[QUESTION] Offline hardware wallet transactions

[bitkapp]

I don't want to release too many details but,

Would it be possible to perform offline wallet transactions between two hardware wallets, and by hardware wallets I mean wallet data stored on a small chip or something of the sort?

Thanks for the feedback!

[icellan]

Funds are not actually stored in the wallet, so it is not possible to do offline transactions. Any transaction made needs to be published on the bitcoin network for it to even exist.

See how Armory deals with offline transactions to understand this a bit better: https://bitcoinarmory.com/using-offline-wallets-in-armory/

[drazvan]

Icellan is right, a transaction exists only after it is broadcast on the Bitcoin network. Completely offline transactions between two parties could be achieved though if the sending wallet offers some sort of guarantee against double spending - for instance, a smartcard-based wallet could offer a guarantee that it will not spend the same outputs twice and will not release the private key. This would obviously involve a trusted third party that certifies that the implementation of the smartcard-based wallet is secure (meaning it can't be made to leak the private key - allowing a double spend from another computer/wallet and it won't double spend an output).

Of course, the risk is not zero, but it may be good enough for smaller transactions and the certifying third party could insure the seller against loss due to double spending (so if they key is leaked or a double spend is performed in spite of their certification, they reimburse the seller).

[bitkapp]

So in any case a wallet needs to be connected to the internet at some point to transact. It would be awesome if someone found out a way to transact with offline wallets and still somehow alert the block chain that the transactions has occurred so double spends and all that don't happen.

[drazvan]

It doesn't have to be on the Internet, it just needs a way to send its transaction bytes to the network. This can be done through a proxy (if you wanted, you could write down the hex representation of the transaction and paste it into https://blockchain.info/pushtx - your wallet would not need to be online for this). Our VisualBTC uses animated QR codes to do the same.

[bitkapp]

It doesn't have to be on the Internet, it just needs a way to send its transaction bytes to the network. This can be done through a proxy (if you wanted, you could write down the hex representation of the transaction and paste it into https://blockchain.info/pushtx - your wallet would not need to be online for this). Our VisualBTC uses animated QR codes to do the same.

Yeah I saw your post about it before just skim read it but it sounded like something I was considering in developing, but then also maybe extend it to hardware wallets in the future.