With the world currently in the midst of a cryptocurrency infatuation, coin owners are rushing to pick up Android Bitcoin wallets as a cheaper alternative to the standard hardware wallet. And while it may at first seem like a good idea, do these low-cost options really protect your money? The answer to that is yes—and no.
Android e-wallets are a safe way to use your Bitcoin and other cryptocurrencies while on the go. They use the best privacy and security measures in the industry to protect what is essentially digital cash that you carry around on your phone.
However, while encryption and privacy are clearly a priority, you’re still trusting your financial details and security to a third party (as well as to your ability to hang on to your smartphone).
Of course, these e-wallets are much better options than storing your cryptocurrency in a coin exchange. There have been innumerable attacks on these exchanges for the simple reason that they store millions of dollars’ worth of cryptocurrencies. You, on the other hand, are a much less attractive target, since your smartphone only contains a small reserve of Bitcoin.
That being said, there’s still the possibility of losing your phone or that a bug in your e-wallet app will lead to a lack of security or even a hack. And given that your smartphone is connected to the internet more often than not, the threats of a hack are very real. Either scenario should fill you with dread, especially if you’ve invested heavily in crypto.
The alternative (and what many say is the more secure option) is the expensive hardware wallet we mentioned earlier. With this option, you have a secure piece of hardware that occasionally connects to the internet so you can handle transactions, but—generally speaking—it remains offline.
This means that you keep the opportunity for hacks at a bare minimum, which we’re sure you can appreciate is a very good thing indeed. And although these wallets are just as susceptible to loss or physical theft as their app-based counterparts, storing them in a vault or safe should protect you.
Many industries are slow to react to the blossoming digital currency industry, and with so many high-profile hacks of coin exchanges, it’s easy to understand why. However, the gaming industry has already embraced bitcoin technology; many casinos allow the use of cryptocurrency for non-table activities in a bid to boost revenues and offer customers a higher level of convenience.
Having said that, many have yet to accept bitcoin as a replacement for cash because they understand that this is a growing and highly-volatile niche. They are suspicious of anything new that touches their money and hedge their bets so that any loss they suffer is at a bare minimum. If there’s one thing they understand, it’s the need for absolute security where money is concerned.
And we should take a leaf from their book. Crypto is a wonderfully-convenient method of saving, investing and paying for services, but you shouldn’t put all your eggs in one basket. The Android crypto wallet is a superb idea in theory, but you should only keep very small amounts of Bitcoin in your phone at any one time. Stay safe and hedge your bets just like the casinos do. And if you are going to use a hardware wallet for large amounts, consider renting a safe deposit box at the bank.