How do you protect your wallet and backup file?

[goldsun]

I am woundering how you protect your wallet and backup file for electrum.

Whenever I click on my wallet, it opens directly and load the wallet file. However, I assume this is not safe. So how do I set a protection or encryption on the actual wallet? And how do you keep the backup file safe? I need a encryption for that, so each time I want to open the file, I will have to type a password.

I tried 7zip but it does not do the work as I want, because it just requires you to type your password one time, and thats it. I also tried AxCrypt, which I find kind of good but I am not sure about it at all because I don't find much about it on this forum, but I've seen some reviews for it on other websites and it seems like a few people are happy about it. Just want to know what encryption to use and why.

Help is appreciated!

[dabura667]

Whenever I click on my wallet, it opens directly and load the wallet file. However, I assume this is not safe. So how do I set a protection or encryption on the actual wallet? And how do you keep the backup file safe? I need a encryption for that, so each time I want to open the file, I will have to type a password.

This is not supported in Electrum for technical reasons.

The password you enter at the creation of the wallet only protects for sending bitcoin and viewing the seed / private keys.

Looking at your balance can not be password protected for technical reasons.

[goldsun]

Whenever I click on my wallet, it opens directly and load the wallet file. However, I assume this is not safe. So how do I set a protection or encryption on the actual wallet? And how do you keep the backup file safe? I need a encryption for that, so each time I want to open the file, I will have to type a password.

This is not supported in Electrum for technical reasons.

The password you enter at the creation of the wallet only protects for sending bitcoin and viewing the seed / private keys.

Looking at your balance can not be password protected for technical reasons.

So there is no risks with someone only being able to actually watch the wallet. Because without the password, its kind of useless, am I right?

I also want to make sure I can set protection to the folder where the wallet file is, is this possible? Because I don't want anyone to access the wallet file, except my self.

[shorena]

-snip-
I don't want anyone to access the wallet file, except my self.

Use your own machine (e.g. personal laptop noone else is using) and use full disk encryption.

[goldsun]

-snip-
I don't want anyone to access the wallet file, except my self.

Use your own machine (e.g. personal laptop noone else is using) and use full disk encryption.

Well I am. I was thinking more of protecting my self from a malware och keylogger. Thats why I wanted to encrypt my wallet file, and the whole folder where my wallet is stored.

I was thinking of Axcrypt but I've seen some good and some bad reviews about it, not sure.

I also saw something called folder lock, seems like a good encryption software. But not sure which one to use. I just need something simple and reliable. And I know that even with encryption, you can not store your wallet or wallet file 100% safe.

And just in case, is it worth to save the private keys somewhere, when using electrum? Or is just the seed enough.. because every page about how to save your wallet is mentioning that one should save the private keys.

[btchris]

I was thinking more of protecting my self from a malware och keylogger. Thats why I wanted to encrypt my wallet file, and the whole folder where my wallet is stored.

If your wallet is protected by a password that you type in, than a keylogger can grab it -- there's no way to protect against this. If you're worried about malware and keyloggers, you should be looking at solutions that aren't simply password-based, e.g.:

1. Web-based multisig wallets with two factor authentication, e.g. Greenaddress.it or BitGo.com.
2. Desktop-based multisig wallets, e.g. Armory or mSIGNA (and another trusted individual running the same).
3. Cold storage solutions, e.g. Electrum or Armory.
4. Hardware wallets, e.g. Trezor or Ledger (a.k.a. HW.1).

(Of course, each of these also has its downsides.)

And just in case, is it worth to save the private keys somewhere, when using electrum? Or is just the seed enough.. because every page about how to save your wallet is mentioning that one should save the private keys.

The seed is enough.

[goldsun]

I was thinking more of protecting my self from a malware och keylogger. Thats why I wanted to encrypt my wallet file, and the whole folder where my wallet is stored.

If your wallet is protected by a password that you type in, than a keylogger can grab it -- there's no way to protect against this. If you're worried about malware and keyloggers, you should be looking at solutions that aren't simply password-based, e.g.:

1. Web-based multisig wallets with two factor authentication, e.g. Greenaddress.it or BitGo.com.
2. Desktop-based multisig wallets, e.g. Armory or mSIGNA (and another trusted individual running the same).
3. Cold storage solutions, e.g. Electrum or Armory.
4. Hardware wallets, e.g. Trezor or Ledger (a.k.a. HW.1).

