Since the release of Wasabi 2.0, many users have told us that they felt that hardware wallet integration had been put on hold. They were somewhat right. WabiSabi has made so many changes to the way coinjoins work that it has required almost exclusive focus for the past two years.

Fast forward to April 2024, WabiSabi coinjoins have largely stabilized and major performance improvements have been made to block filters. Because of this, active work on hardware wallet integration support has resumed.

In 2.0.6, two new wallets were added to Wasabi’s list of supported hardware wallets: BitBox02 and Blockstream Jade. 

With the latest release (2.0.7), we’re announcing that the newly released Trezor Safe 3 hardware wallet with secure element protection is now compatible with Wasabi Wallet. 

If you want to know all the details about this integration, keep reading. We will talk about what exactly is supported in this integration, how to use your Trezor with Wasabi, and finally how you can coinjoin directly from your hardware wallet using Trezor Suite. 

Why the Trezor Safe​​ 3?

The Trezor One and Model T do not rely on secure elements for protection, making them vulnerable to physical security attacks without the use of a passphrase. 

The Trezor Safe 3 introduces Secure Element Protection (EAL6+), and combined with a device-entry passphrase, it provides bulletproof security. 

It also features Trezor’s open-source design, on-device transaction confirmation, and an intuitive user experience. And as with all Trezor hardware wallets, you can use Shamir backups for added security. 

The most surprising thing about Trezor Safe 3 is how affordable it is: just $79 USD. If you don’t already have one, get yours here. 

What is Supported in Wasabi’s Latest Integration?

This integration is very similar to the existing integration for Trezor’s One and T models. Wasabi only uses one device management component, HWI (Hardware Wallet Interface), which limits the scope of what we can support.

You can add a wallet, send and receive bitcoin, and confirm your transactions and addresses on the device. You can also use and manage your passphrase directly from your Trezor Safe 3.

Keep in mind, device initialization and firmware updates are not supported and you’re better off using Trezor Suite for that. Finally, as with all our hardware wallet integrations, there’s no support for coinjoins directly from your hardware device with Wasabi.

Coinjoin on Trezor Suite

However, you can coinjoin on Trezor Suite using the Safe 3 and the other two devices. The best part of this feature is that you’ll be using the same coordinator as on Wasabi, the zkSNACKs coordinator based on WabiSabi technology.

To learn more about this integration made possible by our partnership with Trezor, read here. 

How To Use Trezor Safe 3 with Wasabi Wallet

Follow these easy steps:

1. Select ‘Add Wallet’ from the sidebar in Wasabi.
2. In the modal window, click on ‘Connect to hardware wallet‘.

3. Name your new wallet, then click ‘Continue’.

4. Connect your Trezor Safe 3 to your computer and unlock it with the PIN.
   1. If necessary, click on Rescan once your device is ready.

5. Wasabi will recognize your Trezor Safe 3. Confirm by clicking Yes.
6. A success message will confirm the connection. Click on Done.

Your Trezor Safe 3 is now ready for use with Wasabi Wallet!
Download and verify the latest version today.

The post Latest Hardware Wallet Integration: Trezor Safe 3 on Wasabi appeared first on Wasabi Wallet - Blog.

Wasabi has proven its reputation as the best privacy-focused bitcoin wallet, and now we’re on a mission to become the best desktop wallet for security-minded users. Integrating support for major hardware wallets is a fundamental step towards that goal.

Swiss-Made Exceptional Engineering

The BitBox02 offers a blend of user-centric design and state-of-the-art security features for Bitcoin cold storage. To learn more about the device or purchase one, check out Bitbox’s website. 

Read on if you want to know how to set up your Bitbox02 with Wasabi Wallet and also how to use it for sending and receiving bitcoin daily. 

How to Setup BitBox02 with Wasabi Wallet

Follow these easy steps to link BitBox02 with Wasabi.

Warning: You may need to disable the “Pairing code” feature or unlock the device with the BitBoxApp or hwi-qt before using it with Wasabi, as Wasabi currently does not support this function.

1. Select ‘Add Wallet’ from the sidebar in Wasabi.
2. In the modal window, click on ‘Connect to hardware wallet‘.

3. Name your new wallet, then click ‘Continue’.

4. Connect your BitBox02 to your computer and unlock it with the PIN.
   1. If necessary, click on Rescan once your device is ready.

5. Wasabi will recognize your BitBox02. Confirm by clicking Yes.

6. A success message will confirm the connection. Click on Done.

Your BitBox02 is now ready for use with Wasabi Wallet!

How to Receive Bitcoin with BitBox02 and Wasabi Wallet

Using your hardware wallet like the Bitbox02 on Wasabi is perfect to send your coins to secure cold-storage after you’ve used the coinjoin feature on your hot wallet.

Receiving Bitcoin is as simple as the following steps:

1. Click on Receive
2. Enter a label with the name of your choice for your receiving address.
3. Verify the address on your BitBox02 by clicking on the small icon shown below.
4. Scan the QR code or copy and paste the bitcoin address.

How to Send Bitcoin with BitBox02 and Wasabi Wallet

Here are the instructions to send bitcoin out of your secure cold-storage BitBox02 wallet. 

