HWs and Airgapped PCs: I'm under doubts. What should I do?

[20kevin20]

So I just got a RYF-certified device on my hands and I'm now thinking about what I should be doing with it.

I love my Ledger. I've been using it for a long time now, but I am constantly thinking about the fact that I sometimes have to access Live to remove/add apps on it, and that is something I definitely don't like from a privacy perspective. I have no programming knowledge to review source codes, and I am highly paranoid that Ledger Live may be collecting information from my HW (I know it does not have an identifiable serial number, but it does have apps and the addresses and these could be linked to my IP) and either store it or even sell it to other interested parties. PC components have backdoors and creepy closed-source stuff in them, so I am constantly wondering why Ledger wouldn't.

In consequence, I'm contemplating about moving my mixed/CoinJoined coins to an airgapped PC that will never go online. I would have used my Ledger in conjunction with an airgapped PC (I'm somehow pretty scared about my private keys and seed living on a hard drive and Ledger makes me feel safer about it), but I know it sounds like a useless idea.

Sometimes I'm wondering if airgapped PCs pose a risk when it comes to outdated wallets. If I airgap a device, I want to keep it forever offline. Will my funds be under risk if I never update my wallet again, as long as the device is never going to connect to the outside world?

The doubts I'm facing are about the way I should store my long-term coins now that I have three different devices: a RYF-certified one, a laptop with all wireless and bluetooth modules removed and HWs. I have been thinking about using my Ledger as a "hot wallet" for non-mixed coins and storing the mixed ones on an airgapped device, but I am not sure whether I should use my RYF-certified device or the kind of device doesn't matter as long as it has no wireless modules to communicate. I want my airgapped PC to be as authority-proof as it can be. Could my non-RYF-certified pose a higher risk of being unlocked by someone who has access to the backdoors installed in it?

In fact, I am not even sure if there is any better alternative, so I thought some members out here could give me a helping hand. I am basically looking for the safest (from a privacy POV) way to sore and use my coins as privately and open-source as possible, or at least for someone who knows what they're talking about to tell me whether my idea is a good one or needs improvement.

[Lucius]

If you want complete privacy you have to start from scratch, which would mean that you will always use a TOR or a trusted VPN, and that all coins will be mixed. So first secure your internet privacy (mask your real IP), then move your coins to another wallet and reset Ledger, create a new seed and never connect to Ledger or any other server with your real IP. Then mix your coins again, and send them to Ledger.

Now the question arises as to how you will use these coins, because if you pay something online with this BTC you will reveal your identity in case you buy an item to be delivered to you - although there is a way not to use your real address. I'm not saying that Ledger has any bad intentions, but they have already shown considerable incompetence, which is just a warning that they should not be completely trusted. IP addresses combined with coin addresses could really be a big security issue, and the question is how Ledger handles them.

If you back up your private keys&seed on a airgapped PCs, then you don't have to worry about it becoming unusable and after a long time, it's something that should always be standardized way for recovery.

[20kevin20]

If you want complete privacy you have to start from scratch, which would mean that you will always use a TOR or a trusted VPN, and that all coins will be mixed. So first secure your internet privacy (mask your real IP), then move your coins to another wallet and reset Ledger, create a new seed and never connect to Ledger or any other server with your real IP. Then mix your coins again, and send them to Ledger.

I mostly got the mixing, IP masking and coin handling part. There definitely are some flaws I have sometimes missed, but now that I have a RYF-certified PC, I'll be fixing them as well. Tech and cybersecurity is a never-ending education.

Now the question arises as to how you will use these coins, because if you pay something online with this BTC you will reveal your identity in case you buy an item to be delivered to you - although there is a way not to use your real address.

My long-term mixed coins will be used P2P only, while my hot wallet will be a little more "vulnerable" privacy-wise. There are some workarounds for name and addresses as well that I've been successfully using for a while now. It feels a bit less secure than handing out your real personal information, but it's worth it in the end.

I'm not saying that Ledger has any bad intentions, but they have already shown considerable incompetence, which is just a warning that they should not be completely trusted. IP addresses combined with coin addresses could really be a big security issue, and the question is how Ledger handles them.

