Coinbase vs Bitcoin Core vs Bitcoin Wallet Review – What Is The Difference?

This review was updated on June 8, 2015.

Millions of people around the world have heard and are curious about Bitcoin. Many are already using the digital currency and many more are planning to start using it in the near future. But the question everybody asks is:

What Bitcoin software or service should I use?

Hello Bitcoin >>>
Hello Bitcoin >>>

There are several solutions in the market, but the three of the most popular are Bitcoin Core, Bitcoin Wallet and Coinbase.

Bitcoin Core (formerly known as Bitcoin-Qt) is the original Bitcoin peer-to-peer open source software created by the network’s founder Satoshi Nakamoto. It is the core of the Bitcoin system and anybody can download it for free to their desktops. It contains the public ledger that lists every Bitcoin transaction in the system. When installed it turns your computer into a node in the Bitcoin Network.

Bitcoin Wallet is what is called a “thin client”. Created by Andreas Schildbach, a Bitcoin community engineer, it is also open source. It’s called “thin” because it doesn’t contain the Bitcoin public ledger and it needs to connect to the network through another Bitcoin server. This software is like any app on your smartphone and works on Android and Blackberry devices.

Coinbase is a private company based in San Francisco, California, that provides web and mobile Bitcoin services. The mission of the founders is to provide Bitcoin value added products for consumers and merchants. Their users deal with the company rather than directly with the network. Coinbase is recognized as “the PayPal” of the Bitcoin Network.

How do they compare?

The three services fulfill the basic functions of storing and keeping track of your Bitcoin account balance, but they differ in features and security format. Take a look at this comparison chart to see the differences:

Coinbase vs Bitcoin-Qt vs Bitcoin Wallet Chart
Coinbase vs Bitcoin Core vs Bitcoin Wallet Chart

And what does this mean for me?

As shown above there are several things to take into account when deciding what solution to use. It all boils down to your personal needs and your security preferences. These are the descriptions for each feature:

Send and Receive: The first thing you do when you get a Bitcoin wallet is to acquire your first bitcoins by selling products and services or by buying them. After that you need to be able to transfer them to pay for things or sell them. For this the features of Send and Receive are needed and the three solutions mentioned above provide this. They all also have the Address Book functionality that let’s you store names and Bitcoin addresses so it’s easier to manage your transfers.

Buy and Sell: If you need to buy and sell bitcoins as an investment or for payment purposes you can use Bitcoin exchanges. For this you need to transfer back and forth bitcoins to and from your exchange accounts. In the case of Coinbase it is the only one that has this service integrated into its wallet and merchant products. On Coinbase you can easily buy and sell bitcoins directly from your account without having to move them elsewhere.

Link Bank Account: When you link your Us dollar bank account with your Bitcoin account you can easily move money between them. Coinbase is the only one that provides this feature. In the case of Bitcoin Core and Bitcoin Wallet you need to handle the dollar transfers and payments separately from your bitcoin movements.

Pay by Email: PayPal pioneered the ability to send and receive money using your email account. Coinbase is emulating this by providing the same functionality but with your Bitcoin account. By entering their email addresses you can send bitcoins to anyone and anyone can send Bitcoins to you using your email address too. On Bitcoin Core and Bitcoin Wallet your need to use the 30 character Bitcoin address instead.

Merchant Services: If you use Bitcoin Core and Bitcoin Wallet you can get paid when you sell products and services by providing your Bitcoin address. This is a 30 character code that anyone can use to transfer the digital currency to your account. In the case of Coinbase they have taken this further by providing “Buy”, “Subscribe”, and “Donate” buttons that are linked to your account. These buttons can be installed in your website so your clients can pay just like they would by clicking your PayPal or other payment buttons.

Web: Coinbase is the only one that has web based services. This means you can open your Bitcoin wallet and fully manage it and use all their services on their website.

Desktop: Bitcoin Core is only desktop based and it is the only one of the three with a desktop app. You can use it on any Windows, Mac, Ubuntu, or Linux computer. It takes 1 day or more to download because it includes all the historic Bitcoin transactions ledger.

Smartphone: Bitcoin Wallet is only a mobile app and works on Android and Blackberry. Coinbase has a full service mobile app that works on Apple and Android and synchronizes with their web services.

