Topic: How wallets make money? It is worse than you think. (Read 828 times)

I also thought of that they make profit from their internal exchange and their transaction fees, but asking developers to maintain their listing is something new to me, they can do that on low level coin but not on coins like Bitcoin and Ethereum and some of the top coins I will never think of using a wallet not supporting popular and top coins in the market, imagine getting a multi wallet wallet without Ethereum there.

i guess we now have the answer to the question "why is Coinomi closed source?".
they keep fooling people by giving an unacceptable answer as "it is to prevent malicious looking copies pop up", but it seems like it is because they don't want others to just fork their wallet and add their own coin easily which is pretty simple considering majority of altcoins are copies of another coin!
basically this is their revenue and they are protecting it by keeping the wallet closed source. there is of course other shady behavior from them in the past that has made the wallet a "must avoid".

That is not how any business work, and there are ethical problems here. As gentlemand said, how services are funded is something we all should take more time to ponder.

Especially in the web, where everything *looks* free.

How is your email provider funded? Does is just read your emails and sell this that to companies advertise you?
How does your social media network makes money?

And finally, How does your wallet makes money? Asking money to support projects which it doesn't see any reason to, just to make money and make its users invest in them?

I guess part of my question would be why 2BTC now and for how long is that good for?
Is their daemon is sucking up 10x the resources of other coin daemons and the 2BTC is just an excuse to boot them.
Or was there some deal of we give you "X" BTX worth "Y" but the value crashed so much that it made it not worth it?
Did coinomi just get greedy?

We know part of the story, without knowing all of it it's just a guess.

-Dave

Quite a few shitfork Electrums turned out to be malware. Which is why wallets like this probably can get what they want most of the time. An unknown wallet is a pretty pungent and potent thing. I can see why most don't want anything to do with them, including me.

exactly and there is nothing wrong in that. they first worked by their own. built the product. established it and even listed so many coins with their own funds. and now when they have some demand in market they are charging money for new coin  integrations. this is normal and common. there is nothing ethically wrong in this.
and I've used coinomi. that is a very nice and secure wallet and very smooth too.
I used it for BTC. ethereum , USDT and some other Ethereum tokens. I did sending and receiving both and all worked perfect.

I had chat with one of coinomi guys, they were self funded at first and as they got established they started charging for integrations. I mean that's how any business works.

Is there any guarantee that the wallet would last for long if it's open-sourced?

Since the whole project might be voluntary worked and the one that could makes them keep working , kepp updating the wallet is money, i can't see any guarantee an open-sourced wallet could survive for long time enough. That's why there must be something to gain , listing fee is just one of them but for reasonable one asking 2btc for just a maintenance reason is way too much, they are not an exchange though.

My main concern when using Electrum Forks is security. The fork Electrum for the fork might be a scam just to steal someone's private keys. It is important to double check everything when claiming forked coins.

It is very handy to have a wallet that can be somewhat trusted (like coinomi) to claim forks.

Coinomi may not be as safe and trusted as ledger/trezor, but they are not stealing my private keys. A random electrum fork might.

If the coin's team is concerned about it they could relatively easily implement a light wallet... someone mentioned Electrum forks, that's what I used for some shitforks where available.

And if the team doesn't care then the coin deserves to die. I can't imagine a better market-based solution to the shitcoining situation. It doesn't make coinomi's actions any less sleazy but they're not really the root of the problem.

Forks are good as long as you claim them and exchange them to btc as fast as you can.
Btg, btw,btd,bca,etc are all worthless now.
But as soon as thet were released you could get around 0.1BTC for each btc (if you collected them all)

So coinomi was a pretty handy wallet for those users who had bitcoin before 2017

All the shitforks I had in Coinomi including Bitcore are now goners. It offers the private key to extract. That didn't seem to take very long. I can imagine this is going to happen time and again.

I had even more shitforks on Bitpie/Bither and they dropped tons with no notice at all. Events like this may well spell the effective end for stuff like this. No one is going to bother with 10-20 unknown core wallets apart from a handful of freaks. The only alternative is an exchange and they're just as likely to kill them off. 

I have basically gone through your explanation op and its nice to understand this from a clear definition you gave, I have always thought of that but I never come to a clear conclusion about wallet profit and its maintenance costs.

But similarly, I'm curious about some wallet that do not support altcoin but only the first mover advantage coin like bitcoin, in your explanation you mentioned bitcore and that's altcoin on coinomi right?, let's take an example of Bitamp wallet that support only bitcoin, should it be the same that, bitcoin is paying Bitamp some fee? I doubt if they could do such, aren't they getting their income from withdrawal fee? Let me understand this scenario please.

