Thanks to the open source cryptocurrency approach the blockchain industry is the way it is. But what is open source crypto? Who is eligible for building a wallet that is based on bitcoin open source? Is bitcoin open source wallet better than a traditional one? Is it secure? In this article, we shall be answering all of those questions you might have related to the open source crypto sector.
What is the bitcoin open source crypto wallet?
An open source bitcoin wallet acts as a device which facilitates transactions for bitcoin. Here, the code is published in public view and is open for any kind of modifications. The users can verify and understand its connections to the blockchain’s flagship and how it processes the transactions after reaching the accounts in the bitcoin network. Even though cryptocurrency source code is still a new thing, many bitcoin wallets are openly accepting this new development. So is bitcoin open source? Yes it is! The cryptocurrency source code being publicly open is progressive for blockchain. What’s more, it also has its own characteristics.
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What are the advantages of bitcoin wallets being open source?
Users who are wondering if the bitcoin wallet being open source has any advantages, then they should know that there are a few advantages. To begin with, bitcoin open source wallets are always available for a public viewing. It works like an endless bounty, many cryptocurrency enthusiasts and experts partake in viewing each other’s creations. This is beneficial because if there are any bugs or errors, they will be spotted and out immediately. This is not the case with wallets that are not open source. The wallets that are not open source are only tested and verified by the cybersecurity vendors. While not to say that it is not a secure method, it still leaves room for potential flaws which may go unspotted.
Users who know programming can customize their open source crypto wallet as per their requirements and upgrade it when they wish to. Hence, this is the main reason why open source cryptocurrency products grow faster than resources that are not open source.
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Where can cryptocurrency source code be improved?
While it is extremely efficient for users to choose an open source wallet for their advantages, there are a few disadvantages which must also be discussed. Is bitcoin open source good? Yes. But the problem with an open cryptocurrency source code is that it can be plagiarized which has also affected quite a number of projects. The open source approach also stops programmers from suing the plagiarists. What’s more, since the cryptocurrency source code is open for the public, they are prone to attacks. Hence, users must thoroughly check if their wallet has any sensitive data stored in it.
Where are the keys to the server-side and client wallets?
Users should know that they are not anon when they use a crypto wallet that is server-side. This is because the server-side wallets which operate through the servers store important data such as name, address and other contact details to match it with the private keys of the bitcoin wallets. This method of working helps centralized cryptocurrency wallets to support more currencies and work faster while maintaining a smooth interface. However, since users will not possess their own keys, the true wallet owners and the government can easily hack and trace the wallets, thus gaining access to the hard earned money.
On the other hand, the client wallets do not possess any kind of infrastructure for their wallets which can store their assets. But the users should know that they alone bear full responsibility for the keys. This means, if they lose their keys then it is gone forever and cannot be restored. On the brightside, no one else can access it but then. At the end, users will have to decide if server-side or client-side wallets suit them better.
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Why does cryptocurrency source code being open matters?
The open blockchain and the crypto networks can provide various functionalities which have the potential to be regulated when it will be provided from a single entity. When there is a centralized cryptocurrency issuer, they should be licensed to conduct transactions wherever they may be based. If the issuer wishes to sell her tokens as an investment, they may be considered securities, and she will need to register with the Securities and Exchange Commission. These rules make sense since centralised services run the danger of the party in the centre not keeping her commitments or testing and securing her products appropriately.
However, the same functionalities can also be created with an open source technology such as bitcoin in the middle. When users join these open source networks, the softwares will align with their cooperation for the incentives. Ultimately, there will be an agreement to own all the data needed to create the currency. This decentralization is based on two points:
- Open consensus mechanisms
- Open source software
For the users who are participating, how would they be able to trust the network they are joining if it is not open source? Token projects which are based on a set of proprietary code can be hidden behind blockchains. However, for the projects to be genuine, it should be decentralized and open source so that the users who are participating can trust each other, agree on incentives and punish those who commit fraud. It was created in the open, free to use and altered by anybody, completely independent of any one or even a few corporate interests, and by hundreds of dedicated users.