Distinction Between Decentralized (Open Source) and Centralized Wallets, Why You Need Bitcoin OX

Distinction Between Decentralized (Open Source) and Centralized Wallets, Why You Need Bitcoin OX

A cryptocurrency wallet literally means a place you can store your digital assets. Just like you would need a bank account in storing your regular cash, the wallets provide a means to store your cryptocurrency.  Wallets are therefore indispensable when using cryptocurrency.

That said, cryptocurrency wallets have to be sophisticated and secure because the digital nature and value of cryptocurrency makes storage a key priority.

Wallets come in different specifications depending on user needs. One structural way to classify cryptocurrency wallets is whether a wallet is centralized or decentralized.

Decentralized or Open Source Wallets

Decentralization is essentially a structural aspect whereby an entity does not have a supervening centralized authority to micromanage operations. Accordingly, decentralized wallets are those whose source codes are open to the public. The public can, therefore, scrutinize this source code from their end.

Open source technology is a really fundamental part of cryptocurrency in general and has brought forth advantages like:

  • Immutability- You cannot interfere with open source technology as an external third party.
  • Transparency
  • Security

The only disadvantage is that the open source nature can be an invitation for hackers to manipulate the code and use it for fraudulent purposes. However, in more recent open- source wallets this is harder and harder to conduct.

Examples of Open source wallets are:

1. Copay

Copay is a leading open source wallet that promises convenient storage. Users can benefit from complete control over their activities and deploy control over the server.

You assume control over the security of your bitcoin instead of trusting unreliable third parties. It is an HD wallet that was specifically designed to secure BitPay funds. Moreover, the wallet supports multiple signatories and in the process multiple, separate wallets within the same application. There is an option for a BWS node for those who need to enhance their security.

2. Bitcoin OX

Bitcoin OX is a new entrant into this market but promises to be a game changer. This wallet comes with the promise of being the world’s powerful blockchain wallet. And it is true. The wallet is completely multi-lingual, supports Bitcoin, Bitcoin Cash and Litecoin–coins which we can say are pioneers in this burgeoning space.

Besides, you don’t have to subscribe to anything. The wallet is free as it comes. As space grows and demand increase, the wallet developers–Excdev, plan to offer support for all ERC 20 tokens, Bitcoin Gold, Bitcoin Cash SV, Ethereum (ETH) and Ethereum Classic (ETH). Apart from that, in the future, users will able to buy supported assets straight from their approved bank accounts and other payment gateways. It’s only through this that users would choose their fiat rate source.

Features

  • Bitcoin Ox offers full access to xpub, xpriv, seed, and addresses. This variety boosts your operational capabilities making life easier.
  • Easy to use compete with fiat currency conversion rates saving you time.
  • Supports Bitcoin Improvement Proposal (BIP) 39 for Mnemonic code. This means the wallet is compatible, Heuristic Deterministic and you can easily recover your wallet thanks to the passphrases which you can back up.
  • There is QR support meaning you can easily send or receive payments without copy pasting or manually writing addresses.
  • Excellent support which includes multilingual capabilities. Add that to their track spending feature from a watch-only account and supervision has been simplified.
  • You can support multi-crypto wallets using one or multiple seeds without hustle.
  • The company is planning to release a convenient user app that will have the benefit of convenience for a user.
  • Supports GAP limits suitable for big wallets

3. MyEtherWallet

MyEtherWallet is a popular Ethereum wallet that operates under the open source MIT license. This is a completely online wallet that allows you to participate in Ethereum blockchain activities confidently and securely. Aside from allowing one to generate wallets and view smart contracts, it has proven to be very versatile with all Ethereum tokens. However, with the operation being mostly online, there is a marginal security risk when using this wallet. Nonetheless, it is very convenient.