Exchanges and custodial wallet do that way since they send in bulk and not for non-custodial wallet such coinomi.

What I thought of is that they are adding a bit of satoshis where they get profit through marking up the fees that we pay for using them. I don't see any other source of revenue for them except the listing fee that they are taking from altcoin developers who are supporting. But thanks for that clarity.

I forgot about donations as I thought this only happens for most projects that really don't have a source to make to sustain the service. But in coinomi, what I've really thought of is the fees but it's all clear to me now as they have another source for generating revenue. I think the commission they get through changelly and coinswitch is kind of decent.

That was a typo. My auto correct in the phone did that. lol
I edited the post. There is no sense in having a wallet just for bitcore (or any other fork)

You'd probably be better off doing that. I can well imagine people will downgrade the security and competence of their wallet to accommodate shitcoins and stick the BTC in there as well for convenience.

The best Bitcoin wallets have been around for much longer and have many more eyes on them than much of the multi stuff out there.

Of course the coin will get more reputation if it is available on reputed wallets.Coins created from nowhere and got the value from the fund raising and they allocate certain amount for the development so they have to spend them for the needs like these.

IMO people who holds huge amount of bitcoin will go for paper wallet or at least hardware wallets and all other other HD wallet users are moderate holders, their portfolio value be in thousands only.

Without a good wallet to support, the altcoin will probably lose more value.
Who wants to download a wallet just for bitcoinbitcore, for example? Having coinomi support is quite handy and make your coin more popular and easier to hold

If wallet take extra charge than fee then people won't be really using it so donations are the only possible way to make money for them or they can integrate with exchange to make money like blockchain but not much people trusting those kind of wallets as well. To list a shit coin I won't mind the listing fee because they are also paying the fee for getting listed into the exchanges so the same rule followed to list on the wallet as well.

Probably I rushed a bit to this conclusion, I'm not dealing with tokens that much and even less with the mechanism behind them, but I still believe that if a token would come with innovative features that would require lots of work it would also be an attractive project and due to demand or at least hype they would have to offer support even without pay. That being said, yeah, it was a shot in the dark, and maybe I'm underestimating the resources needed by a wide margin.


Yeah, it was a pretty good advertisement, we support all shitforks, they used those as an advertisement when it was cheaper to do so, not that they don't have anything to gain from advertising they support bitcoinxxlmegaalfa they are demanding money, one side I understand them, nothing is free, but I can't shake the feeling that looking from the moral point of view its nor really the same. This tactic reminds me somewhat of exchanges that support no name coins because they would be the only ones where bounty hunters can go and exchange their new coins and thus gaining a bit of traffic, volume, coins, enough .....to get hacked! At least with coinomi that's not possible.


Didn't knew that, hmm, makes me even less anxious to try it out.

Coinomi also receive revenue from ads inside the wallet.
I don't know if that is enough...

About open source. I don't know any multicurrency wallet which is open source. This is a problem already mentioned a few times. This could a good opportunity for coinomi.

So you mean that the developer will not care about the earning as a developer?

I guess custodial wallet will most likely depend on the fees earning on the fees and also the fees when you are swapping your bitcoin into altcoins. But if only for donations, I dont know if there is someone willing to donate, even me, I didn't experience donating into developers of wallet because I thought they had already gain profit by collecting the fees.

If so, developers from open-source wallet will I guess amke their own wallet once they are expert on this.

I thought that most wallets make through the fee for each transaction. They will put a small mark up with the transaction fees and that's it. I didn't know that they're asking the same thing just as the exchanges to keep a coin listed and supported.

2 BTC for the example of Bitcore to be maintained. That's quite a lot for a fee and it's not that actually far from the fee that other exchanges are asking, of course except Binance and other the same tier exchanges.

I'm not sure about that. IIRC, there are different set of questions if you choose tokens on ethereum or tokens on other blockchains. Under ethereum, they also ask if you made changes to 'this or that' code. I guess it would require them more work if token devs made more tweaks.

Yeah it was a clever bait-and-switch scheme. Other than that it's not even a good wallet... clunky to use, leaks memory. Get whatever the reference wallet is for your coin and don't bother with these multi-coin traps.

OTOH, if an honest developer wanted to implement a multi-coin wallet they don't really need to run their own nodes. Publish the API spec and have the coin developers provide the backend.

Certainly. Specially in the internet, where we are usually the product.


It is interesting that all bitcoin forks were almsot instantly supported, because everyone was after them.
Then, we there are not more forks, they start asking for money to keep supporting.

The software probably needs an update to continue to be secure. And that costs money...

The whole problem is mostly related to the fact that those coins have no value. Most of those coins are unsustainable, they have no use, no value, nothing. Just a pump and dump project.