(Of course, each of these also has its downsides.)

And just in case, is it worth to save the private keys somewhere, when using electrum? Or is just the seed enough.. because every page about how to save your wallet is mentioning that one should save the private keys.

The seed is enough.

So the seed is enough, just if I use electrum? Not with other wallets right, because not all have the option of seed? Should it then be good to save the private keys or just the wallet file?

I am using Electrum as a cold storage solution. But my wallet, is in a folder. And inside the folder, is the wallet file. Isn't electrum password based? Because you need to type a password when you want to transfer bitcoins to another address.

I want to password protect, or encrypt the whole folder, so before I access the folder, I will have to type a password or even two. That would make the security level go up a bit.

[goldsun]

I just got a notification about my password expiring for electrum. I didn't even had my external harddrive connected to my computer. Should I worry+

Also, if someone could answer my above questions it would be much appreciated!

[shorena]

Also, if someone could answer my above questions it would be much appreciated!

Not sure.

-snip-
So the seed is enough, just if I use electrum?

Yes, with electrum the seed is enough.

Not with other wallets right, because not all have the option of seed?

I cant answer that for all wallets. Some have seeds, some dont.

Should it then be good to save the private keys or just the wallet file?

Usually thats no difference, but this depends on the wallet you are using. E.g. Multibit has a file for all private keys and an extra file for each individual private key.

I am using Electrum as a cold storage solution. But my wallet, is in a folder. And inside the folder, is the wallet file. Isn't electrum password based? Because you need to type a password when you want to transfer bitcoins to another address.

I dont know what "password based" means. Electrum requires a password to unlock the private keys it needs to create a transaction for you.

I want to password protect, or encrypt the whole folder,

Why?

so before I access the folder, I will have to type a password or even two. That would make the security level go up a bit.

What exactly do you think this would protect against? Either someone can access your private keys or not, the rest does not matter. Or at least it does not to me. I dont know you or your surroundings. I can only guess why it would be bad if someone that has hardware access to your machine and knows the passwords needed to boot, unlock the encrypted disk and log into your user account would also know how much bitcoin you have. If you have none of the mentioned security mechanisms allready its better and easier to set them up instead of "protecting" the folder, which is possible but most likely a pain in the ass regarding comfort.

[goldsun]

Also, if someone could answer my above questions it would be much appreciated!

Not sure.

-snip-
So the seed is enough, just if I use electrum?

Yes, with electrum the seed is enough.

Not with other wallets right, because not all have the option of seed?

I cant answer that for all wallets. Some have seeds, some dont.

Should it then be good to save the private keys or just the wallet file?

Usually thats no difference, but this depends on the wallet you are using. E.g. Multibit has a file for all private keys and an extra file for each individual private key.

I am using Electrum as a cold storage solution. But my wallet, is in a folder. And inside the folder, is the wallet file. Isn't electrum password based? Because you need to type a password when you want to transfer bitcoins to another address.

I dont know what "password based" means. Electrum requires a password to unlock the private keys it needs to create a transaction for you.

I want to password protect, or encrypt the whole folder,

Why?

so before I access the folder, I will have to type a password or even two. That would make the security level go up a bit.

What exactly do you think this would protect against? Either someone can access your private keys or not, the rest does not matter. Or at least it does not to me. I dont know you or your surroundings. I can only guess why it would be bad if someone that has hardware access to your machine and knows the passwords needed to boot, unlock the encrypted disk and log into your user account would also know how much bitcoin you have. If you have none of the mentioned security mechanisms allready its better and easier to set them up instead of "protecting" the folder, which is possible but most likely a pain in the ass regarding comfort.

Maybe I am not explaining to well, or I don't understand how it really works. I have my electrum wallet inside a folder named folder A. Inside folder A is another folder created by electrum. In that folder is my wallet file.

I just want to protect that wallet file and the folder it is stored in the best possible way.

But can someone who for example have access  to my wallet file, load up the file in another wallet and move my bitcoins to themself? Or do they still need my password I have for electrum?

I want to protect it just in case. And thats why I asked about some encryption or something like axcrypt or folder lock. But will the protection of the folder be necessary? Or how do you suggest to do it?

[shorena]

-snip-
Maybe I am not explaining to well, or I don't understand how it really works. I have my electrum wallet inside a folder named folder A. Inside folder A is another folder created by electrum. In that folder is my wallet file.

Yep.

I just want to protect that wallet file and the folder it is stored in the best possible way.

