How can an online wallet be more secure than paper wallets or cold storages?

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I tested it by creating a secure wallet on BitGo.

They gave a multisig address for deposits. 2/3 of keys are needed to withdraw Bitcoins. BitGo holds one key, you get private key and backup key. You don't need to printed private key to withdraw Bitcoins. the passphrase is enough (apparently the key is derived form the passphrase).

BitGo cannot do Bitcoin transactions without user consent, because they (claim to) lack the other halves of the key. This protects againt some attacks. E.g. the site doesn't have a hot wallet which could be emptied if there is a breach on the server. BitGo forces SMS two-factor authentication to be activated upon sign up. This is good too, protecting against lose of credentials due to stealing or phishing.

If the BitGo infrastructure gets compromised all created wallets after the compromise are compromised too, as the attack can capture keys upon creation. So ultimately you are placing trust on BitGo. They could also blatantly lie you...

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Bitcoin cold storage is achieved when Bitcoin private keys are created and stored in a secure offline environment. Cold storage is important for anyone with bitcoin holdings. Online computers are vulnerable to hackers and should not be used to store a significant amount of bitcoins.

There are three ways to create secure Bitcoin cold storage: paper wallets, hardware wallets, and offline computers using software wallets.

Paper Wallets

Paper wallets were the most popular form of cold storage before hardware wallets and offline software wallets hit the market.

Creating a 100% secure paper wallet requires some technical knowledge, an offline computer or bootable operating system, a USB flash drive, a printer, and some patience. Here is a basic guide for creating a secure paper wallet:

1. Security

Not all paper wallets are created equally. There are paper wallets and there are secure paper wallets. If your goal is to secure bitcoins, you should...

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Cold storage in the context of Bitcoin refers to keeping a reserve of Bitcoins offline. This is often a necessary security precaution, especially dealing with large amounts of Bitcoin.

For example, a Bitcoin exchange typically offers an instant withdrawal feature, and might be a steward over hundreds of thousands of Bitcoins. To minimize the possibility that an intruder could steal the entire reserve in a security breach, the operator of the website follows a best practice by keeping the majority of the reserve in cold storage, or in other words, not present on the web server or any other computer. The only amount kept on the server is the amount needed to cover anticipated withdrawals.

Methods of cold storage include keeping bitcoins:

Potential problems with cold storage methods exist but can be mitigated.

There are a number of cases where secret/private keys and/or backup seeds can be lost because of the medium on which they are stored. The the more...

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Modern operating systems are highly complexity, leading to a large attack surface. They also constantly leak information without the user’s knowledge or consent.

No matter how many precautions you take, it is very hard to ensure your wallets is reasonably secure on an Internet connected computer.

Because Bitcoins can be stored directly on your computer and because they are real money, the motivation for sophisticated and targeted attacks against your system is very high. Previously, only large organizations had to worry about advanced attacks.

The bitcoin ecosystem is still relatively young and unfortunately not many user friendly and highly secure wallets have been developed yet.

Today these are the two best ways to secure your bitcoins against theft:

1. Using a hardware wallet such as TREZOR.

A hardware wallet has two functions - it stores your Bitcoins in a hardened device that is designed to be simple and highly resistant to the usual...

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Last updated: 19th October 2015

Bitcoin wallets store the private keys that you need to access a bitcoin address and spend your funds. They come in different forms, designed for different types of device. You can even use paper storage to avoid having them on a computer at all. Of course, it is very important to secure and back up your bitcoin wallet.

Bitcoins are a modern equivalent of cash and, every day, another merchant starts accepting them as payment. We know how they are generated and how a bitcoin transaction works, but how are they stored? We store fiat cash in a physical wallet, and bitcoin works in a similar way, except it's normally digital.

Well, to be absolutely accurate, you don't technically store bitcoins anywhere. What you store are the secure digital keys used to access your public bitcoin addresses and sign transactions. This information is stored in a bitcoin wallet.

Bitcoin wallets come in a variety of forms. There are five main...

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With Bitcoin, Ethereum, and a host of other cryptocurrencies once again making headlines following an incredibly bullish year, crypto security has never been more important, this guide will teach you how to protect your cryptocurrency with a paper wallet and cold storage.

It’s likely, if you’re reading this guide, you’ve recently decided to buy into this rapidly expanding market, potentially to trade but, most probably, with the intention of holding an amount of a particular currency long term. We’ve prepared it to help readers learn how to safely store their cryptocurrencies themselves, in the true trustless spirit of Satoshi Nakamoto himself/herself/themselves.

The first, and most important lesson in this guide are:

You and you alone are responsible for your cryptocurrencies.

Their security is only your...

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Properly created cold storage is more secure in that there is no possibility that malware/virus/security breaches can know what your private keys are. However, relying on paper in a digital world is ridiculous. It’s fragile, susceptible to fire and water, and it’s only as safe as the security of your storage, like a deposit box or safe.

