Online wallets for bitcoin beginners

Web wallets: Also called online wallets or hosted wallets or
cloud wallets, are an online accounts accessed through a web browser and store the user’s wallet on a server owned by an external provider, where a user can deposit its funds. The funds are controlled by the web wallet provider. By authenticating with it, the user can later access those funds, i.e. make transactions.

The primary advantage of web wallets are that they are easy to use, users don’t typically  need to know about Bitcoin’s inner workings. No software installation is required; users just sign up and log in to their wallet via a website using a web browser and that the management of the private keys is done by the web wallet provider, thus lowering the entry barrier for new users.

There are additional advantages, such as:
- No syncing is necessary, your Bitcoins are instantly available.
- It can be accessed in more places than just your personal computer; all you need is a web browser.
- You can use browser plugins to make Bitcoin use online very simple.
- Your coins aren’t kept on your HDD, so if your pc crashes your coins will still be safe online.

However, there are several significant disadvantages to using an online wallet.
- You trust a third party with your funds. While several online wallets have a great reputation, it is still a substantial risk to allow another party hold your private keys.
- in case you are connected to the web you are already susceptible to malicious attackers who could try to steal your coins.Using an online wallet could make that attack even easier.
- The web wallet services themselves can be-and have been- attacked. Several have already been shut down due to these attacks.

Web wallets are similar to online banking, in the sense that funds are kept by the web wallet provider. However, as opposed to regular banks, where deposits are covered by deposit insurance, the user does not have any recourse against the web wallet provider absconding with the funds. Furthermore, web wallet providers are not as thoroughly regulated as banks are, which can increase doubts about their
solvency . Security practices for web wallet providers or exchanges act like the practices for individual users. It is inadvisable to store large amounts of bitcoin on web wallet. Users should store only small amount necessary for dayto-day operations, and keep the rest in offline wallets/cold storage. The utilization of web wallets has privacy implications too. On the one hand they can boost the anonymity of the user, because the addresses used in transactions are those of the web wallet with no direct relation to the user. On the other hand, anonymity is decreased because the web wallet provider usually keeps a record of the transactions, and also retains personal details about their users.

So should you use an online wallet? I do, for small amounts. It’s a simple way to keep a small amount of coins available if I’m going out of town and want to make sure I can access some coins easily, at this time i recommend that you do not trust any third parties with large amounts of bitcoins. Also, remember that web wallets offer the least amount of privacy when you use bitcoins, because the provider knows who you are, the number of bitcoins you have, and all of your incoming and outgoing transactions.

Which wallet to use?  Blockchain and Coinbase have wallets built into their services, and both are fine to use. They are the most widely used online wallet, and for good reason, they are simple but have an excellent reputation. You can find out about other online wallets in here:
The best online bitcoin wallets for beginners