Great.

But can someone who for example have access  to my wallet file, load up the file in another wallet and move my bitcoins to themself? Or do they still need my password I have for electrum?

Yes, without the password they can see your balance etc, information about the transactions you received. But without the password or(!) the seed, the coins can not be spend. The seed allows you to create a new wallet (without password) with the same private keys. The password unlocks the allready existing private keys.

I want to protect it just in case. And thats why I asked about some encryption or something like axcrypt or folder lock. But will the protection of the folder be necessary? Or how do you suggest to do it?

In my personal opinion it is not helping if you encrypt the folder. The file is encrypted allready, if you wanted to add another layer, Id suggest you protect the system itself BIOS&boot password, fully encrypted disk or at least protect the user account that has access to the file by setting a userpassword if you dont have one allready.
All these methods would protect the folder as well as the file inside it indirectly, as anyone that would have access to your machine would need at least one of those passwords to operate it or time.
E.g. if you only set a userpassword this can be circumvented by booting from an external device and extract the data that way.
If you also have a boot & bios password, its not possible to boot from an external device, so an attacker would have to dismantle the machine and remove the harddisk. Once the harddisk is in another machine the file can be read.
If the harddisk is also encrypted, well sucks to try and steal your bitcoin. You are still vulnerable to viruses / keyloggers, social engeneering as well the 5$ wrench and drugs attack [1] however.
A encrypted folder would also buy you more time to notice something is wrong, but it would also result in manual steps. You would have to decrypt the folder with a tool, start electrum, do what you want to do, close electrum, encrypt the folder with a tool. While an encrypted disk can be handled by your OS automatically (besides entering the password ofc). I know this works perfectly fine on a linux machine and suspect its also possible for Windows and MacOS nowadays.



[1] https://xkcd.com/538/

[goldsun]

-snip-
Maybe I am not explaining to well, or I don't understand how it really works. I have my electrum wallet inside a folder named folder A. Inside folder A is another folder created by electrum. In that folder is my wallet file.

Yep.

I just want to protect that wallet file and the folder it is stored in the best possible way.

Great.

But can someone who for example have access  to my wallet file, load up the file in another wallet and move my bitcoins to themself? Or do they still need my password I have for electrum?

Yes, without the password they can see your balance etc, information about the transactions you received. But without the password or(!) the seed, the coins can not be spend. The seed allows you to create a new wallet (without password) with the same private keys. The password unlocks the allready existing private keys.

I want to protect it just in case. And thats why I asked about some encryption or something like axcrypt or folder lock. But will the protection of the folder be necessary? Or how do you suggest to do it?

In my personal opinion it is not helping if you encrypt the folder. The file is encrypted allready, if you wanted to add another layer, Id suggest you protect the system itself BIOS&boot password, fully encrypted disk or at least protect the user account that has access to the file by setting a userpassword if you dont have one allready.
All these methods would protect the folder as well as the file inside it indirectly, as anyone that would have access to your machine would need at least one of those passwords to operate it or time.
E.g. if you only set a userpassword this can be circumvented by booting from an external device and extract the data that way.
If you also have a boot & bios password, its not possible to boot from an external device, so an attacker would have to dismantle the machine and remove the harddisk. Once the harddisk is in another machine the file can be read.
If the harddisk is also encrypted, well sucks to try and steal your bitcoin. You are still vulnerable to viruses / keyloggers, social engeneering as well the 5$ wrench and drugs attack [1] however.
A encrypted folder would also buy you more time to notice something is wrong, but it would also result in manual steps. You would have to decrypt the folder with a tool, start electrum, do what you want to do, close electrum, encrypt the folder with a tool. While an encrypted disk can be handled by your OS automatically (besides entering the password ofc). I know this works perfectly fine on a linux machine and suspect its also possible for Windows and MacOS nowadays.





[1] https://xkcd.com/538/

So they can just steal my wallet file, and put it inside another wallet of their choise, like it doesn't have to be electrum, and then they are not able to spend/move my bitcoins right? If this is the case, I shouldn't be worried about the wallet file, and if someone steals it, they can't do anything with it because they dont have my password or seed?

But why is then everybody saying protect and backup your wallet etc..

Your suggestion of seucurity seems like a bit advanced to me, although I kind of understand what you mean.

But my wallet is on my external harddrive. If I set a password lock/encryption to the whole folder, it will make the security level go up a little bit, which is good I guess.

