Online vs. Offline Wallets

I posted about this issue in the noob subreddit and it didn't garner much of a response. If anyone here could give me some info on why I almost never see offline wallets mentioned here and if libertyx requires tumbling that would be sweet.

My initial plan was to purchase coin through libertyx and send them to an offline wallet on a separate hard drive (bitcoin core). However, I have noticed that electrum and online wallets seem to be a way more popular route? Is there a reason online wallets seem to be preferred over offline wallets and is one route more viable/secure than the other? I have no problem storing the blockchain on my offline wallet but is that the main reason why people prefer online? The convenience of having a current blockchain? I am having a hard time finding a comparison between the two. Also, if I choose to go with an offline wallet is tumbling that necessary coming from libertyx? Any help would be great guys and thank you in advance!


Comments


[1 Points] trynakick:

I use libertyX and I don't tumble, but then again I spend less than $100/month and use an account not linked to my identity. If you were maxing out libertyX every week with an account created through Facebook, maybe you'd want to tumble.

I assume you mean cold storage by 'offline wallet'. I don't use it, I have never owned more than roughly 1.5 BTC, so it never made sense to me to use cold storage. Why would you want to use it?


[1 Points] None:

Bitcoin core uses way too much disk space. 70gigs iirc...and growing quickly. Now, I have 8 terabytes of storage on this machine, but, do you really want to waste it on pointless crap?

Dont use core.


[1 Points] acheulian:

However, I have noticed that electrum and online wallets seem to be a way more popular route?

The Bitcoin core client and Electrum are both just wallets. The difference between the two is that the core client downloads the blockchain where as Electrum doesn't. I think the terminology that you have mixed up is that Electrum is a thin client.

Is there a reason online wallets seem to be preferred over offline wallets

An online wallet usually refers to browser based wallets that you access through a website. The main reason why thin client wallets are more popular is because that the blockchain winds up taking a lot of space.

and is one route more viable/secure than the other?

If you are doing it correctly, an offline wallet (plus the computer/operating system the wallet is hosted on) will never see an internet connection. That's why it's called an offline wallet. The reason why this is more secure is because if your wallet keys never see an internet connection, they are more difficult to steal.

A reason why offline wallets aren't more popular is because they require some intermediate steps in order to send a transaction.


[1 Points] NightSymphony:

You can use Electrum to do offline cold storage. I will be making a video tutorial on this next week. but the steps simply break down to; create a wallet without being connected to the internet, save the wallet's seed, copy the "Master Public Keys" and wipe the wallet from its saved location. reconnect to the internet and "restore wallet" but provide the "Master PUblic Key" to create a "watch only" wallet so you can actively watch over the cold storage without the bitcoin private key being readily accessible. then just send bitcoin to any of those addresses. when you want to withdraw, create a transaction with the "watch only" wallet, it will be "unsigned" since the private key is not available to sign with. save the "unsigned transaction" and disconnect from the internet, restore the wallet with the seed, goto Tools> Load transaction>From File and load the unsigned.txn sign it and save it. then wipe the wallet again, reconnect to the internet open your "watch only" wallet and load the signed transaction file and broadcast.


Tumbling should always be neccessary. Being an offline wallet doesnt prevent the blockchain from showing the connection between you and the place you spent the bitcoin. offline wallets are only good for ensuring your bitcoin private key isn't stolen by and sent over the internet to the person who stole it, who can then move all your bitcoin out of your bitcoin address because they have your private key to sign transactions from your address with.


[1 Points] ElectronicExorcist:

I don't understand why anyone would ever use an online wallet. That means that the actual wallet is owned by someone else and you must trust that they will continue to let you access your money. They could take their site down any day and you are SOL.

If you have any btc that is not immediately in use, you should keep it in an offline wallet. Electrum is a great choice. When btc is in an electrum wallet, then you are the only one who can access it, and you needn't worry about the website scamming or going out of business.