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Author Topic: I've been challenged with a prize of 10BTC to speculate with  (Read 634 times)
kakazao3
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December 01, 2017, 12:00:28 AM
 #1

I work in IT and a friend of mine that has a vast knowledge in hacking doesn't believe in the potential of Bitcoin.

He says things about bitcoin not being "backed by gold", that the encryption can be broken, that "some exchange in 2015" had disappeared and the money just vanished, or about the MT.Gox incident. I tried to argue but he didn't really listen.

So he proposed to me that he could give me 10 BTCTC, but if I lost it or if "the bubble bursted", I would pay it to him at least two times worth. If I manage to secure it and the value increases, I get half of the profits.

So I need to prepare for him a document with the procedure to generate a safe wallet, safely access it with no traces, hold the bitcoin for some months and present the profits on his table. The problem is I don't know a lot about hardware wallets, becoming a fullnode or how to use a paper wallet.

Anyway, he doesn't really expect to break the blockchain's encryption, I think. He just thinks I would be foolish to leave my bitcoins on an exchange, leave traces, execute the procedures on my usual network with no VPN and on my usual computer, save my private keys on a text file or something like that. I bet he is planning to get access to my wallet, recover all the bitcoins and then "forgive" my debt, like a good friend would do. Well, I won't let that happen.

tl;dr: I need to elaborate a procedure to store bitcoins securely, with all the paranoia I can afford to deal with. It needs to be impossible to forget my credentials, to get hacked or to lose everything due to "storage issues".

_______________________________________________________________________________ _____________________________________________
[edited]

I have a notebook that I don't use anymore, with a 320GB hard-drive, so the blockchain fits. I will use a bootable tool to cleanse it's hard drive once and for all, and I won't connect the notebook to the internet until I've got Tails Linux running. Anything I do on this notebook will be for opening the fullnode (or eletrum client) and storing my bitcoins.

What do I need to access the bitcoins contained on my paper wallet? Is Eletrum fully trustable? Is there any way I would lose my bitcoins with it, if used with Tails Linux and taking all the necessary precautions?
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cr1776
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December 01, 2017, 12:05:25 AM
 #2

Here is how to create a paper wallet, follow all the instructions including the live cd etc:

https://www.coindesk.com/information/paper-wallet-tutorial/

The bitcoins will be safe if you store the paper wallet (and a copy or two) somewhere safe.

As far as the “bubble” bursting (or “bursted” as he says) you have no control over that. It just depends on the time frame.
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December 01, 2017, 12:12:28 AM
 #3

So he proposed to me that he could give me 10 BTCTC, but if I lost it or if "the bubble bursted", I would pay it to him at least two times worth. If I manage to secure it and the value increases, I get half of the profits.
Over what time frame? You had better clarify that, because it could be "indefinitely" or whatever suits your friend.

Anyway, he doesn't really expect to break the blockchain's encryption, I think.
The blockchain does not use any encryption. What you would need to break is ECDSA, SHA256, and RIPEMD160. Those have so far been unbreakable.

What is far more likely is error on your part that results in the coins being stolen. That would be human error, not a failure of the system.


I recommend that you use a hardware wallet or a paper wallet.

A hardware wallet like Trezor or the Ledger Nano S is very secure and the only way to get the private keys is to get physical access to the device, know the PIN, and know the passphrase (passphrase is optional, but you should do it anyways as it is an extra security measure). Assuming you know the PIN and the passphrase, you just need to keep the mnemonic safe. You can do that by storing it in a secure place like a safe deposit box. Note that even if the mnemonic is stolen, if you have a passphrase, your coins will still be fairly safe.

To be absolutely sure that you do not forget the PIN or the passphrase, I suggest that you routinely connect the device to a computer and open up the wallet. This does not leak any private keys onto your computer or compromise your coins security in any way. It just makes sure that you still remember what the PIN and passphrase are.

Alternatively you could use a paper wallet encrypted with BIP 68 encryption. If you do that, you must store the paper wallet in a secure place (e.g. a safe deposit box) but you cannot forget the passphrase. If you forget the passphrase, then the coins will be lost. You should use the encryption as it will protect against anyone stealing the paper wallet. You should also make multiple copies and store them securely in separate places.

I have a notebook that I don't use anymore, with a 320GB hard-drive, so the blockchain fits. I will use a bootable tool to cleanse it's hard drive once and for all, and I won't connect the notebook to the internet until I've got Tails Linux running. Anything I do on this notebook will be for opening the fullnode (or eletrum client) and storing my bitcoins.

What do I need to access the bitcoins contained on my paper wallet? Is Eletrum fully trustable? Is there any way I would lose my bitcoins with it, if used with Tails Linux and taking all the necessary precautions?
Electrum is trusted. However I would not recommend that you use a paper wallet of use an old device to store the coins on. I recommend that you use a hardware wallet. That way you can keep it on your person at all times and verify that it is functioning with basically any computer at any time.

kakazao3
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December 01, 2017, 12:48:49 AM
 #4

Here is how to create a paper wallet, follow all the instructions including the live cd etc:

https://www.coindesk.com/information/paper-wallet-tutorial/

The bitcoins will be safe if you store the paper wallet (and a copy or two) somewhere safe.

As far as the “bubble” bursting (or “bursted” as he says) you have no control over that. It just depends on the time frame.