A few days ago I read a thread here which is now deleted, but the op linked to a website. And it said that I didn't have flash installed, so I was not thinking more than I should, and tried to download the file and install it. I already even had flash on my computer so I don't know why I did that. Later on I get a message on my screen saying electrum password expired! change it. And I didn't even had my external harddrive connected to my PC. And how they knew I used electrum, not sure. And then I realised it was some kind of trojan/malware, and I also looked in the thread and some more users confirmed this. So I deleted it and checked that my coins were safe on my computer at a later point, and they were.

But imagine if I had my external harddrive connected to my computer at that point, what could of happen? Could the malware just see my password and take my coins, or would it log me when I type my password, and then transfer the coins to themself? I guess it's better to have electrum on a external harddrive rather than on the computer it self. Becuase you could always check that your coins are safe in another computer, thats not infected with virus/trojan or malware, and then proceed to clean the computer.


Btw, I appreciate the time you take to help me understand this whole thing!

[shorena]

So they can just steal my wallet file, and put it inside another wallet of their choise, like it doesn't have to be electrum, and then they are not able to spend/move my bitcoins right?

Kinda. The wallet files are rarely compatible, but if someone has your file they can figure out which software its for, open it and not (!) spend your coins. It would act the same as your copy and upon spending ask for the password.

If this is the case, I shouldn't be worried about the wallet file, and if someone steals it, they can't do anything with it because they dont have my password or seed?

Correct. Just because I am a bit paranoid Id still create a new wallet and make a final TX moving all the coins from the old wallet to the new one. As long as your password is strong enough this is not needed though.

But why is then everybody saying protect and backup your wallet etc..

Because files get corrupted sometimes if you only have one file there is a single point of failure. I read about a father that lost plenty coins from a mobile wallet because the kids needed space for their games and hit the "delete appdata"-button for dads wallet. So the backups are to protect against other things that can go wrong besides beeing attacked. The great thing about Electrum is that it only ever needs the seed.

Your suggestion of seucurity seems like a bit advanced to me, although I kind of understand what you mean.

But my wallet is on my external harddrive. If I set a password lock/encryption to the whole folder, it will make the security level go up a little bit, which is good I guess.

I cant deny that it would increase security.

A few days ago I read a thread here which is now deleted, but the op linked to a website. And it said that I didn't have flash installed, so I was not thinking more than I should, and tried to download the file and install it. I already even had flash on my computer so I don't know why I did that. Later on I get a message on my screen saying electrum password expired! change it. And I didn't even had my external harddrive connected to my PC. And how they knew I used electrum, not sure.

Usually there are some file that indicate which wallet you arw using even though the data is storred externally.

And then I realised it was some kind of trojan/malware, and I also looked in the thread and some more users confirmed this. So I deleted it and checked that my coins were safe on my computer at a later point, and they were.

You dodged a bullet there.

But imagine if I had my external harddrive connected to my computer at that point, what could of happen? Could the malware just see my password and take my coins, or would it log me when I type my password, and then transfer the coins to themself?

With your password the virus could either send the coins directly with your copy of electrum or send the file with the password to someone else to do this manually. Depends how "well" the virus is written.

I guess it's better to have electrum on a external harddrive rather than on the computer it self. Becuase you could always check that your coins are safe in another computer, thats not infected with virus/trojan or malware, and then proceed to clean the computer.

Yes. I have to admit I never thought about it like this. I think you learned the "dont download random stuff" lesson. Yet the next virus might be attacking when you have your folder decrypted. This is where I think the idea might lead to a false sense of security.

Btw, I appreciate the time you take to help me understand this whole thing!

[goldsun]

So they can just steal my wallet file, and put it inside another wallet of their choise, like it doesn't have to be electrum, and then they are not able to spend/move my bitcoins right?

Kinda. The wallet files are rarely compatible, but if someone has your file they can figure out which software its for, open it and not (!) spend your coins. It would act the same as your copy and upon spending ask for the password.

If this is the case, I shouldn't be worried about the wallet file, and if someone steals it, they can't do anything with it because they dont have my password or seed?

Correct. Just because I am a bit paranoid Id still create a new wallet and make a final TX moving all the coins from the old wallet to the new one. As long as your password is strong enough this is not needed though.

But why is then everybody saying protect and backup your wallet etc..

