Ethereum cold storage

I've seen it go around ethereum cold storage around that the most secure and reliable way of cold storing your various cryptocurrencies are hardware wallets. I've seen people get ridiculous safes and put their little hardware wallet inside of them. This is, however, NOT the best way to store your crypto currency. Hardware wallets are great if you want to be able to use your crypto in large quantities frequently, however there is no reason to use one for true 'cold storage.

It's in the name--cryptocurrency is based on cryptography, and if you believe ethereum cold storage cryptocurrency in general to succeed then you also must believe in open-source cryptography, since ethereum cold storage is the backbone of what every cryptocurrency is based on. In this article I'll outline why a hardware wallet, paper wallet ethereum cold storage safe is not the best way to store your cryptocurrency, and go over ethereum cold storage I believe is the best way to store it.

The issue with hardware and paper wallets is two-fold. First, the issue of location. If you are storing your hardware or paper wallet in one place, then if that location is compromised, so are your funds.

Basic robbery or theft will compromise your hardware wallet. Even if ethereum cold storage store multiple in separate ethereum cold storage relatively close to each other, you are still at risk of a natural disaster like a fire, flood, tornado, etc.

In the case of a hardware wallet, the fallback is a mnemonic peg that you get when you receive your device that will allow you to recover your funds cryptographically. This is a good solution, but only if used properly.

If you stored this peg on paper and in a similar location, that could be gone as well. If you stored it on your computer in plain text, then you are wasting your time with a hardware wallet anyway, because your money is as vulnerable as your computer is, which is what you were trying to avoid.

The only solution is to send multiple copies to geographically significant distances from each other, but this is both ethereum cold storage and introduces multiple extra attack vectors for a possible attacker. Your money is only as safe as the weakest storage location that you put a copy ethereum cold storage your paper or hardware wallet.

Second is the issue of how physically safe the storage of your hardware wallet is. It is vulnerable to being stolen just like any other valuable item you have, and is as vulnerable ethereum cold storage the safe you put it in. While safes are generally quite, well, safe, they are ethereum cold storage near as safe as what can be accomplished with cryptography if used properly.

This especially applies to models of safes that are cheaper and not cost-prohibitive for people not storing tens or hundreds of thousands of dollars worth of crypto. Even for those people, though, I will argue that this is not the best option, because of the reasons listed above. In this case, extra caution should be taken to verify each step of the process I will go through below. A third thing I will mention is cost.

A hardware wallet plus a nice safe worth its salt could easily be a significant percentage of the amount people will be storing in crypto for a beginner. For larger sums, this is obviously less of an issue, but is still worth mentioning. Ethereum cold storage very secure cryptography-based solution can be had for free and if you want to be ultra paranoid, can be done for much less than multiple hardware wallets plus effective safes in multiple locations to put them in.

This method is provided as-is, and I am not responsible for any possible loss of money. It simply means disconnected from the internet. We'll accomplish this by installing a verified version of Tails on a USB key and using it as an amnesiac computer that can be air-gapped simply by unplugging it or turning off the wifi.

Encrypt the private "secret" key of the generated key-pair using an officially supported algorithm or openssl using salted AES with a strong passphrase that will need to be remembered ideally or stored in a trusted password manager.

For extra reliability not securityencrypt the chosen passphrase using an implementation of Shamir's Secret Ethereum cold storage. Distribute the pieces of the secret to trusted places, which can be later reassembled to regain access to the original password. This will ethereum cold storage create the functional equivalent of a paper wallet when sending to it or withdrawing from it. With some currencies, like Ethereum or Ripple, this does not limit functionality and you can use the wallet basically as you would any other wallet, meaning send or withdraw as much or as little as you want at a time.

This is because of the concept of Change Addresses. You can read more about this here. These steps sound simple, and in theory they are, but there are still some possible attack vectors when using this method improperly. In this tutorial I will provide a detailed method that minimizes the possible attack vectors. I will be walking you through how to do this for three currencies: Bitcoin, Ethereum, and Ripple. The Bitcoin and Ethereum ones are specific to those coins, where the Ripple one can also be used for basically any altcoin that has a paper wallet generator.

