Bitcoin Forum

 

The golden rule will always be to have full ownership of your private key. The centralized service should never know what your private key is, even if they operate like Blockchain.info. I think most

people would opt for decentralization over centralization. The best option will always be for you to not make use of any service, but to handle your own Bitcoin affairs, but for convenience people opt

for extra services which is normally not associated or applicable with decentralized options.  ::)

The line between decentralised and centralised wallets is blurred. Electrum lets you keep your private key but connects to the Bitcoin network through one of a limited number of servers. Blockchain.info lets you keep your private key but you must access the Bitcoin network through its website. Coinbase is fully centralised because you don't know your private key, but Electrum and Blockchain.info are partly centralised.

How is electrum centralised when your private keys never leave your pc and you can do what ever you like with your coins. The only thing electrum needs is an internet connection. Centralized mean some central supreme authority watching over you and making decisions for you, decentralized mean no central authority, you are free to do what you like, thats the big difference between Electrum and Coinbase which don't let you know your private keys.

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Electrum's wallet connects to the Bitcoin network through one of a number of servers. One of those servers is what relays all your transactions to the Bitcoin network. You have to trust the server isn't malicious. If it's malicious your Bitcoins are less secure. With the full Bitcoin core wallet it doesn't matter if your wallet connects to a malicious node because it connects to multiple nodes at the same time, and ignores any malicious one.

I will prefer decentralized wallet as we are the masters of the wallet and we have all the control over our wallets, but that isn't the case with centralized wallets as anytime they can run off with our bitcoins and can make any excuse.

Wow this info is helpful and informativ ,  i will choose between this is decentralized wallets .i am also using this mycelium wallet to have my full access and my private keys are kept .but i'm also using centralized wallet to exchange and buy .

I have the bulk of my holdings on paper wallets but also have some that I use for transactions on blockchain.info for convenience

So are you suggesting me to switch to Bitcoin Core, I can install it in my laptop as in my PC I don't  have that much space left. Is Bitcoin core more secure than electrum, if thats the case I am giving it a try, hopefully it will run on Linux.

You can enable pruning in Bitcoin Core as well, then 5 GB HDD storage is enought. But the synchronizing might take long anyway, depending how fast your computer and internet connection is. Electrum advantage is it is instaneous, no long synchronizing necessary, but one of the electrum disadvantage is all your Bitcoin addresses are know to the electrum server where you connect to query your Bitcoin ballance.

This is not entirely true as all that a malicious electrum server can really do is prevent you from spending your coins (via electrum), spy on you and tell you that you have a 0/unconfirmed transaction that has not been sent to the rest of the network.

Also not entirely true as if a malicious entity is able to connect to your node multiple times then your node might not be able to detect that they are connected to a malicious node and would not know to ignore it.

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This answer does not apply to me personally, however I do think it applies to many Bitcoin users, as well as an even higher percentage of potential Bitcoin users - I think that many people do not possess the technical abilities to keep their private keys both secure and properly backed up and I envision that many people will use online wallets like coinbase (how it is setup currently) to protect their money and facilitate the spending of their money. There has been a lot of money both lost and stolen by/from people who were the victims of bitcoin stealing malware, hacking, and poor backups.

def a decentralised wallet  ;)

of course a decentralized wallet is the best for me, to be honest the main thing why bitcoin is so popular and everyone likes it is that the currency is decentralized and that its easy to use

for me centralized wallet is nearly the same as just an ordinary bank account that has no benefits that bitcoin has, if i have a chance i always avoid centralized wallets and not use them

We've seen a bunch of times what happens when you got coins in centralized wallets. Even if the company doesn't go bust, they might shut you down anyway for breaking some rule you never read. I'd prefer to control my coins and use the centralized guys when I have to even if takes a little longer.

Consensus seems to be a decentralized wallet such as bitcoin core or (debatably) electrum.

I myself consider exchanges themselves to be centralized wallets and treat them as such. That's why when Cryptsy fell to ruin I was understandably furious but not SOL, because I kept the vast majority of my coins in a private wallet on my offline laptop that has one use and one use only, to keep my coins safe.