Because files get corrupted sometimes if you only have one file there is a single point of failure. I read about a father that lost plenty coins from a mobile wallet because the kids needed space for their games and hit the "delete appdata"-button for dads wallet. So the backups are to protect against other things that can go wrong besides beeing attacked. The great thing about Electrum is that it only ever needs the seed.

Your suggestion of seucurity seems like a bit advanced to me, although I kind of understand what you mean.

But my wallet is on my external harddrive. If I set a password lock/encryption to the whole folder, it will make the security level go up a little bit, which is good I guess.

I cant deny that it would increase security.

A few days ago I read a thread here which is now deleted, but the op linked to a website. And it said that I didn't have flash installed, so I was not thinking more than I should, and tried to download the file and install it. I already even had flash on my computer so I don't know why I did that. Later on I get a message on my screen saying electrum password expired! change it. And I didn't even had my external harddrive connected to my PC. And how they knew I used electrum, not sure.

Usually there are some file that indicate which wallet you arw using even though the data is storred externally.

And then I realised it was some kind of trojan/malware, and I also looked in the thread and some more users confirmed this. So I deleted it and checked that my coins were safe on my computer at a later point, and they were.

You dodged a bullet there.

But imagine if I had my external harddrive connected to my computer at that point, what could of happen? Could the malware just see my password and take my coins, or would it log me when I type my password, and then transfer the coins to themself?

With your password the virus could either send the coins directly with your copy of electrum or send the file with the password to someone else to do this manually. Depends how "well" the virus is written.

I guess it's better to have electrum on a external harddrive rather than on the computer it self. Becuase you could always check that your coins are safe in another computer, thats not infected with virus/trojan or malware, and then proceed to clean the computer.

Yes. I have to admit I never thought about it like this. I think you learned the "dont download random stuff" lesson. Yet the next virus might be attacking when you have your folder decrypted. This is where I think the idea might lead to a false sense of security.

Btw, I appreciate the time you take to help me understand this whole thing!

Yeah, creating a new wallet and transfer the coins to that one would be good if the wallet file gets in someone elses hand that shouldn't have it. Although as you say, they can't do much without the password or the seed.

So with electrum we don't need to back up the file as long as we have the seed because we can re-create the wallet by typing in the seed. But for other wallets, back up of the wallet file is necessary.

But would you recomend to put a locker on the whole file? Just in case. Because sometimes even when downloading something, you are not 100% sure if it contains virus or malware or not, even though you can read the comments for the file etc. But I assume a random virus that's not coded to log or steal bitcoins, wouldn't do any harm to a wallet, so ideally it could be safe to operate the wallet while having a virus, am I right?

What do you mean about that the next virus could attack my electrum wallet when I am decrypting my folder, if I am using an external harddrive? Because if I do use an external harddrive, I would probably make sure that my coins are safe on another computer, and hopefully that one won't have virus or malware or trojan or anything like that.

But if I am connecting my external harddrive to my own computer while it's infected, and I try to decrypt the folder, its no point in having a decryption then because with or without decryption, they will see my password once I type it in.

Can a virus or trojan infect an external harddrive when you connect it to a computer thats infected? It sound like it should, so I am not even sure why I am asking tho.

And another question, would you rather have two electrum wallets with your bitcoins or just one? It would be smarter to have two wallets, but a bit more jobs with saving the seed, even though it's not that hard.

[shorena]

-snip-
Yeah, creating a new wallet and transfer the coins to that one would be good if the wallet file gets in someone elses hand that shouldn't have it. Although as you say, they can't do much without the password or the seed.

So with electrum we don't need to back up the file as long as we have the seed because we can re-create the wallet by typing in the seed. But for other wallets, back up of the wallet file is necessary.

Correct. E.g. I do regular backups of my bitcoin core wallet.dat even though it has 100 pregenerated addresses. Even if one of the backups fail, I still have at least one more that is still recent.

But would you recomend to put a locker on the whole file? Just in case. Because sometimes even when downloading something, you are not 100% sure if it contains virus or malware or not, even though you can read the comments for the file etc. But I assume a random virus that's not coded to log or steal bitcoins, wouldn't do any harm to a wallet, so ideally it could be safe to operate the wallet while having a virus, am I right?

Id recommend not to download random stuff that might contain a virus, but thats easier said than done. You can encrypt the file, but if your system is infected with a virus it is not safe to operate the wallet regardless of the additional encryption. If the virus is not looking for bitcoin related information, but only for e.g. CC information you might be fine anyway.