1. Click on Send
2. Enter the destination address and the bitcoin amount.
3. Enter a label with the name of your choice for the destination address. 
4. Most importantly, verify the details of the transaction on your BitBox02 before confirming. 

Congratulations!

You’ve made a successful transaction with your favorite hardware wallet from Wasabi. 

Ready to use BitBox02 with Wasabi Wallet? 

Download and verify the latest version today.

More on the Juggernaut Release

The Juggernaut Release of Wasabi Wallet introduces significant advancements in performance and privacy. 

This update extends support to two leading open-source hardware wallets: BitBox02 and Blockstream Jade. It also introduces the Safety Coinjoin feature, adds 11 new RPC calls, and implements numerous performance and user experience enhancements.

To dive deeper into the specifics of this update, including all the new features and improvements, read the full announcement article here.

The post How to Use BitBox02 (New) with Wasabi Wallet appeared first on Wasabi Wallet - Blog.

The latest integration allows users to protect their bitcoin holdings in cold storage with Jade while using the coinjoin feature from the hot wallet, all from the same Wasabi application. You will have to initialize your Jade with the Blockstream Green software wallet, but once that is done you will be ready to use it with Wasabi. 

Why Blockstream Jade?

Blockstream has a striking track record of state-of-the-art engineering, and Jade proves this once again.

“Blockstream Jade is an easy-to-use, purely open-source hardware wallet that offers advanced security for your Bitcoin and Liquid assets.” – Blockstream

One of the key differences between Jade and other hardware wallets is that the device is fully open-source, it doesn’t have a security element BUT is still resistant to physical attacks. Jade achieves this by introducing a zero-knowledge oracle-enforced PIN protection system. Learn more about this innovative approach to physical security here. 

Get your Jade now for only $64.99 on the Blockstream Store. 

How to Connect Your Blockstream Jade with Wasabi Wallet?

Once you follow these simple steps, you should be able to connect your Jade with Wasabi.

1. First,click ‘Add Wallet’ on Wasabi’s sidebar.
2. Then, click on ‘Connect to hardware wallet‘ when the modal opens.
3. Name your new wallet. Click on ‘Continue’ when done.
4. Connect your Jade to your computer and unlock it with the PIN.
   1. Click on Rescan when your device is ready if needed.
5. Wasabi will detect your Jade. Click on Yes if it’s correct.
6. A success confirmation message will appear. Click on Done.

Your Jade is now ready to be used with Wasabi! 

Hardware Wallets that are Compatible with Wasabi

• BitBox02-BtcOnly1*
• Blockstream Jade
• ColdCard MK1, MK2, MK3, MK4
• Ledger Nano S, S Plus, X
• Trezor Model T

1* The device by default asks for a “Pairing code”, currently, there is no such function in Wasabi.Disable the feature or unlock the device with BitBoxApp or hwi-qt before using it with Wasabi.

More On the Juggernaut Release

Wasabi’s Juggernaut Release contains significant performance and privacy improvements and adds compatibility for two popular open-source hardware devices: Blockstream Jade and BitBox02.

To learn more about the details of this release such as the introduction of the Safety Coinjoin feature, the 11 new RPC calls and the performance and user experience improvements, read the announcement article here. 

Download and verify the new version now.

The post Introducing Support for Blockstream Jade on Wasabi Wallet appeared first on Wasabi Wallet - Blog.

A BIP39 passphrase is an additional layer of protection for your bitcoin wallet; it acts as the 13th word to your 12-word seed phrase, or the 25th word if you have a 24-word seed phrase. If you lose your passphrase, you will lose access to your wallet and won’t be able to recover your funds.

A bitcoin wallet password is a way to lock your wallet application, and in the case of Wasabi Wallet, it’s the same as a BIP39 passphrase. However, in other wallets, it will only lock you out of the wallet, but you will be able to recover with your seed phrase without the need for the password.

In this article, we will explain what BIP39 is, the benefits and tradeoffs of passphrases, how to properly back them up, and how they differ from regular passwords.

What is BIP39?

BIP39 is a bitcoin improvement proposal from 2013 that revolutionized the way bitcoin wallets work. Here’s the description straight from the BIP:

“This BIP describes the implementation of a mnemonic code or mnemonic sentence — a group of easy-to-remember words — for the generation of deterministic wallets.”

Today, BIP39 is the standard for how bitcoin wallets work. You create a wallet and you get a set of words, often 12 or 24, and if you back up that property, you can retrieve your wallet anywhere, anytime.

But what if someone other than you finds your seed phrase backup? They would have instant access to your money, and you wouldn’t be too happy about it.

What can be done to solve this problem?

What is a Passphrase?

To add an extra layer of protection to your wallet, you can add a passphrase to protect your seed phrase. This passphrase can be anything you want; any combination of alphanumeric and special characters of any length.

When you set up Wasabi Wallet, you’ll be asked to enter a passphrase. This is a BIP39 passphrase, and you should take the time to understand that you will need this passphrase every time you want to use your wallet, and if you lose it, you will lose access to your funds.

As long as you understand and accept the tradeoff of losing access to your funds if you lose your passphrase, you’re ready to use it. Just make sure you back it up properly.

How to Properly Backup a Passphrase?

First, remember why you’re using a passphrase in the first place: to protect your seed phrase. The first step to properly handling your passphrase backup is to keep it separate from your seed phrase backup.