Security of third party software is also an important aspect of those projects. Many people jsut go throwing money in those different cryptocurrencies, but there are many things at risk. More than it looks like at first glance. Are wallets giving proper updates to the software? Is it secure to use all those softwares for shitcoins?

Each day i am more convinced that Bitcoin is way safer.

I assume some wallets are hoping to be bought out. There'll come a time where their market lead can't be beaten. Others may extort shitcoin communities like Coinomi are doing here. Others may simply choose to con their users like Mycelium and their token sale what paid for their holiday to Spain and was never heard from again.

It's definitely a curious area.

The first thing I thought when I read about this, how do others manage, especially the ones which support way fewer coins and electrum is probably the best example, they even don't have a donation address listed on the website, or I can't find it which is almost the same.


Uff, this is like telling people to put larger sums there to even get a response. tokens are all the same, they don't need extra work, they should come with the same price for everyone, not negotiate bases on how much they can squeeze out of a project.
But, it's their product, they are free to set up the rules and the developers that are creating coins should also understand that nobody can be forced to deal with their coins for free, definitely not the best way of getting things done but that's how things are.


Probably they would ask for some monthly maintenance fee at most, demanding again sums like that just for running some nodes and a platform would be a bit too greedy and it will not look good for them either, would look more like extortion.

That makes me dislike Coinomi rather intensely. They'll have many users who don't bother to check or update all that often and that leaves them in the lurch.

I get that it costs them money in labour but ransom demands are not cool.

How these things are funded is something people should take more time to ponder. It wouldn't take much for a developer to throw in the towel and be bought out by an asshole. Most people just mindlessly update forever and don't conceive of there being another actual human somewhere in charge of it who's as fallible as they are.

Don't really follow either project. I have used Trust wallet as a multi currency wallet - obviously doesn't support a crazy amount. Sidebar it was to use an erc-20 token our local meetup group created as a training tool for newbies, and downloaded atomic at some point to look it over. They just aren't my cup of tea, I prefer a project specific wallet for all my holdings.

My thoughts are this is a bit of a greasy move. It shows that their business doesn't have a clear plan to cover operational costs, and could be problematic in the future. Does this 2BTC amount cover the cost of keeping the coin supported indefinitely?? If not how long before they come looking again.

I could also completely understand them delivering this as an ultimatum where they state clearly how long this buys support for, and/or saying raise the funds or expect to be unsupported as of this date.

Forgive the ignorance as I see in the ANN for BTX there are several wallet options out there. So I would likely just move on, but I'm not sure how many of them are in a similar situation to coinomi. I would be much more open to a wallet project such as this coming with a one-time fee or something similar, upon first deposit. Nothing crazy something like 25/50 cents to ensure they don't essentially have to extort funds out of users in the future.

AFAIK, they only earned from donations not directly on the wallet fees of course.

Open-source wallet devs aren't seeking for money, yes, that is, believe me, or not they are enjoying what they have done. Since it is open-source, nobody forcing them to get paid, and that what they like. It seems like, the benefits of being an open-source developer are experienced what they got especially working software that a lot of good developers. That's why professional developers would like to work their own way not just for economical compensation.

For the non open-source wallet, basically, they just run their service for generating profit through the transaction fees.

I think there's no other option for them to earn money, do they? I can't think any alternative ways of making money. What about electrum, I think they have no ways of earning, right? I don't know how much donation they get though.
This makes me to think that, what about some shitcoins being listed in some popular gambling sites? Are they paid too? Or are they have been implemented due to user demand? I doubt though.

Some software are open-sourced which is a software's source codes are published and everyone can contribute or modify by their own or add some features within software.
So, some of the famous Bitcoin or cryptocurrency wallets are open-sourced and this is also one of wallets I want to use and I advising for some people to use since for sure, since the code is public and if the developer may tried to put some feature or part that will the user's fund on wallet may be in danger, some people may find it.
But does not mean all open-sourced software or wallet are totally safe.

This is my first time to hear that some wallets are also collecting a money for some cryptocurrency founders/owners to get listed their coin in such cryptocurrency wallet. I only thought it is happening only in some exchanges.
It's kinda fishy, I also don't think Coinomi is doing this kind of way to get some cryptocurrency will be listed on their wallet.
I also already tried to use Coinomi before when I am starting to learn cryptocurrencies.

I believe it was initially listed for free, just like all bitcoin forks. It is very handy for a wallet to get a quickly bitcoin fork support. This is how people get to know many wallets.


Because everyone would just move to another wallet, unless it can do something more than just receiving and sending coins.

