At first, understanding Ethereum is like trying to understand Einstein’s General Relativity. Watch youtube clips of Ethereum founder, Vitalik Buterin, for too long and your head might explode. The concepts are so new and so often counter-intuitive, it’s hard to define them simply. Blockchains, distributed decentralized applications (Dapps), or smart contracts all have one thing in common: complexity. Even professional coders and financial professionals sometimes struggle to grasp the utility of Ethereum. The fact is, much of Ethereum’s potential and uses have yet to be conceived.
Myetherwallet aims to simplify all of that for the average user. Before Myetherewallet, owning Ether meant using command-line programs like Geth and Eth to send and receive transactions. Except for Linux users, learning to use the command-line is like teaching your great-grandmother to use an iPhone. While some people prefer to use the daunting black-box of code, most users don’t have the time or the interest to learn a new, unintuitive interface. According to a recent reddit post by the MyEtherWallet creators, “[MyEtherWallet] has been used successfully (by more people than [they] ever imagined) to transfer Ether, print paper wallets, move funds from exchanges into cold storage, and more.”
With Myetherwallet the process of creating a wallet is easy. Simply type a minimum 7 character password and your wallet is generated in JSON, private key, and QR code form. Sending ETH is just as simple. Most importantly, the code is all client side. None of the data that is created by MyEtherWallet is stored on their servers.
The importance of cold-storage‒storing Ether locally on a computer or on paper‒can not be understated. Storing cryptocurrencies on exchanges like Poloniex or Kraken, or using other online based wallet services, is fundamentally counter to the inherent safety of decentralized currencies. By keeping your wallet secure and local, you are in full control of your funds. While reputable exchanges can seem secure, they do not have the inherent security of the blockchain, and who knows how good their auditing and cyber defenses really are.
Yesterday, MyEtherWallet released a Chrome browser extension that makes Ether handling seamless and secure. The extension stores and encrypts your wallet just like it stores any passwords or data you may already have on Chrome. They are relatively certain the system is secure, but they do warn that the client is still in “beta” stages and could have bugs. In particular, they warn not to put more Ether in than you are willing to lose until they release a 100% stable version.
MyEtherWallet brings a timely web-based tool to the massive migration of people to the Ethereum network and cryptocurrency. At the time of this writing, ETH has risen 30% surpassing DASH at 4.14 USD. Ether is now the most valuable cryptocurrency second only to Bitcoin and there are no signs of it slowing down.
Mist, Ethereum’s proprietary wallet client, is still encountering issues in its fledgling stages. The client is reliant on the command-line program Geth and is not as polished as it needs to be. Beyond being a wallet, Mist actually processes blocks in the Ether network and can provide statistics such as ‘gas’ fees used in transactions, allow you to send data with your ETH, and aid in setting up smart contracts. Unlike MyEtherWallet, Mist is aimed at developers and coders who want to use Ether in association with Dapps on the blockchain.
Another wallet to watch, that works similar to MyEtherWallet, is EthereumWallet.com. EthereumWallet cleverly generates a random Ether address using user mouse inputs on the screen. It offers a clean interface that allows you to download your JSON, QR code, or simply write down your address. EthereumWallet also supports transactions, but is still completely in beta and isn’t necessarily ready to handle your life savings.
If Ethereum continues to gain traction like it has in the last few weeks, it’s entirely possible the MyEtherWallet Chrome Extension will be the most handy extension around for Ether transactions. Until then, be cautious about the reliability of these services and make sure to fact check and do research on any wallet before using it. Even while these wallets are aesthetically pleasing, carelessly losing money can be just a few keystrokes away if you fail to verify your addresses. Luckily, services like MyEtherWallet and Mist do well to prevent major mistakes, but the most important thing for newcomers to remember is that there is no “undo” button on the blockchain.