Then, you should test your passphrase and your full wallet backup before sending a significant amount of money to your wallet. Also, make sure you’re comfortable with the recovery process. 

Some people may tell you that you shouldn’t write your passphrase down anywhere and that you should memorize it, but they’re dead wrong. You should never make your memory your single point of failure, unless you have no choice, like crossing a border in a war zone.

So is there a difference between passphrases and passwords?

The Difference Between a Passphrase and a Password

The answer is that it depends on the wallet. In the case of Wasabi Wallet, there’s no difference between a passphrase and a password, they are used interchangeably.

However, in many other wallets, such as Blue Wallet, a password is not part of your wallet, it’s just a way to protect access to your application. This means that if you restore your wallet from your seed phrase backup, you won’t be asked for your password to access your funds, and you will be able to set a new password.

Conclusion

In this article, we explained what BIP 39 is, what is a passphrase, how passphrases help protect your seed phrase, how to properly back them up and the difference between a passphrase and a password.

Bitcoin self-storage isn’t too difficult, but you do need to take the time to familiarize yourself with the basics and feel comfortable with the recovery process. We recommend that everyone take the time to properly test their wallet backup so that they are not nervous when the time comes to do it for real.

The post What is the Difference Between a Passphrase and a Password? appeared first on Wasabi Wallet - Blog.

Coinjoins.org was announced earlier this year by Thibaud and Gustavo as a new public resource to discover and review bitcoin wallets with coinjoin features. Today, 3 new wallet reviews were released to help consumers discover the best bitcoin wallets for privacy. 

Trezor Suite and WabiSabi 

Trezor Suite is an easy-to-use bitcoin wallet desktop application with hardware wallet integration (Trezor T, One and Safe) and a built-in coinjoin feature using WabiSabi, the same coinjoin protocol used in Wasabi Wallet. 

One benefit is that Trezor Suite is the only wallet that allows you to coinjoin directly from a hardware wallet account, significantly increasing the security of your bitcoin. There is no need to use a hot wallet.

One limitation is that the process of coinjoining is somewhat manual. Users need to create a separate coinjoin wallet account, block filters have to be downloaded, and once the funds are deposited, a user need to manually click start to join a round.

The coinjoin integration was co-announced by Trezor and Wasabi Wallet back in April of this year. 

Find the full Trezor Suite review on Coinjoins.org. 

Jam and JoinMarket 

Jam is a web interface for JoinMarket focusing on user-friendliness and ease-of-use. It aims to provide sensible defaults and be easy to use for beginners while still having the features advanced users expect.

One benefit is that Jam significantly improves the user experience by abstracting away the complexity of Joinmarket. Joinmarket is the most censorship-resistant coinjoin on the market due to the competitive nature of a peer-to-peer free market with many takers and makers. There is no single coordinator in Joinmarket, but each round has a central coordinator (the taker).

One limitation is that Jam is not easy to install if you don’t have a full node system such as Umbrel, Citadel, Start9, Raspiblitz, MyNode and Raspibolt. Running Jam still requires technical skills. If a user doesn’t buy the pre-built node systems, it also requires technical skills to DIY (do it yourself).

Find the full Jam review on Coinjoins.org. 

BTCPay Coinjoin Plugin

BTCPay Server is a self-hosted, open-source bitcoin payment processor that includes a bitcoin wallet with a WabiSabi coinjoin plugin. 

One benefit of using BTCPay Server is that it is the most censorship-resistant WabiSabi bitcoin wallet because you can browse coordinators on Nostr (uncensored social media platform) and also run your own coordinator and publish it for discoverability.

One limitation is that it’s harder to run your own BTCPay server instance than it is to install a desktop or mobile wallet application. To use the WabiSabi coinjoin plugin, you need to install it after deploying BTCPay. It’s mandatory to use coinjoin on your own instance because you need to use a hot wallet.

Find the full BTCPay Server Coinjoin Plugin review on Coinjoins.org. 

Contribute 

Coinjoins.org is a free and open source project developed and maintained by Thibaud and Gustavo. If you would like to share suggestions, please open an issue on the GitHub repository, or even fork the project to show improvements. 

The post Coinjoins.org Presents 3 New Coinjoin Wallet Reviews appeared first on Wasabi Wallet - Blog.

xPub stands for Extended Public Key while xPrivs stands for Extended Private Key. Simply put, xPubs and xPrivs are the parent keys that can allow a wallet to mathematically produce billions of child keys that work as public keys and private keys within your wallet.

As a Bitcoin user, knowing about xPubs and xPrivs will help you to:

• Discover ways to unlock more out of your Bitcoin experience
• Understand how xPubs and xPrivs affect the security and privacy of your bitcoin
• Know why the best bitcoin wallets use this

xPubs and xPrivs have not always been around since the beginning of Bitcoin wallets, here is why they were introduced.

Bitcoin Before xPubs and xPrivs

The first bitcoin wallet, Bitcoin-Qt, had a key-management problem. It generated private keys at random which were all stored on the computer in a wallet.dat file.

While this worked, there was a flaw in that users could lose their bitcoin when they accidentally deleted the file or fell victim to malware. In the case that you encrypt this file and forget your wallet’s password, there is no way to recover your funds.

