Bitcoin Forum

Hello,

I have been reading articles and scanning the forum(s) for the past week in attempt to wrap my mind around all the terminology, verbiage, and functions surrounding BTC.  I am in need of a little clarification as I am unsure how the process fully works at this point in time.   

I have been to bitcoin.org/en/getting-started/ and am hovering between steps 2 and 3.  For the purpose of this topic, I will focus on setting up a wallet. 

Regarding a wallet, I have downloaded Armory 0.96.4 on Windows 10 @ 64-bit.  I am having trouble getting armory online and in turn, I have downloaded Bitcoin Core 0.16.0 to speed things up. 

Regarding storage space and the blockchain size, I do not have adequate storage space on this drive to store the entire chain; but I have an external HD with plenty of space. 

Is it OK / safe to store the block chain on an external drive?  I have seen products which are 'physical wallets' (a USB drive) which seems like the same concept as I am investigating here. 

If this is a viable option, will I have to connect the external drive each time I use my wallet? 

I appreciate anyone who will take the time to answer a few of my questions.  I will have more once this one is answered.

Thank you in advance. 

--direct

Bitcoin Core does not just "speed things up" for Armory. Armory requires Bitcoin Core to be installed and running when Armory runs. Otherwise it will not work.

You can, however keep in mind that when you do so, Bitcoin Core's databases are more likely to become corrupted.

No, they are vastly different things.

Yes.

Physical wallets (also called 'hardware wallets') are not just a USB drive.
Those are small 'mini computers' or micro processors. Those do generate a seed (used for deriving private keys) randomly and air-gapped (secret information never leave the device).
Hardware wallets can theoretically be used on an compromised computer without running risk of losing BTC.

While simple (unencrypted) USB drives can be compromised once you plug them in and encrypted USB devices can be compromised once you decrypt the content (e.g. required when creating a transaction).
Here is a small article comparing different wallet types and explaining how hardware wallets work (https://hackernoon.com/what-is-a-bitcoin-hardware-wallet-and-why-you-must-use-it-3fceeae2b21).

To add to what achow101 and bob123 already posted on this matter:

Note that the blockchain is something entirely different from your wallet.

The blockchain is a collection of files that contains the whole history of every transaction ever made. A wallet file is a collection of private keys that enables you to sign transactions for later publishing on the blockchain.

Your wallet file, ie. your private keys or the seed from which the private keys are derived, is what you want to keep safe.

That's why the blockchain can be stored on an online device (well, it has to be an online device by necessity, as it has to be connected to other nodes to stay up-to-date) while your private keys should be stored on an air-gapped, offline device.

That's why with Armory you usually have a watch-only wallet that is connected to the internet (the one syncing with the blockchain) and an offline-wallet installed on a separate, air-gapped device that doesn't require the blockchain (the one you use to sign transactions with). Hardware wallets are basically the latter, in a more compact form, with the blockchain being hosted on a third party server.

Note that if you run Armory on a single device, without using two separate devices for a watch-only wallet and an offline-wallet respectively, you are effectively running a hot wallet and not using Armory's full security potential (ie. cold storage).

Unlikely, it is always complicated to understand some technical details; am asking further about what should be the results of corrupted Bitcoin Core's databases and what's the best drive to store the blockchain. I still think that i can't install the Bitcoin Core because of not having enough space in my pc hard drive to store the Blockchain.

You do not need to download a full blockchain(more than 166 GB ). if you have a small space, you can use "prune" it means delete old/verified blocks(confirmed blocks are not useful for your node.)
also, you can save it to an external hard drive, but this hard drive must be mounted when running your core.