I have been a loyal and happy customer of Proton for many years. I use ProtonMail, ProtonPass and ProtonDrive every day and am largely happy with them. At the end of July this year, Proton announced the product "Proton Wallet" and made it available in a semi-open beta.
Since I am a Proton Visionary user, I had direct access to the beta and have taken a closer look at the product over the last few weeks.
Have you noticed? Since the whole world is only talking about AI, the perceptible hype around blockchain and Bitcoin has somehow completely died down. Actually a very bad time for Proton to introduce its own BitCoin Waller.
What is the Proton Wallet?
The Proton Wallet is an electronic wallet for the cryptocurrency Bitcoin. You can store your Bitcoins in the Proton Wallet, buy Bitcoins directly or send Bitcoins to other people or wallets. As is usual with Proton, with the highest data protection standards.
To also pick up the readers who are not at home in the crypto world, a few basics - but I am deliberately only scratching the surface here:
What is my basic problem with Proton Wallet?
Cryptocurrencies are often mistakenly regarded as strictly private transaction systems.
However, most cryptocurrencies, such as Bitcoin, are based on a transparent and public blockchain that records all transactions. This means that anyone who knows your wallet address or has carried out transactions with you can track your past and future transactions.
This is problematic for Proton Wallet, as it only supports Bitcoin. In addition, features for privacy-oriented Bitcoin extensions such as CoinJoin or the Lightning Network are missing, which, although they do not offer perfect protection, would at least represent a certain improvement. It is disappointing that a company dedicated to privacy has not integrated such technologies.
Proton stated in interviews that they chose Bitcoin because of its wide acceptance. Bitcoin is indeed the best-known cryptocurrency, but the most popular choice is not always the best.
Had Proton Wallet supported Monero or a similar cryptocurrency with a focus on privacy, they could have promoted a system that guarantees privacy by default. The fact that they instead opted for the market leader is, in my opinion, a step backwards with regard to their goal of making data protection the standard.
Using the Proton Wallet
The Proton Wallet is currently in the beta phase, like many other Proton products at their launch. It is available via the internet as well as an Android app and in an iOS TestFlight version.
Access is currently only available to people who have a Proton Visionary account. I still have a limited number of invitations to give away, if anyone is interested, they are welcome to send me a PM, please be sure to include your ProtonMail e-mail address, as you can only invite them.
There is not much that distinguishes Proton Wallet from the existing options on the market. It is a non-custodial wallet, which means that you control the private keys and Proton has no access to them. Compared to storing your Bitcoins in an online exchange like Coinbase, this represents a huge security advantage, but it does not represent a major difference to other software wallets, where non-custodial key storage is usually the norm.
Registration and setup
Creating a wallet is straightforward. After registration, you will be asked to give your wallet a name and select a default currency. This currency is only used to display the current exchange rate between Bitcoin and your local currency, but it is not actually stored in your wallet. You can additionally set up an optional passphrase that provides additional security for your account. Note that this is a BIP39 passphrase, which provides protection for your account beyond the usual login credentials. Should this passphrase be lost, your wallet cannot be restored, even with a secured seed phrase.
Operating the wallet
Once you are logged in, operating the Proton Wallet is very simple. There are only a few functions that you need to explore, mainly finding your wallet address and buying Bitcoin. When you click on "Receive", your wallet address will be displayed, and you have the option to generate a new address with one click. All previous addresses will remain functional, even if they are no longer displayed in the app.
Buying Bitcoin
Buying Bitcoin via the Proton Wallet is also simple. Proton works with two providers here: Banxa and Ramp. Depending on your location, you will be offered the corresponding options. In Switzerland, for example, both providers are available, so you can choose the one that offers the better exchange rate. Unfortunately, there is no option for anonymous payments, as only credit cards as well as Google Pay and Apple Pay are supported. For the actual purchase, you will be redirected to the providers' websites, where the transaction is completed. However, your wallet data is automatically transferred to simplify the process.
However, I cannot recommend that you buy the Bitcoins via the Proton Wallet function. The rates there are pretty miserable. Here is a comparison (both on October 8th at the same time).
Am I the only one who is annoyed that the Swiss flag is wrong (should be square). This is a Swiss company and gets the flag wrong... Anyway, with Proton Wallet I would have to spend over 57200 CHF to buy a whole Bitcoin.
For example, at Revolut I would have to pay 54410 CHF for a Bitcoin, so almost 2800 CHF (approx. 2975 Euro) less. And Revolut doesn't have the best Bitcoin rates either.
Sending Bitcoin by e-mail
One of the main functions of the Proton Wallet is the ability to send Bitcoin by e-mail. This function is integrated into Proton Mail and allows you to send Bitcoin to any Proton e-mail address. In the wallet settings, you can activate the option "Receive Bitcoin by e-mail". This allows other Proton Wallet users to send Bitcoin directly to your Proton Mail address.
If you use multiple e-mail addresses or aliases in your Proton account, you can only link one address to your wallet. This can be inconvenient if you have used different Proton addresses in the past, but it also offers a clear separation if you use different addresses for different purposes. For example, you can link your private e-mail address to your primary wallet and set up a separate wallet for business purposes.
Conclusion
The Proton Wallet offers solid basic functions for managing Bitcoin, but without major innovations. The ability to send Bitcoin by e-mail is useful, but not a groundbreaking innovation. There are other wallets that offer similar or even more extensive functions.
If you are already a Proton user and are looking for a simple way to manage your Bitcoin, the Proton Wallet could be a good choice. But for advanced users or for those who are looking for additional data protection functions or support for other cryptocurrencies, the Proton Wallet currently does not offer enough to stand out from the competition.
The wallet could unfold more potential in the future if it integrates additional functions such as support for NFC payments or other financial services. But at the moment, it mainly performs basic tasks without exploiting the full potential of the crypto world.
For me, the Proton Wallet is simply not a real Proton product. ProtonMail came onto the market revolutionary at the time. It made PGP encryption possible without having an IT degree and it also worked largely automatically.
And all other products were measured against it. ProtonDrive completely end-to-end encrypted cloud storage - great by default! A calendar from Proton that encrypts all my calendar entries end-to-end and so no service provider knows that I have to go to the dentist or my appointments are used for better ad targeting. As these products and their data protection approach is what Proton also does.
And now comes the Proton Wallet: that doesn't focus on the privacy-friendly cryptocurrencies or that doesn't offer options to buy cryptocurrencies anonymously, somehow Proton Wallet is a strange product within the Proton family.