For your funds to be safe as a Bitcoin-Qt user, you had to make continual backups of the newer versions of the wallet.dat file every time you made a transaction. Still, there was no solution for losing your password.

To make this less cumbersome, Bitcoin Improvement Proposal 32 (BIP32) was devised to change how private keys are generated. In the proposal, instead of Bitcoin wallets needing to generate private keys at random for every transaction, a wallet can have one master key that can generate other keys from itself in a predefined way.

Having a determined way to generate private keys means that:

• You only need to backup one (master) private key
• You have the convenience of using the private keys across different wallet applications

Here’s how one parent private key can replace multiple private keys:

How xPubs and xPrivs Work

The key-pair concept is inseparable from Bitcoin, where private keys are meant to sign transactions and public keys, derived from private keys, are used to receive transactions.

When it comes to xPubs (Extended Public Keys) and xPrivs (Extended Private Key) they also  serve as public keys and private keys, only in a morphed manner. Their “extendedness” gives them the ability to derive more child private keys and public keys. And just as in normal private keys and public keys, the extended public key is generated from an extended private key.

What’s more, all derived child keys can also derive their own future generations of grandchild keys. But even with continued derivation, all derived keys always carry the unique signature (like DNA) of their parent keys throughout their generation. It’s this family-tree-like derivation process that serves as the origin of a new breed of Bitcoin wallets, hierarchical deterministic wallets.

In hierarchical deterministic wallets (also called HD-wallets), a specific tree-path/branch is selected from which future child keys will be held in. And by having the parent keys, which are the xPub and xPriv, you can traverse through all branches to check for child keys.

The convenience of having a master key to derive all possible keys generated opened a new world in Bitcoin where users no longer have to make the decision between better privacy or easy backups.

xPubs and xPrivs in Action

You Can Have Many Accounts in One Wallet

By having a parent key that can generate many child keys, a wallet can derive child private keys and child public keys that serve as parent keys for new wallets within one main wallet.

As a user, you can find this useful if you wish to have multiple accounts within one wallet. You can use this to separate your financial concerns. For example, you could have an account for personal expenses, business, or even savings without needing to set up multiple bitcoin wallets.

Securing your Keys is Easier

Generating private keys at random meant you had many keys to backup. This is not the case with wallets that implement xPubs and xPrivs.

With parent keys that can deterministically generate child keys for all your wallet transactions, you’ll only have to backup one master key. This master key can be used to derive all other keys you previously generated to transact. Thus, you only need one backup to restore everything.

You Can Share Funds in One Bitcoin wallet

Since an xPriv can sign for transactions from any address generated by it, sharing it can allow other trusted parties to make payments on your behalf. For example, an organization can use the Master xPriv to give child keys to both the procurement and employee payments departments without giving either department the ability to spend each others’ funds.

With this in mind, sharing your xPriv should be done with extreme caution since anyone who holds your private key gains control over all your funds.

More Privacy for your Transactions

An xPub can generate multiple child public keys that can be used to receive funds. This is a simple way to improve privacy for Bitcoin transactions as it prevents linking transaction data together by reusing an address to receive unrelated transactions.

A Multi-Wallet Experience is Possible

xPriv and xPubs are the advancement in Bitcoin that allows users to use more than one wallet software application without creating multiple backups.

Using your wallet’s seed, any wallet application can derive both the xPub and the xPriv and recover coins that you previously received with another wallet.

Despite this, there is always a challenge when wallets use different schemes to derive keys. As a user you can benefit from checking for Bitcoin wallet compatibility before switching vendors.

Payments are Secure With Untrusted Parties

Since private keys have full control of your wallets, storing them on an Internet connected device to accept payments may be sub-optimal. Particularly, if you store your private keys on an unsecure payment processor to generate addresses, any breach can lead to the loss of your funds.

Instead, with an xpub you can generate multiple payment addresses without having to expose your private keys to potential threats.

The post xPubs & xPrivs appeared first on Wasabi Wallet - Blog.

This article will first explain wallet recovery interoperability and how to check if your existing wallet is interoperable in case you lose your wallet and need to recover from the backup file. Then, we will go through the steps to use Wasabi for your Coldcard (or other hardware wallets) through a USB cable connection and in the air-gapped method.

What is Bitcoin Wallet Recovery Interoperability?

Bitcoin is a decentralized network, so there’s no one else responsible for your funds besides you. For this reason, when setting up a Bitcoin wallet, you must create a backup. There are many backup formats, ranging from rare methods like .dat files for Bitcoin Core to the popular BIP39 mnemonic seed phrases.

If you ever lose your hardware wallet, you want to ensure you can recover your funds on a new wallet. Bitcoin Wallet recovery interoperability is the ability to recover a wallet from your backup phrase into another wallet. Remember that you should avoid recovering the backup of a hardware wallet in another wallet unless it’s strictly necessary. When backing up your hardware wallet, you will notice that they all use the most common backup standard, a BIP39 mnemonic seed phrase. However, this isn’t sufficient enough data because there’s a follow-up concept called the wallet derivation path.

Modern Bitcoin wallets are Hierarchical Deterministic (BIP32), meaning they have many addresses that can be derived from the master key by specifying a path. A wallet derivation path is a sequence of fields used to organize a wallet in a multi-currency, multi-account, and multi-address system.

m / purpose’ / coin_type’ / account’ / change / address_index

Wasabi Wallet uses BIP39 mnemonic seed phrases as a backup method and the derivation path can be either m/84’/0’/0′ or m/86’/0’/0′ (since version 2.0.3).

