1

How paranoid should you be when storing cryptocurrencies?

1. I am currently storing some BTC and LTC at paper wallets, but this does not feel good because what if the paper wallet gets 100 transactions in? Won't the paper wallet then be "full"? What if I accidentaly missed one character when I copied the private key by hand?

2. What if I import the private key to my Bitcoin-QT wallet on my computer in order to spend some BTC. When I am done spending the BTC I backup the wallet.dat on a USB stick, then I remove the wallet.dat file from the computer. The file will still be on the HDD and what if someone gets their hand on my computer and runs some recovery program that recovers the wallet.dat file?

I have soon 10 000€ stored in cryptocurrencies and losing them would suck so hard. What if someone comes up with a backdoor in Windows that steals everyone's wallet.dat file? I am sure there are people working on something like this, since they would be millionares if they succeed...

Improve this question
1

2 Answers 2

Reset to default
2

Someone might steal your hard drive, so run your PC from a live-CD, and remove all persistent storage except for your Thumb Drive that contains the sensitive data. Physically secure the Thumb Drive.

They can still use advanced techniques to read your RAM after the PC is powered off, so rig your PC to be destroyed with thermite in case of emergency.

Improve this answer
4
  • Someone might infect your PC's BIOS with malware that steals any file named wallet.dat, so change it to something else, like buttcoin.lol.
    – daxlerod
    Jan 20, 2014 at 19:56
  • How can I run the Bitcoin client from a USB stick when the blockchain is 15+ GB? I am not sitting on USB sticks with that capacity... @daxlerod Can I not damage the file by changing its file extension?
    – Guestpestbest
    Jan 20, 2014 at 20:01
  • You're the one with 10 000€ in crypto currency. Buy an external HDD.
    – daxlerod
    Jan 20, 2014 at 22:09
  • Changing the extension of a file doesn't change anything but the extension of the filename. The only thing that "breaks" is the association with a program when you double click on the file.
    – daxlerod
    Jan 20, 2014 at 22:10
1

I'm not sure of how or if this would work - I only have a shallow knowledge of bitcoin, but I would "split up" your wallet. Create a second bitcoin client, and transfer most of your money to it, except for the amount you expect to spend in the near future. You can then keep your main stash offline and away from any computer or network.

When saving your offline wallet.dat file:

  • save at least two copies (and get drives that can handle the size of your wallet)
  • keep these copies geographically distant from one another
  • use full disk encryption on these drives
  • don't forget the full disk encryption password

You will have to go through a hassle of keeping this updated and moving files back to an online system when you want to transfer funds back, but if you want good security you'll have to give up some convenience.

If you want to go overboard with this, I'd purchase a coreboot compatible laptop, install coreboot to it (dispensing with any possibility of backdoored BIOS), then keep a live CD around with it. This would become my "bitcoin only computer." I'd get 2 or 3 of these to protect against hardware loss.

Improve this answer

Not the answer you're looking for? Browse other questions tagged .