Why use a web wallet?
Web wallets are the way most people start using Bitcoin. What a lot of people don’t realize though, is that many web wallets can vary widely in how they work and what features they have. Many of the features are hidden from users, or are too difficult to use. Features such as message signing or dynamically generated addresses are considered “best practice” for Bitcoin wallets, but not all wallets offer these options.
What are the advantages/disadvantages?
The biggest advantage of web wallets is that they are easily accessible from practically any web browser. This advantage however may turn into a disadvantage if sensitive data is transmitted across the Internet. A web wallet may depend on an “account” at a wallet provider, or it may be generated securely each time a user visits a web wallet app. Generally keeping as much of the application on the user’s browser is considered best practice.
Not an actual “wallet”?
Some “wallets” are not quite really wallets at all actually! Many Bitcoin exchanges (where you change Bitcoins to dollars or other currencies and back again) offer what “seems” to be a wallet - but it is completely under the control of the exchange. You can’t sign messages, you can’t easily use new addresses, it’s not a real wallet. We here at BitLox heavily recommend that when you use an exchange, you only keep your Bitcoins there for as long as it takes to exchange them to or from another currency.
So where should I keep my Bitcoins?
Your Bitcoins should be kept in a secure web wallet where you control the keys and the security. The wallet provider should keep as little information about you as necessary. Alternatively, for the highest security, you may turn to a dedicated hardware wallet (such as the BitLox) to hold your Bitcoins.
What is short message signing and why does it matter?
Short message signing is where you use the special key you have for sending Bitcoins to “sign” a message - proving you are the rightful owner of a particular Bitcoin address. A full-featured web wallet will enable you to sign free-form messages so as to PROVE you are the person in control of an address. This feature brings the highest security when used by third party sites to verify an address for sending funds to. If this feature is used, no-one can steal your funds by redirecting them to an unauthorized address.
What are the advantages of our approach?
With the BitLox™ Web Wallet, you get the best of all worlds.
You get ease of use, browser-centric security, portability, control and compatibility that you need. A full-featured wallet that lets you do what you need to do when you need to do it.