How to Check if My Existing Wallet Backup is Interoperable?

In the past, the process of checking wallet backup interoperability was very complex: you had to check the documentation or sometimes the codebase of each wallet to find the wallet derivation path. Thankfully, this data is all documented nowadays on Wallets Recovery maintained by Rodolfo Novak (NVK), CEO at Coinkite, Coldcard’s manufacturer.

Most Bitcoin wallets and their respective information on the supported derivation paths, bip39 passphrase support, and links to their documentation are on the website. For example, we can observe that Blue Wallet and Green Wallet’s recovery is interoperable with Wasabi’s. On the other hand, Electrum isn’t because it doesn’t use BIP 39 mnemonic seed phrase as its backup method.

Now that we’ve defined wallet recovery interoperability and how to check for it, we want to accentuate the importance of backing up correctly your bitcoin wallet. We can proceed to the tutorial on connecting your hardware wallet to Wasabi Wallet.

How to Connect Your Hardware Wallet to Wasabi Wallet

For this section, we will show two methods of integrating your hardware wallet into Wasabi Wallet, in this case, Coldcard. The first one is with the hardware wallet connected to the computer, basically the same for other hardware wallets such as Trezor or Ledger. The second one is with the Coldcard air-gapped.

Method 1: How to Connect your Coldcard (or other Hardware Wallets) to Wasabi Wallet

We assume you have downloaded and installed Wasabi which you can do by following the steps listed here for Windows, Linux, and MacOS. There’s no need to check for recovery interoperability; you only need to ensure Wasabi Wallet supports your hardware wallet (list here). Here are all the steps to accomplish this:

1. Open Wasabi Wallet by clicking on its Application Icon, which looks like this.

2. When the Application opens, click ‘Add Wallet’ on the sidebar.

3. Click on ‘connect to hardware wallet‘ when the new smaller window opens.

4. Give a name of your choosing to your new wallet. Click on ‘Continue’ when done.

5. Connect your Coldcard (or another hardware wallet) to your computer and unlock it with the PIN. Click on Rescan when your device is ready.

6. Wasabi will detect your hardware wallet. Click on Yes if it’s correct.

7. A success confirmation message will appear. Click on Done.

You have successfully integrated Wasabi Wallet with your Coldcard (or another hardware wallet). You simply have to wait for syncing to complete. Let’s proceed to the Coldcard air-gapped tutorial.

Method 2: How to air-gap your Coldcard transactions with Wasabi Wallet

To complete this method, first, export a wallet file from Coldcard onto a MicroSD. Then, you need to import this file into Wasabi Wallet. Exporting it this way ensures that there’s never a physical connection between your Coldcard hardware wallet and your computer.

Steps to reproduce on Coldcard

1. Insert a microSD into your Coldcard’s slot.
2. Power the Coldcard and unlock it with the PIN.
3. On the main menu, select Advanced.
4. Select MicroSD card.
5. Select Export Wallet.
6. Select Wasabi Wallet.
7. Follow the instructions shown on the screen to complete the file export.
8. Safely remove the microSD from your Coldcard.

Steps to reproduce on Wasabi Wallet

1. Insert the microSD into your computer’s slot.
2. Open Wasabi Wallet by clicking on its Application Icon, which looks like this.

3. When the Application opens, click ‘Add Wallet‘ on the sidebar.

4. When the new smaller window opens, click on ‘Import a Wallet‘.

5. You will be prompted to select the wallet file from your microSD.

6. A success confirmation message will appear. Click on Done.

You’ve successfully integrated Wasabi Wallet with your Coldcard air-gapped. You simply have to wait for syncing to complete.

Conclusion

This article explains that Bitcoin wallet recovery interoperability applies not only on the wallet backup level but also on the wallet derivation path. Wallets Recovery is a tool to check if your existing wallet backup is interoperable with Wasabi Wallet.

This article presents all the steps to the two methods that exist to connect your Coldcard (or another hardware wallet), through a USB cable connection or the air-gapped method, to Wasabi Wallet.

The post How to Connect Your Hardware Wallet to Wasabi Wallet appeared first on Wasabi Wallet - Blog.

However, not all Bitcoin wallets deliver on this promise. In fact, some wallets purposefully take it away. Nonetheless, getting into Bitcoin will always bring you to make a choice of a wallet.

The two things that you have to be aware of in order to make an informed decision on a Bitcoin wallet are:

• Bitcoin wallets don’t store bitcoin in them, they are stored on the blockchain
• Bitcoin is not private by default, using it leaves publicly available tracks

Having this in mind is what will give you a picture of what you might have traded away in your choice of wallet. Rather than jumping blindly into a choice, the qualities highlighted in this article help you:

• Find a Bitcoin wallet that suits you
• Keep your Bitcoin safe
• Avoid possible mishaps while using Bitcoin since transactions are irreversible once confirmed
• Use Bitcoin privately

1. You Want Your Bitcoin to be Safe.

When it comes to your hard-earned Bitcoin, the worst that can happen is that you lose it all.

Often this is the price you pay for not understanding how Bitcoin wallets work.  

