The open-source approach has been respected and widely utilised by programmers all across the world. It entails useful content, information, and tools from the users, by the users. Given that cryptocurrencies are tech-based, it was only a matter of time before an open-source crypto wallet became a thing of reality.
Let’s discover more about crypto wallets and the basics of an open-source Bitcoin wallet.
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What Does a BTC Wallet Do?
Even if you’re not in the world of crypto investment, you’ve probably heard about Bitcoin wallets. To understand how their open-source versions work, let’s get the basics of regular BTC wallets out of the way.
At its core, a Bitcoin wallet is an address on the BTC network which works based on private and public keys. The user who has Bitcoin uses their private key (unique to the user) to authorise sending the cryptocurrency to someone else’s wallet.
These can be in software and hardware form and are based on safely storing the user’s Bitcoin. The former is either a downloadable app/browser extension, while the latter is in physical form (usually a USB-based device).
The Open-Source BTC Wallet
This wallet type is based on typical BTC wallets, only it’s open to public modification and review. In other words, the users get even more transparency regarding the wallet’s connection to the pillar of all cryptocurrencies – the famed blockchain. Everything from the method of reaching accounts to transaction processing is available to the public at all times.
However, open-source Bitcoin wallet technology is still very much in its infancy – it has a long way to go until it becomes 100% stable. Regardless, most popular Bitcoin wallets make use of open-source technology to develop their projects.
So, why do they do it? What’s so special about the open-source method?
The Clear Advantage of Open-Source Wallets
We’ve already talked about the transparency aspect – open-source wallets are available for public review 24/7. But it’s not all about being transparent and honest. Like any other open-source project, it’s appealing to various developers to work around the different bugs and issues. Essentially, an open-source project has a crowd of trouble-shooters who work on perfecting it for free.
Whereas regular wallets get tested by cybersecurity vendors, an open-source wallet benefits from the collective wisdom of countless developers on GitHub.
An open-source Bitcoin wallet, like every other open-source project, grows faster compared to closed projects. This brings more innovation and success to the table.
The Downsides of Open-Source Wallets
Increased growth, speed and innovation of open-source projects do come at a price, though. Seeing how the project is open for anyone’s viewing and tweaking, copyright becomes a problem. A developer who’s working on an open-source product can’t sue someone for copyright breaches. This downside is curbed by the quality of a project’s development and its open-source release timing.
Then, there’s the security aspect of things. This project type is vulnerable to data flaws and attack attempts. This brings a fair amount of concern with large-scale investment projects and finances like cryptocurrencies, not to mention Bitcoin.
This is why reputable open-source wallets choose to perform their operations locally – within their users’ browsers. Information such as private keys is never shared as an open-source part of a project. The users have to have absolute control over their Bitcoin balance.
Client-Side vs. Server-Side
Server-side open-source BTC wallets do exist. These are the fastest wallets available and support a lot of cryptocurrencies. They also boast eye-catching, easy-to-work interfaces. However, the users here aren’t anonymous. Although security measures are put in place, the users’ accounts are still very much susceptible to hacker attempts and governmental access. Server-side wallets are not recommended.
With client-side wallets, however, there is no server infrastructure in place. The private keys are private and the users’ responsibility. Lose the private key, and you’ve lost it forever, along with the entire wallet balance. Client-side open-source wallets are very secure.
The Basics of Open-Source Wallets
Open-source crypto wallets offer a ton of advantages compared to closed wallet projects. This is what makes them the technology of the future. When it comes to security, though, you can’t rely on full transparency. You don’t want your private keys to be information available to anyone. Thankfully, client-side open-source Bitcoin wallets are solid, advanced, and safe technology.
Author Bio: Hitesh is a digital marketing strategist and entrepreneur with more than 15 years of experience in digital marketing, start-ups, branding, and customer acquisition strategies. Hitesh is the CEO and Founder of Reposition Group, which specialises in digital growth strategies for companies in the cryptocurrency market such as Bitamp.com.
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