Bitcoin Wallet by SpectroCoinlatest release: 1.18.1 ( 23rd November 2021 ) last analysed 12th October 2020 Custodial: The provider holds the keys
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Please help us spread the word discussing the risks of centralized custodians with Bitcoin Wallet by SpectroCoin via their Twitter!
Do your own research!
Try out searching for "lost bitcoins", "stole my money" or "scammers" together with the wallet's name, even if you think the wallet is generally trustworthy. For all the bigger wallets you will find accusations. Make sure you understand why they were made and if you are comfortable with the provider's reaction.
The Analysis ¶
This part of the wallet’s descriptions certainly sounds like a custodial app:
We respect your privacy and collect only necessary data, which is processed and stored in accordance with applicable laws. We give you great control, so you can always manage and update your SpectroCoin account easily. As with so many things, it is a matter of balancing security and convenience. A safe environment, in which you can exchange cryptocurrency and make borderless payments, requires industry-leading safety standards, including multi-stage account verification, advanced authentication methods, and bank-level security.
Also the user comments are a lesson in why a custodial wallet is not for everyone.
Their website has the confirmation about the app being custodial:
99% of all digital currency is stored in protected SpectroCoin offline storage (deep cold wallet) to secure the assets
Our verdict: not verifiable
As the provider of this product holds the keys, verifiability of the product is not relevant to the security of the funds!
As part of our Methodology, we ask:Is the product self-custodial? If not, we tag it Custodial!
A custodial service is a service where the funds are held by a third party like the provider. The custodial service can at any point steal all the funds of all the users at their discretion. Our investigations stop there.
Some services might claim their setup is super secure, that they don’t actually have access to the funds, or that the access is shared between multiple parties. For our evaluation of it being a wallet, these details are irrelevant. They might be a trustworthy Bitcoin bank and they might be a better fit for certain users than being your own bank but our investigation still stops there as we are only interested in wallets.
Products that claim to be non-custodial but feature custodial accounts without very clearly marking those as custodial are also considered “custodial” as a whole to avoid misguiding users that follow our assessment.
This verdict means that the provider might or might not publish source code and maybe it is even possible to reproduce the build from the source code but as it is custodial, the provider already has control over the funds, so it is not a wallet where you would be in exclusive control of your funds.
We have to acknowledge that a huge majority of Bitcoiners are currently using custodial Bitcoin banks. If you do, please:
- Do your own research if the provider is trust-worthy!
- Check if you know at least enough about them so you can sue them when you have to!
- Check if the provider is under a jurisdiction that will allow them to release your funds when you need them?
- Check if the provider is taking security measures proportional to the amount of funds secured? If they have a million users and don’t use cold storage, that hot wallet is a million times more valuable for hackers to attack. A million times more effort will be taken by hackers to infiltrate their security systems.
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