Bitcoin Forum
December 06, 2016, 10:10:47 PM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: Noob question about e-wallet security  (Read 1040 times)
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 13, 2012, 10:42:53 PM
 #1

Hi,
I've been reading the forum posts about the issues with Bitcoinica today and it is raising some questions for me:

1) I currently do not have any BTC, but I am planning to purchase some and I am interested in keeping it in an e-wallet. Are all e-wallets susceptible to the same problem that Bitcoinica faced today?

2) The e-wallet service I use allows me to back-up my wallet to dropbox or google drive; would doing so save me from an event like Bitcoinica experienced today?

I'm still learning to understand this stuff and I am interested in detailed explanations if anyone is willing to take the time to explain it as it relates to the current Bitcoinica problems.

Thanks,
Jugg
1481062247
Hero Member
*
Offline Offline

Posts: 1481062247

View Profile Personal Message (Offline)

Ignore
1481062247
Reply with quote  #2

1481062247
Report to moderator
1481062247
Hero Member
*
Offline Offline

Posts: 1481062247

View Profile Personal Message (Offline)

Ignore
1481062247
Reply with quote  #2

1481062247
Report to moderator
1481062247
Hero Member
*
Offline Offline

Posts: 1481062247

View Profile Personal Message (Offline)

Ignore
1481062247
Reply with quote  #2

1481062247
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481062247
Hero Member
*
Offline Offline

Posts: 1481062247

View Profile Personal Message (Offline)

Ignore
1481062247
Reply with quote  #2

1481062247
Report to moderator
Khanduras
Full Member
***
Offline Offline

Activity: 168

Movin' on up.


View Profile
July 13, 2012, 10:49:19 PM
 #2

Any website, anywhere in the world has to worry about security issues with their servers.  It was likely targeted due to the fact that whomever hacked it could get something of monetary value from doing so - but it doesn't mean it happens regularly, or that using e-wallets are insecure.

Whether it was on the internet and stored by someone else or on your own computer it's still something you'd need to worry about.  Unfortunately, the internet is not a safe of friendly place.

Backing up your wallet just makes sure you don't lose your wallet.  If you lose it, you lose everything that was in it.  You should definitely make a backup.  If you want to make it more secure, encrypt it.

Bitcoin Address: 1N1sex4rktWdxBJcFTczYZF5Xa75C47j4c                 |
Mining Income Address: 15wgpV7fDN8fVYn1q9QaPb9XSLjGRhry5L    |
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 13, 2012, 11:08:09 PM
 #3

So, essentially, backing-up my wallet only protects me from my own mistakes. It serves no protection for me against the mistakes of the e-wallet service?
MoonShadow
Legendary
*
Offline Offline

Activity: 1666



View Profile
July 13, 2012, 11:11:03 PM
 #4

So, essentially, backing-up my wallet only protects me from my own mistakes. It serves no protection for me against the mistakes of the e-wallet service?

correct

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 13, 2012, 11:13:17 PM
 #5

Excellent. Thanks for the quick replies; this really cleared things up for me.
FreeMoney
Legendary
*
Offline Offline

Activity: 1246


Strength in numbers


View Profile WWW
July 14, 2012, 08:40:28 AM
 #6

If you want to save an amount that is meaningful to you learn how to safely handle your own wallet. If you convenience for a small amount use an e-wallet. You might want both.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 14, 2012, 09:24:59 AM
 #7

Well, it's a balance between convenience and trust, as in I don't trust myself to get the whole wallet-security procedure done correctly every time. I'm more afraid I will somehow screw up my own wallet than I am an e-wallet company screwing up my e-wallet.
Khanduras
Full Member
***
Offline Offline

Activity: 168

Movin' on up.


View Profile
July 14, 2012, 12:16:37 PM
 #8

Again, that's why you should always back up your wallet.  I copied mine about seven times across different trusted mediums.

Bitcoin Address: 1N1sex4rktWdxBJcFTczYZF5Xa75C47j4c                 |
Mining Income Address: 15wgpV7fDN8fVYn1q9QaPb9XSLjGRhry5L    |
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 14, 2012, 09:38:59 PM
 #9

Curious, how large are the wallet files when backing them up?
casascius
Mike Caldwell
VIP
Legendary
*
Offline Offline

Activity: 1344


The Casascius 1oz 10BTC Silver Round (w/ Gold B)


View Profile WWW
July 14, 2012, 10:12:02 PM
 #10

Just as an alternate take - I principally use paper wallets to manage bitcoin.  I bought a USB QR code scanner that imitates a keyboard, so for me, moving bitcoins from and to paper wallets is trivial.

