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Author Topic: Storing Bitcoin - Please corect me if I'm wrong  (Read 135 times)
Atalol
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January 28, 2018, 09:15:39 AM
Merited by DannyHamilton (2), LoyceV (2)
 #1

Hey,

From what I read, for small amounts desktop wallets like Electrum (I currently have Exodus - any thoughts?) are alright.
Let's say I have an amount of BTC that I don't feel comfortable holding on an exchange.  I will leave a bit on Exodus (then I will look for a desktop that supports SegWit) but for long-term storage, I have those options:

1. Best option: Hardware Wallet - send a small amount, wipe clean, check if recovery works and then send the rest.
2. Paper wallet: Use https://segwitaddress.org/ on a Linux booted from live CD or USB stick (offline) and write down or print (preferably on a dumb printer with no memory/internet connection). Then store somewhere safe.
3. Bitcoin Core Client on a dedicated computer used only for storing Crypto (with TOR for privacy?).

So my plan is to generate SegWit address using segwitaddress.org (offline, using Linux installed on USB stick) and send money there. I have some questions:
- Can I send Bitcoins there multiple times without compromising security (I understand that privacy will be compromised anyway??)?
- When I send from paper wallet I should use Sweep option to send all funds at once. Preferably to HD wallet that has been checked for recovery prior. Am I correct?
- Any other tips or guides you can send me to so I can confirm that this is a good way of protecting my BTC?

I appreciate all feedback.

regards,
Atalol
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Xynerise
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January 28, 2018, 09:27:17 AM
Last edit: January 28, 2018, 10:01:15 AM by Xynerise
Merited by achow101 (2), HeRetiK (1)
 #2

Hey,

From what I read, for small amounts desktop wallets like Electrum (I currently have Exodus - any thoughts?) are alright.
Exodus is not open source so it's not recommended.

Quote
Let's say I have an amount of BTC that I don't feel comfortable holding on an exchange.  I will leave a bit on Exodus (then I will look for a desktop that supports SegWit) but for long-term storage, I have those options:
Electrum supports native segwit already (Bech32), but since it's not widely accepted yet you can manually create a normal P2PWKH-P2SH address on Electrum.

Quote
1. Best option: Hardware Wallet - send a small amount, wipe clean, check if recovery works and then send the rest.
Yes, a hardware wallet is the best option.
You should try sending also, not just receiving.

Quote
2. Paper wallet: Use https://segwitaddress.org/ on a Linux booted from live CD or USB stick (offline) and write down or print (preferably on a dumb printer with no memory/internet connection). Then store somewhere safe.
This works.
Writing it down is recommended though; the term "paper wallet" is literal: you'll have to write it on a piece of paper.

Quote
3. Bitcoin Core Client on a dedicated computer used only for storing Crypto (with TOR for privacy?).
If you want to go the paranoid route then get 2 computers: one offline and airgapped for signing transactions and the other for broadcasting.

Quote
So my plan is to generate SegWit address using segwitaddress.org (offline, using Linux installed on USB stick) and send money there.
I think a hardware wallet is better as there are less steps involved so you'll have lower opportunities to make mistakes.

Quote
I have some questions:
- Can I send Bitcoins there multiple times without compromising security (I understand that privacy will be compromised anyway??)?
Yes, of course.
Privacy is compromised by reusing addresses because someone could tie that address to an identity.

Quote
- When I send from paper wallet I should use Sweep option to send all funds at once. Preferably to HD wallet that has been checked for recovery prior. Am I correct?
Exactly.
Sweep all funds.
Or you risk the change being sent to an address you don't control depending on the wallet.

Quote
- Any other tips or guides you can send me to so I can confirm that this is a good way of protecting my BTC?
Like I said earlier, a hardware wallet is better.
It does the functions of a paper wallet and there are smaller vectors of attack and lower probability something would go wrong as a result of human error.

Also whenever you write down your seed, try to import it to see if you wrote it down correctly.
There have been cases where people didn't write down the correct word or wrote it in the wrong order.

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January 28, 2018, 09:41:37 AM
Merited by buwaytress (1)
 #3

Quote
2. Paper wallet: Use https://segwitaddress.org/ on a Linux booted from live CD or USB stick (offline) and write down or print (preferably on a dumb printer with no memory/internet connection). Then store somewhere safe.
This works.
Writing it down is recommended though; the term "paper wallet" is literal: you'll have to write it on a piece of paper.
Writing makes mistakes likely, use a printer.
You can download it from Github. It's open source, but I can't verify the source by myself. I haven't read anything bad about it, but I'd be very careful which (quite new) website/software I trust to create private keys. I'd feel more secure using an offline Electrum to generate a seed phrase (write this down!), and print addresses and private keys from there. This is more work though.

Atalol
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January 28, 2018, 10:18:29 AM
Merited by achow101 (1)
 #4

Xynerice and LoyceV - Thank you very much for your replies. I think I understand now how by not sweeping address security is compromised (because you use "x" wallet to send and you give it your PK to do that). Also, I am interested how could I use Electrum to generate PK + Seed?
Would it be something like this then:

1. Download Electrum onto USB stick
2. Go offline and install
3. Generate Seed + PK + address
4. Write them down
5. Check by sending a small amount onto address generated (use block explorer?)
6. Do I need to send BTC from that address to make sure it PK works (as I generated them together using electrum)? If so, should I use electrum on the same stick just go online?

It's not that I'm not paranoid enough. It's just that a) I'm not tech savvy enough I think, b) amount is too big for exchange but not as big to be too crazy about it. At least not yet.. when one BTC will be 1 000 000$, I might rethink my methods  Grin
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