Bitcoin Cash
Wallet Types

Users interact with the Bitcoin Cash network using a wallet. There are a ton of different wallets out there, all with different features and focuses. Some have very active development while others are catching dust. There are a lot of factors to compare and certainly no 'one size fits all’. Our goal is to help you find the ideal wallet for you!

The importance of open source

Two of the most popular multi-token wallets, Exodus and Jaxx, are not open source. It is important from a security point of view that cryptocurrency wallets are completely open sourced and that the project is maintained on a repository (e.g. Github) that records and tracks changes. The reason for this, is so that anyone can check if malicious code has ever been rolled out in a software release. Because wallets have access to private keys and the ability to communicate across the internet, closed source wallets could just send your private keys to the attacker (either an insider or an outsider) to steal your funds.

Being open source alone doesn't prevent this if nobody takes a look at the code. That's why it's important to choose a wallet used by a lot of people which has built up a good reputation in the community. For securing large amounts it's recommended to look into 'cold storage' solutions where your wallet is not connected to the internet.

Types of validation

For ‘thin clients’ there are two types of validation, SPV and server-trusting (or trusted in short). SPV stands for Simplified Payment Verification and was first described by Satoshi Nakamoto in the original Bitcoin whitepaper. It allows a wallet to provide strong security without the need for downloading the whole blockchain. SPV lets you validate your own transactions by ensuring they are confirmed in the blockchain by using the header chain with the most cumulative proof of work and the correct hashing difficulty level. This is in line with the 'don't trust, verify' moto.

Server-trusting clients on the other hand trust the server they rely upon because they do not actually verify for themsleves. In theory, the server could lie about the Bitcoin Cash received to a wallet. The user could –assuming that the server was telling the truth- perform some service, transfer funds or send goods without receiving any BCH in exchange. Therefore, using this type of wallet means implicitly trusting the server. It is important to note that the server can never steal any coins because they don't have acces to your keys, they can only lie about what's included in the blockchain.

Backend redundancy

'Backend redudancy' is a technical term to decribe the servers/nodes your lightweight wallet relies upon behind the scenes. This is not as important for most users when choosing a wallet as the validation type but it can still have important consequences for the uptime and reliability of a wallet. The majority of the wallets rely on a single server for communication. The backend is centralized and has a single point of failure, if/when the server is down, your wallet is bricked. This means it won't be able to send and receive transacions anymore and you'll have to export your keys to a new wallet. There is no loss of funds if you have acces to your private keys but it is a hassle.

About full nodes

This site only lists lightweight wallets but for businesses, developers and privacy-minded users it can be beneficial to have a direct connection in the network by running their own full-node. Some of the most notable node-implentations are Bitcoin ABC, Bitcoin Unlimited and BCHD. A more complete overview can be found here.