Mycelium Wallet Review.

Mycelium is presently one of the most interesting choices within the ever widening spectrum of Bitcoin wallets. Being awarded as the “Best Mobile App” by Blockchain.info in 2014, Mycelium wallet offers a considerate set of features for transacting with Bitcoin, in addition to a series of mechanisms for ensuring bank-grade security.

 

The company started in 2008 as a mesh networking project, and decided to diversify itself in 2012, leveraging Bitcoin technology in order to build “the next generation for value transfer”, a whole ecosystem of products designed to serve as means for transferring money conveniently and securely at a global scale. Mycelium Mobile Wallet stands as the spearhead of this ambitious project, and it has become a highly preferred choice within the Bitcoin community. Its source code is publicly available for viewing at github.

 

Mycelium is a mobile-only wallet currently available for Android and iOS, and it offers a vast collection of useful features such as encrypted PDF backups, bitcoin address book, integrated QR-code scanner, and a local trading system, among many others.

In the present article we’ll be making a thorough revision of the most relevant features of Mycelium mobile wallet.

Security

With Mycelium, users have b of their private keys, these never leave the device, unless explicitly exported. Private keys are stored in a database which resides in a protected storage area of the phone, completely unreachable from other applications. Also, it can be protected by setting a PIN code. Apart from this, the wallet also has a nifty “cold storage spending” feature which might be useful for quite a few people.

 

Mycelium is a Hierarchical Deterministic wallet (BIP 32), meaning that every address is generated from one master seed, which can be backed up using a 12-word mnemonic in order to recover funds in case of lost or theft (BIP 39).

New addresses are created for each transaction, increasing privacy. Change will also be sent to a new address after each transaction, except when spending directly from a cold storage.

 

Cashila Integration

Cashila is fully licensed payment processor that works with bitcoin and euro. It serves as an “euro wallet” that enables users to easily convert bitcoins into euros and vice versa. It allows for easily paying monthly bills with bitcoin and receive or send money seamlessly within Europe.

Cashila image

By integrating with this service, Mycelium users are able to make transfers to any SEPA bank account directly from their bitcoin wallet. Also, any bitcoin user around the world is now able to receive euro payments without needing to have a european bank account. This is definitely a convenient choice for freelancers and migrant workers.

Cashila usually charges 1% fee for all incoming bitcoin or fiat money remittances, yet they’re currently offering free transactions for the first 1000 to all Mycelium users.

As it removes the need to manually exchange currencies in order to make or receive payments, this is surely a practical feature that simplifies many aspects of using bitcoin, especially for users in Europe.

Bitcoin to Euro conversion is done seamlessly by the Cashila service

 

Coinapult Locks

By integrating with Coinapult, Mycelium provides the option to create a Coinapult USD Account, which allows to receive bitcoin and automatically “lock” its value to its corresponding USD conversion rate, as if they were automatically converted to dollars. When sending funds from this account, dollars are automatically converted back to bitcoin.

Although the account is only able to receive and send bitcoin, this is quite a convenient way to hedge funds against bitcoin’s usual volatility.

Local Trader

Mycelium Local Trader is a service that helps users to locate nearby bitcoin buyers or sellers, while assisting them in the process of arranging a person-to-person meeting in order to effectively carry out the trade. Local Trader can be thought of as a decentralized in-person exchange, very similar to how localbitcoins work, but built right into the Mycelium bitcoin wallet.

Local trader finds the best options to buy or sell locally. For reliability, a reputation system is implemented where reputation score is calculated automatically, based on the number of successful or aborted trades.

A chat function is provided for users to communicate between each other and arrange the meeting details. All communication is completely encrypted.

After the cash is handed out, the seller must confirm such event and then the transaction is automatically initiated by the app. A “Transaction Confidence Graph” is shown to the buyer, which is a calculation of the probability that this transaction is effectively included in the next block.

When the bar reaches 99%, the buyer can rest assured that the trade has been successful

Cold Storage Spending

Mycelium provides a simple way to spend funds from a paper wallet or any other form of cold storage by scanning a QR code or introducing the private key manually. This allows to partially spend some part of the funds being kept under cold storage. Mycelium also supports BIP38 encrypted private keys, in which case it will prompt the user for the corresponding password.

Also, it’s possible to completely import a private key by scanning its QR or introducing it manually. This would enable the wallet to be completely usable within Mycelium, in which case the former would stop acting as cold storage.

