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Author Topic: A simple question about wallets.  (Read 378 times)
Spendulus
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May 30, 2018, 12:38:42 AM
 #1

Much of crypto currency was done by dedicated visionaries, often without a goal of personal gain.

This is true of bitcoin. To the benefit of the world.

But what's with all the wallets? There are hundreds of wallets of various sorts, and with the exception of hardware wallets that are bought, they are all free.

What do the developers get? Why are wallets free?

Consider normal, "typical" android and IOS development. People download "free" apps. Then the developers and marketers steal your data and sell it. It's all about your data. And we all know that.

But what model of development are wallet developers following? That of dedicated shareware developers with no profit in mind? That of the current generation of "steal your private data and give you the app for free?"

What am I missing.
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May 30, 2018, 01:49:17 AM
Merited by DarkStar_ (2), bones261 (1), theyoungmillionaire (1)
 #2

A lot of the more popular wallets (such as Electrum) are open source and developed by people who truly wanted to see Crypto succeed and wanted to improve accessibility and usability. They discovered crypto early, and found a way to build/improve on it. Developers of wallets like these generally have good intentions and just want to better Crypto as a whole.

When a coin dev releases a wallet for their own coin, they want the coin to succeed as they probably hold a significant stake in that said coin.

Other wallets aim to generate revenue for themselves through affiliate links, ads, etc. An example of this is coinami or blockchain.info. They have a built in "currency exchange" feature where you can trade altcoins using shapeshift and/or changelly, and they make a % of the exchange fee.

And finally, yes there are many wallets out their that are scams and/or contain malware aiming to steal your coins. A very recent example of this is ElectrumPro, which was basically a ripoff of Electrum but packaged with malware. This is why its important to use a wallet that is open source and secure.
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May 30, 2018, 02:08:44 AM
 #3

Much of crypto currency was done by dedicated visionaries, often without a goal of personal gain.

This is true of bitcoin. To the benefit of the world.

But what's with all the wallets? There are hundreds of wallets of various sorts, and with the exception of hardware wallets that are bought, they are all free.

What do the developers get? Why are wallets free?

Consider normal, "typical" android and IOS development. People download "free" apps. Then the developers and marketers steal your data and sell it. It's all about your data. And we all know that.

But what model of development are wallet developers following? That of dedicated shareware developers with no profit in mind? That of the current generation of "steal your private data and give you the app for free?"

What am I missing.

Most of the things these days are not free, the price is your privacy.
Your private data, your eyes catching the ads... even this forum, is not that free. Most of us are "working" here, wearing signatures, making posts to expose the ads...

These wallets works the same way.
Let's look at some common wallets, and how they make money:

Blockchain.info - ads
Coinbase - exchange/ads
coinomi android wallet - ads

I made some posts already about this.
How much does an Airdrop cost?
Let's talk about privacy

People really do not care about their privacy. I thought that in the crypto community people would be paranoid about privacy. But most of the users here don't even know what is an adblock....

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May 30, 2018, 02:39:50 AM
 #4

Much of crypto currency was done by dedicated visionaries, often without a goal of personal gain.

This is true of bitcoin. To the benefit of the world.

But what's with all the wallets? There are hundreds of wallets of various sorts, and with the exception of hardware wallets that are bought, they are all free.

What do the developers get? Why are wallets free?

Consider normal, "typical" android and IOS development. People download "free" apps. Then the developers and marketers steal your data and sell it. It's all about your data. And we all know that.

But what model of development are wallet developers following? That of dedicated shareware developers with no profit in mind? That of the current generation of "steal your private data and give you the app for free?"

What am I missing.

Most of the things these days are not free, the price is your privacy.
Your private data, your eyes catching the ads... even this forum, is not that free. Most of us are "working" here, wearing signatures, making posts to expose the ads...

These wallets works the same way.
Let's look at some common wallets, and how they make money:

Blockchain.info - ads
Coinbase - exchange/ads
coinomi android wallet - ads

I made some posts already about this.
How much does an Airdrop cost?
Let's talk about privacy

People really do not care about their privacy. I thought that in the crypto community people would be paranoid about privacy. But most of the users here don't even know what is an adblock....

Ah, one correction.

