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Web Wallets Review

Speaking of wallets, I would like to give you some hints on one of the most types preferred on the market – web wallets. Considered as part of the hot wallets, because of the constant connection with the Internet, these ones are extremely vulnerable to hack attacks. In fact, what’s more interesting is that web wallets possess the highest number of defenses such as security and anonymity features to protect your funds.

What it is and How it works?

These wallets are accessible via Internet browser, that’s why they’re always a light node (requests information from a full-node without storing the blockchain data locally). Most of them are autonomous but others are simply crypto exchanges. In this case scenario, usually your private key is kept by the wallet itself and you don’t have access to it. The wallet is the one responsible to keep it safe. Normally, there’s a central authority, which validate the transactions, so you’re more or less dependent on the web wallet’s conditions. Let me review all that matters for you, starting with the best web wallets:

Wallet Supported coins Pros and cons Pros and cons
BTC Robust security features
Longer set up		 CREATE WALLET
ETH, ETC, EOS, ERC20 tokens  Doesn’t store your private keys
Pushing atacks		 CREATE WALLET
BTC, BCH, ETH, LTC, ETC, ZRX High liquidity
Limited payment methods		 CREATE WALLET

Web Wallets Types

Web wallets are the perfect merge between software wallets and exchanges, because of the nicely established balance of security and convenience. They are accessible from both browsers and mobile apps, which makes them better when compared to desktop wallets. What is an advantage, compared to exchanges is the fact that online wallets don’t store your private key, so you’re less likely to compromise it by yourself. I personally don’t recommend you using the exceptions, which let you have your private credentials.

When it’s up to exchanges, I would say they’re quite unsafe. And even if they give you the possibility to use both fiat and crypto currencies, they stay a tasty bite for hackers. The crypto industry isn’t regulated enough, so scams and phishing are frequently observed issues. Anyway, to buy some cryptos at the beginning you’ll need an exchange, and it will create you an account (wallet). If you’re going to trade small amounts on daily basis feel free to use it but if your aim is to hold crypto in a long-term perspective and save the online based nature, I’ll suggest you to switch into a web wallet.

Security and Privacy features

The following tables will let you get aware with all the details when speaking of security and privacy features, so you can appreciate the web wallets functionality.

Security

SFA vs 2FA

This is an additional layer of security to protect your funds, which request you enter some extra information (PIN, passphrase, SMS, email)

Multi-signature

This feature request more than one person to sign a transaction to get broadcasted in the network, which is avoiding malicious influence.

Encryption

Having this password demand let you secure your funds by entering it each time you would like to access/user your wallet. 

Privacy

HD Wallet

Here the couple keys are generated from a seed, which allows easy backup and restore processes

TOR

Using this feature provides you the opportunity to perform anonymous and hard to track transactions

Mixing

The purpose of mixing transactions is to basically make them untraceable by breaking the link ability

How to Choose a Web Wallet?

I would like to point you some hints on how to choose a web wallet and what to watch out for. Check the following list of good practices:

  • Use and look for two factor-authentication (2FA) when possible. A very overlooked practice, 2FA adds an extra layer of security to the account, making it harder for attackers to hack the account as the information needed for the 2FA is not stored anywhere on any server. Which one offers this? Check for sure CoinBase.
  • Use a strong antivirus software on the computer used to access the exchange and update it regularly. This really can be said about your entire OS and software ecosystem. Make sure they are all up to date with the latest patches and updates to make sure the entire ecosystem is a bit more protected.
  • Use a cold storage wallet as an extension to the web wallet. Consider investing in a hardware wallet, or just any cold storage wallet in that sense. Once you go over a certain amount in the web wallet, “transfer” the money to the cold storage wallet. Some of them are compatible with the Ledger hardware wallet.
  • Do not access you web wallet or funds through public networks such as café and hotel wi-fis. We cannot stress this enough; public networks give a virtual window for attackers to access your machine and data. If you absolutely must use public networks, consider using the TOR network or a VPN service and always check the website is using https protocols when collecting and sending data.
  • Fee control is what attracts some of the users. This is the ability to change the transaction fee, depending on how fast you would like it to be broadcasted. The higher the fee is, the faster it will get an approval. Why is that so? Well, miners receive this fee as reward for confirming transactions, therefore they put in the next block the ones with higher fees to get payed better. An example of wallet, which gives you this opportunity is MyEtherWallet.
  • There’s no ability to back it up here, so always check on your password/PIN code and take care of it. You’re the only one responsible to protect your account. In this relation, always check on the HTTPS – this ‘S” after it and the green padlock mean it’s a secured connection.
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