For Bitcoin and Ethereum, there are officially-supported algorithms for encrypting your private key. For Bitcoin I'll be using bitaddress. To generate the wallet securely, we'll be using Tails. Go ahead and follow ethereum cold storage instructions to install tails here. Make sure you're downloading using BitTorrent, which will cryptographically verify what you've downloaded matches what it should, or using GPG to verify if you know how to use it. Next, boot up Tails and open up the web browser.

Now we'll grab the software we need to do our wallet and passphrase generation. Head to the bitaddress. Next, right click on the button that says "Raw" in the upper left of the code editor and choose Save Link As Then, right click on the Raw button again and choose Copy Link Address Now, open up ethereum cold storage terminal window and type:.

Replace the url with the url you just copied from the browser. You'll get a string of characters that is the SHA sum of the file. Next, navigate to http: It should look like. This sum should also match the first two. If any of these don't match, you know that one of the files is not legitimate. We ethereum cold storage downloading the GPG signing keys for the author of the next piece of software and trusting them so that we can reference them later.

At the prompt that comes up type trust then enter a decision of 4 and finally type quit at the subsequent prompt like so:. You should get a message that says gpg: If ethereum cold storage, you're good and can continue onto the next steps.

Now we can start the process of actually creating the wallet and securing it. At this point, you should disconnect your computer from the internet by either disabling it in Tails or physically unplugging it if you have a wired connection. First, navigate to your Downloads folder and double-click the bitaddress.

When it opens, move your mouse around or type random characters into the box until you unlock the other options which will initially be covered by percentages. Click on the "Bulk Wallet" option. Now, go back to your Downloads folder and navigate into the diceware folder. Double click on index. Click on one of the green buttons to generate a password of that word length. You should generate a password of at ethereum cold storage 7 wordsand more if you'd like to be even more careful.

Feel free to regenerate as many ethereum cold storage to find a set that you like. However, NEVER select words you like from each and assemble them together to create your own because you think they'll be easier to remember or for any other reason.

You MUST choose an entirely generated set for this to work. If you want to read more about how this generator works or the rationale behind it, feel free to scroll down and read the rest of the page. If not, find one you like and then copy the password with dashes separating the words. At this point, you can temporarily write down the password on paper as you learn to memorize it, but you will eventually want to destroy any copies that you have of it. See this and this ethereum cold storage information on how to memorize the password easier.

You should also periodically test yourself to exercise your memory and make sure you remember the password. One way of doing this would be writing it down on paper and then destroying the paper. It will think for a minute, and then you'll get an ethereum cold storage that looks something like this:. The 1 just signifies that this is the first wallet in the list. This is where you will send bitcoins to in order to add them to your wallet. It is in the standard BIP38 format, meaning that when you import it into most reputable bitcoin wallet software, it will automatically detect it as such and ask you to input your password to decrypt it.

Since it is encrypted, there is no way to use it without ethereum cold storage knowing the password. Therefore, feel free to put this anywhere you wish. Write it down, print it ethereum cold storage, upload it to the internet wherever you want, etc.

As long as you made a password as described above and did not ever put it somewhere it could be stolen, your money will be safe. What I propose to do with it, as one extra layer of security, is to upload this ethereum cold storage semi-secure file hosting services like Dropbox, Google Drive, etc. An easy way to do this is to copy your private address and then enter the following in a terminal, replacing the example encrypted private key with your own.

You can now copy this file from the desktop onto another flash drive and bring it to another computer to upload it to whichever of these sites you wish. You may also want to name it something innocuous so that ethereum cold storage not obvious for a potential attacker what it contains.

What we will be doing here is creating a set of files that can be assembled to recreate your password if you forget ethereum cold storage or lose it, or if you die and you want family or someone else to ethereum cold storage able to recover your funds. The way this works is you will make a number of files, N, of which a threshold number, T, of those files must be assembled in order to recover the original password.

If any less than that number are assembled then you will know nothing about the original file, in our case the password. To do this, we will use ssss-split to split our shared secret.

Issue this command, replacing the number after -t with how many shares you want to require in order to re-assemble the password, and the number after -n with how many shares to generate total:.

This will create 10 shares, with 6 required to reassemble the secret.

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