Coinbase keeps a percentage. Their wallet is a straight business deal and (In my opinion) a good one for all parties.
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May 30, 2018, 02:43:55 AM
 #5

.....coinami or blockchain.info. They have a built in "currency exchange" feature where you can trade altcoins using shapeshift and/or changelly, and they make a % of the exchange fee.

And finally, yes there are many wallets out their that are scams and/or contain malware ....This is why its important to use a wallet that is open source and secure.

1. Yes, apps embed shapeshifter / changelly. This has serious problems, but it is a way to provide a service and keep a small fraction, thus making a profit.

2. This thread is not about "outright scam wallets." Rather it is about the typical wallets that people download and use.
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May 30, 2018, 02:55:12 AM
 #6


1. Yes, apps embed shapeshifter / changelly. This has serious problems, but it is a way to provide a service and keep a small fraction, thus making a profit.

2. This thread is not about "outright scam wallets." Rather it is about the typical wallets that people download and use.

How is it a problem? I would say it's a decent method to monetize their wallet without compromising privacy/security.
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May 30, 2018, 04:19:58 AM
 #7

A lot of the more popular wallets (such as Electrum) are open source and developed by people who truly wanted to see Crypto succeed and wanted to improve accessibility and usability. They discovered crypto early, and found a way to build/improve on it. Developers of wallets like these generally have good intentions and just want to better Crypto as a whole.

When a coin dev releases a wallet for their own coin, they want the coin to succeed as they probably hold a significant stake in that said coin.

Other wallets aim to generate revenue for themselves through affiliate links, ads, etc. An example of this is coinami or blockchain.info. They have a built in "currency exchange" feature where you can trade altcoins using shapeshift and/or changelly, and they make a % of the exchange fee.

And finally, yes there are many wallets out their that are scams and/or contain malware aiming to steal your coins. A very recent example of this is ElectrumPro, which was basically a ripoff of Electrum but packaged with malware. This is why its important to use a wallet that is open source and secure.
Good analysis! I think that you emphasize in general lines with what intention were created the Wallets that we know today.
My attention was drawn to the fact that you pointed out the blockchain.info wallet. Recently, I created a Wallet on the platform and I hope to make good use of it. As a new user I agreed to carry out a survey and I answered it without any concern because I understand due to the series of questions that it was about getting to know the client, improving the product and knowing the client's satisfaction.

Today we are talking about the protection of user data in all scenarios, the topic is trending and there are even several projects that have been working according to the data of the users, taking advantage of the blockchain technology, the innovation, the advancement of technology, as well as solving some problems of today's world and a lot of things.
When we participate in the internet in a public way, anybody can access our data and measure us, create statistics, etc. is my knowledge when we do it public I do not have any knowledge of our private data.
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May 30, 2018, 07:24:50 AM
 #8

Coinbase keeps a percentage. Their wallet is a straight business deal and (In my opinion) a good one for all parties.

I wouldn't call it a 'wallet'.

A wallet describes a piece of software (or hardware) which does manage private-/public- keys for the user and allows to sign transactions/messages.


Coinbase is an exchange. They do offer a 'service' where you can send your BTC to them, which you then can withdraw later.
However, you are not in possession of the private keys, and therefore also not in possession of your BTC funds. They only give you a number in their database which will allow you to withdraw that amount of BTC.
Once coinbase decides your balance is zero, your balance is zero. From that moment on you won't have access to any BTC which have been under your control prior to sending them to coinbase.
It is a company. You are trusting that company to store your money. I'd rather choose a bank, than an online company to store my money..

In my opinion, this is not a wallet. It is a service. But not a wallet.

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May 30, 2018, 08:51:57 AM
 #9

Coinbase keeps a percentage. Their wallet is a straight business deal and (In my opinion) a good one for all parties.

I wouldn't call it a 'wallet'.

A wallet describes a piece of software (or hardware) which does manage private-/public- keys for the user and allows to sign transactions/messages.


Coinbase is an exchange. They do offer a 'service' where you can send your BTC to them, which you then can withdraw later.
However, you are not in possession of the private keys, and therefore also not in possession of your BTC funds. They only give you a number in their database which will allow you to withdraw that amount of BTC.
Once coinbase decides your balance is zero, your balance is zero. From that moment on you won't have access to any BTC which have been under your control prior to sending them to coinbase.
It is a company. You are trusting that company to store your money. I'd rather choose a bank, than an online company to store my money..

