Bitcoin Forum
November 16, 2018, 12:16:25 AM *
News: Latest Bitcoin Core release: 0.17.0 [Torrent].
 
   Home   Help Search Login Register More  
Pages: [1] 2 »  All
  Print  
Author Topic: A few questions because I don't understand how BTC works it doesn't make any s.  (Read 798 times)
alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 08, 2017, 01:19:48 AM
 #1

Hello,
My goal is to store a few thousands $ worth of BTC as safely as possible as an investment in Bitcoins.
I read the best way is to store them on a USB key, or even better, on a specific device called the Ledger Nano S (less expensive option it seems?).
I don't understand exactly how does BTC works with this device?
Are the BTC transferred INTO the device?
I read that if you lose the device, you can still access your BTC, so: what's the point of having this device? And would that mean that the BTC are not actually stored on the device? since losing it doesn't mean that you lose access to the BTC. So my previous statement above is wrong?
And it's said to use your device instead of an online service wallet like bitgo or greenéddress? greenbits?? or whatever??
But on the device sales page it says that we can use the device with those online services.
I'm SO lost.
I understand nothing about all of that.
Can you help and/or point me to all the right documentation i could find to understand everything since I like to understand what I'm doing, and all the info online suggest the device as the safest solution to store btc as savings.
Thank you very much :-)
1542327385
Hero Member
*
Offline Offline

Posts: 1542327385

View Profile Personal Message (Offline)

Ignore
1542327385
Reply with quote  #2

1542327385
Report to moderator
1542327385
Hero Member
*
Offline Offline

Posts: 1542327385

View Profile Personal Message (Offline)

Ignore
1542327385
Reply with quote  #2

1542327385
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1542327385
Hero Member
*
Offline Offline

Posts: 1542327385

View Profile Personal Message (Offline)

Ignore
1542327385
Reply with quote  #2

1542327385
Report to moderator
1542327385
Hero Member
*
Offline Offline

Posts: 1542327385

View Profile Personal Message (Offline)

Ignore
1542327385
Reply with quote  #2

1542327385
Report to moderator
1542327385
Hero Member
*
Offline Offline

Posts: 1542327385

View Profile Personal Message (Offline)

Ignore
1542327385
Reply with quote  #2

1542327385
Report to moderator
cissrawk
Sr. Member
****
Offline Offline

Activity: 672
Merit: 366

Need video promotion? https://goo.gl/QN55ZH


View Profile WWW
November 08, 2017, 02:39:26 AM
 #2

I read the best way is to store them on a USB key, or even better, on a specific device called the Ledger Nano S (less expensive option it seems?).
I don't understand exactly how does BTC works with this device?
Are the BTC transferred INTO the device?
Basically, it will create wallet address and private. So your btc will transfered to hardware wallet adress. More info how it works https://bitfalls.com/2017/09/08/hardware-wallets-like-ledger-nano-s-work/

Hello,
I read that if you lose the device, you can still access your BTC, so: what's the point of having this device? And would that mean that the BTC are not actually stored on the device? since losing it doesn't mean that you lose access to the BTC. So my previous statement above is wrong?
You can access it if you have something called "Backup". Example is Private Key and Seed. So even your hardware wallet is lost, you can still access it if you backup it before. Like save your private key and seed or print it.

And it's said to use your device instead of an online service wallet like bitgo or greenéddress? greenbits?? or whatever??
But on the device sales page it says that we can use the device with those online services.
It mean you can use them for do transaction like send to another address and etc.

Need Video Promotion For Your Project? Click Here! || Find me and my team on Fiverr! || Binomo Binary Option, accept bitcoin!
I can create ANN Thread, Banner design for ads, animating your logo, simple signature, and more! Just PM me!
Contact : Telegram, E-Mail, WorkingForBitcoins || Tip: BTC16CYsf1yonoVAN3jLAJguREmoJfCy5twi4
RGBKey
Hero Member
*****
Offline Offline

Activity: 840
Merit: 628


rgbkey.github.io/pgp.txt


View Profile WWW
November 08, 2017, 04:49:01 AM
 #3

It can be weird to think about how Bitcoin works for people just finding out about it. These hardware devices hold the keys you use to spend your Bitcoin. As long as you have these keys, you can tell the network to send your Bitcoins from your wallet to another. It is true that if you lose the device, you still have access to your coins, but this is only if you've backed up your wallet. Backing up your wallet is like making a copy of the key you use to send your coins, and putting it somewhere safe. Since this copy is usually on paper, it's not vulnerable to any sort of hack and can be safely stored in a fire safe, safe deposit box, under your pillow, etc.

You use your device to send your Bitcoins because that's where the keys are. In short, what happens is you use an online app that generates a "lock" for you (in technical terms this is an unsigned transaction). It then sends it to the device to unlock it (signing the transaction). Because your key never touches your computer, which could be infected with malware, it is much safer than a software wallet (a program on your computer instead of a hardware device).

The problem with Bitcoin is it is inherently a very technical system and can be hard to understand, but if you didn't get any of what I said just ask and I'll try to help you understand it.

