Review 18 – Bitcoinwallet.com

Bitcoinwallet.com

I’m always on the lookout for easy ways to have people send me bitcoin. QR codes are great, but what if I’m on the go and don’t have time to dig out my phone, unlock it, pull up my wallet, unlock it, pull up a QR code, and have it scanned? What if I’m talking on the phone with someone and they ask for a Bitcoin address to send me some funds? What’s an easy way to just say here’s my address, verbally? One place I found that simplifies this is BitcoinWallet.com.

bitcoin_wallet_com_1Bitcoin Wallet bills itself as “A Bitcoin Wallet As Easy As Your Name”. You only have to provide an email address, select a username, provide a mobile phone number for 2FA, and then verify. For instance, mine is subcypher.bitcoinwallet.com. You can see my address and a QR code for it right there on the page. This could come in very handy, but despite it making things easier it’s coupled with some very bad features.

I do like the fact that I can give someone a URL to visit so that they can send me Bitcoin. It’s snappy, can be transmitted verbally, and it’s easy to remember. I could mention this in passing in a video chat, if I’m working on the phone with a customer, or if I’m in an interview and someone wants to tip me some bits for some information I’ve provided. They don’t need to scan anything to remember and can get to it later if they don’t have time at the moment. The FAQ says you can even shorten it, which would be even better if it worked. When I tried to go to the shortened URL all it did was timeout.

bitcoin_wallet_com_2Of course, you don’t know for sure that this address is owned by me. Sure, my picture is on it, but I use that picture everywhere. Someone could have snagged it from any of my online profiles and set this up. You can’t verify my email address on the account because it’s hidden behind asterisks. How do you know that *********@gmail.com is actually my email address? You can’t go by the description because it’s nearly identical to the same description I use everywhere. Well, what I could fit in there is nearly identical. As a test I tried to use a longer description, but it wouldn’t take it. That means you can’t even put in a PGP public key block for verification there. Verification of identity isn’t even the worst of the problems with this service.

A major problem with this service is that you get one Bitcoin address and it appears to be static. You can’t even change it manually. It’s not an extended public address, either. I sent $1 USD to my own address to test it and my Bitcoin address didn’t change. This is a very big Bitcoin no-no. I was ok with the idea that I could hand out a URL that wouldn’t change, but handing out a URL to a Bitcoin address that doesn’t change, that I can’t change, is not a good thing.

bitcoin_wallet_com_5Another major downside is that the fees are just plain too high. The $1 USD I sent above cost me 0.001 BTC to receive. And they billed me before my transaction was fully verified, which made my account appear negative for a time. Since the $1 USD I sent was 0.00248487 at the time of writing, that’s nearly half my transaction. I’ve never heard of a Bitcoin service charging a static amount of BTC to receive funds, and certainly not an amount that currently equals $0.47 USD. That’s just ridiculous. I don’t mind paying some fees, especially transaction fees when I’m sending, but charging fees to receive bitcoin is just plain robbery.

Internal transactions are off chain, which means they are only recorded internally and aren’t recorded to the blockchain. This is similar to how Coinbase and Circle do internal transfers. This means they don’t have to charge transaction fees for money moved between customers. However, it also means that you have to trust BitcoinWallet.com that the funds are actually there. They do use blind solvency proof to show that you actually have those funds in your account. But, again, since it’s off chain you have to trust their proof as well.

And off chain transactions mean spam. All the transactions in my BitcoinWallet.com address have either been system messages from the founders, spam from LocalBitcoins, a Bitcoin casino. To reduce this they allow you to raise the minimum amount of bitcoin you’re willing to receive. This is handy to reduce spam because the spammers have to pay you to get messages through. So, either they’ll stop sending spam or at least you’ll make money off of them for sending it to you. But if you set your minimum too high you might reject legitimate transactions and it rules out microtransactions as a service. That could be a bit of a problem.

The third and final nail in this service’s coffin is that they hold your funds without multi-sig in an account which can be shut down and is under complete control of the service provider. This means that any funds that are in your BitcoinWallet.com address are technically the property of BitcoinWallet.com, kind of like Coinbase and Circle. They hold the private keys and you don’t. Again, I’m not saying that they’re going to run off with your bitcoin, but I’m definitely pointing out that they could. As they are based in the US and subject to US law, they could also make an excuse that you sent it somewhere they don’t approve of and shut down your account. So, please, think twice before storing any serious amount of funds in this wallet. In fact, it’s safer if you just don’t.

bitcoin_wallet_com_4The good news is that you can input external Bitcoin addresses to get around most of these issues. You could conceivably go there on a regular basis and input a new Bitcoin address so that it manually rotates. I verified that by inputting my vanity address just for the sake of testing. I recognize the irony of using an address that doesn’t change here, but I originally thought that this could double as verification that it’s me. I then sent it $1 USD using the QR code displayed on the website and verified that it does not charge your account fees. And I verified that the funds went straight through to my wallet and the transaction was recorded on the blockchain.

But, come to think of it, a scammer could list my vanity address on the site and then tell you not to send coin there because it’s just for proof. They could list another address alongside it and say to send to that one. Again, there is no good verification that it’s me because there’s no really good way to prove I set this service up. Combine the verification issues with outrageous fees and the fact that your account can be seized and I simply cannot recommend using this service, even in the manner in which I pointed out above.

Note: I’ll leave my BitcoinWallet.com wallet up so readers can see it and know that my review is real. I’m even naming my vanity wallet listing a shortened URL to this review. But, if you feel the desire to send me bitcoin, for one reason or another, please don’t do it through there. Use my donation box or use the Changetip link on my articles. Also, if you know of a service that performs the service BitcoinWallet.com tries to provide only better, let me know about it using the Contact page and I’ll mention you in the review I write about it.

Posted in Other, Reviews, Services, Wallets, Web

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