In my opinion, this is not a wallet. It is a service. But not a wallet.


Agree 100%
Coinbase is a company, as many others on the market. Use a true private wallet. Trezor for example.
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May 30, 2018, 08:54:12 AM
 #10

To be fair there are a lot of enthusiastic people who has another income and sometimes do things freely.
But also at the same time, some services makes free apps for developing of their own business and making it avaipable for more customers.
But also your question is logical, let's forget wallets, why are web browsers free? For example opera, mozilla and etc. There are a lot of reasons and you can find answers in google, not 100% sure but logical ones.
Key is your data

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May 30, 2018, 10:22:21 AM
 #11

If you're looking for security, a hardware wallet or a wallet that is on an airgapped computer is still the best option. I would only store funds you are okay with losing on web wallets, and using them as hot wallets for everyday use- there's many costs to using web and free wallets, and those that aren't official wallets will be blatantly trying to make a profit off of you. People don't just design wallets not-for-profit most of the time, they make wallets to earn money.

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May 30, 2018, 09:21:29 PM
 #12

Coinbase keeps a percentage. Their wallet is a straight business deal and (In my opinion) a good one for all parties.

I wouldn't call it a 'wallet'.
.....
In my opinion, this is not a wallet. It is a service. But not a wallet.

I'm good with your distinction. At the same time, we could say, "It's clear what Coinbase's business model is."

Now let's go back to various wallets.

It's NOT CLEAR with a fair number of them what their business model is.


1. Yes, apps embed shapeshifter / changelly. This has serious problems, but it is a way to provide a service and keep a small fraction, thus making a profit.

2. This thread is not about "outright scam wallets." Rather it is about the typical wallets that people download and use.

How is it a problem? I would say it's a decent method to monetize their wallet without compromising privacy/security.
Here's the test. Do a transaction from your app which incorporates shapeshift/changelly.

Now tell me the transactions which occurred on the blockchains.

Better, just link and put them here for discussion.
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May 30, 2018, 10:58:29 PM
 #13

I'm good with your distinction. At the same time, we could say, "It's clear what Coinbase's business model is."

Now let's go back to various wallets.

It's NOT CLEAR with a fair number of them what their business model is.

When I look at a company like Blockchain, their approach seems obviously about market share, and more precisely as you point out, customer data. They already monetize advertisement within the wallet, but I think it's more about the long game -- creating a massive database of potential customers with personalized data. They're probably sniffing all the PII they can, too.

Here's the test. Do a transaction from your app which incorporates shapeshift/changelly.

Now tell me the transactions which occurred on the blockchains.

Better, just link and put them here for discussion.

I assume you're referring to privacy issues? Because the customer has given a Shapeshift/Changelly useful starting points for de-anonymization via blockchain analysis. The company now knows your inputs and outputs on various blockchain -- and can now analyze your activity in both directions, past and future.

But these are just private companies, so unless they are honeypots, using this data to deanonymize you should theoretically require warrants.

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May 30, 2018, 11:56:20 PM
 #14

It's NOT CLEAR with a fair number of them what their business model is.
mostly they earn profit from ads, (exchange) affiliate commisions and value added service
Electrum with TrustedCoin charges 0.001BTC/20tx for 2FA feature, I'm not sure if Electrum gets a share of it
the rest, "a fair number of them" as you said, probably still in early phase of development created by bitcoin supporters
once they earn trust and built well-develop wallet, then they would start thinking of a business model

How is it a problem? I would say it's a decent method to monetize their wallet without compromising privacy/security.
Here's the test. Do a transaction from your app which incorporates shapeshift/changelly.

Now tell me the transactions which occurred on the blockchains.

Better, just link and put them here for discussion.
I'm not sure where you going with this, can you explain more?
afaik, using shapeshift doesn't require any identifiable personal data and only from/to addresses for asset exchange
although they are also not protecting (privacy of) their user's transactions and any related data

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May 31, 2018, 07:38:22 AM
 #15

Coinbase keeps a percentage. Their wallet is a straight business deal and (In my opinion) a good one for all parties.

I wouldn't call it a 'wallet'.

A wallet describes a piece of software (or hardware) which does manage private-/public- keys for the user and allows to sign transactions/messages.


