This is what allows you to restore access to your funds even if you lose access to your original wallet. Using the recovery phrase will copy over your private keys to a new wallet, essentially creating an exact replica of your original wallet, complete with used addresses and transaction history

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: coupable on November 13, 2019, 01:28:36 PM

Is it confirmd that this wallet provider has no access to the private keys of my wallet /as a user/

Short answer: No, it is not confirmed (as far as I am aware).

Longer answer: Blockchain.com state that although your wallet is backed up to their servers, it is encrypted on your device using your password before it is sent to their servers (https://www.blockchain.com/learning-portal/how-it-works). They also claim they have no access to your password, and so can't decrypted it. If you trust them, then they would have no access to your seed/private keys/coins, but why take that risk? Blockchain.com are hardly a company with a shiny clean reputation, from (as you correctly point out) terrible customer support through to their support for things like XT, Unlimited and S2X. The whole point of bitcoin is to not have to place your trust in third parties, so why do so here?

coupable

hero member

Activity: 2338

Merit: 757

Top-tier crypto casino and sportsbook

Quote from: o_e_l_e_o on November 13, 2019, 10:23:46 AM

If a web wallet lets you export your seed and your private key, but the wallet provider also has access to that information, then they are still custodial as they can still unilaterally move/transfer/spend/steal your coins, and there is nothing you can do about it.

According to this quote, i want to ask about the example provided in op , blockchain.com . Is it confirmd that this wallet provider has no access to the private keys of my wallet /as a user/ . By visiting the "exchanges" board, majority of topics are about blockchain.com; withdraw problems , fees issues , bad SUPPORT .
In my opinion , if i can use a support service (whatever the matter) in a wallet, then it's not a wallet despite all the garantees.

o_e_l_e_o

legendary

Activity: 2268

Merit: 18771

Quote from: RapTarX on November 13, 2019, 08:34:39 AM

Non Custodial: Web Wallet
These wallets give whole control of your wallet to you. You will have a private key, you can import the private key in your desktop wallet. Your funds are holding by the wallet owner of course but they are giving you the power of control. Even if you lose everything other than the private key, you can access your fund. For example- Blockchain.com

I don't agree with your categorization here at all. You say these wallets give "whole control" to you, but then you also say they are holding your coins. Either they are custodial (they have access to your coins) or they aren't (they have no access to your coins). If a web wallet lets you export your seed and your private key, but the wallet provider also has access to that information, then they are still custodial as they can still unilaterally move/transfer/spend/steal your coins, and there is nothing you can do about it.

Non custodial wallets are wallets where you are the only person able to access your coins. All wallets where a third party is holding your coins, can access your seed/keys, or can move/spend your coins without your approval should be avoided at all times.

rosezionjohn

sr. member

Activity: 882

Merit: 301

Quote from: RapTarX on November 13, 2019, 08:34:39 AM

Was reading some replies in this topic,

The same topic I was reminded of when I read the title lol.

Quote from: RapTarX on November 13, 2019, 08:34:39 AM

Browser Based Wallet
These are some sort of application which is compatible with your browser. You will hold the credential like private key/seed key etc. You are the controller of your fund. For example- Metamask.

Maybe a "browser extension" is a more appropriate title but since you provided an example, readers should be able to get it.

Quote from: RapTarX on November 13, 2019, 08:34:39 AM

At the end, I would like to remember one more time- "Not your key, Not your crypto."

Some custodial wallet provider will try to dispute this and say that they are more secure since they can take care of your funds for you and protect it from getting stolen by hackers Cheesy

Lucius

legendary

Activity: 3234

Merit: 5637

Blackjack.fun-Free Raffle-Join&Win $50🎲

Those who want to use cryptocurrency should first try to understand that the concept of "be your own bank" is precisely in not allowing others to manage your assets. Having $100 in your bank account is much safer than having $100 worth of BTC on some custodial wallet, and this is because when someone hacks your bank account, the bank will return money very quickly. In case someone is hack online wallet/exchange you face a complete loss or a long wait for a refund.

Personally, I stopped believing in almost all ways of safekeeping crypto except for specialized devices such as hardware wallets. Of course, some would say why to spend money on something when there is a better way in terms of paper wallets. But security is a very general term, some people think that mobile wallets are a safe way of keeping crypto, others don't believe too much in hardware wallets.

Topic: Custodial vs Non Custodial vs Browser Based Wallet (Read 400 times)