Topic: Cold storage/watching wallet - how to determine how many bitcoins are in which? (Read 2072 times)

thank you all for your help!

Think of your watch only wallet as a window into your cold storage. It allows you to look at but not touch your bitcoins. That 0.002 balance is in your cold storage not on your online computer.

The technical details are as dabura said. The blockchain is a ledger that records transactions and bitcoin is a ledger rather than token based currency.

Perfect!

You chose one of the best ways to keep large amounts of bitcoin safe imo. Just guard that seed and your offline computer as you would a vault.

Those are your keys to your bitcoin fortune on the blockchain.

Hi!

(sheepish look) ok, so it looks like i didn't quite understand it after all, thanks really a lot for helping to clear that up. Just to make sure that i understand - question to the audience at large out there - what i keep in cold storage is simply the master key with which i sign transactions i want to make from my watch-only wallet. There are never any coins in it nor for that matter 'in' any other wallet of mine, they just possess the keys with which transactions can be made.

More or less correct?

Thanks again for the help!

Adrian

I think you misunderstand what cold storage with Electrum is.

1. All bitcoins exist on the blockchain, not on your computer.

2. You computer merely stores "Private Keys" that "Unlock" bitcoins FROM the blockchain, and you send them to other people by locking them back up into the blockchain using the address you are sending to. (Think of Bitcoin addresses as lock-only keys, and "Private Keys" as unlock-only keys)

3. Every "Private Key" is directly associated with a "public key" which is used to create your Bitcoin address. So Private Key - Public Key sets come in pairs.

4. Your Offline electrum contains a "seed" (that 12 word phrase) that will go through a mathematical function to create one of those "private keys"

5. From that initial "Private Key" created from your seed, a special mathematical function is used to generate sequential private keys. (meaning if you use this function on your original Private Key once, it will create a second private key, twice it will create a third private key etc.)

6. This mathematical function allows for the Public Keys and Private Keys to be generated separately. ie. if we call the original private-public pair Private(1) and Public(1), then I can generate Public 2, 3, 4, 5 etc. just from knowing ONLY Public(1), but in order to generate Private 2, 3, 4, etc. I must have Private(1).

7. Your offline wallet holds your Private Keys(1,2,3,4...infiniti)

8. Your "watch-only" wallet holds the Public Keys OF YOUR OFFLINE WALLET, (Public(1,2,3,4...infiniti))

9. To send bitcoins to cold storage, you just need to send bitcoins TO one of the addresses on your watch-only wallet. (because these addresses are EXACTLY THE SAME as your offline wallet)

10. However, because your watch-only wallet only has your Public Keys, you must sign the transaction using your Private Keys on the Offline wallet to SPEND FROM your cold storage offline Electrum wallet.


tl;dr Your offline wallet and your watch-only wallet are THE SAME WALLET. Just your watch only wallet has no private keys, so no one can steal your bitcoins from your online computer.

Hi Mr Burdell, and thanks for your reply to my previous question,

the cold storage wallet resides on a separate computer with a lubuntu installation, all set up according to the excellent tutorial video from 'coding in my sleep'. In order to move coins to this offline wallet i have to 'create an unsigned transaction' in my online, watch-only wallet, sign it in my offline cold-storage wallet and then return to the online, watch-only wallet to broadcast this transaction to the network. It's a bone fide cold-storage wallet.

My question is rather, as my offline wallet is not connected to the internet and therefore not able to display any balances, how can i tell how many of my coins have been transferred to this offline, cold-storage wallet and how many still reside in the online, watch-only wallet when this online wallet displays only one overall balance and doesn't indicate how many coins have been packed safely away into cold storage? do i need to start labeling my transactions, giving them names so i can follow them myself with paper and pen, or have i misunderstood something or even done something wrong?

thanks again,
adrian

I think you have set up just one wallet, which is a cold wallet.  If you have to sign your transactions offline, then it's already a cold wallet.  The addresses should match on both wallets if they're the same.

The watch-only wallet is the same wallet as your cold wallet, but it doesn't contain the private key data, only the public key and address information.

If you can send a transaction by just entering a password on the online wallet, then it's not a cold wallet.

hello again,

thanks for the speedy reply to my question on why the balance in my offline cold storage wallet always appears to be zero.

Of course I have a follow-up (equally NOOBy) question:

My online, watching-only wallet shows my total balance in my wallet, but doesn't show how many coins have been transferred to cold storage as that all appears to be an internal process. so having transferred 0.002 coins to cold storage as a test i still have the same balance in my watching-only wallet, the transferals (2 transactions of 0.001 coins) appear as 'internal' bookings.

how, then, am i to know how many coins have been removed to cold storage and how many are still in the watching-only wallet? i transferred a good number of coins to the watching-only wallet on their way to cold storage and now i'm wondering how to keep track of the ones that have been furthered to cold storage (without resorting to pen and paper)?

again, thanks in advance for any help.

adrian