I wish every bitcoiner would know that any coin that sits in a wallet they don't have the private key to isn't their coin.

It just isn't. If (when) that centralized service provider goes dark, there is nothing you can do. Because everything you could have done and should have done is the only protection you have. Keeping just a small fraction of your coins in an exchange when you want to trade them is a calculable risk, but the services offered by these exchanges are too incredible to resist for the average user. They see the exchange as reliable and don't hesitate to hand their coins over to the exchange, wide-eyed as they read the features list, until wham.

Their coins are gone. R.I.P.

Shoulda/coulda/woulda kept them cold.

Actually I never heard about wallet company being hacked and bitcoin stolen as a result. But I've seen many exchanges robbed (MtGox, Cryptsy, BTC-e (long time ago), and most recently Gatecoin)
I know some wallet companies went out of business tho, but I don't know if people lost coins in the process.

Anyone can confirm any cases of failed online wallets?

There was that tradefortress guy who was running a wallet and claimed to be hacked. 4000 bitcoins gone.

No, I'm saying weigh up the advantages and disadvantages of all available wallets and pick the ones most suited to your requirements. Bitcoin core needs an 80GB blockchain download and a long time to sync before you can use it. Electrum is fairly secure, just not as secure as Bitcoin core. However, you can use Electrum immediately after installing it, and it's light on CPU use, unlike core.



Also, Quickseller made some good points that my view of Electrum might not be entirely right.

Use both, one for ease of use, and another for storage. I always have btc scattered in various places in small amounts, but the main balance is still
on good old core client where im certain it will stay and where i have only access.

Would never trust third party to hold my funds in large sums, we have all seen what can happen if you do.

Both of them has a different usefulness, try to use all and you can take all of the advantages from the centralized or decentralized wallet. Good thinking.

Finally, it's not a big problem if a centralized or decentralized wallet as long as your bitcoin is safe and you can easy to manage them.

Decentralized wallet is better actually because we have the private key, we are the controller. but I don't use it honestly.
I use blockchain, I have the private key, and there is service, so between centralized and decentralized wallet.

both of these wallets have their benefits and maybe some cons also.
for example using a decentralized wallet like coinbase or xapo lets you gather dust as much as you wish without worrying about crowding your wallet and paying high fees afterwards. but the problems is the trust and the fact that they can block your account as they wish.

For Bitcoin to go mainstream we need both, because people's preferences differ from each other. Most people are already used to 3rd parties handling the risk for them, and they are willing to pay the price for that, but you get other people < control freaks like myself > who wants to do everything on their own. We cannot simply use one option to cater for everyone's needs. ^smile^

For me its depend i use decentralized wallet if im earning bitcoin but if i need to secure it or i need the full access of my bitcoin funds i need to transfer all of my bitcoin in decentralized because here i have the security of my account in centralized i have also but the point is how if centralized wallet close their site. But now im earning only few bitcoin i risk my earning in centralized.

Yeah that's the problem i think if you choose centralized wallet if the sites or the server wallet is down all users of the wallet will be affected unlike decentralized here you can relay here

 https://qph.is.quoracdn.net/main-qimg-96e44acdfb042da91ea3dbcb6f5ec430?convert_to_webp=true

For everyday use (i.e. low BTC amounts) I think is necessary to use easy syncing wallets. I can't always run bitcoin core when I'm out. Not considering cold storage and such.
So I would happily use bitcoin core everyday but for my funds security it is better to divide my btc into more parts.

the golden rule is simple.
long term savings: keep on your own personal private key.

daily spend: use a service that makes it convenient for you.

As of 2017, which decentralized wallet do you advice now ?
Thank you for any advice !

i will always go for the decentralized wallet.
having a full control of your keys will always be more secured as compared when someone has them for you.
and i have already heard a lot of stories about accounts being stolen or coins stolen on a centralized wallets...
better be sure than sorry..
:D