I guess now I understand how this works. I think a paper wallet will be fine, no need for a hardware wallet. I will divide the 10 BTC in half Bitcoin, half Ether. So the process is, buy from exchange, sell BTC for Ether, create one paper wallet for each (offline and with the disposable computer), transfer funds to the paper wallets, then hold for some time, transfer it all to the exchanges by importing the paper wallet to a software wallet on the disposable notebook and then depositing it on the exchanges, convert into FIAT currency, done.

Over what time frame? You had better clarify that, because it could be "indefinitely" or whatever suits your friend.

He did say "however long you want", so I think I will stop when it reaches 20% appreciation. No kidding with somebody else's money.

Thank you both for replying, too!
b20lopez
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December 01, 2017, 03:11:55 AM
 #5

Send 10 btc to this address:

1LWfuUC4sXMiHmSmoceVXczMwbpiCpXXBK


And just wait for him to give up.


Then send me a PM and lets share the profits

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btctousd81
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December 01, 2017, 05:01:16 AM
 #6

create offline paper wallet, make its copies., store in bank locker, send to yourself using your own email address as an attachment as photo of paper wallet, enable 2 factor authentication on that email account.

never store funds in online wallet, unless you are day trader, you will never know whicch site when will get hacked.




Kakmakr
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December 01, 2017, 06:33:56 AM
 #7

10 BTC is nearly $100 000 now, so if you take $300 now and you buy a old second hand computer and printer and use that to create your paper wallets, then it would not hurt your profits, when you cash out in the future. Buy the equipment, download the https://bitaddress.org/ script to a memory stick and transfer it to the second hand computer and then execute the script offline and generate the paper wallets. <print 500 or more paper wallets and then destroy the equipment> STAY OFFLINE

Pick some of the paper wallets and divide the 10 BTC into 0.1 BTC chucks and send it to those paper wallets. Find a few good hiding places away from your home or work. <because he might search for them there> and hide it.

Job Done.

Ps. Leave some paper wallets laying around your house as honey traps <fund with your own money> to see if someone triggers the traps. <then you know someone is searching your house> ^smile^

kahc
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December 01, 2017, 04:46:20 PM
 #8

You don't need to bother with paper wallets, here is a few super simple and secure steps you can do.

1. Download Electrum , MyEtherWallet(from github) and KeePass , move those files over to the offline notebook.
2. Generate a wallet with Electrum. With or without encryption.
3. Generate a wallet with MyEtherWallet.
3. Create Keepass DB with a strong algorithm and password(that you can remember) and key transformation of 1000000+.
4. Save the Electrum wallet seeds, and private key(s) to Keepass DB. Do the same with MyEtherWallet.
Also note down your public addresses, so you know where to receive coins.
5. Move the Keepass DB to your online computer.
6. Make backups of you Keepass DB, and store on dropbox, email or wherever you want.
7. Use Darik's Boot and Nuke (DBAN)  or other tools to nuke your offline notebook.
8. Buy BTC and ETH from an exchange and send to your public addresses.
9. You can create hints to your Keepass DB password if you are not 100% sure of your memory.
For example if you password is "@@@@@@@@@@YeahbitchIamgoingtobesuperrich" your hint could be "10*aYbigtbsr". Cheesy

dietmarfritz59
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December 01, 2017, 08:43:38 PM
 #9

Also, if you want to be even more paranoid, go to busy local computers. A good place for this is usually a university library or any popular library where computers are constantly being logged on to. Make everything under a fake name.

This way your friend cannot hack into your computer or any computer he thinks you may use. 

J. Cooper
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December 01, 2017, 09:22:50 PM
 #10

Also, if you want to be even more paranoid, go to busy local computers. A good place for this is usually a university library or any popular library where computers are constantly being logged on to. Make everything under a fake name.

This way your friend cannot hack into your computer or any computer he thinks you may use. 
I don't think that would be the most secure way to store 100 grant, not to mention if the servers get cleaned up or there's a malfunction in the system. You're better off setting up some sort of cold storage wallet (hardware or a paperwallet, I'm personally not a huge fan of hardware wallets).
suzanne5223
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December 02, 2017, 02:49:29 PM
 #11

Here is how to create a paper wallet, follow all the instructions including the live cd etc:

https://www.coindesk.com/information/paper-wallet-tutorial/

The bitcoins will be safe if you store the paper wallet (and a copy or two) somewhere safe.

As far as the “bubble” bursting (or “bursted” as he says) you have no control over that. It just depends on the time frame.

I guess now I understand how this works. I think a paper wallet will be fine, no need for a hardware wallet. I will divide the 10 BTC in half Bitcoin, half Ether. So the process is, buy from exchange, sell BTC for Ether, create one paper wallet for each (offline and with the disposable computer), transfer funds to the paper wallets, then hold for some time, transfer it all to the exchanges by importing the paper wallet to a software wallet on the disposable notebook and then depositing it on the exchanges, convert into FIAT currency, done.

Yes, paper wallet is the best way to secure bitcoin for a long period of time and as Achow101 said human error not failure of the system determine how safe wallet is. Therefore, you need to be more careful if you're going to use MyEtherWallet because people complain lately about there coin been stole.

aliashraf
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December 02, 2017, 06:37:36 PM
 #12

Send 10 btc to this address:

1LWfuUC4sXMiHmSmoceVXczMwbpiCpXXBK


And just wait for him to give up.


Then send me a PM and lets share the profits

 Cheesy
The most stupid strategy ever: Give your coins to this smarty neob  Tongue


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