Monday, May 22, 2017

Zcash Wallets

A wallet is an essential part of any crypto-currency. The wallet is what holds both your Private and Public Keys which are required for spending, receiving, and storing your Zcash.

There are several types of wallets available for you to use, each having it’s own benefits and drawbacks. The most important thing you need to keep in mind about wallets is that by using a wallet (whether on your own computer, on an app, or on an exchange) YOU are acting as your own Bank. If you lose, misplace, forget your password, or are somehow hacked then your Zcash will be lost forever. Be very careful when dealing with wallets and always use strong passwords to help protect yourself.

Wallets fall into these general categories

  • Local Wallets – This wallet is stored on your computer. To take advantage of the Private Addresses in Zcash you will need to use kind of wallet. None of the other types below support Zcash Private Addresses (yet)
  • Hardware Wallets – Similar to the local wallet, these use your computer along with a physical piece of hardware to store your Keys.
  • Exchanges Wallets – When you sign up for an exchange you can generate public addresses to send and receive Zcash.
  • Web Wallets – Websites and Apps that you can download or login to store your Keys.
  • Paper Wallets – Print out your private and public keys for offline storage.

Local Wallets– The first wallet type is the one that is included when you install Zcash via the Official Zcash Guide. This wallet is included in Zcash client and is similar to the Bitcoin RPC (command line) interface. The only real drawback to this wallet (currently) is that you have to do everything via the command line which some users find difficult. You can find a list of the API commands to use with the Zcash wallet Here

The good news about the Zcash client is that several community members have been working on simplifying the experience by creating a Graphic User Interface (GUI) and creating installers for both Windows and Mac. If you have already installed Zcash and wish to have a more user friendly GUI you will want to install Vaklinovs GUI for Zcash which you can find on Github and there is a step-by-step guide for installing the Vaklinov GUI HERE. I have also included an install video for this wallet below.

David Mercier has done some fantastic work on porting Zcash to Windows and Mac you can download directly from his websites:

Hardware Wallets – Hardware wallets are the safest way to store your Zcash and other crypto-currencies. The main drawback (for now) is that they do not support Private Zcash Addresses and they cost between $40-$99.  You purchase a physical device which has a number of safeguards to prevent theft and have emergency steps you can take to recover your Zcash if your device is lost.

The most popular hardware wallets that support Zcash are:

Web Wallets – Web wallets are internet based wallets that are similar to Exchanges. They are very easy to set up and allow you to access your Zcash via websites and apps you can download from the Android or Apple stores.

It’s important to note that Web Wallets also have the same drawbacks as Exchanges; some do not do not let you control your private Keys so if the company/site were hacked you would not be able to recover your Zcash. Again, use strong passwords and enable 2-factor authentication when it is available. CryptoCompare has a nice guide to help you research before choosing.

Web based applications/wallets that work with Zcash

Exchange Wallets – Exchange wallets are one of the easiest to set up because all you have to do is create an account with one of the many Exchanges that support Zcash. After you create an account it is very simple to generate an address to receive/spend or trade Zcash. No exchanges currently support Zcash private addresses.

You should know that exchanges are one of the riskier places for you to store your funds because of the increased efforts of hackers to hack the exchange or to social engineer your username and passwords. Since the exchange holds your private Keys you will never be able to recover your funds if something catastrophic were to happen. If you do use an exchange as your wallet be sure to use a strong password and enable 2-factor authentication.

Paper Wallets – The concept of a paper wallet is simple; once you have installed Zcash per the Official Zcash Guide you can then use the Zcash client to generate your Keys. Once you have your address and it’s private key you can then print them out on a piece of paper for long-term offline storage.

There are many places online that will allow you to create a QR code for making paper wallets for Bitcoin addresses so this should be possible with Zcash too. There also sites that will let you create a QR code with any random string of text but I have not yet found a website that supports Zcash address QR code generation. Since I have not personally tried storing and then retrieving Zcash from a paper wallet I can not recommend it. There are a few threads on the Zcash forums on this subject you can read if this sounds like an interesting option. If you do successfully use this method please drop me an email.

Here are a few videos explaining how to create and use the different types of wallets:

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