4. Electrum

Electrum is a Bitcoin wallet that conveniently balances the beginner user-friendliness and expert control over your wallet. The open source Bitcoin wallet operates under the MIT License. The wallet is great because you can encrypt your private keys locally. It also supports cold storage and provides multi-signature capabilities with minimal resource usage on your machine. Electrum is compatible with most operating systems and devices, including Windows, MacOS, Android, iOS, and Linux, and hardware wallets such as Trezor.

 

Centralized Wallets

Centralized wallets are simply the non-open source wallets. The source code is not open to the public as would be the case for open source wallets. Centralized wallets are typically more secure but offer less versatility that open source wallets. The following are some significant open-source wallets.

1. Ledger Nano S

Ledger Nano S is a consensus pick for most cryptocurrency enthusiasts. This USB sized hardware wallet may be relatively pricey at about $95. That said, it comes with almost unparalleled security and private key backup.

Notably, the wallet has a small LCD screen meaning you don’t necessarily need a computer to use it. The screen allows conducting functions like transaction and exchange of your digital currency. Once unplugged from a computer, the wallet is literally impossible to hack.

Notable features

  • Multi-currency support: Ledger Nano-S supports most popular cryptocurrencies giving an investor convenience. Moreover, you can store different currencies at once.
  • Display screen-The LCD screen allows you to physically visualize transactions for confirmation and verification purposes.
  • User-friendly- This hardware wallet may be small for convenience but is still easy to operate. There are buttons on the device as well to ease operation.
  • Security-Security is the hallmark of cold wallets and Ledger Nano does not disappoint. A distinctive feature is an option of locking your wallet with a customized pin code.
  • Back Up- Recovery when using Ledger Nano S is very efficient as it comes with a recovery sheet to facilitate the process.

2. Exodus

Exodus is probably the most prominent Desktop wallet having curved a niche among competitors since the launch in 2016. The wallet stores cryptocurrency on your desktop and has reasonable security measures. However, it is not fool-proof and makes up for its security shortcomings with unparalleled user-friendliness.

  • Exodus has a versatile design which is its main attraction.  The coin provides access to simple yet informative charts as well as cool personalization features.
  • Access the most popular cryptocurrencies and complete control over your crypto-assets.
  • Fully compatible with a notable cryptocurrency exchange called shapeshift.

3. Mycelium

Mycelium is a mobile-only Bitcoin wallet, with Android and iPhone versions available. Mycelium is known for being a bit more complicated to use than some other Bitcoin wallets. But advanced users should be just fine navigating the experience.

The wallet offers the convenience of portability in that you can walk around with your wallet instead of having it on a desktop only. This is great because mobile phones are a really crucial part of our lives in the 21st century. However, you should not expect the level of security that Ledger Nano S offers. Nonetheless, it is a convenient tool for small scale traders in particular who conduct transactions on their mobile devices.

Why Bitcoin OX is superior and a cut above the rest

  1. The full access to xpub, xpriv, seed, and addresses boosts your operational capabilities making wallet operation more transparent.
  2. Easy to use compete with fiat currency conversion rates saving you time.
  3. Supports Bitcoin Improvement Proposal (BIP) 39 for Mnemonic code. This means the wallet is compatible, Heuristic Deterministic and you can easily recover your wallet thanks to the passphrases which you can back up.
  4. Excellent support which includes multilingual capabilities. Add that to their track spending feature from a watch-only account and supervision has been simplified.
  5. You can support multi-crypto wallets using one or multiple seeds without hustle.
  6. The company is planning to release a convenient user app that will have the benefit of convenience for a user.

Bitcoin OX also enjoys the advantage of being new. This means that it incorporates the advantages of previous open source wallets while making improvements on the shortcomings.

Conclusion

Cryptocurrency wallets are diverse in specification and features. These are the crème of the crop and contain a lot that an ordinary user or investor would need. For long term permanent storage, centralized wallets like Ledger take the prize. However, for convenient use, an open source wallet like Bitcoin OX is as good as it gets.  All in all, this list should have you covered.

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