They're a company and they may have shown mostly good intentions in the first few years, but lately they've turned to the "darker" side in my opinion. As a company, no matter how much it looks like they are well intended, they may be influenced in the end the same way Google and almost all the other corporations of today have been - especially if large money comes into the game. The Secure Element is another thing that makes me question whether backdoors are a thing - hence why I previously searched for a way to use my HW offline.

If you back up your private keys&seed on a airgapped PCs, then you don't have to worry about it becoming unusable and after a long time, it's something that should always be standardized way for recovery.

I wouldn't worry about losing the privkeys/seed as much as I'd worry about the fact it's somewhere stored on my drive. While Ledger has its own security and encryption by default, the other devices I own such as PCs are only as safe as I make them be. And since I'm not a security expert, there may be large flaws I'm missing.

[o_e_l_e_o]

I'm somehow pretty scared about my private keys and seed living on a hard drive and Ledger makes me feel safer about it

I would recommend using whole disk encryption on your airgapped computer.

Will my funds be under risk if I never update my wallet again, as long as the device is never going to connect to the outside world?

No, provided the seed phrase was created securely and you don't expose the seed phrase or private keys via any other means. The risk of leaking information from a permanently airgapped device is very small, and would likely require that you be a target of a three letter agency somewhere. As long as the airgapped software you are using can still sign transactions created by whatever software you are using for your watch only wallet, then there is no need to ever update it. I probably still would every so often though (by transferring the update on removable media - not by going online!)

Could my non-RYF-certified pose a higher risk of being unlocked by someone who has access to the backdoors installed in it?

Possibly, but if you use whole disk encryption using good open source software (LUKS or VeraCrypt, for example), then you would be largely protected against a physical attack by someone with some sort of backdoor in to the hardware.

[20kevin20]

I would recommend using whole disk encryption on your airgapped computer.
~
Possibly, but if you use whole disk encryption using good open source software (LUKS or VeraCrypt, for example), then you would be largely protected against a physical attack by someone with some sort of backdoor in to the hardware.

Oh I will, no doubt. Thanks for the recommendations of encryption software.

No, provided the seed phrase was created securely and you don't expose the seed phrase or private keys via any other means. The risk of leaking information from a permanently airgapped device is very small, and would likely require that you be a target of a three letter agency somewhere. As long as the airgapped software you are using can still sign transactions created by whatever software you are using for your watch only wallet, then there is no need to ever update it. I probably still would every so often though (by transferring the update on removable media - not by going online!)

Got it. I might do updates using disposable CDs to make sure the data is written one-way only then. You are some kind of privacy genie here tbh so I will have the insolence to ask this do you have any other recommendations, or do you think the way I thought organizing my coins sounds fine so far?


Also, I have a little doubt that came up in my mind right after reading @Lucius' reply above: is connecting Bitcoin Core with Tor the safest way to broadcast a tx signed from my airgapped PC without revealing my fingerprint?

[notblox1]

Got it. I might do updates using disposable CDs to make sure the data is written one-way only then. You are some kind of privacy genie here tbh so I will have the insolence to ask this do you have any other recommendations, or do you think the way I thought organizing my coins sounds fine so far?

I would not use disposable CDs for storing anything really.
They are very unreliable any data stored on them can easily be gone in few years even without moving or playing CDs.
I had bad experience several times with backup on CDs that was not being able to load, so I would suggest you use USB or SD card if you want to store it in digital format.
Usual CD storage life is two to five years, and USB is over 10 years.

[20kevin20]

I would not use disposable CDs for storing anything really.
They are very unreliable any data stored on them can easily be gone in few years even without moving or playing CDs.
I had bad experience several times with backup on CDs that was not being able to load, so I would suggest you use USB or SD card if you want to store it in digital format.
Usual CD storage life is two to five years, and USB is over 10 years.

I feel like you haven't really read my post, but I'll reply anyway. Using writable devices such as USB or SD cards on a PC that is supposed to have no connection to the outside world poses a risk imo to the security of the airgapped device.

I could insert an USB into my Internet-connected PC, download an Electrum update, infect the USB, plug it into my airgapped device and infect it. Now:
 - If I had used a CD instead, after the update is done, even if the airgapped PC is now infected, I would just unplug the CD and cut it into pieces. No information will leave my infected airgapped PC.
 - With the USB, the device is re-writable, so crucial information may now leave from my now-infected, airgapped PC straight onto the USB. Next time I plug it into an Internet-connected device, the "fun" part begins.