Golerm
Newbie
*
Offline Offline

Activity: 57
Merit: 0


View Profile
November 08, 2017, 09:30:06 AM
 #4

An easy solution is to download "Ethereum" and create a new wallet.
It creates a "seed" which are just some random words in a specific order. You need to remember (for example store in a password manager) this seed but never share it with anyone.
Now transfer the Bitcoin funds to this new wallet.
The backup is the "seed". As long as you have that you can access the coins from any computer at any time.

Like RGBKey says it's hard to comprehend this at first. Think of it like your coins are stored in the cloud. Everyone who has your exact seed words can access them. It's secure because guessing the seed is basically impossible.
HCP
Hero Member
*****
Offline Offline

Activity: 784
Merit: 951

<insert witty quote here>


View Profile
November 08, 2017, 10:06:17 AM
 #5

An easy solution is to download "Ethereum" and create a new wallet.
Ummm, No... Ethereum is a completly different CryptoCurrency... Roll Eyes It is NOT related to BTC at all! Tongue

I think you meant to say... download "Electrum" and create a new wallet. For the record, Electrum is available here: https://electrum.org/#download

BitcoinDiamond
Newbie
*
Offline Offline

Activity: 28
Merit: 0


View Profile
November 08, 2017, 12:45:35 PM
 #6

You can never have too many back ups. I learnt the hard way. Get both.
alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 08, 2017, 01:56:20 PM
 #7

It can be weird to think about how Bitcoin works for people just finding out about it. These hardware devices hold the keys you use to spend your Bitcoin. As long as you have these keys, you can tell the network to send your Bitcoins from your wallet to another. It is true that if you lose the device, you still have access to your coins, but this is only if you've backed up your wallet. Backing up your wallet is like making a copy of the key you use to send your coins, and putting it somewhere safe. Since this copy is usually on paper, it's not vulnerable to any sort of hack and can be safely stored in a fire safe, safe deposit box, under your pillow, etc.

You use your device to send your Bitcoins because that's where the keys are. In short, what happens is you use an online app that generates a "lock" for you (in technical terms this is an unsigned transaction). It then sends it to the device to unlock it (signing the transaction). Because your key never touches your computer, which could be infected with malware, it is much safer than a software wallet (a program on your computer instead of a hardware device).

The problem with Bitcoin is it is inherently a very technical system and can be hard to understand, but if you didn't get any of what I said just ask and I'll try to help you understand it.

An easy solution is to download "Ethereum" and create a new wallet.
It creates a "seed" which are just some random words in a specific order. You need to remember (for example store in a password manager) this seed but never share it with anyone.
Now transfer the Bitcoin funds to this new wallet.
The backup is the "seed". As long as you have that you can access the coins from any computer at any time.

Like RGBKey says it's hard to comprehend this at first. Think of it like your coins are stored in the cloud. Everyone who has your exact seed words can access them. It's secure because guessing the seed is basically impossible.

Thank you both for your answers. Here is more ;-)
So I just need a seed from Electrum? Will creating a seed also create btc address?
This seed which is a few words only, saved on a piece of paper, is enough to have my BTC secure whatever happens?
What if Electrum disappears? Would I be able to use the seed (list of few words) with another program or with an online service like bitgo or greenaddress to get them back? Or how would I get them back?
And where are the private keys in this case?
And where are the BTC actually?
And what can I do with the USB device? The USB device will store the private keys (how many are there?), but not the seed? Or both?

Thank you :-)
RGBKey
Hero Member
*****
Offline Offline

Activity: 840
Merit: 628


rgbkey.github.io/pgp.txt


View Profile WWW
November 08, 2017, 02:25:04 PM
 #8

Thank you both for your answers. Here is more ;-)
So I just need a seed from Electrum? Will creating a seed also create btc address?
This seed which is a few words only, saved on a piece of paper, is enough to have my BTC secure whatever happens?
What if Electrum disappears? Would I be able to use the seed (list of few words) with another program or with an online service like bitgo or greenaddress to get them back? Or how would I get them back?
And where are the private keys in this case?
And where are the BTC actually?
And what can I do with the USB device? The USB device will store the private keys (how many are there?), but not the seed? Or both?

Thank you :-)

Electrum will create a new seed for you if you do not have one. This seed is used to generate many BTC addresses (As many as you need, there is no limit). All of the keys for the bitcoin addresses it generates come from this seed. And that is correct, as long as you have that seed stored somewhere, you can use it to re-generate all the Bitcoin addresses you've used in your wallet to re-create it and have control over your money. If Electrum disappears it would still be possible to use that seed and restore your wallet.

The private keys in this case are all derived from the seed, in what's called a Hierarchical Deterministic wallet (HD wallet). Those keys themselves are not usually stored, just the seed used to create them, because as long as you have the same seed you can re-create all of the same addresses. Bitcoins are never really "in" any computer or device, in the sense that if that device is broken/lost the Bitcoins are destroyed. The Bitcoins reside in the network, and the keys that are used to spend them are on the devices. If the device that has the only copy of the key to your Bitcoins is destroyed, those Bitcoins are lost in the sense that nobody can spend them. But if you have your seed written down somewhere else, you can use it to re-create your keys and regain access to those Bitcoins.

