How Did Bitcoin Wallet Evolved To Become So Secured

How Did Bitcoin Wallet Evolved To Become So Secured

The digital world is transforming at a great pace, many different digital currencies are gaining popularity. Bitcoins are the earliest and currently the most valuable cryptocurrency we know. According to Coin Casso, Bitcoins are the most popular cryptocurrency worldwide with a 68.7% share in the cryptocurrency market. It is one of the best ways to invest your money and make transactions online. Bitcoins evolved into one of the most secure ways to make digital transactions.

There are many Bitcoin wallets available in the market that facilitated the storage and transactions of Bitcoins online. They play an important role in ensuring that all transactions made through Bitcoins are secure. Bitcoin wallets come with tonnes of features to ensure all our transactions are made securely. Some of the exceptional security features which are provided by modern Bitcoin wallets are Two-factor authentication, Anti-theft feature, PIN and password protection, Biometric protection, and multi-signature protection.

There are many benefits of using a Bitcoin wallet apart from security. It eliminates the need for banking fees due to the lack of any central bank to facilitate the transaction. This makes Bitcoins one of the most cost-effective methods to send and receive payments for businesses and freelancers. The latest Bitcoin wallets also come with an impressive user interface. This increases user satisfaction and makes it much more beginner-friendly.

However, Bitcoin wallets were not always as secure and feature-rich as we see it today. Bitcoins were founded in 2009 by an unidentified person with the name of Satoshi Nakamoto. Nakamoto released the first Bitcoin wallet for the public just one month later. The name of the first Bitcoin wallet released by Satoshi Nakamoto was the Bitcoin-Qt wallet. Gavin Andresen, one of the early contributors of Bitcoins later changed its name as Bitcoin core wallet.

However, it was much different from the Bitcoins wallets we use today. It lacked many security features that are available in the latest bitcoin wallets. To run Bitcoin wallets, you had to download the entire blockchain into your computer which was quite cumbersome. The size of Blockchain at that time was 6 GB and according to Statista, it is currently reaching 285 GB in June 2020. However, the limitations of the first Bitcoin wallet doesn’t end here.

The private keys which store the Bitcoin address were stored in a desktop folder Wallet.dat. This made the Bitcoin private keys quite vulnerable to malware attacks. Apart from that, there were any cases of users accidentally deleting the folders which stored the private keys. One of the most popular cases of losing Bitcoins is of an IT guy James Howells. Howells accidentally lost the hard drive in where he stored his private keys for Bitcoins only realizing it later when the value of Bitcoins increased remarkably.

According to some estimates, 25% of Bitcoins are lost permanently and cannot be recovered. Bitcoin Core wallet is still available on Bitcoin.org. However, it comes with fewer security features than the modern Bitcoin wallets and has a download size of more than 300 GB’s.

Many types of Bitcoin wallets are available today. Some of them are Mobile, Web, Desktop, and hardware-based. The size of the latest Bitcoin wallets that are available today can be as small as 2 MB. Apart from that, you get a lot more features and PIN protection in the wallets which are popular today. Many Bitcoin Management techniques have also emerged to increase the safety and security of Bitcoin users while making transactions online.

One of the most popular Bitcoin Management techniques is SPV Wallets. Unlike, Bitcoin core wallet, SPV wallets only had to download transactions and not the entire blockchain to run on a particular device. This reduced the size of Bitcoins’ wallets tremendously. Using SPV techniques also increased the security of Bitcoin wallets. Many common threats like Bait and Switch, Chain highjacking, Chain rewriting, Unintentional Transaction suppressions were greatly reduced after the introduction of SPV wallets. Many popular Bitcoin wallets in the market are now using SPV techniques.

Bitcoin wallets available today that use the SPV techniques are fast secured and user-friendly. Bitcoin exchange wallets are other popular types of wallets in use today. There is a high demand for Bitcoins in the market which positively affects its liquidity. Bitcoin exchange wallets are useful when you want to convert your Bitcoins into some other form of currency. Similar to wallets that use SPV techniques, Bitcoin exchange wallets are highly secure. The chances of many online threats like Direct theft, fabricated transactions, and chain highjacking are very low on Bitcoin exchange wallets.

Many Hot wallets have also emerged in the market. These wallets are making the transaction of Bitcoins possible in a matter of seconds. These hot wallets are connected to the internet to ensure speedy transactions. Hot wallets are generally easier to set up and you can get your Bitcoin address in a few minutes after downloading Hot wallets. They provide an impressive backup facility and PIN protection to avoid and security threats.

However, being always connected to the internet, these wallets are susceptible to threats that arise from it. Hence, it is advisable to use offline wallets if you have to store a large value of money in Bitcoins. Some of the well-known hot wallets which are available in the market are the Exodus wallet, Electrum wallet, Mycelium wallet, etc.

The Takeaway

Bitcoins are a great way to make fast and secure online transactions. There are many types of Bitcoin wallets available in the market. However, Bitcoin wallets were not always dependable and convenient to use as it is today. There have been many innovations in the field of Blockchain. Many startups are showing up and making a presence in the Blockchain market. One of the primary purposes of all the bitcoin wallets in the market is to ensure the best customer satisfaction.

Although the oldest Bitcoin wallet is still available, there are lots of new Bitcoin wallets available in the market with tonnes of features and using the latest technologies. Some of the great security features in the recent Bitcoin wallets like Two-factor authentication, PIN protection, anti-theft feature, and secure backup helps to build a secure blockchain ecosystem.

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