Questions about node, digital sig and HD wallet

[Maus0728]

Greeting everyone,

I am on a research spree with regards to how I am going to take start staking control of my private keys since purchasing a hardware wallet is on my top priority right now. However, I came up with a few questions and some of the guides that I have read makes me confused about the privacy and security of the wallets.

[1]

This guide uses HD-wallets (hierarchical deterministic wallet) with mnemonic seeds (12-24 regular English words). That reduce the risk of fatal mistakes and improves privacy since you don't have to reuse addresses.

If an HD wallet improves the privacy of the user by not reusing the same address overtime why is it that this person has been caught in using hundreds of bitcointalk account even though he is using an HD wallet?

[2]
I wanted to help the bitcoin network to become more decentralized thus, It is obviously required to run my own bitcoin node to help validate my transaction in the bitcoin network while maintaining my privacy. However, Is there any option in running a bitcoin node without consuming a large amount of storage?

Note, the Bitcoin blockchain size is approaching 300 GB. It could take several days to download the whole blockchain. If storage is an issue, you could use “pruned mode”. That way, you´d discard old transactions and only need to store a few GB of data. You won’t be able to help new nodes connect, but you´d still validate everything yourself. If you´re on a limited data plan, downloading 300 GB of data might still be an issue. In that case you´d have to rely on third parties for validating and broadcasting transactions and can skip this step.

[3]
Do we have any tutorials in verifying the digital signature of a downloaded file in different OS? It looks like I also need to master this one since this is one of the fundamentals needed to ensure that the file we are downloading on the internet is not tampered or does not contain any malicious file. As I see it, this is an important skill to master if you are downloading a cryptocurrency wallet where your funds is involve.

These questions pops up in my mind when I read these resources. This is a must read if you want to become a good bitcoin citizen

https://github.com/DriftwoodPalace/guides/blob/master/hodl-guide-light/README.md
https://github.com/DriftwoodPalace/guides/blob/master/hodl-guide-light-ms/README.md
https://github.com/DriftwoodPalace/guides/blob/master/hodl-guide/README.md

Answers are very much appreciated! I also can't reply as fast as I can since I am doing my pending commission. Thank you for understanding.

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[Rath_]

If an HD wallet improves the privacy of the user by not reusing the same address overtime why is it that this person has been caught in using hundreds of bitcointalk account even though he is using an HD wallet?

HD wallet does not protect from mixing coins from other addresses in the same wallet. Most wallets don't support coin control which helps not to use coins from specific addresses as inputs in a new transaction.

However, Is there any option in running a bitcoin node without consuming a large amount of storage?

Yes, you can run a node in pruned mode. It will take significantly less space. Note that you will still have to download and verify all the blocks.

[Csmiami]

[1]
If an HD wallet improves the privacy of the user by not reusing the same address overtime why is it that this person has been caught in using hundreds of bitcointalk account even though he is using an HD wallet?

People tend to be stupid, lazy or both. It's sometimes faster to re-use an address than to select a new empty one. And when you are consolidating transactions, all the inputs will be linked together in the blockhain

[2]
I wanted to help the bitcoin network to become more decentralized thus, It is obviously required to run my own bitcoin node to help validate my transaction in the bitcoin network while maintaining my privacy. However, Is there any option in running a bitcoin node without consuming a large amount of storage?

You can run a pruned node; you will have to download the whole blochain, but only the GB of data you set will be stored in the device. Check this thread for a bit more information

[3]
Do we have any tutorials in verifying the digital signature of a downloaded file in different OS? It looks like I also need to master this one since this is one of the fundamentals needed to ensure that the file we are downloading on the internet is not tampered or does not contain any malicious file. As I see it, this is an important skill to master if you are downloading a cryptocurrency wallet where your funds is involve.

Direwolf has a guide on how to verify Electrum. You can use it as a base, and then repeat the process on other files, you want to verify.

[Chikito]

..
Do we have any tutorials in verifying the digital signature of a downloaded file in different OS?
 ...

Every wallet has tutorial or FAQ how to Verify your download, example for bitcoin core wallet download,

Windows verification instructions
MacOS verification instructions
Linux verification instructions
Snap package verification instructions

> Here How to verify signature bitcoin core download ( but not in english, sorry)

same as electrum wallet, in official site has FAQ how to verify, you can see https://electrum.org/#download below How to verify GPG signatures.

You need some tool like software GPG/PGP to verify using windows or mac OS and understand command line for linux.

[posi]

Greeting everyone,

I am on a research spree with regards to how I am going to take start staking control of my private keys since purchasing a hardware wallet is on my top priority right now. However, I came up with a few questions and some of the guides that I have read makes me confused about the privacy and security of the wallets.

[1]

This guide uses HD-wallets (hierarchical deterministic wallet) with mnemonic seeds (12-24 regular English words). That reduce the risk of fatal mistakes and improves privacy since you don't have to reuse addresses.

If an HD wallet improves the privacy of the user by not reusing the same address overtime why is it that this person has been caught in using hundreds of bitcointalk account even though he is using an HD wallet?


Answers are very much appreciated! I also can't reply as fast as I can since I am doing my pending commission. Thank you for understanding.

BitCryptex and others has provided the perfect answer for number 2 and 3 question but i will give an understandable answer to question number 1.
Walletexplorer does their process through the use of uncompressed/compressed keys to provide wallet creator and then used chain code to detect/provide all  addresses associated or created by with a single private key without knowing the private key of the addresses.

[hatshepsut93]

[1]

This guide uses HD-wallets (hierarchical deterministic wallet) with mnemonic seeds (12-24 regular English words). That reduce the risk of fatal mistakes and improves privacy since you don't have to reuse addresses.

If an HD wallet improves the privacy of the user by not reusing the same address overtime why is it that this person has been caught in using hundreds of bitcointalk account even though he is using an HD wallet?

HD wallet simply means that all the keys/addresses are derived from a seed, which makes it easier to back it up and store. Before HD wallets were created, you could only store your wallet digitally, or create paper wallets for one address only. HD wallet or any other wallet doesn't prevent you from receiving coins to the same address more than once, in fact no wallet can prevent it, because such transaction is always valid in Bitcoin protocol. Some wallets may choose to hide already used addresses to discourage users from reusing them, but it's an implementation detail of individual wallets.

[LoyceV]

HD wallet does not protect from mixing coins from other addresses in the same wallet. Most wallets don't support coin control which helps not to use coins from specific addresses as inputs in a new transaction.

I was surprised about this total lack of privacy options when I first installed my Ledger. Even worse: you can't even get a new address without funding the first one in Ledger Live! So if you want to give 5 different people a payment address, it's not even possible. That's pathetic
So I use Electrum with my Ledger now. Electrum allows coin control provides loads of receiving addresses. Verifying addresses and signing transactions still takes place on the Ledger, so it still provides the same level of security.

[Maus0728]

I was surprised about this total lack of privacy options when I first installed my Ledger. Even worse: you can't even get a new address without funding the first one in Ledger Live! So if you want to give 5 different people a payment address, it's not even possible. That's pathetic
So I use Electrum with my Ledger now. Electrum allows coin control provides loads of receiving addresses. Verifying addresses and signing transactions still takes place on the Ledger, so it still provides the same level of security.

That is why many people are complaining about the lack of basic functionalities in Ledger Live. It is kinda disappointing that they rather focus on adding altcoin application and exchange instead of providing basic coin control, pay-to-many, RBF features on their updates.