The USB devices (hardware wallets) use the same method as Electrum in that they use a seed to create addresses. As long as you have the seed stored somewhere safe, even if you lose the hardware wallet or it stops working, you still have access to your coins.

Bitcoin Addresses look like this: 1KsFhYKLs8qb1GHqrPxHoywNQpet2CtP9t. These are the things that you give to other people so they can send you money. Each bitcoin address is created from one private key, and each private key creates only one bitcoin address. The seeds used in modern wallets can create any number of private keys, so you can create any number of Bitcoin addresses.

alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 08, 2017, 02:52:23 PM
 #9

Thank you both for your answers. Here is more ;-)
So I just need a seed from Electrum? Will creating a seed also create btc address?
This seed which is a few words only, saved on a piece of paper, is enough to have my BTC secure whatever happens?
What if Electrum disappears? Would I be able to use the seed (list of few words) with another program or with an online service like bitgo or greenaddress to get them back? Or how would I get them back?
And where are the private keys in this case?
And where are the BTC actually?
And what can I do with the USB device? The USB device will store the private keys (how many are there?), but not the seed? Or both?

Thank you :-)

Electrum will create a new seed for you if you do not have one. This seed is used to generate many BTC addresses (As many as you need, there is no limit). All of the keys for the bitcoin addresses it generates come from this seed. And that is correct, as long as you have that seed stored somewhere, you can use it to re-generate all the Bitcoin addresses you've used in your wallet to re-create it and have control over your money. If Electrum disappears it would still be possible to use that seed and restore your wallet.

The private keys in this case are all derived from the seed, in what's called a Hierarchical Deterministic wallet (HD wallet). Those keys themselves are not usually stored, just the seed used to create them, because as long as you have the same seed you can re-create all of the same addresses. Bitcoins are never really "in" any computer or device, in the sense that if that device is broken/lost the Bitcoins are destroyed. The Bitcoins reside in the network, and the keys that are used to spend them are on the devices. If the device that has the only copy of the key to your Bitcoins is destroyed, those Bitcoins are lost in the sense that nobody can spend them. But if you have your seed written down somewhere else, you can use it to re-create your keys and regain access to those Bitcoins.

The USB devices (hardware wallets) use the same method as Electrum in that they use a seed to create addresses. As long as you have the seed stored somewhere safe, even if you lose the hardware wallet or it stops working, you still have access to your coins.

Bitcoin Addresses look like this: 1KsFhYKLs8qb1GHqrPxHoywNQpet2CtP9t. These are the things that you give to other people so they can send you money. Each bitcoin address is created from one private key, and each private key creates only one bitcoin address. The seeds used in modern wallets can create any number of private keys, so you can create any number of Bitcoin addresses.

If I understand well:
The seed allows you to generate the private keys? You can generate the private keys as many time as you want from the seed?
Private keys can be stored either on the usb device, or online like on bitgo, or locally on my computer using Electrum? How do you generate the private keys from the seed for each of the 3 situations (device, online and locally).
Can I use the seed from Electrum on Bitgo so they generate my private keys again?
What's the point of saving the private keys on the usb device if you only need the seed?
I could only save the seed on a few pieces of papers in 3 locations and then I could generate the private keys anytime and anywhere I want with those? So why saving the private keys?
Thank you ^^
ranochigo
Legendary
*
Offline Offline

Activity: 1568
Merit: 1094

Somewhat inactive.


View Profile WWW
November 08, 2017, 03:52:40 PM
 #10

The seed allows you to generate the private keys? You can generate the private keys as many time as you want from the seed?
Yes. Using the seed, you can convert it into a string of letters and that would be your master private key. Using that, you can generate as many private keys as you want.
Private keys can be stored either on the usb device, or online like on bitgo, or locally on my computer using Electrum?
Some online wallets generates the wallet only from your seed, they don't store it. But yes, it can also be stored on any storage medium. Its like a key.
How do you generate the private keys from the seed for each of the 3 situations (device, online and locally).
The wallet does it for you.
Can I use the seed from Electrum on Bitgo so they generate my private keys again?
I'm not aware of what standard Bitgo adopts. For Electrum, they use their own exclusive standard which most(all?) wallets do not currently use. Hence, you can only be importing the seed into an Electrum wallet.
What's the point of saving the private keys on the usb device if you only need the seed?
There's honestly no point.
I could only save the seed on a few pieces of papers in 3 locations and then I could generate the private keys anytime and anywhere I want with those? So why saving the private keys?
Exactly. Exporting the private keys would likely just cause more confusion.

DannyHamilton
Legendary
*
Offline Offline

Activity: 2198
Merit: 1385



View Profile
November 08, 2017, 03:57:58 PM
 #11

If I understand well:
The seed allows you to generate the private keys?

Correct.  Technically the seed is just a VERY VERY big number.  Then a standardized system is used to represent that number with a set of words that are easy to write down.

When you enter the seed into a bitcoin wallet program that supports that seed, it internally converts it back into a number and then uses a standardized set of mathematical formula to generate keys from that number.  Without that starting number (represented by the seed) it is impossible to generate the same sequence of keys, so as long as you keep the seed secure, nobody else can access your bitcoins.

