is it dangerous to not use tor with bitcoin?

[niko]

it may not be likely that i will correlate an ip address to a home address in most cases, and i agree with gavin and you about this. but, it's not strictly impossible. and you guys should also maybe think about insiders in companies that _can_ get that information.

anyway i think gavin's statement advising bitcoin users to use tor is all that needs to be said for now.

-w

Agreed. As an added exercise for everyone, try determining physical location of private keys corresponding to any of these addresses:

13iH15i8CesFkNo64L9T58zXgSSngLu8kq, currently holding 1,953.999 coins
13wirvgFtjc28mmxWRLc7xKSH4cjR8VkdK, currently holding 1,100.002665 coins
1LCeofivDzcuH8S6AicScudbxC3AiVZA9X, currenly holding 8,000 coins.

I ensure you that even the CIA, with all their resources, would have a hard time doing this reliably. Hell, they might even send you to the embassy of China by mistake.

[1715377041]

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[im3w1l]

I would recommend a paper wallet together with an "k out of n" code. Such a code means that you make n papers, and to decrypt, you need to have at least k of them (any k of them). This means that a thief can not get your money by stealing one paper, and also that you will not lose your money if you lose one paper.

This can probably not be done automatically at the moment though.

[auzaar]

What about using a heavily used VPN?

[DannyHamilton]

Far more people give up far more anonymity in the acquiring and spending of bitcoin than they ever do by failing to use Tor.  This conversation is much like standing in the shade under a coconut tree on the beach refusing to get in the ocean because you are afraid that you might be killed by a shark.  Focusing so narrowmindedly on revealing an IP address distracts from the more significant ways that people are giving up their anonymity without realizing it.  Get everyone out from under the coconut trees.  Once you've done that you can start trying to convince some of them to go for a swim.


Edit: Yes, I realize that it has never been officially confirmed that more people are killed by coconuts than sharks.  The point of the story is that people have a tendency to over-react to unlikely risks while under-reacting to more likely risks.  It happens all the time, not just with IP addresses and other identity revealing actions.

[RodeoX]

I don't fear thugs. If they come for me they will find out that I have a lot more real security in real life than I do on my computers. 

[franky1]

paper wallets can be many forms..
EG i can have a paper wallet that is a poem in a book...
and the key is (for example but not reality) the 3rd word 7th word 26th word and a bunch of numbers for the brain wallet key.
so just having a book on my book shelf that is my paperwallet.
now try stealing my coins..
and for inheritance reasons if i die, just putting a statement for family to read in my Will as:
read my favourite book, word numbers ... .. ..  to receive your riches.
and basically if anyone does not know you well enough to know what your talking about, doesnt really deserve your hard labours

What if the house burns down during your funeral and your loved ones are left destitute because they cannot access your Bitcoins?  

then they go to a book store, or a library read the poem again access the bitcoin address from someones computer and transfer what they need.

the poem i used is not a poem i wrote. it s a widely available book. so thank you for proving that even when the house burns down the money is safe.

but if you mean what do they do in the couple weeks from the funeral until the reading of the will to receive their inheritance, well i never throw all my eggs into one basket. its not like the family needs to ask me for a daily allowance upfront. and in my death they are left on the streets for a few weeks. the reality is that thy can still afford hotel rooms for , well a few weeks using their own wages, etc. but if they want their inheritance they have to wait for the reading of the Will before buying their porsche's and mansions

[ShadowOfHarbringer]

- SNIP -
- What if somebody steals the paper wallet from you ? It is not encrypted.

Why isn't it encrypted.  You can store an encrypted private key on paper.

...which will unfortunately take much more space than microSD card if the encryption is to be done properly (the paper cannot be too small or the print will become unreadable with time).

- How is paper wallet better than microSD card which CAN be encrypted, so you can push it to the cloud, make multiple backups everywhere and you don't care if the backups get lost or stolen ?

And a paper wallet can be uncrypted, pushed to multiple safes, and have multiple backups stored everywhere so you don't care if the backups get lost or stolen.

Yes, you do care. A microSD card can be encrypted in a way that nobody even KNOWS whether it **CONTAINS ANYTHING**. And it is easy, just truecrypt + 5 - line bash script.
Try doing that with paper wallet. Good luck.

The laptop may even have a truecrypt invisible partition  so you have plausible deniability in case a thug wants to take your coins from you.

Wouldn't a carefully encrypted and disguised piece of paper also give you plausible deniability?

You cannot disguise paper wallet as well as you can disguise microSD card.
MicroSD card can be encrypted in a way that it will be impossible to tell if it contains anything.

Also for extra security, instead of synchronizing blockchain through running client normally, you can synchronize on a different computer and transfer the blockchain files through other means (SFTP, RSYNC).

Wouldn't it be better not to synchronize the blockchain at all?  I don't think you need it to spend bitcoin as long as you know the hash value of the outputs that have been sent to you.

Armory allows this.

[Timo Y]

Now compare this whole mix of unrelated or losely related issues with the fact that anyone wanting to steal something of value can simply (compared to the goatfuck above it is simple) steal a car,

Stolen cars are difficult to hide, risky to transport, and must be dismantled by a trained mechanic before they can be sold as spare parts.

rob someone of their gold necklace,

Not a lot of people walk around with necklaces worth $10 Million, and the few who do are usually in the company of bodyguards.

kidnap for ransom,

Kidnapping for ransom is high risk operation that often ends badly for the kidnapper.  Express kidnapping isn't, which is why it's so common in some Latin American countries.  A bitcoin owner is the ideal victim for express kidnappings.

or just break into a wealthy-looking home and hope for the best.

That's why wealthy people don't keep kilograms of gold bars inside their home.


I agree that right now, it's a bit premature to worry about violent gangs coming after your bitcoins.  However, if bitcoin ever reaches prices of $1000+, the concerns of the OP are valid. Bitcoins are easier to steal than cars or jewellery, even if stored physically.

Simple offline wallets alone won't be secure enough.  Additional features, such as multiple signatories and mandatory lock times for withdrawals will be required. 

see:

https://en.bitcoin.it/wiki/Contracts