Check Bitcoin wallet balance online
| Share | Tweet | Share | +1 | print | On February 28, 2014, Mt. Gox filed for bankruptcy. Shortly before that, the online Bitcoin exchange froze user accounts and shut down all services. To their surprise and dismay, hundreds—if not thousands—of users lost access to their Bitcoin.
Mt. Gox account holders are currently involved in lawsuits against Mt. Gox and the company’s CEO, Mark Karpeles. There is some chance customers may eventually regain access to their funds, but unfortunately this has happened to other exchanges before.
Over the last year they were in business, Mt. Gox halted both withdrawals & trading for short periods of time. During each of these account freezes, and after Mt. Gox shut down completely, users were faced with the fact they didn’t truly control their Bitcoin after all—not unless Mt. Gox let them.
The truth is, you never own bitcoin (Learn more about Bitcoin).
Even if you have a wallet running on your personal computer, all you own is a private key—or collection of private keys—that allows you to control a Bitcoin address. Bitcoin security is based on public-key cryptography, so each Bitcoin address has both a public key & a private key.
Example Bitcoin AddressPublic key: 1MsHWS1BnwMc3tLE8G35UXsS58fKipzB7a
Private key: 5HpHagT65TZzG1PH3CSu63k8DbpvD8s5ip4nEB3kEsreAbuatmU
Your public key is what is used as your wallet address, so you can receive Bitcoin or check your account balance. Your private key is used to prove ownership of a Bitcoin address, so that you can send bitcoin to other wallet addresses.
When you store your Bitcoin in an online exchange, you don’t have access to your private keys. When you leave them there, you’re trusting a third party to keep your private keys for you. Your account balance simply represents a digital IOU from the exchange, claiming they have your Bitcoin on hand should you choose to use it.
Online exchanges do this because they need to have liquidity. It’s easiest for them to treat each bitcoin they hold as equal—despite the fact they are owned by different users—so that they can process buys, sells, & transfers internally without having to process those transactions on the block chain. This works well for an exchange, but makes for lousy long-term storage.
Anytime you use an online exchange, you are entrusting a third party with your private keys. If you can’t find your Bitcoin wallet on the block chain, chances are you don’t truly control it.
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