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This has been a major concern for me since I started dealing with the exchanges: nobody knows what standards they use in protecting user-supplied documents.
Some of the people running the exchanges are known by name only, some not even by that. Just because somebody has some rudimentary coding skills and opens a web site, it is not enough for me to trust him with my personal documents.
If I send him money, I am hoping that in 2-3 days I am done with the transaction. With documents, this can be an engagement written in hell for eternity. Not only you never know if they follow through on your request to destroy the documents when the time comes, in a matter of fact they can't - they must keep them for LE if the need ever arises. Do they encrypt the files? to they keep it off site? we will never know.
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"The European Banking Authority (EBA) is set to create a taskforce to advise on whether virtual currencies should be regulated. The watchdog, which is due to be created before July, will analyse the risk to consumers of using virtual currencies such as bitcoins." Source: http://www.bbc.com/news/technology-26420932 (last 2 paragraphs) |
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@DannyHamilton
You explain things very clearly. Thanks again.
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Of course, that sort of attack would be pretty easy to identify. An unplanned blockchain reorganization that goes back a few hundred blocks would be immediately obvious to most users. There are a few potential solutions that could restore the commonly accepted blockchain and reject the U.S. govt. submitted blockchain. It would require an update to the software, and none of the solutions would be great, but given the choice between fighting an attacker or accepting the damaging blocks, I suspect a consensus would be reached on one of the unpleasant solutions.
Thank you for the detailed response. I am pleased to see that the blockchain infrastructure is fairly robust even when facing such an theoretical enormous attack. Regarding the pools hashrates vs. NSA/DOE computing power, I looked up some numbers. It appears that the aggregate commercial pools' current 50% hashrate is about 12 petahash/sec. One of the fastest supercomputers today in NSA hands is the Cray XK6, clocking at about 15 Petaflops (estimated to go x1000 speedup by 2018.) Since one SHA256 pass requires several hundreds operations (integer though, but for supercomputer they are processed at about the same speed as floating point), I concur with you that the mining pools possess formidable amount of computing power... |
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@kjj
Now I'm concerned. I thought to prepare a paper wallet for my local hot wallet, but from what you say I realize that it is not enough to blindly use one of the paper-wallet generating ustilities, lest I could not properly retrieve the funds when the time comes. Need to learn more about the transaction mechanism. Thanks for the warning.
@DannyHamilton
Thank you for a great explanation. Just to make sure that I understand the robustness of the blockchain, here is a scenario that although it carries a negligible small chance of happaning, it is still a technical possibility:
Let's assume that the US gov wants to corrupt the blockchain and destroy the whole Bitcoin economy. Since the gov has much more hashing power (cracking machines at the NSA, number crunchers at the DOE) than the whole mining community, it can easily take over more than 50% of the hashing rate of the Bitcoin ecosystem, thus controlling the blockchain and be able to corrupt it. Is this (fictional) scenario, i.e. the ability to corrupt the blockchain if one has more than 50% hashrate than the rest, technically correct?
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.. You can move the coins straight from the online wallet to the paper wallet, just pay it in to the address  I will do that. Thanks you all for the help. |
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@serje
So the gist of the process is to transfer the bitcoins from the online wallet to the local one and then move the local one to an offline storage (paper or bits). I wish blockchain.info would have provided a more direct and simple method:
- backup your wallet to another location
- destroy the online wallet you have with us.
Thanks.
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...
You can make paper wallets directly in the blockchain site.
Yes, I am aware of this and did generate one - but this is just a backup method. My question was how to make the private keys located only in my paper wallet and have them inaccessible at the blockchain.info site. @freebit13 : Thanks for the info, I will read it over. |
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you cannot - if you have an address on a site which has coins in it then they can have access to it...
if you want it stored off site then it has to be offsite and not have keys stored online
So I guess the only practical way is to generate a new local wallet ( with a new BTC address) and transfer the bitcoins from blockchain.info into my local storage. Correct? |
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I don't mean to hijack this thread, but the question is relevant:
Let's say that I keep 2 btc in an online wallet at blockchain.info, and that I'm concerned that the site will get hacked and my wallet will be drained by the hacker (or that the site operator will run away with it).
Therefore, I wish to move the wallet to a a local paper wallet. If I follow the procedure outlined above, in addition to having the wallet locally stored, the wallet still exists at the blockchain.info site - therefore still suceptible to external elements.
How can I be sure that I am the only one who can possess the wallet content, and that the private key is not available to anybody else - not even to a crooked site operator?
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Payment has been received. Thanks.
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