Cryptowallets Review: Top Reasons Why XZEN Is Better
Today Dmitry Laptev XZEN co-founder and CFO, is going to tell about how he nearly lost amount of money, how private keys are stored and why you should join XZEN Pre-ICO (on XZEN.io) to get the best wallet on this market.
According to Forbes analytics, the amount of funds stored at cryptocurrency wallets with lost access is around $21 bln. A while ago, this amount has been on the verge of increasing by my $10K).
Forgotten password
I have registered an account at MyEtherWallet, a web wallet, to participate in pre-ICO of one startup. When registering you have to print out the password (which I did not do right away since I had no access to printer) and save the file with the key to a certain directory on your computer. When accessing the wallet you have to enter the password and indicate the file path.
Two or three months have passed when I had to use this wallet once again, but I failed to find the document with the key anywhere. $10K was at stake. I dug up my whole computer with no luck, checked every folder and recycle bin — every single corner of my PC. Yet in several days, I accidentally remembered that I had saved the file on the laptop, which I barely use.
My case in not a unique one. Mark Frauenfelder, a US journalist, has recently told a story about how he lost a PIN to a private key storage device and nearly lost USD 30K. I believe that Forbes statistics of lost wallets has a great share of forgotten passwords. These include the ones forgotten by the owners who stored their money in different wallets. It is rather difficult to manage even with a single one, not to speak of passwords to five wallets. The mission of saving all of them and not getting mixed up is almost impossible.
That is why solutions of easy storage and protection of own funds are extensively used at the market of cryptocurrency storage.
Types of wallets
From a technical point of view, cryptocurrency wallets do not store the money, but the private keys required for authorization and transactions. Hence, they provide access to funds only to the person with an access to the wallet. Currently the storage systems are provided for various devices and fall into two types: hot and cold.
Hot systems have Internet access
The advantage of such wallets is a rather high speed and simplicity of transactions. The wallets could be of different types: Web browser extensions (such as DarkWallet), PC clients (MyEtherWallet) or mobile applications (Mycelium, Xapo). There are online systems with cloud storage such as Strongcoin. In addition to that, it is also possible to store funds at exchanges such as Poloniex, Exmo and dozens of others.
The key disadvantage of such storage type is insufficient security. The wallet has a direct connection to Internet, thus leading to potential problems such as data interception, device infection and vulnerability of exchange security system. The major thefts of cryptocurrency happened exactly with the last-mentioned. In 2016 hackers transferred 119 756 bitcoins (USD 72 MM at the rate as of that time) from Bitfinex, a Hong Kong exchange. In 2014 it became known that 744 408 bitcoins (equivalent to USD 460 MM) were stolen from the accounts of Mt.Gox exchange.
Generally, use of hot wallets is reasonable if you trade on exchanges regularly or keep minor amounts for routine expenditures on such exchanges. Nevertheless, I wouldn’t recommend you to use them as the primary wallet.
Cold system do not have Internet access
There are two types of cold systems — paper and hardware.
A paper wallet means a way to store keys on paper as is clear from its name. You can write down the key on a notebook sheet and store it in a safe place. You can use a specialized website such as Paper Wallet where all your data will be ciphered as QR codes to be printed out.
Such wallets are easy-to-use and easily understandable, but they require safekeeping, i.e. secure storage — one has to create backup copies, keep them safely and, most importantly, always remember their exact location. Needless to say, one shall never take pictures of them, store their images in an unsecured phone or send via Internet.
Hardware wallets are small-sized electronic devices such as USB flash drives. They don’t have Internet access though could be connected to devices with such access. When a request for transaction is made, the system does not give the private key itself to the PC or mobile application, but merely signs the transaction. I.e. the data from the hardware wallet doesn’t go anywhere. There are several devices of this kind currently at the market. Let’s have a look at the most popular ones and find out why they are not perfect.
Review of hardware wallets
Name: Trezor
Year of market launch: 2013
Price: USD 99
Pros:
· Supports various types of cryptocurrencies: bitcoin, Ethereum (+ all ERC-20 markers), Ethereum Classic, ZCash, Litecoin, Namecoin, Dogecoin, Dash and Testnet bitcoin;
· Supports Chrome and Firefox;
· Possible to restore access in case of loss of the device
Cons:
· Unappealing design;
· Hard to use for a naive user;
· USB cable is required for operation;
· Compatible only with Android devices which shall be equipped with USB On-The-Go;
· Vulnerabilities have been repeatedly revealed and had to be eliminated by the manufacturer.