You Control Private Key: To be able to transfer bitcoins in the network you need your public Bitcoin address and your private key which is secret. In the case of Bitcoin Core and Bitcoin Wallet your private keys are stored in the software and app which are only installed on your devices. This means they are not held anywhere else and you have exclusive control of your Bitcoin accounts.

They Control Private Key: In the case of Coinbase they control your private keys. This is because it is the only way they can serve as a gateway to the Bitcoin ecosystem and provide their value added services. It is more or less like a bank account: when you have dollar bills in your wallet you have full control of your money, but when you deposit them in the bank they have control of your money.

Security formats:

Bitcoin Core is considered the most secure and stable solution because users control their private keys and it is a node in the network. It’s downside is that it occupies significant space in your computer and it has less features than the other alternatives.

In the case of Bitcoin Wallet it is considered secure, users also control their private keys, and it is convenient because it is mobile and you can pay and get paid using QR codes.

Coinbase is as secure as the company and its technology are. Because users interact with Coinbase and thus indirectly with the network, they need to entrust their private keys to the company just like they would their money with PayPal or with a bank. Because Coinbase is compliant with federal and state regulations and counts with the support of important investors it is considered to be a safe Bitcoin service provider.

Conclusion:

If you want to be part of the Bitcoin Network and maybe even are planning to provide Bitcoin services in the future, the best alternative for you is to use Bitcoin Core .

For those who want a high level of security, but at the same time convenience and mobility then Bitcoin Wallet is the most suitable solution.

For a simple and full service experience Coinbase offers the best alternative. If you want to easily open a Bitcoin account, use it on the web and on your mobile device, and maybe even sell your products and get paid in bitcoins then the Coinbase Wallet is the best way to start.

Bitcoin Review – What Is Bitcoin?

Just like email was created to send messages from person to person around the world, Bitcoin was created to send money from person to person around the world. Just like the email system works with email addresses and emails, the Bitcoin system works with Bitcoin addresses and bitcoins.

Hello Bitcoin!
Hello Bitcoin!

While on the email system the format of an address is name@example.com and you have to type this on the “To:” space to be able to send an email, on the Bitcoin system the format of an address is a 34 character code like 1JqjAHgjCmNCRUHWKHrtUcvCofhWt9FTSW and you have to copy this on the “To:” space to be able to send a bitcoin.

To start using email you need to go to an email service like Gmail, open an email account, and start sending and receiving emails. On the bitcoin system you need to go to a bitcoin service like Coinbase, open a Bitcoin wallet, and start buying, selling, sending, and receiving bitcoins.

Email is something you can create and store in your “Sent emails” box infinitely, and the receiver can also store, copy, and resend endlessly. Bitcoins are something there is a limited amount of and when you send one it goes away from your wallet just like a dollar bill would from your physical wallet. The receiver can store it in his wallet or send it away, but when he does send it away it will be deleted from his computer. Thus, unlike emails, bitcoins are finite and unique. In this way they are more like gold than email; there is a limited amount and they cannot be copied or replicated.

These last two characteristics, finite and unique, are what make bitcoin ideal to be used as a currency. The fact that it is electronic and used only on the internet is what makes it a digital currency.

It is time to start using bitcoins:

As adoption of Bitcoin accelerates, its use case and functionality are more compelling for a growing number of merchants, consumers, traders, and investors. The following are some features that make Bitcoin so attractive:

It is a valid currency: While many are still analyzing if Bitcoin will be a valid currency or not, I say it is a store of value, an exchange mechanism, and a unit of account, therefore it is already a currency.

A store of value: Although the price of Bitcoin has been volatile, since inception it has been gaining value and already has a market capitalization of several billion dollars. As Bitcoin users continue grow globally its function as a store of value will be reinforced.

A unit of account: Since bitcoins can be used to store value, this value can be compared with the value of any other currency or merchandise. This makes it a valid unit of account to price products and services and to measure cash flows, among other things.

An exchange mechanism: Since it is easy to transfer, Bitcoin can be exchanged for products and services or used to payoff debts if the parties agree. Therefore, it can be used as an exchange mechanism.

It is a global online network: Just like email, anybody in the world with a computer or a mobile device with internet access can have a Bitcoin address. With a Bitcoin address and a Bitcoin wallet it is possible to send and receive bitcoins to and from anybody and anywhere in the world.

It is decentralized: The Bitcoin network is the sum of people transacting in bitcoins with one another directly on the internet. There is no central server or entity, like a government, central bank, corporation, or foundation that controls the network.  Therefore it cannot be manipulated like normal currencies issued by decree and controlled by governments.