AFAIK, Linux systems are way harder to infect than Windows ones. However, I'm taking as much precaution as possible. I want no USB devices to ever be connected to my airgapped device. The safer, the better. USB devices can be wiped, but I would honestly not risk information leaks when a CD is only like $0.20. (sorry for repeating "airgapped" 6 times in this post)

[notblox1]

I feel like you haven't really read my post, but I'll reply anyway. Using writable devices such as USB or SD cards on a PC that is supposed to have no connection to the outside world poses a risk imo to the security of the airgapped device.

I did read it, and you can make your SD card or even USB un-writable and make it as read-only mode with a lock, and there is also Write-Once-Read Micro SD Cards.
Thanks for explaining.

[20kevin20]

I did read it, and you can make your SD card or even USB un-writable and make it as read-only mode with a lock, and there is also Write-Once-Read Micro SD Cards.
Thanks for explaining.

Now that makes me wonder if there is any workaround to bypass the write protection hardware switch of SD card readers, or if there's any way these hardware switches could be faulty and simply not lock the SD card when I think it physically did so. I don't trust hardware that much, especially as I'm not an expert and I mostly trust what others tell me about it rather than studying the facts by myself - I wish I had the knowledge to personally study those as well, but we can't have everything.

One thing I know is, today's software and components are filled up with backdoors and maliciously-intended codelines. The "old ways" are safer than ever before: dumb phones, CDs, wired connections etc.

I don't mind CDs being unreliable for long-term storage. After all, I would only use them for wallet updates and I don't need those forever. In fact, I'd rather use as many disposable devices and objects as possible the same way I'd rather use Live CDs than install the OS. I feel like it's safer and chances of messing up are lower when you know you just start from point zero every time.

[o_e_l_e_o]

do you have any other recommendations, or do you think the way I thought organizing my coins sounds fine so far?

It's pretty good. The disposable CDs for updates is a nice idea. My airgapped device does not have a CD drive, so I use a USB drive with a hardware write protection switch on the outside, and I format it after each use just to be extra sure. I also transfer transactions back and forth using QR codes and cameras (which I unplug when I am not actively using them).

is connecting Bitcoin Core with Tor the safest way to broadcast a tx signed from my airgapped PC without revealing my fingerprint?

Provided you aren't leaking information in other ways, such as via your OS or your Tor session. It's best to use a dedicated session to broadcast your transaction and nothing else. Again, unless you are the target of a three letter agency who could potentially monitor your entry and exit nodes, this is probably the best balance of privacy and ease of use.

[Lucius]

My long-term mixed coins will be used P2P only, while my hot wallet will be a little more "vulnerable" privacy-wise.

I think it is terribly difficult to achieve absolute privacy in today's world where everything is actually analyzed, and if you look at all those companies that deal exclusively with BTC blockchain analysis, just one wrong step is enough to be identified in one way or another. For those to whom BTC is attractive as a payment currency, privacy is a terribly big challenge - I have to admit that so far I have not decided to go in that direction.

They're a company and they may have shown mostly good intentions in the first few years, but lately they've turned to the "darker" side in my opinion. As a company, no matter how much it looks like they are well intended, they may be influenced in the end the same way Google and almost all the other corporations of today have been - especially if large money comes into the game. The Secure Element is another thing that makes me question whether backdoors are a thing - hence why I previously searched for a way to use my HW offline.

Whether it’s Ledger or Trezor (or any other HW) anyone who doesn’t doubt and question their methods constantly actually lives in the false belief that the world is a fair place, when in fact it is quite the opposite. I’ve been using Ledger HW for years, but that doesn’t mean I trust them absolutely, and this latest data leak has definitely shown that anything is possible.

Therefore, it is quite justified to look for some new solutions and to look for every possible flaw in the existing ones.

[20kevin20]

Thanks @o_e_l_e_o for the last reply. Will keep everything you mentioned in mind.

I think it is terribly difficult to achieve absolute privacy in today's world where everything is actually analyzed, and if you look at all those companies that deal exclusively with BTC blockchain analysis, just one wrong step is enough to be identified in one way or another. For those to whom BTC is attractive as a payment currency, privacy is a terribly big challenge - I have to admit that so far I have not decided to go in that direction.
~
Therefore, it is quite justified to look for some new solutions and to look for every possible flaw in the existing ones.

