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NiceHash

Latest release: 5.2.1 ( 16th January 2023 ) 🔍 Last analysed 24th June 2022 . Custodial: The provider holds the keys
4.3 ★★★★★
1372 ratings
29th April 2020

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 the answer is "no", we mark it as "Custodial: The provider holds the keys".

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.
The product cannot be independently verified. If the provider puts your funds at risk on purpose or by accident, you will probably not know about the issue before people start losing money. If the provider is more criminally inclined he might have collected all the backups of all the wallets, ready to be emptied at the press of a button. The product might have a formidable track record but out of distress or change in management turns out to be evil from some point on, with nobody outside ever knowing before it is too late.

Help spread awareness for build reproducibility

Please help us spread the word discussing the risks of centralized custodians with NiceHash  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.

If you find something we should include, you can create an issue or edit this analysis yourself and create a merge request for your changes.

The Analysis 

(Analysis from Android review)

App Description

From the Play Store:

NiceHash is the official mobile app for the NiceHash platform. You can manage your crypto wallets, account settings, and manage your mining rigs on the go thanks to our easy and intuitive app! Stay in control of your mining operations and earnings at all times.

NiceHash is a multi-faceted app that provides the following services:

■ Rig Manager

Manage and monitor your mining rigs remotely, keep an eye on temperatures, start and stop mining, and change power settings easily on the go.

■ Crypto Wallets

Deposit or withdraw over 60 cryptocurrencies and check your wallet activities. Please note that this is not a mobile cryptocurrency wallet, no seed phrases are stored on your device. NiceHash provides a secure custodial wallet for all users.

■ Hashpower Marketplace

Check the status of your hashpower orders, place new orders, and manage or cancel existing orders easily on the go.

■ Notifications

Enable push notifications and get instant information and updates about your NiceHash activities and important news on our platform.

■ User profile

Manage your NiceHash profile or your organization profile settings and upgrade your account tiers by completing KYC inside the app.

Verdict

After account registration and verification, various cryptocurrency wallets are available. None of them provide an option for backing up via seed phrases.

According to the Terms and Conditions

NiceWallet means a wallet created automatically for the Account holder and provided by the NiceWallet provider. NiceHash does not hold funds on behalf of the Account holder but only transfers Account holder’s requests regarding the NiceWallet transaction to the NiceWallet provider who executes the requested transactions. In this respect NiceHash only processes and performs administrative services related to the payments regarding the NiceHash Mining Services.

NiceWallet provider is a third party which on the behalf of the Account holder provides and manages the NiceWallet, holds, stores and transfers funds and hosts NiceWallet. For more information about the NiceWallet provider BitGo, see the following website: https://www.bitgo.com and for NiceWallet provider NICEX Ltd., see the following website: https://www.nicex.com.

The wallet service component of NiceHash is a custodial service.

(dg)