It is free: Because it is an open source protocol and it is decentralized its use is free. To store, send, and receive bitcoins has no cost. This must not be confused with the purchase and sale of bitcoins. Bitcoins have value so to buy bitcoins you need to pay for them!

Wallet services: To be able to use Bitcoin there are wallet services that are easy to subscribe to and provide the functionality to transact with bitcoins.

Send and receive: The basic functionality of a Bitcoin wallet is to manage a Bitcoin address so you can send and receive bitcoins. You can see your Bitcoin balance and the transaction history so you can track your Bitcoin activity.

Buy and sell: Since bitcoins can be stored and transferred they can also be bought and sold. You can do this by transacting with someone directly and then sending or receiving the bitcoins or you can use a Bitcoin exchange.

Connected to the dollar system: Some Bitcoin wallet services may be linked with your regular dollar based bank account. This makes it easier to convert bitcoins to dollars and vice versa and to move money between your wallet and your account.

Global exchanges: To facilitate the exchange of bitcoins with other currencies there are many global exchanges like Mt. Gox or Bitstamp where Bitcoin users can trade them for different currencies like dollars, pounds, yens, or euros.

Sell and get paid: Once you have a Bitcoin address it is easy to post it on your website or send by email so other Bitcoin users can send you bitcoins in exchange for your products and services. You can also use a Bitcoin wallet provider that offers merchant services so you can install a “buy” or “pay” button on your site so you can get paid to your wallet directly.

What are the risks of using Bitcoin?

Because it is a relatively new technology Bitcoin has certain risks associated with it:

Volatility: Since inception Bitcoin prices have been very volatile. Recently the Bitcoin price went up from $100 to $1250 and is now trading in a wide range between those levels. This happened in a matter of weeks so it is still very volatile to use it as a stable savings or investment mechanism.

Theft: Although the majority of Bitcoin services like wallets and exchanges have established bank level security in their systems, some are still not very sophisticated and may be subject to hacker attacks and theft. This is a serious risk in the Bitcoin network because once bitcoins are transferred they cannot be recovered.

Trust: Related to the above and because Bitcoin has been around for only a few years, all Bitcoin services are mainly start-ups or companies with no significant capitalization. This poses an additional institutional risk as the majority of these services wouldn’t be able to respond to customer claims like theft, fraud, or errors.

Accessibility: Many Bitcoin exchanges and wallet services have been affected by hackers with denial-of-service attacks (also known as distributed-denial-of-service attacks – DDoS). These are not internal thefts of bitcoins or information, but massive attacks that overload their servers. These attacks make these services unavailable for long periods of time so there can be little or no access to your wallet and thus the ability to withdraw money or transfer bitcoins out of your account.

Conclusion:

Bitcoin is a new concept, but it’s in the process of being understood and adopted by a growing number of consumers, merchants, and investors around the world. As this process continues the reasons to start using bitcoins are becoming more compelling.

There is also increased investment in the sector and many new finance companies are offering more professional and consumer friendly solutions for everyday use.

Bitcoin poses some technological and financial risks, namely the permanent loss of capital. However as these risks are mitigated, more consumers, merchants, and investors should start learning about and using Bitcoin.

Open your first Bitcoin Wallet! >>>

Ripple Wallet Review – Try The Ripple Multi-Currency Network And Buy Some XRP

As you can see I own 2500 ripples >>>
<<< As you can see I own 2500 ripples currently worth $10!

The Ripple Network is still in its early stages. It is in “beta” which means they are discovering and fixing bugs and adjusting the user experience. Nevertheless it is worth exploring and getting a Ripple Wallet to buy some XRP and move money around the world for free.

The Ripple Wallet has been around for some time. Last June I got the invitation to open one and OpenCoin Inc., the creators of The Ripple Network, gave me 1000 ripples as part of their global distribution program of the XRP digital currency.

The Ripple Network is a global open payments system that supports any currency including bitcoin. It also has its own native currency (the ripple or XRP) to facilitate money transfers within the system. To learn more about The Ripple Network please read my review or watch my interview with Patrick Griffin, head of business development at OpenCoin Inc..

Last week OpenCoin Inc. contacted Ripple Wallet users again to distribute more XRP, but in this case I had to join a new “gateway” service called SnapSwap.us to get my 1500 new XRP.

