Bitcoin Forum

I'm trying to ascertain empirically how secure the bitcoin-qt local wallet is. Forget the brain wallets and paper wallets for now. From the amount of paranoia on these forums, a newbie would think that bitcoin thefts are a high risk event that happens to every other user.

If bitcoin-qt would not be secure, people would not be here working on developing bitcoin…

i find that after turning on wallet encryption i have relative peace of mind.
couple things are that the encrypted wallet still exposes the public keys that the wallet contains encrypted private keys for, and if you have a compromised system to begin with with a keylogger or something nasty like that all the password protected encryption in the world won't help. but if you can maintain a clean (malware-wise) system, and are not TOO worried about the long arm of the law possibly implicating you as party to a bitcoin transaction (*gasp*) through evidence found on your disks, then that simple builtin wallet encryption should be adequate safety for every day use.

Bitcoin-qt is as secure as the person using it.
The weak link is always between the chair and the computer, as someone else so eloquently described it. ;D

right now, even a non-expert can secure his bitcoins with bitcoin-qt in a way that only a specialized malware or someone with direct access to the computer can aquire your bitcoins, and even then only if you transfer bitcoins in the time frame the computer is compromised.

for comparison, with versions up to 0.3.x any person or program that could copy wallet.dat had your bitcoins.  there was no way to secure your bitcoins and run the client at the same time at all. plus for backups you needed to know the location of the wallet.dat and encrypt the backup manually.

If the case is as the previous two posts by psy and BladeMcCool is the state of play, then bitcoin will never achieve mass adoption. I am asking you to put yourself in the shoes of Joseph Blythe-Smith, who has no idea what a computer virus is but wants to try out what this bitcoin malarky is all about. Without people like him, all bitcoin ever will be is just a way of passing fancy encrypted messages from one computer geek to the other techno-nerd. What kind of market is that. You guys comprehend where I am coming from?

Things take time. Revisit this issue in 5 years and see how things have developed. I don't really care that the adoption rate is slow right now. The scarcity of bitcoins and the fact that I'm not the only person who wants them is going to be enough to give them some value until something with the bitcoin network is fundamentally broken. Right now 99% of people have never even heard of Bitcoin, and I'm starting to tire of explaining to to people unless they show a genuine interest. IMO bitcoin will rule the world but probably not for at least 10 or 20 years.

True, the weakest link in Bitcoin security setup is thermal grease applied between chair and monitor.Wallet encryption will be useless if you will launch malware on your computer. Encryption helps only against the simplest forms of malware who have no keylogger or remote access. It was designed to counter the first proof-of-concept code that just copied the wallet.dat on remote FTP server.

that being said, there is a lot of "simple" malware around. you can just modify any existing malware to search&copy wallet.dat in a minute.
plus now you have a chance to find the malware before you make your next transaction.

the security for non-geeks has already increased considerably. offline wallets with armory are not that hard to setup either, if you really need the extra security. if you compare that to the situation in early 2011, its already vastly improved. of course, its not perfect. but security for non-experts will always be far from perfect.

Somewhat true but the false sense of security with very little actual security is bad thing. Better be paranoid what you run on your computer

As good as the idiot hammering on the keys...
BTC is far beyond the clueless idiots who use most computers. BTC put another nail in its own coffin with ASIC.
The specialized hardware means most people will NEVER EVER even bother look at BTC.

every sense of security or danger is "false" unless you actually know the exact threats you are (still) exposed to. thats something a layman will never have. so whats the point of being paranoid? wasting your time protecting yourself from nonexistent threats is no better than wasting your time recovering from existing threats. so assess how much you could lose and decide if becoming an expert is worth the time. otherwise just go with the reasonable standard security.

