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Author Topic: Super fast savings wallet + expenses wallet for newbies  (Read 763 times)
Rampion
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February 04, 2013, 12:24:53 PM
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I've recently discovered bitcoins. It seems a clever and sound currency, and I decided to invest a little part of my savings on it, while also using it for day-by-day transactions in order to support the bitcoin economy. I'm a non-geek, with an slightly above average cryptography understanding, and these are the steps I've followed:

1) I downloaded Bitcoint-Qt. It took a full week to download all the blockchain, which is a pain in the ass (I'm afraid that this extremely slow process will scare a lot of new users)

2) For immediate testing purposes I created an ewallet at blockchain.info. This is quick, but I understand that is not secure as an external service has access to my private keys

I then decided to created a secure wallet for my savings. I've read all the documentation about creating a wallet.dat with an Ubuntu LiveCD or bootable USB, but this process seems slow and complicate for the average user. Therefore I decided to proceed this way:

3) I've downloaded bitaddress.org and I run it in a clean, offline computer

4) With my offline version of bitaddress.org I created a paper wallet, containing three addresses with their corresponding private keys. I printed this paper wallet.

5) I transferred my savings from my local Bitcoin-QT wallet, and online blockchain.info ewallet to one of the addresses listed on my paper wallet.

In this point, I consider that Bitcoin-QT is unnecessary at first, as my savings go to the paper wallet and for day-by-day expenses I will use just a few coins, therefore the ewallet is suitable and secure enough for this purpose (in case of theft the loss would be minimum).

I would like to know other fellow bitcoiners opinion on the following points:

a) do you think that my savings paper wallet is as secure as a "secure offline savings wallet" created as per the instructions on the Bitcoin Wikia (https://en.bitcoin.it/wiki/How_to_set_up_a_secure_offline_savings_wallet)?

b) what would be the "cons" of my method, compared to a secure offline savings wallet?

c) are there any quicker methods for creating secure offline wallets (paper or non-paper) for newbies?

d) how would you check the balance on the paper savings account without exposing online the private keys? If I understand the mechanic correctly any client should be able to check in the blockchain the balance of any address, but I can't find a quick solution for this purpose. I can't use Armory (I'm on OSX) and I don't want to use the "hybrid wallet paper" solution of blockchain.info (https://blockchain.info/wallet/paper-tutorial))

I thank you in advance for your insights.

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DannyHamilton
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February 04, 2013, 08:04:48 PM
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1) I downloaded Bitcoint-Qt. It took a full week to download all the blockchain, which is a pain in the ass (I'm afraid that this extremely slow process will scare a lot of new users)

Those that aren't interested in maintaining a full node with the entire blockchain can look into running a lightweight wallet such as Electrum or MultiBit.  They also may want to condiser using a web hosted wallet such as https://blockchain.info/wallet

2) For immediate testing purposes I created an ewallet at blockchain.info. This is quick, but I understand that is not secure as an external service has access to my private keys

Unless you receive a hacked/malicious web page, blockchain.info does not have access to your private keys.  They only store an encrypted copy.  The private key is decrypted locally in your browser.  There are browser plug-ins that you can install to monitor the javascript to ensure that you are using the proper webpage.

In this point, I consider that Bitcoin-QT is unnecessary at first, as my savings go to the paper wallet and for day-by-day expenses I will use just a few coins, therefore the ewallet is suitable and secure enough for this purpose (in case of theft the loss would be minimum).

If this was your intent from the beginning, then there was no need to use the Bitcoin-Qt wallet in the first place.  When you acquired your bitcoins, you could have just arranged for the "savings" to be sent to the paper wallet address, and your day-to-day spendable bitcoins to be sent to your blockchain.info wallet.

a) do you think that my savings paper wallet is as secure as a "secure offline savings wallet" created as per the instructions on the Bitcoin Wikia (https://en.bitcoin.it/wiki/How_to_set_up_a_secure_offline_savings_wallet)?