This was great because SnapSwap is the first US Ripple gateway. This means now I can move money from my US dollar bank account to my Ripple Wallet, back and forth, through SnapSwap. Before this, my Ripple Wallet was somewhat isolated. The way of “loading” some money was by receiving XRP from an OpenCoin giveaway. The other alternative was buying them from someone else, sending the dollars through other means, so they would send the XRP to my wallet.

Now that my wallet is linked to the US bank system through SnapSwap, I can do much more with it.

Features:

Before anything let me tell you that bitcoins, ripples, and other digital currencies have been very volatile. If you use them there is still a significant risk you may lose substantial amounts of money. Having said this I don’t mind using my XRP 2500 which amounts to around $10 and maybe I will upload $100 more to buy things and see how it works.

Registration and security:

Register - be careful with your pass phrase and secret key!
Register – be careful with your pass phrase and secret key!

To get the wallet you need to go to https://ripple.com/client/#/register to register. You need to select a name for you wallet and then create a pass phrase (password). Be careful here because they make it clear that if you lose your pass phrase the only way of recovering your wallet is by using your secret key. The secret key is obtained after opening the wallet. They let you see the pass phrase you selected and your secret key. You need to back them up in a file or secure place in your laptop. If you lose your secret key and your pass phrase you will lose your wallet and the money you had there. It’s like a real wallet in your pocket!

Activation: Once you open your wallet it is not yet operational. It needs to be activated by depositing a minimum of 75 XRP or by connecting it to the SnapSwap gateway. OpenCoin might give away new XRP and offer promotions in the future, but that is not guaranteed. You can also buy XRP from someone that transfers them to your wallet.

Ripple account address: When you created your wallet not only your secret key was created, but also your public key. This is the one you give others so they can send you money. This key can be found on the “receive” page (see below under “Receive”).

SnapSwap connection:

My $ bank account >>> My SnapSwap >>> My Ripple Wallet >>> My SnapSwap >>> My bank $ account.

SnapSwap - Ripple Gateway >>>
SnapSwap – Ripple Gateway >>>

Like I said before SnapSwap is a gateway. This means you can connect your real bank account to your SnapSwap profile and your Ripple account public key. Once you do this you will be able to send dollars to your Ripple Wallet and vice versa.

Send money: To send money you need the Ripple account address of your counterparty. You enter their address on the “Send” page, select which currency you want to transfer, the amount, and press “send”.

Ripple - send $10 >>>
Ripple – send $10 >>>

The system is brilliant because regardless of what currencies you hold, you can send any other currency. The Ripple Network will automatically find a seller of the other currency and exchange it at the best price. The receiver will see the other currency deposited in his account automatically in a matter of seconds.

Receive: Like I said above, to receive XRP or any other currency the sender needs your public account address. For this you need to go to the “Receive” page and copy it or to use the QR code of your account.

Ripple - receive >>>
Ripple – receive >>>

See your secret key: In the security tab is where you can find your key. These are controled by you and not by Ripple.com or OpenCoin. If you lose them you will not recover your wallet or your money. To back them up you can select “Show my keys” in this section to see them and copy them.

Ripple - show my keys >>>
Ripple – show my keys >>>

Send bitcoins to bitcoin addresses! On July 2nd Ripple.com announced the Bitcoin Bridge. This means that anybody with a ripple wallet can now send bitcoins to any bitcoin wallet. Like with other types of transfers on Ripple you can originate the transaction in any currency, it will be exchanged into bitcoin at the best rate, and it will be delivered to the bitcoin address you indicated.

Ripple - send - receive - Bitcoin Wallets >>>
Ripple – send – receive – Bitcoin Wallets >>>

Conclusion:

The Ripple Network will likely change the way money is handled in the world. By opening a Ripple Wallet everybody gets access to the global currency market including digital currencies like bitcoin.

It works like email, but with money instead of messages. You can send and receive any currency like yens, pounds, rubles, bitcoins or dollars. To and from anyone in the world, direct, for free, and instantly. In one wallet you can hold all currencies, buy and sell them, and pay anything.

Even if it is in its early stages I recommend opening a Ripple Wallet for exploration purposes. You can send a few dollars through SnapSwap, buy some XRP, and even send bitcoins to your bitcoin address. It’s the Gmail of money.

Check out the Ripple >>>