This is true. Retards must be forbidden from using computers. At least in past they were unable to use them because DOS command line interface was the natural filter.Not true at all. First the ASIC from BFL is a scam, they never deliver. Secondly the selling point of Bitcoins are the Silk Road and similar sites, not the mining. I also could not mine reasonable amount of BTC using my GPU, it is not affecting how I use Bitcoins.Then they must be cautious of running anything that have .exe extension. Back in year 2001 I was asked to install Winamp because people were afraid from running Setup.exe because they would not know what will happen and it might break something. Now every retard runs exe files between relapses from epileptic coma.

Morons will need to pay someone else to handle their security just like they do now. And those of us who are competent enough to handle our own shit can save the fees by handling our own shit. Its that simple. The average Jackoff doesnt need to care about mining, just like he doesnt need to know how central banks create interest bearing garbage out of thin air and call it money, all he knows is that the grocery store wants a certain kind of money and his online drug dealer wants something else. He'll take whatever steps he needs to get the money of the kind his supplier of whatever goods wants and thats the end of it.

you know how many people die in car accidents? or cleaning their guns? you know exactly what your food or your shampoo contains?
if you apply the same strict standards to everything else, 99% of the population shouldnt be allowed to get out of bed in the morning.

Car accidents are mostly random chances. Becoming good driver, learning how to predict actions of other drivers and how to handle car in extreme situations greatly helps to avoid traffic accident. Traffic accident is no concern for me as it is very likely that if I get in serious accident then me is no more.

When cleaning guns follow the same procedure - remove magazine, open and check chamber to be sure it is empty. Know how your gun is build and functions, it is not difficult at all.

For food I befriended the seller of my local shop and she knows what food is good and what is made from surrogates and she recommends me what to buy. For shampoo it is irrelevant as I don't drink shampoo. When gasoline was cheap I sometimes washed arms and legs in gasoline, so I don't mind even if my shampoo is made from car fuel.

Exactly.

I removed virus for my living - the vast majority of end uses don't understand the basic operation of a computer, much less the concepts of networking, security. Most of them don't even understand how a program runs or have the ability to discern between real software and malware.

I have one customer who calls in about once a week to have the "FBI - moneypak" virus removed. He just won't stop going to some shady porn sites and "finally clicks yes" on a prompt asking him to install something because it won't let him off the site if he doesn't, I can't convince this customer to avoid the site or to simply rightclick close the browser stack when he gets that msg. But hey as long as he wants to keep paying me $100 a pop for 20 mins of work... whatever.

not bad.  36 to 0.  no hacks so far.  this is what i would've expected.  wallet encryption has helped tremendously as has educated users.

Bitcoins stored in an encrypted wallet are as secure as credit card you use for online purchases from the same computer.

This.

Obviously, if you're infected with keylogging malware then stolen BTC are only one of a number of monster problems you may face.

This sounds so similar to me! I also worked as a computer techie/repairman and all the time I removed malware. But the economic recession hit hard and now I can't make a living out of it. Instead I turned to dark side completely as it is more fun, more profit and I don't need to drive to work in unhandy times. And exploiting the stupidness of moronic users is a good relief.

I was wrong. My statement above is true on the user side, but credit card numbers can be compromised  once they leave the user's computer. Not a problem with bitcoins. 

Bitcoin-Qt is highly exposed and susceptible to the PEBCAK Virus. (Problem Exists Between Chair And Keyboard)

I noticed that 1 person has now said that they have had btc stolen from their local wallet. In the interests of the public good and generally being a helpful person, could that individual please come forward and tell us the general circumstances of how that happened? Sorry to that person who had btc stolen, I hope the criminal was caught in the end.

I strongly think that was a troll, that's why he didn't comment.

No, there was a serious thread about this. I think it was forum user Cdecker who claimed to have been robbed of about BTC9k that was taken from possibly an unprotected, unencrypted backup wallet.

And Cdecker could definitely be considered an expert user. Although maybe not in the area of security. But maybe he has expert level security knowledge but was just complacent and careless. Either way, I feel very bad for him and it is is a very unfortunate incident.

Last year it was widely reported that a user lost 25,000 BTC to a 'hacker'. I believe he posts, or used to post here on bitcointalk.

