Need comments on wallet security

[gochk]

This is my plan ... please comment / suggest on the security of it.

I plan to create a "savings" account.
Plan is:
1) Encrypt the whole usb drive
2) Download a btc client to a usb drive, run that client to generate addresses.
3) Redirect the .bitcoin folder to the usb drive as well (so client, wallet, blocks, etc) will be in the same usb drive
4) Send some / all my btc to one of the address.

My question then is
1) future 'savings' - should it go to the same address or a different address generated in the usb drive client?
2) do I have to get the usb drive client to catch up on the blocks?
3) do I have to (from time to time) plug the usb drive in to update the block count?

If I have to update the block count, then
1) is there a way to update it fast?
I recently did a clean upgrade of my Ubuntu LTS and it has been 3 days (of about 6 hours / day); I haven't even catch up, currently at 98%.

Welcome any comments / suggestions.

Thanks!

[Winterfrost]

My question then is
1) future 'savings' - should it go to the same address or a different address generated in the usb drive client?
2) do I have to get the usb drive client to catch up on the blocks?
3) do I have to (from time to time) plug the usb drive in to update the block count?

If I have to update the block count, then
1) is there a way to update it fast?
I recently did a clean upgrade of my Ubuntu LTS and it has been 3 days (of about 6 hours / day); I haven't even catch up, currently at 98%.

I'm not exactly an expert, but I can try to help you out a bit.

1) It's really up to you. Sending it to different addresses might be a bit more anonymous, but it's all going to the same wallet in the end.
2) The client doesn't have to "catch up" in order for you to receive your coins, if that's what you mean. As long as the transaction is included in the blockchain, then your coins are on the addresses in your wallet.
3) Nope, not at all. I have a so-called "paper wallet" in a secure physical location that I send coins to. I don't have to be running a client for the coins to be sent there. Of course, you will need to download the blockchain before you're able to spend the Bitcoins when you want to take them out.

1) I don't think there's a way to increase the speed it updates, but then I'm probably not the best person to ask.

As for other suggestions, if you're looking to store a significant amount of Bitcoins for a length of time, you might consider making a paper wallet for more security. Blockchain.info has a nice tutorial.

[gochk]

The blockchain.info website - isn't that like an online wallet? I'm supposed to create an account with them and transfer my btc there? Weren't there a case where an online wallet website was hacked and users of that website were refunded pennies on the dollar?
Edit: And recently Bitonica.com?

However, the paper wallet idea intrigues me. I did some reading about paper wallet - on https://en.bitcoin.it/wiki/Paper_wallet and https://en.bitcoin.it/wiki/Securing_your_wallet.

My understanding is I can go to sites like bitaddress.org to generate addresses, print it out (the address and private keys) and send my bitcoins there. I don't have to actually have that address anywhere in the bitcoin client.

I have a couple of questions though, hopefully not dumb questions.
1) I'm guessing all the addresses generated by bitaddress.org is unique?
2) How do I add the address and the private keys to the bitcoin client for when I actually need to get the blocks up-to-date for when I need to use my bitcoin?

Thanks.

[Winterfrost]

The blockchain.info website - isn't that like an online wallet? I'm supposed to create an account with them and transfer my btc there? Weren't there a case where an online wallet website was hacked and users of that website were refunded pennies on the dollar?
Edit: And recently Bitonica.com?

However, the paper wallet idea intrigues me. I did some reading about paper wallet - on https://en.bitcoin.it/wiki/Paper_wallet and https://en.bitcoin.it/wiki/Securing_your_wallet.

My understanding is I can go to sites like bitaddress.org to generate addresses, print it out (the address and private keys) and send my bitcoins there. I don't have to actually have that address anywhere in the bitcoin client.

I have a couple of questions though, hopefully not dumb questions.
1) I'm guessing all the addresses generated by bitaddress.org is unique?
2) How do I add the address and the private keys to the bitcoin client for when I actually need to get the blocks up-to-date for when I need to use my bitcoin?

Thanks.

Blockchain.info does have an online wallet of sorts, although the decryption is all client-side scripting from what I understand, so they do not have access to your addresses' private keys.

Yes, that is more or less what a paper wallet is. You print out the private keys, send Bitcoins to the corresponding address, and then no one will be able to access them without physical access to the paper you printed out (unless you had a keylogger on your system at the time, which is why it's best to do this on a Linux live CD). The balance of any address is stored in the blockchain, not in the bitcoin client.

1) Yes, the keys are all unique and generated on your computer using javascript, so bitaddress doesn't know what your private keys are.
2) If you use bitcoin-qt (aka the "Satoshi client"), I think that a utility called Pywallet will let you import the private key (they usually have an associated QR code so you can scan it with a webcam/smartphone). Or you can use the online wallet from Blockchain.info, which is fairly safe if you need to use it for a short period (again, because the keys are decrypted on the computer you're using, it's probably best just to use a Linux live CD to import and send with it).

[BigJon901]

So can i make a paper wallet print it out and take it to my local bank and put it into a safety deposit box? If so how would i make withdrawals? scan the QR code on the paper?

[Winterfrost]

So can i make a paper wallet print it out and take it to my local bank and put it into a safety deposit box? If so how would i make withdrawals? scan the QR code on the paper?

That's correct. To transfer money out, you import the private key from the printout (type it, use the QR code, whatever) into a wallet and then perform the transaction.