Since the collapse of MyBitcoin in August, managed online wallets have seen a decline in popularity. However, there is one exception that stands out – Instawallet.
Instawallet offers several advantages that make it an appealing choice for users:
User-Friendly Interface: Instawallet is incredibly easy to use. You don't even need to create an account. Simply visiting the website automatically generates a new wallet for you. To access it later, you can revisit the same URL.
Green Address Feature: Instawallet includes the green address feature, which enhances the security of transactions.
Accessible from Any Computer: You can conveniently access your bitcoins from any computer with an internet connection.
Protection against Loss: There's no need to worry about accidentally deleting your wallet or losing it due to computer or hard drive failures.
However, it's important to consider the disadvantages of using Instawallet:
Lower Security Level: Instawallet employs a "URL as password" mechanism, making it less secure compared to other options. Instawallet itself advises users not to store significant amounts of bitcoins there, recommending it only for casual use or keeping spare change.
Trust Dependency: When using Instawallet, you have to place a significant amount of trust in the provider. Since the code cannot be audited, there is a risk that the provider or a hacker could abscond with the funds unexpectedly.
Additionally, there is an Android frontend for Instawallet called Bitpay (not to be confused with the Bitcoin payment processor). Bitpay offers a potentially more secure option as it stores the URL behind the scenes, though it remains accessible to the user.