Hardware wallets like Trezor or Ledger allow for the creation of private keys using devices that are secure enough. The backups are reproducible, even if you don’t have another of the same device. There is always the issue that they interact with software wallets that could be on insecure computers or phones. To mitigate this there are several authentication factors that can be used.

I guess what I’m saying is, if “security through obscurity” is your method, cold storage is the way to go. If digital backups using multi-factor security is your method, pick up a hardware...

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Bitcoin security? UGH!!!

Bitcoin does so many things better than banks (trusts, escrows, programmable money, cheap transfers, instant accounts, etc.), but one area that is not quite so nice, is security.

While the bitcoin network, itself, appears bullet-proof, lots of bitcoins are being stolen, via hacking, malware and flaws in online wallets and even google's random number generator.

The answer is to get your bitcoins entirely offline, and the two ways to do this are paper wallets and cold storage. This video is an introduction to making both. Host, James D'Angelo, walks you through the software and ideas used in making 'sloppy' offline wallets (which are great to have). He also gives suggestions at making even better offline wallets. This is the first of many videos we will make on bitcoin security, and the least technical.

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### Transcript

Hello. This is James D'Angelo and welcome to the Bitcoin...

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I love Bitcoin. I love how it's elegant, functional, philosophical, and radical.

Unfortunately, for folks not steeped in cypherpunk ideology and network security, bitcoins are hard to understand, hard to purchase, and hard to keep safe. The primary purpose of this site is to make it easier to keep your coins safe once you've gone through the hard work of acquiring some.

The secondary purpose of this site is to encourage you to expand the understanding and acceptance of Bitcoin by loading up and giving away these beautiful and fairly idiot-proof paper wallets.

Hey, here's a couple bitcoins. Keep this paper somewhere safe for now, because some day it might be worth a whole lot and you can buy yourself something nice. Enjoy!

About the Author

Tel +1.505.501.8091
canton@gmail.com / G+
www.cantonbecker.com

Canton Becker has been making web sites and programming database-driven web...

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Preface

The following assumes you are not using a Ledger or TREZOR hardware wallet. Due to their ease of use and security, we recommend a hardware wallet for cold storage.

To save / backup your Ledger or TREZOR device, simply write down the 24-word phrase on the card they provide and keep it very, very safe. Never put this key on an online device or type it in to MyEtherWallet.com.

How-To

Go to https://www.myetherwallet.com/. Enter a strong but easy to remember password. Do not forget it. This encrypts (protects) your private key. It does not generate your private key. This password alone will not be enough to access your Ether. Click the "Generate Wallet" button. Download your Keystore / UTC file & save this file to a USB drive. This is the encrypted version of your private key. You need the password to access it. It is safer than your unencrypted private key but you must have your password to access it in the future. Read the warning. If you...
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Here’s something every bitcoin owner should know: the safety and security of your bitcoins is ultimately your responsibility.

Combining digital security knowledge as well as secure bitcoin storage is important if you don’t want your accounts hacked and bitcoins drained. Remember – bitcoin transactions are not reversible. To send or spend bitcoins, one must have access to both public and private keys. Private keys, especially, must be protected.

Types of Bitcoin Wallets

There are a few types of bitcoin wallets and they have varying security mechanism to ensure the safety of private keys.

Simplistically, bitcoin wallets can be divided into 5 types: desktop, mobile, online, hardware and paper wallets. Some types may overlap or used in combination with each other. I’m going to touch on what to expect from each type and feature a few examples you can try out.

Here are 14 secure bitcoin wallet options you can choose from.

Desktop...

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A Bitcoin wallet is analogous to your bank account. You use a Bitcoin wallet to store, send and receive Bitcoins. In particular, a Bitcoin wallet stores the private keys and public keys. The public key is used to send/receive money and the private key is what actually gives you access to your account. There are many different types of Bitcoin wallet you can use but all the wallets can be classified into two categories: Hot Wallet and Cold Storage Wallet.

Hot Wallet vs Cold Storage Wallet

A Hot Wallet in Bitcoin refers to any kind of online storage wallet. Hot storage wallets can be accessible from anywhere from a web portal. These kind of wallet are usually not recommended because the wallet is stored online, which makes it susceptible to hacking.

On the other hand, any type of wallet which is stored offline is termed as Cold Storage Wallet. These kind of wallets are more secure, as they are stored physically and hackers do not have any access to...

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A lot of people are concerned about one very important question: What’s the best BitCoin wallet. Well, before finding out the best and the most secure bitcoin wallet, we need to first understand what are the different types of wallets available and how one is better than other.

What is a BitCoin Wallet

A BitCoin wallet (or any cryptocurrency wallet) is just like your bank account or a place where you store your money.

What are public and private keys?

A public key is used to send or receive cryptocurrency to your wallet. Private key is the one which gives you actual access to your cryptocurrency account.

Two main categories of BitCoin wallets

We can classify all bitcoin wallets into two main categories:

Hot wallet (online wallets) Cold storate wallet (offline wallets)

Ok so now lets see four types of cryptocurrency wallets

1. Online Wallets

Online wallets are also called web wallets. They come under the...

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