EWallet

An eWallet is an online account with an external provider where bitcoins can be stored. Examples include accounts on currency exchange Markets and with ecommerce transaction processors such as MyBitcoin.

Benefits

• Use of an eWallet provider may help improvide anonymity.
• An account with an eWallet provider can generally be established in just minutes.
• Some bitcoin users store some or all of their bitcoins in an eWallet to avoid having to worry about keeping a local wallet secure.

Risks

When bitcoins are stored online the ewallet provider retains full control of those amounts.

• There is no guarantee that the amount of bitcoins showing for the account holder's balance are truly being held in reserve by the ewallet provider.
  • Some providers describe their reserve policy in their terms of service (TOS). For example, MyBitcoin's TOS states:

6. OBLIGATIONS OF MYBITCOIN LLC
6.1 MYBITCOIN LLC will ensure that for all Bitcoins in circulation in the MyBitcoin System there is at all times an identical quantity of unencumbered Bitcoins held in MYBITCOIN LLC's master Bitcoin wallet.

• The ewallet provider's security may be vulnerable to theft as well.