Despite the vulnerabilities, Trezor is a wallet with high level of security. Nevertheless, it is clearly not a mass product.
First of all, it is complicated to use it. The first setting up implies that you have to enter the PIN and write down a combination of words (which will become the check phrase in case you forget the PIN). In order to perform a transaction you have to confirm it by pushing the button. Well, I’d say it’s for impassioned enthusiasts.
Secondly, the wallet is large and unattractive. It does not meet the contemporary needs for beautiful and intuitive gadgets. Unfortunately, there is no pleasure of using it.
Name: Ledger Nano S
Year of market launch: 2014
Price: USD 68
Pros:
· Low cost;
· Supports a great deal of various currencies: Ark, Bitcoin, Bitcoin Cash, Dash, Dogecoin, Ethereum, Ethereum Classic, Expanse, Komodo, Litecoin, PivX, PoSW, Ripple, Stratis, Ubiq, Vertcoin, Viacoin, ZCash;
· Compact size;
· When initialized, a backup copy is created automatically. It is possible to restore the data in a new device in case of losing one.
Cons:
· Data is deleted after three attempts to enter a wrong PIN;
· A very small screen;
· Compatible only with Android devices and only in case Mycelium mobile wallet is used;
· Supports Chrome only with the use of a special extension;
· USB cable is required for operation.
As opposed to other wallets, this wallet uses a smart card — a protected element within the body of the device — to store the data. The manufacturer assures that the smart card is more reliable that microprocessor control units that are used in competitors’ devices. Nevertheless, the devise is behindhand in convenience. The interface consists of two buttons on the body and a status bar on a small screen. It is hard to call Ledger Nano S an ideal one.
Name: XZEN
Year of market launch: Q3 2018
Price: USD 100–120
Pros:
· Supports a great number of wallets with limitless amount of secret keys;
· Could be used with different computers;
· Possible to restore the data in a new wallet in case of loss of the device;
· Exchange of any cryptocurency at the market exchange rate inside the wallet
· Compatible with Mobile devices via Bluetooth
· NFC Payments for goods and services using the built-in chip
· Large screen displaying transaction data;
First of all , the concept of XZEN is to produce a mass product that would meet most of the needs of almost all users. Besides the development of its own new technological solutions, XZEN plans to integrate the most advanced modern services into its wallet, thereby creating a universal and convenient platform for personal financial management for the user. The development of a highquality mass product will accelerate the dissemination and implementation of blockchain technologies in the traditional fiat financial system.
Secondary, XZEN is the world’s first secure crypto wallet, which supports the use of highly liquid crypto currencies (for example, Bitcoin, Ethereum, Litecoin), smart assets (ERC20 standard), and which is also capable of storing any kind of fiat currencies in one device. Such an approach will allow owners of crypto currencies to obtain a variety of options for using and spending funds, and at the same time to deal with the cryptocurrency world and the world of fiat money. Due to the wide range of functionalities, users will be able to invest money in tokens of the companies through the major exchanges and the ICO, they will get an access to credit services and a possibility to make transfers within the system without commissions. In addition, with the help of NFC chip built in the devices XZEN Wallet and XZEN Band, users can make contactless payments for goods and services in many countries.
And, finally inside our hardware wallet users can find Qualcomm Snapdragon 430 processor, a fingerprint scanner, and triple encryption and decentralized storage of data, thus enabling secure transactions and storage of financial assets. The gadget will also be dust- and water-resistant per IP67, have a high-contrastLCD display with a resolution of 960 by 640 pixels, and an integrated 1100 mAh battery with a standby time of up to two weeks. . Finally, XZEN’s built-in NFC chip enables contactless payments in any of the 36 million points of sale throughout the world.
Conclusion
Nowadays, when the bitcoin-to-USD exchange rate fluctuates between USD 6,000 to 7,000, even a minor amount of cryptocurrency is of interest to cyber criminals.
Having reviewed the most popular representatives of the cold wallet market, we can conclude that:
· The wallets either have a high level of security or too complicated to use; or
· They are easy to use though poorly secured.
There is not a single wallet, which is easy and secured all at the same time. The users are forced to face inconveniences. In order to confirm even a slightest transaction of 1 dollar, a user has to turn on a specific computer, find a special file there and, on top of it, enter the password.
Storage of passwords constitutes another problem. Users still have to write down or otherwise save the passwords and relevant check phrases. This does not look like up-to-date technologies making life easier. The main aim of XZEN is to shift this paradigm, and to bring to the mass new type of cryptowallet — the most functional and secure one. Join our project on XZEN.io to get your free wallet!