What the additional encryption of the folder or file would help with is the following scenario:

You did not use your wallet durring the current session your machine is running, install some sort of malware or get infected by it that somehow tricks you into entering your password, but since it cant find the wallet file it is unable to do anything with it and you have a chance to safe your bitcoin on a different machine.
In a way you allready have a very similar protection machanism with your external disk. As long as its not connected to your machine, a virus is unable to find the files needed and even if you entered the password you could still safe your coins.

What do you mean about that the next virus could attack my electrum wallet when I am decrypting my folder, if I am using an external harddrive? Because if I do use an external harddrive, I would probably make sure that my coins are safe on another computer, and hopefully that one won't have virus or malware or trojan or anything like that.

What I meant was: if you use your wallet while infected you have to
#1 connect the external drive
#2 decrypt the folder
#3 enter the password
if the virus is sneaky enough so you do not notice it while using your wallet you gain no advantage by adding an extra layer of encryption to your folder/wallet file.

But if I am connecting my external harddrive to my own computer while it's infected, and I try to decrypt the folder, its no point in having a decryption then because with or without decryption, they will see my password once I type it in.

My point exactly.

Can a virus or trojan infect an external harddrive when you connect it to a computer thats infected? It sound like it should, so I am not even sure why I am asking tho.

It can yes. Recent revelations show that intelligent agencies are able to infect certain USB devices on a hardware level. Spreading via external devices is an old technique. Before the internet it was the only way for a virus to spread, from floppy to floppy one machine at a time. This behaviour might return to reach offline wallets.

And another question, would you rather have two electrum wallets with your bitcoins or just one? It would be smarter to have two wallets, but a bit more jobs with saving the seed, even though it's not that hard.

It depends on the amount of bitcoins and how much that is to you. With a small amount of BTC Id be fine with a single wallet. With more than a months salary a cold wallet would be in order. Not necessary two versions of electrum but e.g. armoy cold and hot and an electrum wallet for smaller amounts that are used more often. Since armory is pretty heavy - needs fully synced bitcoin core as well as a database of its own thats eating even more space - you might consider paper or hardware wallets for long term storrage. I also played around with old phones for a while as cold storrage, but I allways had this nagging feeling that they might "call home".

[goldsun]

-snip-
Yeah, creating a new wallet and transfer the coins to that one would be good if the wallet file gets in someone elses hand that shouldn't have it. Although as you say, they can't do much without the password or the seed.

So with electrum we don't need to back up the file as long as we have the seed because we can re-create the wallet by typing in the seed. But for other wallets, back up of the wallet file is necessary.

Correct. E.g. I do regular backups of my bitcoin core wallet.dat even though it has 100 pregenerated addresses. Even if one of the backups fail, I still have at least one more that is still recent.

But would you recomend to put a locker on the whole file? Just in case. Because sometimes even when downloading something, you are not 100% sure if it contains virus or malware or not, even though you can read the comments for the file etc. But I assume a random virus that's not coded to log or steal bitcoins, wouldn't do any harm to a wallet, so ideally it could be safe to operate the wallet while having a virus, am I right?

Id recommend not to download random stuff that might contain a virus, but thats easier said than done. You can encrypt the file, but if your system is infected with a virus it is not safe to operate the wallet regardless of the additional encryption. If the virus is not looking for bitcoin related information, but only for e.g. CC information you might be fine anyway.

What the additional encryption of the folder or file would help with is the following scenario:

You did not use your wallet durring the current session your machine is running, install some sort of malware or get infected by it that somehow tricks you into entering your password, but since it cant find the wallet file it is unable to do anything with it and you have a chance to safe your bitcoin on a different machine.
In a way you allready have a very similar protection machanism with your external disk. As long as its not connected to your machine, a virus is unable to find the files needed and even if you entered the password you could still safe your coins.

What do you mean about that the next virus could attack my electrum wallet when I am decrypting my folder, if I am using an external harddrive? Because if I do use an external harddrive, I would probably make sure that my coins are safe on another computer, and hopefully that one won't have virus or malware or trojan or anything like that.

What I meant was: if you use your wallet while infected you have to
#1 connect the external drive
#2 decrypt the folder
#3 enter the password
if the virus is sneaky enough so you do not notice it while using your wallet you gain no advantage by adding an extra layer of encryption to your folder/wallet file.

