Wasabi Wallet Review: Privacy-focused Wallet for Desktop

Description

Wasabi is an open-source, non-custodial bitcoin wallet for desktop known for its security and privacy-enhacing features such as Coin Control, CoinJoin, PayJoin, and Tor, and hardware wallet compatibility.

How to Use Wasabi Wallet

To get started with Wasabi desktop wallet, download and install the wallet from the official website. It is compatible with Windows 10+, macOS 10.15+ Intel, macOS 10.15+ M1, M2, Ubuntu, Debian, and Linux.

Once downloaded, you have these options: connect to a hardware wallet, create a new wallet, import a wallet, or recover an already existing wallet in Wasabi. It is possible to create as many wallets as you want. To back up a wallet, write down a mnemonic seed phrase of 12 words and keep them in a safe place. Then create a password that you will enter whenever you use your wallet. To recover your wallet on a different computer using Wasabi or another BIP 39-compliant wallet, you will need to enter the seed phrase along with your password.

Wasabi Wallet Features

Wasabi wallet is a Bitcoin-focused software wallet designed to prioritize financial freedom, security, and enhanced privacy. Here’s a closer look at some of its key features:

Hardware Wallets Support

Being a desktop wallet, Wasabi can be connected to hardware wallets via cable connected to your computer to enhance security. You are able to generate a public address to which you can receive bitcoin. The private keys for this address are securely stored inside the hardware wallet. This feature works correctly and reliably with almost any hardware wallet, including Trezor, Ledger, Blockstream Jade, Bitbox, and Coldcard.

Open Source

Wasabi is an open source wallet, meaning anyone can inspect and verify its functionality. This transparency fosters trust and ensures the community can contribute to its development and improvement. Additionally, Wasabi is a deterministically reproducible software. This basically means that anyone can independently replicate the build process and compare the resulting binaries to the official releases, verifying their authenticity and preventing tampering. This builds trust and transparency in the software.

SegWit

Wasabi Wallet has adopted support for Segregated Witness (SegWit), the newer Bitcoin address protocol upgrade. SegWit brings forth several advantages to the Bitcoin network, including a significant reduction in transaction fees by up to 40%, an increase in transaction capacity, and an enhancement of security through the improvement of transaction integrity. This feature increases the efficiency and security of Bitcoin transactions for its users.

PayJoin

Wasabi Wallet integrates PayJoin, a collaborative transaction technique designed to enhance privacy features. This innovative approach enables both senders and recipients to collaboratively create transactions, merging payments in a way that makes it challenging to distinguish individual transaction amounts and origins. By incorporating PayJoin, Wasabi not only strengthens privacy measures but also enhances the effectiveness of CoinJoin by obscuring payment flows, contributing to a more secure and confidential transaction experience for users.

CoinJoin

Wasabi Wallet shut down its CoinJoin coordination service effective from June 1, 2024. However, the latest Wasabi Wallet release introduces a new beta version of its CoinJoin feature, marking an exciting step forward in its privacy-focused functionality.

The Payment in CoinJoin feature is now officially in beta. It is currently accessible only through the RPC ((Remote Procedure Call)). While this feature is still in development and lacks certain functionalities, users are encouraged to test it and provide feedback to improve the system.

For those looking for alternatives, JoinMarket remains a viable option for privacy-conscious Bitcoin users.

Coin Control

This is a feature offered by Wasabi that allows users to select specific unspent transaction outputs (UTXOs) to spend in a transaction. This can be helpful for managing transaction fees, organizing your UTXOs, and potentially improving privacy in some situations. While not as strong as CoinJoin, being able to choose which UTXOs you spend can make it slightly more difficult to track your spending history. For example, you might avoid spending UTXOs received from KYC exchanges, which could be linked to your identity.

Tor

Wasabi wallet uses Tor by default for all communication needs. This includes connecting to the bitcoin network for downloading blocks and broadcasting transactions, interfacing with the coinjoin coordinator to receive block filters and coinjoin round statuses during wallet loading, and crucially, handling all communication steps in the coinjoin transaction, such as input selection, output selection, and transaction signing.

This makes it difficult to trace and monitor your activity. It also encrypts your traffic, adding an extra layer of security. The wallet can use both locally installed and automatic Tor integration to mask your IP address. Thus, a much higher level of privacy is ensured.

Wasabi Wallet Buy Anything

Wasabi Wallet 2.0.5 has introduced a new feature called the “Buy Anything” button, marking a significant step towards wider Bitcoin adoption. This feature, powered by ShopinBit, Europe’s leading Bitcoin marketplace, allows users to purchase various goods directly from their Wasabi wallets. Simply clicking the button on the home screen connects them with a personal concierge who assists in acquiring desired items, from everyday essentials to luxury purchases like cars or even ASIC miners. While the minimum order amount is USD 1,000, VIP customers with previous ShopinBit concierge experience can purchase items exceeding USD 60,000. However, it’s important to note that fees may vary depending on the order.

Headless Daemon

Traditionally, users engage with Wasabi Wallet through graphical user interface (GUI), which, despite being user-friendly, may occasionally consume significant computer resources. The introduction of the headless daemon addresses this issue. This feature enables you to interact with their wallet using a streamlined command-line interface, akin to a lightweight version of the wallet. The headless daemon minimizes resource usage, including CPU, GPU, memory, and bandwidth, allowing Wasabi Wallet to operate inconspicuously in the background. With this functionality, power users can incorporate Wasabi’s unparalleled privacy features into their project workflows.