If the "offline computer" has never been online, and will never be online, then yes.  If that computer is ever put online in the future, then there is a very small chance that some sort of malware recorded your private keys and is just waiting to get online so it can transmit them.

b) what would be the "cons" of my method, compared to a secure offline savings wallet?
Already mentioned above

c) are there any quicker methods for creating secure offline wallets (paper or non-paper) for newbies?
Depends on how secure, but generally no, none that I can think of.

d) how would you check the balance on the paper savings account without exposing online the private keys? If I understand the mechanic correctly any client should be able to check in the blockchain the balance of any address, but I can't find a quick solution for this purpose. I can't use Armory (I'm on OSX) and I don't want to use the "hybrid wallet paper" solution of blockchain.info (https://blockchain.info/wallet/paper-tutorial))

I'm sure in the future better tools will become available, but for now I'd just use the following link and replace YOUR_PUBLIC_BITCOIN_ADDRESS_HERE with your actual bitcoin address. Do NOT use your private key, just your public bitcoin address.

https://blockchain.info/address/YOUR_PUBLIC_BITCOIN_ADDRESS_HERE

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February 04, 2013, 08:58:57 PM
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1) I downloaded Bitcoint-Qt. It took a full week to download all the blockchain, which is a pain in the ass (I'm afraid that this extremely slow process will scare a lot of new users)

Those that aren't interested in maintaining a full node with the entire blockchain can look into running a lightweight wallet such as Electrum or MultiBit.  They also may want to condiser using a web hosted wallet such as https://blockchain.info/wallet


What would you say that are the benefits of mataining a full node, apart from having more control on the security of a locally hosted wallet.dat?

d) how would you check the balance on the paper savings account without exposing online the private keys? If I understand the mechanic correctly any client should be able to check in the blockchain the balance of any address, but I can't find a quick solution for this purpose. I can't use Armory (I'm on OSX) and I don't want to use the "hybrid wallet paper" solution of blockchain.info (https://blockchain.info/wallet/paper-tutorial))

I'm sure in the future better tools will become available, but for now I'd just use the following link and replace YOUR_PUBLIC_BITCOIN_ADDRESS_HERE with your actual bitcoin address. Do NOT use your private key, just your public bitcoin address.

https://blockchain.info/address/YOUR_PUBLIC_BITCOIN_ADDRESS_HERE


I just realized that the blockchain.info has the option to add "watch only addresses" to your ewallet, enabling checking the paper-wallet savings account . I assume this is pretty secure, as no private keys are shared online.

Blockchain.info is a great product, very complete and easy to use. I think it should be on every beginners guide, and all new users should be directed there.

Last but not least, thank you very much for your useful replies.

DannyHamilton
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February 04, 2013, 09:38:37 PM
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1) I downloaded Bitcoint-Qt. It took a full week to download all the blockchain, which is a pain in the ass (I'm afraid that this extremely slow process will scare a lot of new users)
Those that aren't interested in maintaining a full node with the entire blockchain can look into running a lightweight wallet such as Electrum or MultiBit.  They also may want to condiser using a web hosted wallet such as https://blockchain.info/wallet
What would you say that are the benefits of mataining a full node, apart from having more control on the security of a locally hosted wallet.dat?

If you don't keep a backup copy of your blockchain.info wallet and blockchain.info suddenly disappears, you will lose the ability to access your bitcoins.  They can't spend them since they are encrypted, but you can't spend them either since you don't have a copy of the private keys.  Blockchain.info does provide a method to receive a backup copy of your wallet file, so if you have a concern about them ceasing to exist, it would be a good idea to have a recent copy at all times.

As I mentioned, there is a small possibility that you could end up with a hacked copy of the webpage when you visit blockchain.info that captures your unencrypted private keys.  This is especially a risk if you are not using blockchain.info's browser plug-in that validates the page you receive.

If you are not running a "full node", then you are not directly contributing to the existence and distributed nature of the bitcoin network by actively validating the blockchain and relaying transactions.

You must trust that blockchain.info will properly create and relay your transactions and properly inform you of your balance.  If their servers crash, you have no control on when they will get them back up and running.

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