Coinbase is an exchange. They do offer a 'service' where you can send your BTC to them, which you then can withdraw later.
However, you are not in possession of the private keys, and therefore also not in possession of your BTC funds. They only give you a number in their database which will allow you to withdraw that amount of BTC.
Once coinbase decides your balance is zero, your balance is zero. From that moment on you won't have access to any BTC which have been under your control prior to sending them to coinbase.
It is a company. You are trusting that company to store your money. I'd rather choose a bank, than an online company to store my money..

In my opinion, this is not a wallet. It is a service. But not a wallet.


Agree 100%
Coinbase is a company, as many others on the market. Use a true private wallet. Trezor for example.

That is the problem, many users are mixing exchanges for wallets and keep there their coins. But that is not their purpose.
And why are wallets for free? I think it's the similar situation like with many mobile applications, a great deal of them are also for free. And the creators have the use of it on other ways.
The whole story with Bitcoin and other cryptocurrencies begun with enthusiasts and with wallets is no different.

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June 03, 2018, 02:36:18 AM
 #16

It's NOT CLEAR with a fair number of them what their business model is.
mostly they earn profit from ads, (exchange) affiliate commisions and value added service
Electrum with TrustedCoin charges 0.001BTC/20tx for 2FA feature, I'm not sure if Electrum gets a share of it
the rest, "a fair number of them" as you said, probably still in early phase of development created by bitcoin supporters
once they earn trust and built well-develop wallet, then they would start thinking of a business model

How is it a problem? I would say it's a decent method to monetize their wallet without compromising privacy/security.
Here's the test. Do a transaction from your app which incorporates shapeshift/changelly.

Now tell me the transactions which occurred on the blockchains.

Better, just link and put them here for discussion.
I'm not sure where you going with this, can you explain more?
afaik, using shapeshift doesn't require any identifiable personal data and only from/to addresses for asset exchange
although they are also not protecting (privacy of) their user's transactions and any related data

You are not sure where I am going with this?

It's a simple question, to show the blockchain transactions.

Otherwise you give value to someone running a click link in an app with zero audit or traceability.

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June 03, 2018, 02:41:42 AM
Last edit: June 03, 2018, 04:05:56 AM by Spendulus
 #17

...
Today we are talking about the protection of user data in all scenarios, the topic is trending and there are even several projects that have been working according to the data of the users, taking advantage of the blockchain technology, the innovation, the advancement of technology, as well as solving some problems of today's world and a lot of things.
When we participate in the internet in a public way, anybody can access our data and measure us, create statistics, etc. is my knowledge when we do it public I do not have any knowledge of our private data.

I have no idea what you said there. I don't care what people are talking about or what topics are trending.

This is a very simple question. There are hundreds of crypto currency wallets available for the various platforms. In many cases they do not show a clear business model.

The lack of a clear business model creates a curiosity.

Why does this exist? Is there a business model that we don't see? What can it be?

For example, one business model could be to gather (for sale) an information list of people with holdings in crypto.

Is the product for sale You?

Is the product for sale the count of your coins?

Or is it undefined what the product might be, such that after development and deployment of a wallet, the start up can be sold to a third party. And what is his motivation?





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June 03, 2018, 12:26:27 PM
 #18

....
These wallets works the same way.
Let's look at some common wallets, and how they make money:

Blockchain.info - ads
Coinbase - exchange/ads
coinomi android wallet - ads

I made some posts already about this.
How much does an Airdrop cost?
Let's talk about privacy
....

These are really good discussions. I am going to merit you for each of them, thanks.
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June 03, 2018, 07:16:08 PM
 #19


Using some wallets i got some experiences inside , with product expertise i think is based on fee when coins arrive and out.

i used FreeWallet.org , Have some "whitelabels" service wallet  ( android) , DogeCoin , USDT ( i cannot found many usdt wallets ), bitcoin and others. High Fees.

And probably that is really profitable, because the base fee is calculated using your money, so if you have a lot of money lot of fee inside.


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June 03, 2018, 07:29:11 PM
Merited by Spendulus (1)
 #20

i used FreeWallet.org
Please don't...

With FreeWallet, you are basically handling your coins to an unknown third-party. They don't even let you "export" your private-keys, so they are literally the only ones in control of your coins. Instead, you access your wallet with a login and password. Basically the same as using Paypal (they can block your account, freeze your funds, run with all the coins or anything else they want to do).

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