Bitcoin wallets don’t keep any bitcoin in them. Instead, they store the relevant credentials called private keys that allow you to control any bitcoin sent to you. Losing these keys means losing your bitcoin.

The safety of your bitcoin depends on who stores your private keys and how they do it.

Who has Control of Your Private Keys?

You can either keep your private keys or trust someone else to keep them for you.

This creates the two major classes of wallets in terms of control:

• Custodial Wallets – someone else has your private keys and they control access to your funds.
• Non-Custodial Wallets – your private keys are in your possession and only you can control your funds.

This is similar to a bank vault for your assets. You either let the bank store your assets for you or you have a personal vault at home.

Custodial Wallets

You don’t own the vault at the bank, the bank does but they offer a service that will allow you to access your assets. You have trusted them enough to know about your assets and store them for you.

Similarly, in custodial wallets, third parties are entrusted to permit you to transact and to keep your Bitcoin safe. A common example of custodial bitcoin wallets is centralized bitcoin exchanges.

Non-Custodial Wallets

The vault at your home is yours and yours alone. You’re responsible for its safety and only you control who can or cannot access your vault. Likewise, non-custodial wallets give you full responsibility for the security of all of your Bitcoin.

Keeping Your Non-Custodial Wallet’s Seed Phrase Safe

Going the non-custodial route means that you’ll have the wallet’s seed phrase to keep safe.

This mnemonic phrase is what you use to initiate or recover your wallet. It is also the source of your private keys and the public keys you use to receive bitcoin in your wallet.

Understandingly, this seed phrase should be for your eyes only. If any other person has it, they can use it to recreate your wallet and steal your funds.

What is also worth noting about seed phrases is that bitcoin wallets go about them differently.

Depending on your wallet, the length of the word phrase will vary from 12 to 24 words. While more words mean stronger security from a potential brute force, a 12-word seed also does the job.

Which Way to Go, Custodial or Non-Custodial?

Custody is a big deal with bitcoin because Bitcoin’s core intent is to remove any third parties or intermediaries from how people transact. Despite that, the type of custody you choose only matters to the extent that it can keep your bitcoin safe.

With Custodial Wallets, you can lose your bitcoin if the central exchange gets hacked, goes bankrupt or your funds get frozen.

Funds in your non-custodial wallet will always be safe as long as you can keep a secret. However, your funds will be gone if you lose your private keys either by accident or through theft.

How Does Your Bitcoin Wallet Store Your Private Keys?

Your bitcoin wallet can either be Hot or Cold. This depends on whether the private keys are stored on a device connected to the Internet or not.

Bitcoin wallets that run on the web, on desktops and on phones are considered hot. The term hot refers to their extent of connectedness to the Internet to allow for transactions.

Cold wallets use hardware that has no ability to connect to the internet and are considered the safer option between the two.  Examples of such cold wallets are Trezor, Coldcard and Ledger.

The choice between cold and hot wallets is motivated by the length of time and the amount of bitcoin one wishes to store. The common practice involves keeping huge amounts of Bitcoin in cold wallets and intermittently transferring small amounts to hot wallets for transactions.

Watch out for Fake Wallets

Fake Bitcoin wallets and exchanges exist primarily to swindle you of your Bitcoin.

Be vigilant of fake websites. Cybercriminals try to exploit new users by imitating legitimate websites using a different domain extension, and can even pay to promote these scams to the top of search engine results. In the case of application installations, make an effort to verify the authenticity of your downloads using PGP keys.

2. Your Financial Privacy Doesn’t Have to be Sacrificed

Bitcoin wallets are not private by default. When you don’t prepare for this, anyone can access your private financial data.

Your wallet leaks your transactional information when:

• Your wallet needs KYC(Know your Customer) details for you to transact
• Your wallet reuses addresses in transactions
• Your wallet does not incorporate any privacy-enhancing techniques like Tor
• Your wallet accesses the blockchain’s data through a third party instead of directly

So what can wallets do for your privacy?

Bitcoin Wallets can Work With Zero Knowledge(zk)

Bitcoin is a permissionless technology. All wallets can work and let you transact without revealing any personal information to the wallet service. This includes how your wallet accesses the public ledger.

When your wallet needs your personal information in order to use it, you ultimately surrender your privacy. This might be what seems like common practice with exchanges but the personal information collected is meant to be used against you, not used for your protection.

Wallets Should Always Generate A Fresh Address for New Transactions

A wallet that does not allow you to generate new addresses for transactions you receive will hurt your privacy. Since all addresses can be publicly viewed, receiving bitcoin using the same address multiple times will remove any doubts that two transactions were made to the same entity.

Address reuse hurts your privacy as the sender also, so before you spend your Bitcoins, check the address you are paying merchants or exchanges and request a new one if you see it has already received coins before.

There are also other risks associated with address reuse in Bitcoin.

Privacy Tools can be Built Right Into Your Wallet

Since Bitcoin implements a public ledger to keep transactions, privacy consideration cannot come as a second thought when picking a wallet.

For users who are conscious about their privacy, multi-participant transactions like coinjoins and the Lightning Network provide a crowd to hide in. That said, having a wallet with built-in privacy tools will make safeguarding your privacy effortless.

