Securing wallet - Am I forgetting something?

[MelG]

Hey guys,

I just earned a few Bitcoins and wanted to test creating a secure wallet. I have a few concerns which I hope someone could explain me. Here is my plan to do this. Please add if I miss something or some other method is better! Also I apology for my noobish questions.

1. I will create a Linux boot CD and boot my computer with that, starting Linux desktop version.
2. I will download Bitcoin software (Bitcoin-QT) from bitcoin.org/en/download and create a new wallet with a few addresses. (Is this absolutely secure on Linux environment? Without doing some hardening or adding firewall?)
3. I will encrypt the wallet by using the encryption provided within Bitcoin software.
4. I will copy the encrypted wallet over to a brand new flash drive and have a backup of it on another flash drive.
5. I will delete the wallet on my computer.
6. I will shutdown linux and go to my PC and send the coins over to the addresses of my new wallet that is stored within my flash drives.
7. I will store the flash drives separately to secure locations. (I understood that the wallets don't need to be connected to internet in order to receive Bitcoins to them?)
8. When I'd like to access my stash, I use the live CD to boot my PC, download bitcoin-qt, unencrypt the wallet from one of the flash drives and place it to the proper file path and that's it?

Is there anything else to add?

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[Abdussamad]

That won't work. Bitcoin-qt needs to download the blockchain to function. That is the public database of all bitcoin transactions ever. It's many gigabytes in size. So in brief bitcoin-qt is not designed to be used off a USB stick.

If you want to create an offline wallet you should look into armory:

https://bitcoinarmory.com/using-offline-wallets-in-armory/

It still won't work off a USB stick but you can put the offline wallet on a separate dedicated computer that never goes online.

Another possibility is a paper wallet.

You need to do more research on the options available to you.

[MelG]

Thank you for your reply! Can you explain this further, why it would not work? Isn't wallet.dat everything that matters? I am not going to be using this wallet in daily basis. This will be just for depositing Bitcoins and cashing out later.

[Abdussamad]

Thank you for your reply! Can you explain this further, why it would not work? Isn't wallet.dat everything that matters?

Bitcoin-qt needs to download the blockchain to function. That is the public database of all bitcoin transactions ever. It's many gigabytes in size.

To spend the coins you will need the copy of the current blockchain. You could back that up on the USB drive too but then it wouldn't stay up to date and would need to be updated before you could spend your coins.

Overall too much trouble to be worth it.

[MelG]

Thanks for the suggestions. Personally I don't mind the trouble as long I will find a simple and secure solution for this. I would like to hear other people's opinions as well.

[dwolfman]

Thanks for the suggestions. Personally I don't mind the trouble as long I will find a simple and secure solution for this. I would like to hear other people's opinions as well.

I'm still not sure you are getting what he is driving at.

My Linux setup with Bitcoin-QT installed created a .bitcoin folder inside my home folder.  It's current size (bitcoin-qt is running and current) is 9.4 GB.

Of that, the wallet.dat is only 92 KB in size.  The rest is the blockchain data.  And considering how slow the blockchain can be to download (took me a week to get all of it the first time, shut the client down for a couple days once and took a few hours to get back up to date), you really don't want to mess with that through a USB drive or in something that isn't frequently updated.  USB drives are generally too slow for this kind of stuff, and you would need a rather large drive to hold it since the blockchain is only going to get larger.

What might work better would be to use one of the light-weight clients that are available instead.  They don't need the whole blockchain to function and would be more suited to what you want to do (just put the bare minimum necessary files on a USB and run it from there).  You could even make the USB itself bootable and load up a minimal Linux with your client already installed in it, no need for CDs or anything else.

Or you could set up Armory, like was suggested.  Though not sure it can be run off a CD like you wanted to.

[MelG]

Thanks for the suggestions. Personally I don't mind the trouble as long I will find a simple and secure solution for this. I would like to hear other people's opinions as well.

I'm still not sure you are getting what he is driving at.

My Linux setup with Bitcoin-QT installed created a .bitcoin folder inside my home folder.  It's current size (bitcoin-qt is running and current) is 9.4 GB.

Of that, the wallet.dat is only 92 KB in size.  The rest is the blockchain data...

I totally get this. However once I have the wallet.dat encrypted on my flash, I can use any client to for accessing it, can't I? The software client is no problem. I can change it to a lighter version. What would you suggest? My problem is to trust any third party code (Armory, i.e) in this. That's why I wanna keep it really simple.

Please also let me know if I understand correctly that the wallet.dat is only thing that matters? The client can be changed afterwards.

[Abdussamad]

Thanks for the suggestions. Personally I don't mind the trouble as long I will find a simple and secure solution for this. I would like to hear other people's opinions as well.

I'm still not sure you are getting what he is driving at.

My Linux setup with Bitcoin-QT installed created a .bitcoin folder inside my home folder.  It's current size (bitcoin-qt is running and current) is 9.4 GB.

Of that, the wallet.dat is only 92 KB in size.  The rest is the blockchain data...

I totally get this. However once I have the wallet.dat encrypted on my flash, I can use any client to for accessing it, can't I? The software client is no problem. I can change it to a lighter version. What would you suggest? My problem is to trust any third party code (Armory, i.e) in this. That's why I wanna keep it really simple.

Please also let me know if I understand correctly that the wallet.dat is only thing that matters? The client can be changed afterwards.

wallet.dat is only used by bitcoin-qt. Other clients like armory or electrum have their own different wallet formats.