Even though it's not what I use for funding Casascius Coins, Blockchain.info is more than satisfactory as a way to move bitcoins to and from paper wallets.  When you import a paper wallet, the bitcoins are available for spending instantly, and you can spend some and then move them right back off to a brand new paper wallet.  So for Blockchain.info to burn you, they'd have to burn you exactly during the 1 to 5 minutes your coins are on their servers... assuming they are lying about your coins being only in javascript in your browser in the first place.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 14, 2012, 10:16:19 PM
 #11

Casascius,
So, you create a new paper wallet every time following a transaction? I've got to read up on this idea.

P.s. your physical Bitcoins are fantastic, I love the idea!
casascius
Mike Caldwell
VIP
Legendary
*
Offline Offline

Activity: 1344


The Casascius 1oz 10BTC Silver Round (w/ Gold B)


View Profile WWW
July 14, 2012, 10:24:36 PM
 #12

Casascius,
So, you create a new paper wallet every time following a transaction? I've got to read up on this idea.

P.s. your physical Bitcoins are fantastic, I love the idea!

I just print off a ton of them in advance so I don't have to create a new one.  For example, I can print 7 unique addresses to a page at Bitaddress.org, and I can just as easily print a dozen pages that'll last me a while.

I simply send bitcoins to the first address and write how many BTC it contains.  When I need to spend them, I import them, send off the coins, and make sure the change goes to the next address on the list.  I write the new amount in spot 2, and cross out the first one.  After all 7 spots are used, throw it away and use a new page.

Result: minimum exposure of online bitcoins.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 14, 2012, 11:09:15 PM
 #13

Casascius,
So, you create a new paper wallet every time following a transaction? I've got to read up on this idea.

P.s. your physical Bitcoins are fantastic, I love the idea!

I just print off a ton of them in advance so I don't have to create a new one.  For example, I can print 7 unique addresses to a page at Bitaddress.org, and I can just as easily print a dozen pages that'll last me a while.

I simply send bitcoins to the first address and write how many BTC it contains.  When I need to spend them, I import them, send off the coins, and make sure the change goes to the next address on the list.  I write the new amount in spot 2, and cross out the first one.  After all 7 spots are used, throw it away and use a new page.

Result: minimum exposure of online bitcoins.

Ok, this has created more questions:
1) Bitcoins exist in reference to a specific address?
2) Wallets are merely a collection of address(es)?
3) A page of addresses printed from bitaddress.org is a paper version of a wallet?
4) This paper wallet exists independently of any other wallet and is hack/theft proof, unless someone steals the paper?
5) Is a casascius coin essentially a physical wallet?
casascius
Mike Caldwell
VIP
Legendary
*
Offline Offline

Activity: 1344


The Casascius 1oz 10BTC Silver Round (w/ Gold B)


View Profile WWW
July 14, 2012, 11:32:27 PM
 #14

Ok, this has created more questions:
1) Bitcoins exist in reference to a specific address?
2) Wallets are merely a collection of address(es)?
3) A page of addresses printed from bitaddress.org is a paper version of a wallet?
4) This paper wallet exists independently of any other wallet and is hack/theft proof, unless someone steals the paper?
5) Is a casascius coin essentially a physical wallet?

All statements are true.  #4 should be qualified to point out that if someone gets a copy of the private keys on the paper wallet, they can steal the coins.  Potential vectors for theft include malware on the computer used to print them.  There is no malware risk on Casascius Coins as I used a freshly formatted computer to produce all of the keys, and then repeatedly overwrote all sectors on the hard drive, and that computer had no network access at any step of the way.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
juggernaut76
Newbie
*
Offline Offline

Activity: 19



View Profile
July 14, 2012, 11:43:11 PM
 #15

Quote
#4 should be qualified to point out that if someone gets a copy of the private keys on the paper wallet, they can steal the coins.

Because the address can be derived via the private key as demo'd on the bitaddress.org website?

casascius
Mike Caldwell
VIP
Legendary
*
Offline Offline

Activity: 1344


The Casascius 1oz 10BTC Silver Round (w/ Gold B)


View Profile WWW
July 15, 2012, 01:22:41 AM
 #16

Quote
#4 should be qualified to point out that if someone gets a copy of the private keys on the paper wallet, they can steal the coins.

Because the address can be derived via the private key as demo'd on the bitaddress.org website?



Because using the private key, that's how you spend the funds... (and yes, the address can be derived from the private key)

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!