3. Your Bitcoin Wallet Should be Nice to You

A wallet’s user-friendliness is what inevitably makes your Bitcoin experience smooth. It will also be what stops you from making unintended mistakes.

But how exactly can a wallet be nice to you?

Your Wallet Helps You Track Your Transactions

The pseudonymous nature of Bitcoin transactions can quickly throw you into an organizational chaos.

The easiest way a wallet can help you follow the privacy properties of your addresses is by offering you a way to label your deposits and expenses.

Your Wallet Stops You from Sending to Faulty Bitcoin Addresses

If you send your coins to the wrong address, you might never get them back. This means you’ll always have to exercise care when sending bitcoin and your wallet can help you with this. How exactly?

A wallet can detect invalid addresses and help you double-check addresses before confirming transactions.

Your Wallet Saves You from Erroneous Transaction Fees

If you were to pay for a $15 meal with two $20 bills, you would confuse the cashier since you could complete the payment with a single $20 bill.

Bitcoin wallets should avoid this confusion as well. Since transactions with extra input addresses waste an unnecessary amount in mining fees. A wallet should be smart enough to only spend just enough coins to make your payment, without overusing your wallet’s balance.

A Friendly Wallet Offers You A Back-Up Option

Seed phrase backups are a critical feature that will allow you to quickly recover your wallet in case of accidents.

A Simple User-Friendly Interface is the Way to Go

Is the wallet’s design straightforward to use? Only when it makes it easy for you to find your way around it regardless of your level of tech expertise can it be considered easy to use.

There Is Always Room for A Better Experience

Having a wallet that is upgradable means that any experience you currently have can be made better. Moreover, new updates are what inevitably resolve new bugs, improve usability, and fix vulnerabilities.

You’ll Need Technical Support When Things Go Sideways

Whether in the form of documentation, video tutorials, or live customer support, good technical support goes a long way. When it comes to your valuable bitcoins, having a helping hand when you get stuck is a nice thing to have.

Can There Be A Perfect Bitcoin Wallet?

Fatefully for Bitcoin, no single wallet can rule them all. In fact, the nature of Bitcoin is that anyone can make their own wallet if they so wish.

Regardless of this, the best bitcoin wallet will always remain the one that keeps your bitcoin safe, shields your privacy and is friendly to you.

The post Qualities of a Good Bitcoin Wallet appeared first on Wasabi Wallet - Blog.

A bitcoin address can be likened to a digital “invoice” used to accept payment on the blockchain. It acts as an intended destination for payment on the blockchain. An address is generated from a wallet in the form of a string of 26-35 characters and is shared with the party who intends to pay you in bitcoin. Any funds sent to an address are under the control of its originating bitcoin wallet.

Address reuse is when a user uses one address for more than one transaction. But what makes address reuse so bad for privacy? What risks does it extend to other users transacting with you?

To bring the matter to light it’s useful to understand what happens under the hood when we reuse an address.

Many users are now getting familiar with the fact that bitcoin transactions are stored on a public ledger which acts like an open receipt book containing all inbound and outbound transactions from all addresses. Anyone can view transactions associated with an address even without sophisticated tools, for example here. However, the only information a viewer can get is the bitcoin transacted into and out of an address.

When you pay or receive bitcoin, the address(es) associated with the transaction can be viewed. However, due to the pseudonymous nature of bitcoin addresses, this is not enough information to reveal the real-world identity of a user.

Despite the anonymity offered, bitcoin addresses only act as an alias involved in a transaction on the blockchain. It takes a single transaction to reveal enough information about the identity of the user and every transaction associated with an address opens a door to traceability. With each transaction, more information about the user is revealed and available for possible real-world identification.

Users transacting with addresses belonging to users whose privacy has been compromised risk losing their privacy through association. One address reuse is enough to give away your privacy even years after it’s long-forgotten because the blockchain is immutable. Once on the blockchain, forever on the blockchain.

Address reuse is intentional when a user only uses one address to receive and store unspent coins. Such cases may be due to habit, the need to maintain trust, or availability. An example of such address reuse happens on exchanges and donation addresses. As bitcoin users, we may also intentionally send bitcoin to the same address to others resulting in address reuse. This type of address reuse is the most rampant affecting half of all bitcoin users.

For some use cases, address reuse may happen when a user owns a single address wallet or paper wallet. Single address wallets are meant to offer convenience and ease to the users by generating a single address that is meant to receive and store their unspent change. In the case where a user prefers privacy, they are better suited to using Deterministic Address Pool Wallets that generate new addresses for new transactions. Paper wallets, on the other hand, may always require the user to be physically present to make a transaction.

Addresses are designed to receive bitcoin and are supposed to be disposable with every use. When the address is reused, the owner’s balance user is open on the ledger. As a business or individual using bitcoin to receive payments, the amount of revenue or balance may always be known if it is tied to one address. Unless your money matters are meant to be public, reusing an address will always make sure your balances are open for everyone to see.

With a discovered identity associated with an address, the user faces the risk of censorship. For example, an address observed donating funds to an activist may be blacklisted from exchanges, and addresses sending funds to the activist may risk being targeted as adversaries in dictatorial states.