But if I am connecting my external harddrive to my own computer while it's infected, and I try to decrypt the folder, its no point in having a decryption then because with or without decryption, they will see my password once I type it in.

My point exactly.

Can a virus or trojan infect an external harddrive when you connect it to a computer thats infected? It sound like it should, so I am not even sure why I am asking tho.

It can yes. Recent revelations show that intelligent agencies are able to infect certain USB devices on a hardware level. Spreading via external devices is an old technique. Before the internet it was the only way for a virus to spread, from floppy to floppy one machine at a time. This behaviour might return to reach offline wallets.

And another question, would you rather have two electrum wallets with your bitcoins or just one? It would be smarter to have two wallets, but a bit more jobs with saving the seed, even though it's not that hard.

It depends on the amount of bitcoins and how much that is to you. With a small amount of BTC Id be fine with a single wallet. With more than a months salary a cold wallet would be in order. Not necessary two versions of electrum but e.g. armoy cold and hot and an electrum wallet for smaller amounts that are used more often. Since armory is pretty heavy - needs fully synced bitcoin core as well as a database of its own thats eating even more space - you might consider paper or hardware wallets for long term storrage. I also played around with old phones for a while as cold storrage, but I allways had this nagging feeling that they might "call home".

Alright, so it seems like I understand what I need to understand about electrum. Now when you mention armory I am thinking, here we go again lol.

I've heard about armory but when I looked into the armory sectioni here I see a lot of threads about armory not working etc, so it makes me think now that electrum is the way to go.

Can I use electrum for long term if I save the seed and keep my password safe, and having my wallet on an external harddrive? I don't even plan to use my bitcoins to buy anything yet, just to make sure they are there, from time to time. And could I shut of internet when I do this, just for extra security, or will it not work when internet is not on? I assume I then would need to do "offline transactions" but I would just want to see if my coins are there or not.

A trezor would be nice but they cost a bit and if electrum can do the job as good as trazor, then there is not a big difference. But thats what u meant with hardware wallets, right?

And for paper wallets, I kind of like the idea but I think it's hard to make them, not sure why but it seems complicated.

And yeah as u notice, I think it's a bit annoying to use the quote function here lol.

[shorena]

-snip-
Alright, so it seems like I understand what I need to understand about electrum. Now when you mention armory I am thinking, here we go again lol.

I've heard about armory but when I looked into the armory sectioni here I see a lot of threads about armory not working etc, so it makes me think now that electrum is the way to go.

I just like to play around with plenty wallets. I like Electrum as well as Armory and I had no problems with Armory itself. The machine I used for testing was just very slow (single core 1Ghz/1GB ram) so it took a few days to sync and a few days to build the database.

Can I use electrum for long term if I save the seed and keep my password safe, and having my wallet on an external harddrive?

Sure. Thats what I like about Electrum the most: a single backup, but other wallets start the implement "HD" as well, so this is no longer Electrum exclusiv.

I don't even plan to use my bitcoins to buy anything yet, just to make sure they are there, from time to time. And could I shut of internet when I do this, just for extra security, or will it not work when internet is not on?

It will not get any data when you are offline, but in order to check your balance you dont even need your wallet file. Just write (or copy paste) your bitcoin address and create a link for a blockchain explorer. E.g.:

https://www.blocktrail.com/BTC/address/18WgDVuiGY4A4mB8YEmVggEfSmFUUKxDcJ

there are plenty explorers like this and since the blockchain is publicly available you can check your balance at any time from any machine as long as you know the address. Make a bookmark, memorize it if you want.
You only need your wallet file with the private keys, protected by your password when you want to spend bitcoin.

I assume I then would need to do "offline transactions" but I would just want to see if my coins are there or not.

Not necessary the way you described it would be semi-cold. You have a wallet that has the private keys and when you want to spend bitcoin it is online (hot), but most of the time you keep your wallet offline (cold) and check in from time to time, but you do so without using your wallet. Its not proper cold storrage as that usually implys that the machine storring your private keys is never online. It could be a old machine sitting in a corner, turned off. When you want to spend coins you create a transaction with your regular wallet (hot) on your main machine thats online and daily used. This machine however can only create an unsigned transaction as it has no access to the private keys. It only knows which addresses you have private keys for somewhere else and monitors them for you. You would then copy that unsigned transaction to the offline machine, get it signed and copy it back to the online machine to broadcast it to the network.
Your semi cold version offers a little less security, but you also only need a single machine, with an external storrage for the wallet file. The external storrage could e.g. be an USB stick that you use for your wallet file only and keep it in a safe place.