You can generate the private keys as many time as you want from the seed?

Correct.  As long as you have the seed, the mathematical formula used to generate keys can be repeated at any time starting at the seed value to regenerate the keys if you lose them.  You can iterate the key formula to generate as many keys as you'd like.

Private keys can be stored either on the usb device, or online like on bitgo, or locally on my computer using Electrum?

At the technical level, a private key is just a VERY VERY big number.  You can store it anywhere that you can store a number.  Bitcoin wallets and services are designed to make it easier to manage those keys (frequently so easy that the user doesn't even need to understand the technical details).

How do you generate the private keys from the seed for each of the 3 situations (device, online and locally).

Some wallets and services support the Seed and HD concepts.  In that case, you simply enter your seed into the software, and the software handles the generation and management of your keys for you.  If you don't have a seed yet, then they will generate one for you and tell you what it is.

In other wallets and services, they have their own methods of managing keys.  In those cases, you might be required to trust them to manage the keys. They may not give you access to the keys at all.  Or they may provide you a method of creating a backup (generally a file that contains your keys) that you would need to securely store somewhere.

Can I use the seed from Electrum on Bitgo so they generate my private keys again?

I don't know a lot about BitGo, but I don't think they support the seeds that Electrum generates.

What's the point of saving the private keys on the usb device if you only need the seed?

It depends on the device. Some devices may only save the seed, and will just re-generate the keys whenever they are needed. Other devices may save the seeds as you use them so that it can access them faster.

I could only save the seed on a few pieces of papers in 3 locations and then I could generate the private keys anytime and anywhere I want with those?

That would be possible.  It is up to you to decide how you want to secure your access.  The two important things are:

1. You can always access the necessary keys when you need them.
This may mean accessing the keys directly, or it may mean generating them from a seed. The point is that if you are unable to access the keys at all, then you can not send your bitcoins anywhere.

2. Nobody else can access your keys.
The more copies of the keys or seed that you make, the more you increase the chance that someone else will gain access. Giving your seed or keys to a website, or untrustworthy software can result in those keys being used without your permission. Paper is nice because it can't be accessed remotely by hackers, but you'll need to import the information from the paper when you want to use the bitcoins.  If you import it to software on a computer that is infected with malware, then that malware could access the keys and access your bitcoin without your permission.  This is why hardware wallets are popular.  They keep the keys (or seed) off the computer both during storage AND while using them.

So why saving the private keys?

There are MANY wallet implementations.  Some of them don't use the HD concept, so each key MUST be individually saved.  Also, not all wallets use the same seed system.  The seed concept was introduced to make it much easier and safer for users to create and maintain their backups.  So, if you have access to a seed, then there is generally no need to save the keys separately.

alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 08, 2017, 05:02:40 PM
 #12

If I understand well:
The seed allows you to generate the private keys?

Correct.  Technically the seed is just a VERY VERY big number.  Then a standardized system is used to represent that number with a set of words that are easy to write down.

When you enter the seed into a bitcoin wallet program that supports that seed, it internally converts it back into a number and then uses a standardized set of mathematical formula to generate keys from that number.  Without that starting number (represented by the seed) it is impossible to generate the same sequence of keys, so as long as you keep the seed secure, nobody else can access your bitcoins.

You can generate the private keys as many time as you want from the seed?

Correct.  As long as you have the seed, the mathematical formula used to generate keys can be repeated at any time starting at the seed value to regenerate the keys if you lose them.  You can iterate the key formula to generate as many keys as you'd like.

Private keys can be stored either on the usb device, or online like on bitgo, or locally on my computer using Electrum?

At the technical level, a private key is just a VERY VERY big number.  You can store it anywhere that you can store a number.  Bitcoin wallets and services are designed to make it easier to manage those keys (frequently so easy that the user doesn't even need to understand the technical details).

How do you generate the private keys from the seed for each of the 3 situations (device, online and locally).

Some wallets and services support the Seed and HD concepts.  In that case, you simply enter your seed into the software, and the software handles the generation and management of your keys for you.  If you don't have a seed yet, then they will generate one for you and tell you what it is.

In other wallets and services, they have their own methods of managing keys.  In those cases, you might be required to trust them to manage the keys. They may not give you access to the keys at all.  Or they may provide you a method of creating a backup (generally a file that contains your keys) that you would need to securely store somewhere.

Can I use the seed from Electrum on Bitgo so they generate my private keys again?

I don't know a lot about BitGo, but I don't think they support the seeds that Electrum generates.

What's the point of saving the private keys on the usb device if you only need the seed?

It depends on the device. Some devices may only save the seed, and will just re-generate the keys whenever they are needed. Other devices may save the seeds as you use them so that it can access them faster.

I could only save the seed on a few pieces of papers in 3 locations and then I could generate the private keys anytime and anywhere I want with those?

That would be possible.  It is up to you to decide how you want to secure your access.  The two important things are:

1. You can always access the necessary keys when you need them.
This may mean accessing the keys directly, or it may mean generating them from a seed. The point is that if you are unable to access the keys at all, then you can not send your bitcoins anywhere.

