Bitcoin client operating in a virtual machine off a USB drive

[matt.collier]

I've been thinking that a specilized *nix distro running as a Virtual Machine (VM) off a USB drive might be a way to secure the bitcoin wallet.  And if that USB drive happened to be a device like the Sansa Clip+, a backup of the wallet could be made to memory in the microSD slot.

Parameters for this solution would include:
* No direct access to the wallet file via the host OS.
* Wallet file should be stored on some kind of encrypted file system within the VM
* Access to wallet file should be tightly controlled in VM OS
* User level access on the VM should only be allowed communicate with the bitcoin daemon via a secure channel

That's the germ of the idea anyway.  Does this have any merit?

[matt.collier]

I just became aware of this document that might apply to this project:

http://www.nsa.gov/ia/_files/os/redhat/rhel5-guide-i731.pdf

[foo]

I experimented with putting the bitcoin data directory on a USB flash drive, but it was so incredibly slow that I abandoned the idea. The block chain downloaded at maybe one block a minute.

[gigabytecoin]

I experimented with putting the bitcoin data directory on a USB flash drive, but it was so incredibly slow that I abandoned the idea. The block chain downloaded at maybe one block a minute.

How fast was your flash drive?

If it was a year or two old... chances are it was operating at around 1-5 mb/s...

Today you can buy flash drives that read/write approximately 100x that speed if you have the cash.

[Raize]

I have been doing this already. I use a portable version of Dropbox to sync to the thumbdrive. Inside the Dropbox container I have a portable version of Truecrypt with a passphrase over 25 characters long, a hidden keyfile, and Serpent+AES+Twofish encryption. Within the Truecrypt volume I keep a full copy of the Bitcoin client along with my BTC.

I have 3 of these thumbdrives, one I keep on my person, another is stored in a hidden location at work, and another is stored in a safe with my car title, will, emergency cash, passport, etc.

[cypherdoc]

I have been doing this already. I use a portable version of Dropbox to sync to the thumbdrive. Inside the Dropbox container I have a portable version of Truecrypt with a passphrase over 25 characters long, a hidden keyfile, and Serpent+AES+Twofish encryption. Within the Truecrypt volume I keep a full copy of the Bitcoin client along with my BTC.

I have 3 of these thumbdrives, one I keep on my person, another is stored in a hidden location at work, and another is stored in a safe with my car title, will, emergency cash, passport, etc.

i have 4 Ironkeys with which i would like to do this exact same thing.  but how did u get a full version of Bitcoin client to run off the USB?  is the entire Bitcoin Directory inside the USB as well?  can u direct me to an easy reference about how to load portable versions of Dropbox and Truecrypt onto the USB?  this is exactly what i've been looking for.

[matt.collier]

I've implemented this.  Please see: http://forum.bitcoin.org/index.php?topic=9937.0

[eturnerx]

This is relevant to my interests.