if you are using a malicious software instead of a wallet then disconnecting from the rest of the world may not even work if the malicious software already has the keys.
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Only good thing to me seemed to be that they copied everything to ram when you ran it. It didnt' seem to be using segwit in the version I got one or two months ago but maybe the developer has stopped hibernating... Do they allow multisig now too? That's the only thing I wanted it for.
As for the second part, a history of the bitcoin addresses should be checked and maybe even the master public keys that correspond to it, not doing so means that you are running the risk of using someone else's address. Everyone should check bitcoin addresses anway based on the tiny probability of a collision (I mean we're talking an extremely low percentage but it is technically possible)...
- it has Electrum on it and Electrum has been supporting Multi Signature for a long time now so yes they do allow multisig. FWIW i have not used bitkey ever though. i am only aware of it and checked it out before.
Exactly, Bitkey runs the previous Electrum 3.1.3, so it should give option to use multisig, Segwit, etc, just like the normal installation of Electrum.
The attack metioned is quite interesting to think about. For example, I use Bitkey in conjunction with an watch-only wallet on Android, where I create the unsigned tx. It could happen that a virus hacks the apk, and creates a new address in the tx, to send the amount to the hacker. But I believe when I import the tx to Bitkey (to be signed) it won't recognize the address (showing that error - Transaction unrelated to your account). Not 100% sure, though. I'd need to test and see.
It's still possible to avoid this risk, by using the "hot-online" feature in Bitkey. Here you boot the Live CD, then it will be on RAM (supposedly without any virus, also check the CD signatures), and you create a watch-only wallet with your Xpub key. Now you generate the txid, and then reboot the CD in a "cold-offline" mode, to sign it. All this would reduce the risks mentioned.