2. Nobody else can access your keys.
The more copies of the keys or seed that you make, the more you increase the chance that someone else will gain access. Giving your seed or keys to a website, or untrustworthy software can result in those keys being used without your permission. Paper is nice because it can't be accessed remotely by hackers, but you'll need to import the information from the paper when you want to use the bitcoins.  If you import it to software on a computer that is infected with malware, then that malware could access the keys and access your bitcoin without your permission.  This is why hardware wallets are popular.  They keep the keys (or seed) off the computer both during storage AND while using them.

So why saving the private keys?

There are MANY wallet implementations.  Some of them don't use the HD concept, so each key MUST be individually saved.  Also, not all wallets use the same seed system.  The seed concept was introduced to make it much easier and safer for users to create and maintain their backups.  So, if you have access to a seed, then there is generally no need to save the keys separately.


Thank you
So concretely: how can I save a few thousands $ worth of BTC without having to rely on an online service trust?
Should I save the private keys? OR the seed "big number"? OR the seed list of words on a piece of paper?
What software to use?
Let's say I want to use 2 pieces of paper that will be in 2 locations. What software or what to use to generate the words that I'll write on those pieces of paper? I can't use Electrum because it was said that only Electrum software can generate the "big number" from the list of words. So if Electrum disappeared my piece of paper would be then useless because I could not use any software to convert the list of words into the big number and then into the private keys.
And when I open Electrum it asks me to select a file. What is this file?

My goal would be to have those few words on paper and only this paper is needed to access my BTC.
And this paper would be the ONLY way to access my BTC and being able to send them to someone, or to check the balance.
Would that work?
I just don't want any technical hack to be possible, except finding the list of word and knowing what is it, etc...
jackg
Copper Member
Legendary
*
Online Online

Activity: 1190
Merit: 1126


View Profile
November 08, 2017, 05:34:28 PM
 #13

Thank you
So concretely: how can I save a few thousands $ worth of BTC without having to rely on an online service trust?

You'd use a wallet like electrum and bitcoin core. In both of those cases it's highly unlikely you'll get scammed by their developers and you do own the private keys.

Should I save the private keys? OR the seed "big number"? OR the seed list of words on a piece of paper?
What software to use?

The seed is all that is needed. If you use a bip39 wallet you may also get a master private key that yoy can also store in case of transcription/data loss errors.


Let's say I want to use 2 pieces of paper that will be in 2 locations. What software or what to use to generate the words that I'll write on those pieces of paper? I can't use Electrum because it was said that only Electrum software can generate the "big number" from the list of words. So if Electrum disappeared my piece of paper would be then useless because I could not use any software to convert the list of words into the big number and then into the private keys.

Electrum is a piece of software, it cannot disappear. There is no master deactivation switch in the developers basements. As long as you keep a copy of your seed, you're good. Should electrum not be accessible, there are achieved versions of it stored. There is also the connectivity issue as it is an spv Waller and is a bit irregular compared to regular nodes. In this case, you can import your seeds into bitcoin core.

And when I open Electrum it asks me to select a file. What is this file?

Did you download it from electrum.org? If so, just input a random name if it already says "Default_Wallet". Keep it that way for now.


My goal would be to have those few words on paper and only this paper is needed to access my BTC.
And this paper would be the ONLY way to access my BTC and being able to send them to someone, or to check the balance.
Would that work?
I just don't want any technical hack to be possible, except finding the list of word and knowing what is it, etc...

Yes that would work. Once your words are written down and stored safely you should be good to go. Make a couple of copies of the seed though.

alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 08, 2017, 05:37:58 PM
 #14

Thank you
So concretely: how can I save a few thousands $ worth of BTC without having to rely on an online service trust?

You'd use a wallet like electrum and bitcoin core. In both of those cases it's highly unlikely you'll get scammed by their developers and you do own the private keys.

Should I save the private keys? OR the seed "big number"? OR the seed list of words on a piece of paper?
What software to use?

The seed is all that is needed. If you use a bip39 wallet you may also get a master private key that yoy can also store in case of transcription/data loss errors.


Let's say I want to use 2 pieces of paper that will be in 2 locations. What software or what to use to generate the words that I'll write on those pieces of paper? I can't use Electrum because it was said that only Electrum software can generate the "big number" from the list of words. So if Electrum disappeared my piece of paper would be then useless because I could not use any software to convert the list of words into the big number and then into the private keys.

Electrum is a piece of software, it cannot disappear. There is no master deactivation switch in the developers basements. As long as you keep a copy of your seed, you're good. Should electrum not be accessible, there are achieved versions of it stored. There is also the connectivity issue as it is an spv Waller and is a bit irregular compared to regular nodes. In this case, you can import your seeds into bitcoin core.

And when I open Electrum it asks me to select a file. What is this file?

Did you download it from electrum.org? If so, just input a random name if it already says "Default_Wallet". Keep it that way for now.


My goal would be to have those few words on paper and only this paper is needed to access my BTC.
And this paper would be the ONLY way to access my BTC and being able to send them to someone, or to check the balance.
Would that work?
I just don't want any technical hack to be possible, except finding the list of word and knowing what is it, etc...

