Why My Way Is Still Better Than Hardware Wallet.

[Dorkie]

Some months ago I wrote an article on "Why I Am Not Using Hardware Wallet For Cold Storage" at https://steemit.com/wallet/@dorky/why-i-am-not-using-hardware-wallet-for-cold-storage and posted the link somewhere here with my hacked "Dorky" account (now taken over by a sinful turkish hacker) and received many opposition on why hardware wallet is still the best way to go, that my way is not good enough.

Recently I stumbled on a case where someone lost his 8000 worth of ETH (I suppose it is $8000, not 8000 units of ETH) despite using Trezor and I wrote an article about it at https://steemit.com/wallet/@dorky/over-usd-6-million-stolen-despite-using-trezor

So I am writing this to reiterate that my method is still the best method ever to secure your savings even over hardware wallets.

Some say MEW is leaking data. Not sure about that, but basically you need to make sure your savings for cold storage should stay offline, strongly encrypted (multiple times), and segregated to many accounts in smaller amounts.

Update:
Apparently the Freewallet app can independently transfer out all your ETH into its own address (for cold storage excuse), even if your ETH is stored in a hardware wallet. So much for the security of using hardware wallet.

[Dorkie]

Apparently this Freewallet app for android can siphon off all your savings even from your hardware wallet.

Beware.

Refer to the comments at https://etherscan.io/address/0x7eD1E469fCb3EE19C0366D829e291451bE638E59#comments

[bob3772]

I think it's fairly clear to most that the best and most secure way would be the one that you described but in terms of cost efficiency and time required it is certainly not the best, you will be paying a lot in fees if you regularly move funds as well as it taking a long time. A great method for a long term holder but not so effective for others. Really with your method the only person to blame if you get your funds stolen is yourself.

[Freewallet]

The address mentioned here is one of service addresses associated with the cold storage, one of the signature features we offer our users. With Freewallet, your funds are safely stored offline in the cold storage with a bank level security grade. Thanks to the cold storage technology, even if your phone gets lost or stolen, you can easily access your wallet using another device.

The address displayed in your app is a so-called "hot wallet" used for receiving transactions. Keeping the funds there as well as storing your private keys locally could be a risk because if the access to your device is compromised, it would give a hacker an opportunity to steal your assets.

That is why after you've received a transaction, the funds are moved to the cold storage. Whenever you need to make a transaction, your funds are transferred from the cold storage as well. Your actual balance is displayed in your app; what is displayed on a blockchain explorer are intermediary transfers of funds in/out of the cold storage. Please note that you aren't charged with any fees for such transactions.

TL;DR With Freewallet, user assets aren't stored on hot addresses, but in the secure cold storage. Transactions from/to service addresses displayed in the blockchain explorer don't affect the user's balance: the actual amount they own is shown in the app; the coins can be accessed and spent at any time.