A trezor would be nice but they cost a bit and if electrum can do the job as good as trazor, then there is not a big difference. But thats what u meant with hardware wallets, right?

Similar to the old machine above a hardware wallet like trezor can do the same job, but its not a fully fledged computer. Its just a little devices build for the specific purpose. It makes the whole "create unsigned tx, copy it, get it signed, copy it back"-process very easy.

And for paper wallets, I kind of like the idea but I think it's hard to make them, not sure why but it seems complicated.

Its not actually that complicated. There are plenty of resources where you can make one online. My problem usually is that I have a hard time trusting the homepage and thats where the complicated part starts. Download the source, verifiy the source, generate the keys (best offline with an OS thats also verified and on a DVD/CD), print it and make sure the printer does not safe a copy, etc. I like BIP38 though as it protects the paper wallet with a password, so even if the printer keeps a copy it can not be used.

Since my 60 days for silverwallet are now over I soon expect my coin to arrive in the next weeks and Ill have to think about paperwallets again. I am not entirely sure If I want to use it as wallet or just keep it as a shiny token to play around with.

And yeah as u notice, I think it's a bit annoying to use the quote function here lol.

I know. I just copy the frist line, e.g.:

Code:

[quote author=goldsun link=topic=870688.msg9709917#msg9709917 date=1417459367]

remove the parts I think are no longer needed and fill in the "end of quote" marks by hand.

[goldsun]

I just like to play around with plenty wallets. I like Electrum as well as Armory and I had no problems with Armory itself. The machine I used for testing was just very slow (single core 1Ghz/1GB ram) so it took a few days to sync and a few days to build the database.

Did you install armory on a second computer? Whats the difference between this and having it on your daily use computer if the security is so good?

It will not get any data when you are offline, but in order to check your balance you dont even need your wallet file. Just write (or copy paste) your bitcoin address and create a link for a blockchain explorer. E.g.:

https://www.blocktrail.com/BTC/address/18WgDVuiGY4A4mB8YEmVggEfSmFUUKxDcJ

there are plenty explorers like this and since the blockchain is publicly available you can check your balance at any time from any machine as long as you know the address. Make a bookmark, memorize it if you want.

In my electrum wallet, I am using a few different addresses, so if I am going to check that my coins are in my wallet and not wanting to plug in my external hardware to my computer, I would need to check upon a few different addresses. Is there any good and simple way to do this on with a when having a few addresses? Also, do you recomend to use one address only once? And does electrum generate new addresses or how does it work? I can't notice that one my self because I don't really keep a track of the address strings.

Not necessary the way you described it would be semi-cold. You have a wallet that has the private keys and when you want to spend bitcoin it is online (hot), but most of the time you keep your wallet offline (cold) and check in from time to time, but you do so without using your wallet. Its not proper cold storrage as that usually implys that the machine storring your private keys is never online. It could be a old machine sitting in a corner, turned off. When you want to spend coins you create a transaction with your regular wallet (hot) on your main machine thats online and daily used. This machine however can only create an unsigned transaction as it has no access to the private keys. It only knows which addresses you have private keys for somewhere else and monitors them for you. You would then copy that unsigned transaction to the offline machine, get it signed and copy it back to the online machine to broadcast it to the network.
Your semi cold version offers a little less security, but you also only need a single machine, with an external storrage for the wallet file. The external storrage could e.g. be an USB stick that you use for your wallet file only and keep it in a safe place.

I do understand the first few lines but when it comes to the part where you mention When you want to spend coins you create.. can you please explain this a bit more? And the trezor wallet, it does all this work right?

Do you have paperwallets? It seems like a bit of more work, but do they expire? Because I don't understand what you meant by that 60 day thing. Are the private keys just on a paper? But what is the actual wallet, because the coins must be on a wallet, but without the private keys, right? And when you want to use the wallet, you need to type in the private keys you have on your printed paper right? I think I am wrong on this one, not sure.

[jonald_fyookball]

lots of options.  I use a fairly simple cold storage/brain wallet
method in the following manner: 

I used a cold computer to install electrum,
sent my coins there, memorized my seed,
and deleted electrum entirely.

I keep an encrypted back up of the seed
in case I ever have a memory lapse.

[pooya87]

i have a fairly strong password for the electrum and also i wrote down my seed on a piece of paper for the future uses.