I agree. It's increasingly difficult to preserve your anonymity and keep everything under control nowadays, and while Bitcoin is an amazing tool we can use to improve the financial freedom and control, the fact that it's a public ledger only makes it even worse in some situations.

A few members of this forum made me focus a lot on privacy issues that come with the average person's usage of Bitcoin, especially as I found myself to be among those who were using it the wrong way - and looking at how things change on a daily basis, I get a general negative sentiment about our digital future. Hence, I see protecting our coins in a private way as an essential thing.. although I may seem to be going a bit towards the extremes lately.

[ABCbits]

If you're that worried, you might as well as use linux distro that only bundle free (as in open source) software or even hardened linux distro.
FSF have such list if you're curious at https://www.gnu.org/distros/free-distros.html, but i never tried any of the listed distro.

Also, I have a little doubt that came up in my mind right after reading @Lucius' reply above: is connecting Bitcoin Core with Tor the safest way to broadcast a tx signed from my airgapped PC without revealing my fingerprint?

It's impossible not to reveal any fingerprint (see https://en.bitcoin.it/wiki/Protocol_documentation#Message_types), what you could do is make the fingerprint less/not unique (just like what Tor Browser does). But AFAIK it's most private way.

[20kevin20]

If you're that worried, you might as well as use linux distro that only bundle free (as in open source) software or even hardened linux distro.
FSF have such list if you're curious at https://www.gnu.org/distros/free-distros.html, but i never tried any of the listed distro.

Thanks. Free Linux distros are something I'd definitely go after, but I find myself getting stuck with various errors due to missing hardware kernels/drivers. It's some kind of maze I can't seem to figure out yet, and Tails/Qubes/ParrotSec seems to fix them all although I'm quite sure a lot of the fixes involve non-free packages. I might give it a try this time though. I'm not in a hurry, so I have plenty of time to experiment before actually moving my funds there.

[20kevin20]

Maybe you should try check distro listed by FSF, since RYF certification also issued by FSF. If it doesn't work, i would question quality of the RYF certification or list of free distro by FSF.

Thanks, I'll look into those as well although there are some other options AFAIK such as installing Debian without the non-free packages. The main issue, as I mentioned earlier, is that it's all fun until I get to issues such as a certain device not being recognized. That's where I always give up after hours of research by adding non-free repos and installing non-free stuff.

All of them include non-free software. Additionally,
1. Tails is designed for live boot OS. You need to configure persistent storage correctly to prevent data loss.
2. Qubes should be most secure/private OS, but it's very heavy and difficult to use. I only wanted to try the OS, but gave up quickly after installation.
3. I don't know much about ParrotSec, so i've no comment about it.

Yeah, I used to play with Tails until I found out Whonix is supposedly more secure than it. AFAIK, it protects your IP way better than Tails does.

Qubes surely is very secure and feels safe, I have it on my primary disk on my PC and I love it. It's not that hard to use if you get the basic stuff, to be honest. Took probably only an hour or two for me to get the hang of it, and the thought that you can basically have isolated offline and online VMs running simultaneously in the same PC is amazing. While it says it's a very heavy distro, I never had an issue running even 5-6 VMs at the same time. That's kinda weird, considering I have a quite old PC I'm running Qubes on.

ParrotSec is a great distro if you want to run Tor on a system-wide level (or to make use of hacking/security tools). AnonSurf is the main reason I've been using it.

[o_e_l_e_o]

The main issue, as I mentioned earlier, is that it's all fun until I get to issues such as a certain device not being recognized.

If you have the funds available, you could always get a third device which you use solely for running Bitcoin Core and broadcasting your transactions you have signed from your airgapped device, and keep your main device entirely separate from all your bitcoin dealings and activity. That has two benefits - you don't have to worry about compatibility or drivers etc. for all your hardware with your bitcoin-only device, since you are only going to use it for one specific purpose, and it also provides a privacy boost as it reduces the risk of you doing something else on the same device as Bitcoin Core, doing something through the same Tor session, leaking details outside the Tor session, etc. which could impact on your privacy.

[20kevin20]

Okay so I experimented a bit with these devices and modified a few laptops to make sure there's no more wireless modules on any of them anymore so that I can control the internet access by myself, physically.