Yes that would work. Once your words are written down and stored safely you should be good to go. Make a couple of copies of the seed though.

When you say "make a couple of copies of the seed". Do you mean write down the list of words on several pieces of papers placed in different locations?
About the file that is created by Electrum. Do I have to save this file? Or delete it? Does it contain the keys? Or anything else?
jackg
Copper Member
Legendary
*
Online Online

Activity: 1190
Merit: 1126


View Profile
November 08, 2017, 05:43:57 PM
 #15

Thank you
So concretely: how can I save a few thousands $ worth of BTC without having to rely on an online service trust?

You'd use a wallet like electrum and bitcoin core. In both of those cases it's highly unlikely you'll get scammed by their developers and you do own the private keys.

Should I save the private keys? OR the seed "big number"? OR the seed list of words on a piece of paper?
What software to use?

The seed is all that is needed. If you use a bip39 wallet you may also get a master private key that yoy can also store in case of transcription/data loss errors.


Let's say I want to use 2 pieces of paper that will be in 2 locations. What software or what to use to generate the words that I'll write on those pieces of paper? I can't use Electrum because it was said that only Electrum software can generate the "big number" from the list of words. So if Electrum disappeared my piece of paper would be then useless because I could not use any software to convert the list of words into the big number and then into the private keys.

Electrum is a piece of software, it cannot disappear. There is no master deactivation switch in the developers basements. As long as you keep a copy of your seed, you're good. Should electrum not be accessible, there are achieved versions of it stored. There is also the connectivity issue as it is an spv Waller and is a bit irregular compared to regular nodes. In this case, you can import your seeds into bitcoin core.

And when I open Electrum it asks me to select a file. What is this file?

Did you download it from electrum.org? If so, just input a random name if it already says "Default_Wallet". Keep it that way for now.


My goal would be to have those few words on paper and only this paper is needed to access my BTC.
And this paper would be the ONLY way to access my BTC and being able to send them to someone, or to check the balance.
Would that work?
I just don't want any technical hack to be possible, except finding the list of word and knowing what is it, etc...

Yes that would work. Once your words are written down and stored safely you should be good to go. Make a couple of copies of the seed though.

When you say "make a couple of copies of the seed". Do you mean write down the list of words on several pieces of papers placed in different locations?
About the file that is created by Electrum. Do I have to save this file? Or delete it? Does it contain the keys? Or anything else?

Yes make  multiple copies in multie places for good security.

Do what you want with the file. The seed contains everything and is all you need.
You could place it on a pendrive as an extra backup or just delete it.
As a note. For maximum security store it on a separate disk when creating it and then destroy/rewrite to the dusk multiple times until it is completely full to ensure everything is completely deleted (a vhd file will do this for you).

alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 08, 2017, 10:41:18 PM
 #16

Thank you
So concretely: how can I save a few thousands $ worth of BTC without having to rely on an online service trust?

You'd use a wallet like electrum and bitcoin core. In both of those cases it's highly unlikely you'll get scammed by their developers and you do own the private keys.

Should I save the private keys? OR the seed "big number"? OR the seed list of words on a piece of paper?
What software to use?

The seed is all that is needed. If you use a bip39 wallet you may also get a master private key that yoy can also store in case of transcription/data loss errors.


Let's say I want to use 2 pieces of paper that will be in 2 locations. What software or what to use to generate the words that I'll write on those pieces of paper? I can't use Electrum because it was said that only Electrum software can generate the "big number" from the list of words. So if Electrum disappeared my piece of paper would be then useless because I could not use any software to convert the list of words into the big number and then into the private keys.

Electrum is a piece of software, it cannot disappear. There is no master deactivation switch in the developers basements. As long as you keep a copy of your seed, you're good. Should electrum not be accessible, there are achieved versions of it stored. There is also the connectivity issue as it is an spv Waller and is a bit irregular compared to regular nodes. In this case, you can import your seeds into bitcoin core.

And when I open Electrum it asks me to select a file. What is this file?

Did you download it from electrum.org? If so, just input a random name if it already says "Default_Wallet". Keep it that way for now.


My goal would be to have those few words on paper and only this paper is needed to access my BTC.
And this paper would be the ONLY way to access my BTC and being able to send them to someone, or to check the balance.
Would that work?
I just don't want any technical hack to be possible, except finding the list of word and knowing what is it, etc...

Yes that would work. Once your words are written down and stored safely you should be good to go. Make a couple of copies of the seed though.

When you say "make a couple of copies of the seed". Do you mean write down the list of words on several pieces of papers placed in different locations?
About the file that is created by Electrum. Do I have to save this file? Or delete it? Does it contain the keys? Or anything else?

Yes make  multiple copies in multie places for good security.

Do what you want with the file. The seed contains everything and is all you need.
You could place it on a pendrive as an extra backup or just delete it.
As a note. For maximum security store it on a separate disk when creating it and then destroy/rewrite to the dusk multiple times until it is completely full to ensure everything is completely deleted (a vhd file will do this for you).