It’s important to note that once funds are spent directly from any form of cold storage, it automatically ceases to be “cold”. The true value of cold storage relies in such private keys never touching the internet. Therefore it’s not recommended to partially spend funds from a paper wallet, for example, but instead to transfer its entire balance, and then generating a new private key for cold storage.

For generating paper wallets, there are many options available, but one of the most interesting is Entropy, another Mycelium product which consists of a hardware device that is able to generate random paper wallets by connecting to a printer via USB and utilizing different entropy sources.

Trezor Support

Currently, there is full support for using Trezor with Mycelium wallet. That means users can add their Trezor account to Mycelium in order to visualize and manage Trezor funds from the mobile app.

Connecting with Mycelium is a simple and safe way to use Trezor.

Click on add new account(the icon with a key in it)

Choose advanced, tap on “trezor”. Subsequently, plug in your trezor through an OTG cable. The app will detect the trezor and you will need to follow the instructions.

If the Trezor device is not connected, imported accounts can still work in watch-only mode. In this manner, it’s possible to check the account balance, transaction history and display the next unused receiving address, but no transactions can be made.

To send money, Trezor must be connected to the mobile device through an OTG cable, and all transactions must be checked and confirmed on the Trezor screen. This is very convenient and secure, since the all the signing occurs within the hardware wallet, ensuring the private keys are never exposed, not even to Mycelium.

Currently, Trezor support is only available for Android.

Ledger Support

Mycelium is also able to integrate with Ledger Nano and Hw.1 hardware wallets. In order to do so, a new account must be created while the Ledger wallet is connected to the mobile device. Mycelium will prompt the user for the corresponding Ledger PIN, and then everything is set so that payments can be sent from the Ledger wallet with Mycelium. All you need is a OTG compatible phone and an OTG cable(note that ledgerwallet sells OTG adapters)

 

When the Ledger device is not connected, its corresponding wallet and addresses are still viewable in watch-only mode and can be quite handy while receiving bitcoin payments.

Using Ledger with Mycelium is extremely easy yet tightly secure and adds yet another barrier to stealing your bitcoins.

Payment Protocol Support

Mycelium supports the Payment Protocol (BIP70), which describes a communication procedure between merchants and customers, providing a more secure and intuitive payment experience for users and businesses owners.

After a user decides to purchase a good or service through a merchant’s website, it’s possible to generate a “payment request” and send it directly to the customer, with all the necessary information associated with the order being executed. This payment request includes human-readable and certified information about the transaction.

The protocol also implements “payment received” notifications, refund addresses, and SSL certificates to verify the payment is being sent to the right person, thus protecting users from man-in-the-middle attacks.

With this feature, Mycelium allows users to confirm and execute BIP70 compliant payment requests received from any vendor, allowing for a secure, private and comfortable e-commerce experience with Bitcoin.

Other Practical Features

One of the most exciting things of Mycelium, is that it’s constantly improving with new functionalities. At the time of publishing, Mycelium mobile wallet implements the following features:

  • No need to download the blockchain. Just install and run in seconds.
  • Fast connection to the Bitcoin network through super nodes located in different data centers.
  • Watch-only addresses.
  • Balance display in 164 fiat currencies
  • Send and receive by specifying an amount in fiat.
  • Address book for commonly used addresses
  • Transaction history with full transaction details.
  • Integrated QR-code scanner.
  • Import private keys using SIPA, mini private key format (Casascius private keys), xPriv from QR-codes or clipboard.
  • Export private keys as QR-codes, on clipboard, or as encrypted PDFs
  • Share your bitcoin address using NFC, Twitter, Facebook or email.

Ongoing integrations include BitWage, Colu, Netki, and Metaco.

Summary

Mycelium wallet’s popularity is definitely not unjustified. Being known as the “swiss army knife” of bitcoin wallets, Mycelium features a huge set of advanced and unique features, while still keeping the user experience simple and intuitive, and all of this while ensuring the most fundamentally important attributes every bitcoin wallet should have: secure and private.

One of the most exciting things in this project, is that its development team is evidently committed to building much more than just a wallet. Mycelium’s goal is to make Bitcoin accessible to anyone, without ever sacrificing the privacy and security principles which stand as the foundation of this fascinating and disruptive technology.