Is The Original Bitcoin Wallet Still Relevant Today?
In October 2008, the Bitcoin was introduced and this digital asset and payment system was then released as an open-source software in 2009. By February last year, the number of merchants accepting bitcoin for services and products surpassed 100,000.
The longest-running Bitcoin wallet is a system known as Bitcoin Core. In order to use Bitcoin Core, its users have to download a local copy of the entire transaction history of the cryptocurrency. This is a process which could take days and will only become even more burdensome with the continuing increase in Bitcoin transactions.
What this means is that unlike the other flashy, venture capital-funded wallets available, such as Circle or Coinbase or even open-source projects like Mycelium, it is impossible to fit Bitcoin Core on a smartphone. However, its function is essentially the same – to receive and send Bitcoins.
Why Bitcoin Core Is Still Developed and Used Today
This then begs the question: If Bitcoin Core is already so difficult to use, while there are several more user-friendly applications out there, why would anyone want a wallet that is so difficult to use? Also, why are there new updates being developed for Bitcoin Core, yet there are far sleeker options available?
Well, the Bitcoin Core virtual wallet provides an alternative which is similar to the original value proposition of Bitcoin, according to Jonas Schnelli, a contributor to the Bitcoin Core project.
Since the wallet was introduced, rapid advances in technology have resulted in the development and emergence of many wallet programs that are much easier to use and are full of innovative features, like cold storage and instant messaging capabilities. However, Schnelli insists that none of these apps are able to completely embody the Bitcoin principles of security, privacy and decentralization.
Less Trust Necessary
Like the Bitcoin system itself, Bitcoin Core was designed in a way that less trust is needed for a third party to keep their end of a deal.
The main worry that the developers and users of Bitcoin Core have is that while other wallet apps are uploaded to a third party website – with Schnelli citing the Apple app store as a particular example – it is possible for the code to be tampered with before posting. This is particularly important due to the heists and hacks Bitcoin has already experienced.
However, with Bitcoin Core, users have access to cryptographic tools that they can use to verify for themselves if they are getting the correct software, although it must be said that it requires quite a bit of tech savvy beyond that of the average internet user.
Schnelli also adds that another reason why the wallet should continue to be developed further is that it offers its users a higher level of privacy than any of the available alternatives.
There is significant merit to this particular argument, since users with SPV wallets can easily distribute a lot of information regarding the structure of their wallet to other sections of their network, such as the nodes used to validate transactions. For example, new research that has come to light indicates that the bloom filtering that SPV nodes use, can be tapped to piece together a complete picture of all the transactions that a particular address has ever made.
“In my opinion, this is a huge privacy leak,” Schnelli said.
Because the Bitcoin Core wallet will automatically create a new address every time there is a new transaction, all the transactions that a user makes, cannot be linked to a single address. The wallet supports Tor as well, so people snooping around cannot link any payments to your IP address.
The tools that Bitcoin Core offers are powerful, and go a long way toward helping to protect users. Schnelli says that he is certain that if developers fail to pay more attention to privacy and security of their wallet apps, issues with stolen funds will only continue to increase.
Could A More Foolproof Wallet Be in Development?
Despite its competitors stealing a march on it, there is still interest among its developers to make the wallet more user-friendly.
According to the developers, the reason why the wallet is so bare, with regard to features, is down to their belief that wallets should safeguard the currency on the Bitcoin blockchain, not in private reserves. Schnelli says that, in comparison to the other open source projects he has participated in, that include libcurl and hardware wallet Digital Bitbox, Bitcoin Core is the most restrictive about adding features.
Although Bitcoin Core is significantly behind the other wallets, in terms of features, there have been some areas of progress, including adding an easier way for users to back up their private keys.
While Schnelli will be the first to admit that the Bitcoin Core wallet probably will not appear on smartphones soon (at least not in the next couple of years, anyway), future updates being planned look to help put together the wallet’s security with the user friendliness that the average user needs.