Does the not encrypted file generated by Electrum is enough, by itself, to access the wallet and use the money?
So I could put this file on a simple usb key to have another form of backup? (edit: this idea is useless I just have to create a text file with the few words' seed and put that on the usb key).
I could also put the file into an encrypted container created with VeraCrypt or whatever?

Edit: I don't find a way to open a file previously created.
Also, why does it always have to create such a file.
Really, what is this file and what is inside?
If I just want to enter my seed and manage my money, I don't want to create a file that I have to delete each and every time for safety reasons??
jackg
Copper Member
Legendary
*
Online Online

Activity: 1190
Merit: 1126


View Profile
November 09, 2017, 12:46:22 AM
 #17

Thank you
So concretely: how can I save a few thousands $ worth of BTC without having to rely on an online service trust?

You'd use a wallet like electrum and bitcoin core. In both of those cases it's highly unlikely you'll get scammed by their developers and you do own the private keys.

Should I save the private keys? OR the seed "big number"? OR the seed list of words on a piece of paper?
What software to use?

The seed is all that is needed. If you use a bip39 wallet you may also get a master private key that yoy can also store in case of transcription/data loss errors.


Let's say I want to use 2 pieces of paper that will be in 2 locations. What software or what to use to generate the words that I'll write on those pieces of paper? I can't use Electrum because it was said that only Electrum software can generate the "big number" from the list of words. So if Electrum disappeared my piece of paper would be then useless because I could not use any software to convert the list of words into the big number and then into the private keys.

Electrum is a piece of software, it cannot disappear. There is no master deactivation switch in the developers basements. As long as you keep a copy of your seed, you're good. Should electrum not be accessible, there are achieved versions of it stored. There is also the connectivity issue as it is an spv Waller and is a bit irregular compared to regular nodes. In this case, you can import your seeds into bitcoin core.

And when I open Electrum it asks me to select a file. What is this file?

Did you download it from electrum.org? If so, just input a random name if it already says "Default_Wallet". Keep it that way for now.


My goal would be to have those few words on paper and only this paper is needed to access my BTC.
And this paper would be the ONLY way to access my BTC and being able to send them to someone, or to check the balance.
Would that work?
I just don't want any technical hack to be possible, except finding the list of word and knowing what is it, etc...

Yes that would work. Once your words are written down and stored safely you should be good to go. Make a couple of copies of the seed though.

When you say "make a couple of copies of the seed". Do you mean write down the list of words on several pieces of papers placed in different locations?
About the file that is created by Electrum. Do I have to save this file? Or delete it? Does it contain the keys? Or anything else?

Yes make  multiple copies in multie places for good security.

Do what you want with the file. The seed contains everything and is all you need.
You could place it on a pendrive as an extra backup or just delete it.
As a note. For maximum security store it on a separate disk when creating it and then destroy/rewrite to the dusk multiple times until it is completely full to ensure everything is completely deleted (a vhd file will do this for you).

Does the not encrypted file generated by Electrum is enough, by itself, to access the wallet and use the money?
So I could put this file on a simple usb key to have another form of backup? (edit: this idea is useless I just have to create a text file with the few words' seed and put that on the usb key).
I could also put the file into an encrypted container created with VeraCrypt or whatever?

Edit: I don't find a way to open a file previously created.
Also, why does it always have to create such a file.
Really, what is this file and what is inside?
If I just want to enter my seed and manage my money, I don't want to create a file that I have to delete each and every time for safety reasons??

If you're on Windows, you could try to find the folder downloads are stored in when you click "open" instead of "save" as I believe that wipes every time you restart the computer. Simply make a shortcut to that folder and put electrum in it and run if from there. As a warning. You'll have to test this works due to Windows settings changing slightly. Also could try booting live Linux from a usb.
Otherwise, there's no way to stop the file from being made.
And you got it that you can just copy-paste the seed to a usb. I think there should be a built in encryption on your computer to encrypt an entire partition (definitely NTFS has one).

alexlouismorlevat
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 09, 2017, 01:13:53 AM
 #18

On bitcoin.org
They write everywhere:
"Secure your wallet"
Do they mean "secure your list of words"?
Is it the same?
DannyHamilton
Legendary
*
Offline Offline

Activity: 2198
Merit: 1385



View Profile
November 09, 2017, 02:57:40 AM
 #19

On bitcoin.org
They write everywhere:
"Secure your wallet"
Do they mean "secure your list of words"?
Is it the same?

That depends on the wallet you choose to use.

If you are using Bitcoin Core, then there are no "words".  There is only the wallet file, and any private keys that you have chosen to export.

If you are using Electrum, then you need to secure your seed words AND your wallet file.

If you are using a Trezor hardware wallet, then you need to secure your seed words AND your device.

Each wallet comes with its own features and it's own vulnerabilities. You should take the time to understand the wallet that you choose, and then make sure that you secure it so that:

1. You do not lose access to the important information for that wallet.

2. You do not leak the important information to anybody else.

HCP
Hero Member
*****
Offline Offline

Activity: 784
Merit: 951

<insert witty quote here>


View Profile
November 09, 2017, 03:57:56 AM
 #20

It would appear that you are attempting to go about things the wrong way. The "12 word seed mnemonic" system is really designed as a "backup" method to regenerate your wallet should your computer explode or hard disk get wiped etc... you should NOT be entering this every time you are wanting to use your wallet.