I think first of all certain software developers must deserve to be the leaders and gain our attention in a positive way. For a while, they should offer their software without any charge to gain attention and customers. After that, for further development, they can ask for subscription service. Most softwares come with trials, such thing can be applied to cryptocurrency wallet softwares. Pay for your license and get their service. This will help them to collect funds, get profit, hire good developers and grow company with it's product(s). Idk why no one does that, they could also charge from transaction fees but idk how is that possible for crypto wallets since users are able to use them offline too.

I don't see a problem of pay a fee to be supported on a wallet, every new coin/token integration has a high cost to implement and keep updated.
Of course... This "fee" isn't the only factor in deciding whether such a coin/token will be listed or not.
It's necessary to thoroughly evaluate the project before, even because the listing of a Scam could greatly affect the reputation of a wallet.

But this information could be more transparent to users.

Thanks for the coin listing request link @BitMaxz

I also tried to submit using random information and yes there is an integration fee. Since it's stated that low fees won't get a feedback, I guess coin devs must put a higher bid to be prioritized 

^ Please note that integration fees come before asking if it's a coin or a token.

About the pricing, I guess it's the engineers. They will estimate based on the coin details and descriptions provided by devs.

For token that not listed on Coinomi, you can add it manually without payment but for coins, it seems it needs payment before the coin listed on their wallet.

Look at this https://www.coinomi.com/en/listing/request/
It's confidential and no pricing after trying to request to add a coin. Coinomi might be ask for a payment or donation before they add the asset to their wallet.

Look at this found on their form request
"Please answer all the questions so our engineers can estimate the effort needed to integrate your coin into Coinomi"

So the engineer is responsible for coin listing and pricing and might be also for maintenance fees?

I've been using Coinomi for quite a long time now and it actually crossed my mind how they are able to maintain all the coins they support before. I thought they're living off donations just like other wallets.

In the case of Bitcore, did Coinomi listed them for free at first and only asked for maintenance fees later?

This might be an unpopular opinion but I don't like what's happening here. Coinomi probably know there's a good number of BTX deposits/withdrawals in their wallet and they're trying to leverage that (just my assumption). I also agree what @dothebeats that dev team should have their own working wallet. They won't need to raise funds anymore and pay another wallet.

Bitcore was a successful coin in the past but for a long time the price went deep down and never got recovered from it so we can't consider it as really a good project.Asking donations is okay but demanding money from the team to listed is not really ethical and no good project will ever do that as you said.

I guess at some point, people will know that wallet providers also need some money for upkeep and upgrade, unless some truly dedicated developers and operators fund the project for free out of their own pockets which rarely happens. Generally, what wallet providers are doing is software development on-demand, which IMO is nothing wrong considering that they are the ones providing the coins some platform to work with and a framework to hang on to. However, coin developers should provide a working and usable wallet for their own coin, and third-party apps should come in second and is just an option for consumers to use. If the coin devs cannot create a stable, working wallet software for their own coin, best to leave it and just look for others out there.

Multi-coin wallets like Coinomi really provide ease of access to a number of coins that a user might be holding at the same time. It's natural for them to ask for something to allocate resources for a coin that has relatively low-demand on their platform. I don't see it being unethical, but rather just a business doing their thing.

I use very few wallets (about 4 now)

I have tried, in all my life, about 20-30 different wallets.

Wallets are a sensitive software. You are trusting the developer that he made his job, otherwise you will lose your funds just like this  guy.

Therefore, it is very important that you use good software, such as Electrum. But when it comes to multicurrency wallets, we don't have so many good options.
I have lost funds already due to bad coding. I was able to talk to the "CEO" of the wallet and he refunded me.. but it was a terrible experience.

So, it is crucial that those service providers make money, so they can pay for that good code we are going to use.

Today, while navigating in the forum i saw this:



Just like exchanges, wallets are charging money to keep the coin "listed".
I didn't know this was happening.

This made me think about a few things:

A project that pays to get listed in exchanges and supported by wallets is worth my money?
Now I am very curious about which coins are paying to be supported to the most used wallets.
I believe that a good project would never pay to get listed in an exchange, or pay to get supported in a wallet. The exchanges/wallet should reach the project, not the other way around.

I know wallets can't live on donations, except a few ones like electrum, bitcoin core, etc. Maybe supporting low quality coins is a way to keep the software good. But is it ethical?
We have tons of dead/scams/ponzi projects out there. Isn't this kind of attitude (pay me and I will keep your coin supported) going to feed this vicious cycle we are in crypto?

---

Bitcore and Coinomi are two project which I like. I really like coinomi, it is an amazing wallet IMO (for its purposes). It is not a long term storage, but a short term mobile wallet, which supports basically anything.
I have nothing against bitcore as well, as it is a bitcoin fork which never pretended to be the "true bitcoin", and always made it clear it was a different proposal.