Client-side Block Filtering

The unique feature of client-side block filtering in Wasabi ensures that you don’t have to download the entire Bitcoin blockchain, which can be over 500GB in size, for the wallet to function effectively. Instead, this technique allows Wasabi to download only the blocks potentially containing transactions relevant to your wallet. This approach significantly reduces data transmission and processing. By concentrating on relevant blocks, Wasabi not only lowers the storage and bandwidth requirements, making it more efficient and accessible, but also enables faster execution of tasks such as wallet synchronization and transaction verification.

Ease of Use

Despite its advanced features, Wasabi prioritizes user experience with a clean and intuitive interface that makes it accessible to both beginners and experienced users. The clean layout and intuitive design make navigating the wallet and managing your funds a breeze, making it accessible to a broader audience within the Bitcoin ecosystem.

The interface simplifies tasks such as coin mixing and transaction management. The wallet automatically manages user privacy behind the scenes, handling various aspects such as network connections, input selection, and the coinjoining process.

Wasabi Wallet Fees

The fees charged by Wasabi Wallet can vary based on factors like transaction size and network congestion. You typically have the flexibility to choose from different fee levels, influencing transaction processing speed. Opting for higher fees generally results in faster confirmations, whereas lower fees may extend the transaction completion time.

Wasabi Wallet’s latest release in April 2024 introduced support for Full RBF (Replace-By-Fee) replacement transactions. Also, the coordinator in Wasabi Wallet has been updated to replace payments with low fees. This means it doubles the spending of coinjoin inputs to protect against Denial of Service attacks. To avoid unnecessary mining fees, Autocoinjoin now waits until funds are confirmed before starting the mixing process. This ensures that fees are only paid for coins that actually need privacy.

Wasabi CoinJoin fees consist of coordination fees and mining fees. Transactions involving coins above 0.01 BTC incur a 0.3% coordination fee, in addition to mining fees. Coins totaling 0.01 BTC or below, as well as remixes, are exempt from coordination fees. Coinjoining funds exceeding 0.01 BTC incurs a 0.3% coordinator fee alongside mining fees. Inputs of 0.01 BTC or below, as well as remixes, remain exempt from coordinator fees, even after one transaction. Consequently, payments made with coinjoined funds allow both the sender and recipient to remix their coins without incurring coordinator fees.

Is Wasabi Wallet Safe?

Wasabi Wallet aims to enhance Bitcoin transaction anonymity by using techniques like CoinJoin, which mixes transactions to make them more difficult to trace and the Tor network to anonymize your internet traffic, making it harder to track your IP address. Moreover, through its client-side block filtering feature, Wasabi only downloads relevant parts of the blockchain, minimizing data exposure. However, it’s important to note that no tool can guarantee complete anonymity.

Generally, Wasabi wallet is considered in the Bitcoin community to be a relatively safe and privacy-focused Bitcoin wallet. Being a non-custodial Bitcoin wallet, it gives you complete control over your Bitcoins.

Wasabi allows you to connect to your own full Bitcoin node, which adds an extra layer of security and privacy. Being an open-source Bitcoin wallet, its source code is publicly available, allowing independent verification of its security features by the community.

However, it’s important to be aware that while CoinJoin enhances privacy, Wasabi’s specific implementation of the technique might have vulnerabilities that could allow advanced tracing techniques to deanonymize transactions. The decision by Wasabi to censor certain CoinJoin inputs raises concerns. This could limit its effectiveness for users seeking maximum anonymity.

There are speculations about Wasabi collaborating with blockchain analysis companies. This could compromise user privacy if true. Finally, as a hot wallet, Wasabi is inherently more vulnerable to hackers compared to hardware wallets that remain offline.

Is Wasabi a Good Desktop Wallet?

Wasabi Wallet is one of the best desktop Bitcoin wallets for Bitcoin purists who treasure both ultimate privacy and control. Features like CoinJoin for anonymized transactions, open-source code, and complete custody of your private keys empower you to be your own Bitcoin bank. Its user-friendly interface makes advanced features accessible, and hardware wallet support adds another layer of security. Note that you can also buy a variety of goods from ShopinBit, Europe’s top Bitcoin marketplace, using your Wasabi wallet directly.

There are apprehensions regarding Wasabi’s “compliant CoinJoin” concept and technique, raising doubts about its ability to fully anonymize transactions. There’s concern that this method might leave transactions vulnerable to advanced tracing techniques, potentially allowing someone to deanonymize them and trace them back to you. In 2022, Wasabi and zkSNACKs, the firm behind the wallet, purportedly began censoring specific coin mixing inputs to adhere to regulations. This move contradicts the privacy expectations of some users seeking complete anonymity.

Some voices in the Bitcoin community suggest that Wasabi could be a “honeypot,” implying cooperation with chain analysis companies that monitor Bitcoin transactions. Such speculation fuels suspicion that Wasabi might be aiding in the identification of its users to authorities. Additionally, there have been instances where centralized exchanges and brokers flagged transactions involving Wasabi CoinJoin, leading to potential delays or blocked transactions.

Furthermore, Wasabi’s lack of a mobile app adds to its limitations. Currently, it is available only as a desktop wallet, which may inconvenience if you prefer to manage your transactions on the go using mobile devices. Finally, while Wasabi wallet allows you to store, send, and receive bitcoin, the function of buying, selling, and trading Bitcoin via an in-built exchange is not provided.

Wasabi Wallet Alternatives

Here’s a list of best Wasabi alternatives:

• Exodus wallet
• Electrum
• Bitcoin Core
• Sparrow

More information

• List of the officially supported hardware wallets
• Support documentation