Based on your original premise:
Hello,
My goal is to store a few thousands $ worth of BTC as safely as possible as an investment in Bitcoins.
I read the best way is to store them on a USB key, or even better, on a specific device called the Ledger Nano S (less expensive option it seems?).
It would seem that somewhere along the line, you've got a bit confused about software wallets, hardware wallets, wallet files, private keys and seeds.

In my opinion, your best options for long term storage are probably:

1. A "paper wallet":

This is literally a piece of paper with the Address/Public Key (in plaintext) and the Private key (possibly encrypted with a password) written/printed on it. You can then give then send bitcoins to the Address, and use a blockchain explorer to view the balance etc. Should you later need to spend the coins, you import or sweep the (decrypted) private key into a software wallet and spend the coins as required (possibly sending whatever the leftover balance is back into a new Paper wallet address)

To enhance security of paper wallets, they should be generated "offline" using methods like rolling dice, or a paper wallet generator on an offline PC using a 'secure' operating system with a Live CD/USB that has not persistent storage or is securely wiped afterwards etc.

The great benefit of a paper wallet, is that it can't be hacked by some guy sitting at a computer thousands of miles away... you can't connect to a piece of paper over the internet! Wink

However, you would need to make sure that this piece of paper is stored securely... taking appropriate precautions against theft (put it in a safe?), fire (fireproof safe?), water (lamination?) etc.


2. A "Hardware wallet":

These are usually a small device containing some specific hardware that store and protect your "Seed" and/or generated private keys. Two of the most common/popular hardware wallets are USB based devices like the Ledger Nano S and Trezor.

The theory is that Hardware wallets never expose your seed/private keys to the outside world. They are locked away, encrypted inside the device on special chips or data storage areas... so even when you connect it to your computer/phone, nothing can read the seed/private keys. Instead, what happens is that when you attempt to spend your coins from the associated wallet application, an "unsigned" transaction is sent to the hardware wallet device... the device will then prompt the user for confirmation that they do indeed want to complete this transaction (this is why the devices with displays are popular, as you can see the address and amount that your coins are being sent to, to help prevent being tricked by malware). If the user confirms that the transaction is "OK", the hardware wallet will internally "sign" the transaction... making it valid, and then send just this "signed" transaction back to the wallet application, ready to be broadcast to the Bitcoin network. No "secret" data ever leaves the hardware wallet.

Hardware wallets, generally provide a 24 word seed mnemonic as the backup method. This seed is generated randomly and then displayed during device setup/initialisation and is usually NEVER displayed again. The idea is the user writes these 24 word mnemonic down on a piece of paper and stores it securely like a paper wallet. As explained previously, you can regenerate your entire wallet from that seed should your device get lost.

The advantage of the hardware wallet over paper wallet, is that it is a lot easier to spend from a hardware wallet without compromising the seed/private keys.


3. An "offline" software wallet:

Basically, you require two computers. One is used completely "offline". One is used "online".

The "offline" computer, should have NO network connection of any description and is NEVER, EVER connected to any network. You install a software wallet on it... As Danny mentioned, depending on the software wallet chosen, it will either generate a wallet file that needs to be securely backed up (ie. Bitcoin Core) or it will give a seed mnemonic and/or private keys (ie. Electrum). Again, in the case of the wallet giving you a seed mnemonic, like the hardware wallet, this should be written down and stored securely. However, unlike hardware wallets, you can usually get a software wallet to display the seed and/or private keys "at will".

On the "online" computer, you generate a special copy of your wallet from the "offline" machine known as a "watching only" wallet. This has all your addresses/public keys... but contains NO seed and/or private key... so even if someone steals the wallet file, they cannot spend your coins as they do not have the private keys needed to sign transactions. They will however be able to see all your transaction history, coin balances and addresses etc.

To spend coins, you create an "unsigned" transaction on the "online" wallet... then copy that onto a usb stick, transfer it to the "offline" computer... load the transaction into your "offline" wallet, sign it using the private keys creating a "signed" transaction, which you copy back onto the usb stick and transfer to the "online" computer ready for broadcasting to the network.

This might seem VERY similar to the hardware wallet system... and it is essentially the same process, just a bit more complicated and time consuming, not to mention requires a 2nd computer that you don't use for anything other than storing your wallet. Essentially, Hardware wallets have pretty much made the "offline"+"online" wallet system obsolete, but it still does work.


As for which wallet you should use, I think Danny sums it up nicely:
Each wallet comes with its own features and it's own vulnerabilities. You should take the time to understand the wallet that you choose, and then make sure that you secure it so that:
1. You do not lose access to the important information for that wallet.
2. You do not leak the important information to anybody else.
So, before storing a substantial amount of BTC into any wallet... I'd suggest you take the time to "experiment" with various wallets using small amounts of BTC until you're familiar with the wallets, how they work, how you secure them and how you can safely spend from them.

A small investment of time and a few dollars now, might save you thousands later!  Wink

Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!