Address reuse facilitates surveillance. If you transact with one address, it is easy to generate a relationship graph of who you transact with, where your money goes and who you receive it from. Every single piece of your financial information will be ushering you into the arms of many surveilling organizations that are always analyzing and tracking transactions on the public ledger. Despite the distance between conspiracy and fact about the level of surveillance on bitcoin, it’s important to understand that present technology is potent in allowing full deanonymization of bitcoin transactions.  A little more effort is required by a user to be free from such surveillance but changing addresses does enough to keep your transactions hard to trace.

With all the apparent risks that address reuse poses to privacy, transacting with a new address for every transaction is about care, that the amount of privacy you have is transmissible to every user you transact with. It’s not necessary to understand the intricacies of bitcoin to use the technology safely.  Picking a good wallet that allows you to generate fresh addresses for every new transaction is good enough. Bitcoin allows us the generation of new addresses whenever we need them. This feature was meant to preserve anonymity. All coins sent to every address generated are always under our control meaning we can transact with as many addresses as we need. The convenience of reusing addresses has the price of privacy.

The post Risks Associated with Address Reuse appeared first on Wasabi Wallet - Blog.

Read the podcast highlights below.

On Working on Wasabi 1.0 with Nopara73 and L.Ontivero in Lisbon.

After Dan started working on Avalonia, his journey with Wasabi Wallet began. In 2018, He was contacted by Nopara73 with an interesting proposition of shortening his vacation time to work on Wasabi Wallet in Lisbon Portugal, a mere few weeks before Nopara73’s presentation at the 2018 Building in Bitcoin conference.

“I met up with Adam, Lucas as well, and I was pretty impressed. And I was like, oh, these guys have flown from the other side of the world to meet me, to find out about Avalonia. And this was kind of like the first time I’ve met anybody, in person, from the sort of Avalonia community or anybody that was building anything with Avalonia. So for me, it was like a pretty exciting adventure and on his own.

So now it’s more than just some people that you just type in a box to, you know, these are actual personalities that you get to know. And, that was, that was really nice. So, Adam sort of tried to explain the concept of what he was doing and what it was. And obviously for somebody that is new to Bitcoin, obviously it was a lot to take in, didn’t fully understand it at first. But, I could see that as you say, he basically built a lot of the code, so he’d done all the engineering and the research to actually implement all of this stuff and it was basically missing the UI.

Basically, we were in a small flat, and me and Lucas would sit around the kitchen table and Adam told us his ideas about how the UX might work and we just went at it like one piece at a time and it was pretty intense. We were working really fast to put stuff together. I think it might’ve been three weeks from nothing until we had something that was at least demonstrable and functional.

If Adam hadn’t already done all the work that he’d done three weeks would have been impossible, so a lot of the stuff had already been done and that was mainly purely building the UI and yeah, and it was really good because obviously, I had so many questions about, Bitcoin, you know, I just had to be like a sponge learning everything. And we would sort of go for these long lunches, me and Lucas and Lucas would tell me absolutely everything that he knows. And I was asking him probably the same question anybody that’s new is asking, you know, over and over again. And he was really patient and explained everything in detail. And, and that was really cool for me.”

On Deciding to Change Wasabi’s UI

Though Wasabi’s initial design was based on Nopara73’s vision of a privacy-focused bitcoin wallet and had a targeted audience of Bitcoin’s early adopters and technical users who understood the principles of bitcoin and Coinjoining, the UI has served its purpose and it’s now time for an upgrade – Wasabi Wallet 2.0, which according to Dan, is completely different and a lot more refined.

The fundamental issue is that we’ve ended up with some slightly redundant UT  concepts in there that are technically now needed and after a while people got used to it and people started talking about our features and things that we could do with Wasabi. It started getting to the point where Okay, maybe we’ve gone a far as we can with the current UI  and as well it is important to remember that in the beginning there were not many users for Wasabi and I guess it was kind of an experiment – I don’t think anybody could’ve imagined that it was gonna get to where it is today. You know, maybe Adam did, but I didn’t imagine. I quickly realized that it probably was going to be once I started to understand.

The current UI that has served a very important purpose, which is it got us up and running very quickly, it’s become stable reasonably quickly, and lots of people are using it, but now it’s got to the point where, okay, we’re now this successful wallet, and we’re able to provide all these features. Would we have done the UI the same now if we’d known this was the position where we’re going to be a few years ago? And, in my opinion, we would have had similar concepts, but the UI would probably be quite different, which is why we’ve started work on Wasabi Wallet 2.0 and the great thing is now we’ve got lots of resources. So we’ve got UI designers, UX designers, a whole team just for the UX and implementing that. And that’s the direction we’re going in now.

“Now we start from a design. We will spend a lot of time on the design refining how the UI is gonna look, how it’s gonna be laid out, how the user is going to interact with what the user experience is around a certain feature or of the product. So there’s a lot more time available and we’re not rushing to get to the next conference in a few weeks. We’ve got months to spend on it. “

Wasabi’s UI will not be the only noticeable feature change with the upcoming Wasabi 2.0  release. Read our previous blogpost to see what’s coming and listen to the full episode below to hear more about Dan’s work.

Listen to other full episodes on all podcast platforms. Don’t forget to like, subscribe to and follow official Wasabi Wallet channels for more interesting and insightful topics on Bitcoin.

The post Podcast Review: Designing a Privacy-Focused Bitcoin Wallet UX appeared first on Wasabi Wallet - Blog.