One interesting tidbit is that Cdecker was using Linux. I wonder if this is the first publicly reported case of theft of a Linux user.

Not that I'm trying to imply Linux distros are inherently safe 'out-of-the-box' or anything, but maybe a lot of people assume that they are immune just by installing the latest Ubuntu. I think it ended up being an issue with him using SSH though, so not directly a Linux issue.

Maybe using Linux is effectively safe though with regards to using a mainstream distro and bitcoin-qt? Not installing any additional packages, encrypting your wallet, and not having anything to do with remote access is good enough to keep secure, or not? I'd be interested to hear peoples opinions on that.

This is a joke isn't it?

You know that this is by nothing better than the common thug, forcing someone to give away his cash.

Just a different weakness of the person you exploit. That a thug exploits the weakness to defend yourself and a hacker exploits the weakness to setup proper security, still makes the action the same.

No, people stealing by using any kind of IT are even lower than the lowlifes robbing in the streets, because they have the ability to make a legal income.

I feel nothing but disdain for such people.

great question.  on the Ubuntu forums they say that VNC and SSH attacks are the 2 most commonly reported hacker exploits.

I thought that the SSH protocol had never been broken before. The only way that I have heard that an exploit can occur is if a weak password is brute-forced. Even this can be prevented with the correct iptables settings. I remember the CDecker thread. He never got back to say exactly how it happened I don't recall. I reaffirm that if bitcoin can't be secure in a moderately hostile environment, i.e. on 50%+ of the general public's computers, then it can't fly, especially as there are no chargebacks and no legal protections. It just takes one or two high profile cases (read old-age pensioners, struggling single parents) to come to press and bitcoin is over as far as mainstream goes. What to do?

Cold storage? Only keep what you need in a hot wallet I guess.

I agree though, it's a huge barrier to mainstream acceptance. 3rd party wallet providers are a good option, but when that goes wrong the problem is just multiplied by the amount of people who lose their money.

It's not an easy problem to solve, but this same problem exists in some form for all assets(security). Maybe in the future we can come up with solutions, but the problem is always going to be almost impossible if one wishes to maintain both anonymity and decentralization.

+1

Now if only we could extract a similar level of sanity from the MSM, then there'd be less reason to worry one's pants off about the bad publicity of a "ZOMG old grannyyyy robb'd of her preshus Bitcoinz by eeevil hakkurz" type story.

Some kind of specialized hardware-signing device will bring the solution. While these are in the making, one can use offline signing as a reasonable alternative. A tradeoff between convenience and security can be made by using a hot-wallet.

With brainwallets / encrypted wallets I see the problem of forgetting the password, which is as bad as losing the coins to someone else. Because of this most people will write down their password somewhere and are thus attackable by traditional theft. Therefore we also need some kind of "dead-man-switch" transaction. This means, coins on a certain address will be sent automatically to some other address after a certain time. The keys for this second address can be written down, or told someone one wouldn't generally trust, but trusts enough to get one's coins in case one forgets the password. So as long as one can remember the password, the coins can be spent immediately AND are not availiable at the second address. Unfortunately, this approach is not feasible with the current protocol (but IMHO could be implemented without hard-fork).

i too have had many people who have received this 'warning' they were young and old male and female.

its a facebook advert that prompts stuff like.
"someone has a crush on you click here to see who"
"new message click here"
"someone wants to share a photo"

u get the jist..
i seen it myself as one person gets it soo often they actually deemed me the culprit. so i went to their house and asked them to do their normal activities. sure enough they were drawn to the facebook advert.

many people in england now know it to be from facebook redirecting them off of facebook to stealth download of the fake warning.

it use to come up as a fake antivirus, but now its an FBI thing.

so not really linked to porn, as i myself once thought.

its up to you to inform your regular customer why they keep getting it and to stick to the standard facebook message, photos and friend buttons. or continue milking them dry, as i done as the moron deserved it

i too think the weakest part of the computer system is not the firewall.. but the user.