I got stuck somewhere though, and it may seem off-topic but I thought it didn't make sense to create yet another thread for this one: I'm not sure how the perfect wallet setup is supposed to look like, honestly.

I'm mostly accomodated to Electrum, but if I understood correctly, Electrum connects to third-party servers which means it broadcasts my addresses and balances. I thought it'd make sense to create my own server then, but I'm not sure whether that's a better option than simply running a full Bitcoin Core node instead.

I have more than 4 devices available to use for my Bitcoin activity, so as long as privacy remains at a maximum level, I'll be using as many as I need. Right now, I have an airgapped PC prepared with the Electrum installed on it. This one will never have any external connection ever again. But I'm a little bit scared of having a "watch-only" wallet on my other Internet-connected Electrum device because I don't want my addresses/balances to be broadcasted to anyone.

I read somewhere that I should be setting up ElectrumX, but I'm not sure whether it's safer/better than the original Electrum or if I should go for the Bitcoin Core instead. Is Bitcoin Core with Tor the safest option privacy-wise, or should I pick Electrum (or something else)?

Also, I'm unsure how I'm supposed to have both unique Tor sessions and a full node Bitcoin Core at the same time. By "unique Tor session", I suppose we're talking about something such as Tails or some other live OS. Is there any way to "renew" the Tor session or my identity through Bitcoin Core?

I thought I'd do everything the following way:
 1. Airgapped PC for signing and cold wallet
 2. Internet-connected PC for running the full node
 3. Tails-running PC for broadcasting txs after connecting to the 2nd device's node

However, I'm honestly completely stuck right now.

[o_e_l_e_o]

Running your own node via Tor will always be better than adding in additional steps. If you did set up your own Electrum server, you would want to point it towards your own node anyway.

If you're running your own node via Tor, then you can use that same Tor session to broadcast your transactions. What you shouldn't do is use that same Tor session to browse the internet, log in anywhere, check your emails, etc.

In your list of devices, I don't think you need device number 3. If you use device number 2 for nothing except running the full node, then device number 3 doesn't really add anything.

[ABCbits]

I'm mostly accomodated to Electrum, but if I understood correctly, Electrum connects to third-party servers which means it broadcasts my addresses and balances. I thought it'd make sense to create my own server then, but I'm not sure whether that's a better option than simply running a full Bitcoin Core node instead.

Third option, use Wasabi Wallet which uses BIP 158 protocol (basically SPV which have better privacy), where you could :
1. Just run Wasabi Wallet
2. Run Wasabi Wallet and Bitcoin Core separately (either on same or different device)
3. Run Wasabi Wallet and use built-in Bitcoin Core/Knots, which integrated on Wasabi Wallet

But according to their FAQ, the biggest cons are
1. the option to add master public key isn't available through GUI (for now)
2. Wasabi Wallet only support Bech32

[20kevin20]

Running your own node via Tor will always be better than adding in additional steps. If you did set up your own Electrum server, you would want to point it towards your own node anyway.

If you're running your own node via Tor, then you can use that same Tor session to broadcast your transactions. What you shouldn't do is use that same Tor session to browse the internet, log in anywhere, check your emails, etc.

In your list of devices, I don't think you need device number 3. If you use device number 2 for nothing except running the full node, then device number 3 doesn't really add anything.

Now that makes sense. Thanks a lot for the help. I'll maintain 2 separate devices solely for Bitcoin purposes then.

Third option, use Wasabi Wallet which uses BIP 158 protocol (basically SPV which have better privacy), where you could :
1. Just run Wasabi Wallet
2. Run Wasabi Wallet and Bitcoin Core separately (either on same or different device)
3. Run Wasabi Wallet and use built-in Bitcoin Core/Knots, which integrated on Wasabi Wallet

But according to their FAQ, the biggest cons are
1. the option to add master public key isn't available through GUI (for now)
2. Wasabi Wallet only support Bech32

This is something that I've been contemplating, honestly.. mostly due to the CoinJoin implementation. If Wasabi can download and run a full node, I'll look more into it. Coin mixing is something I'd definitely want to have as a handy feature.

Why would Bech32-only support be a con though? I'm using SegWit only anyway, so that's not an issue for me at all.