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Topic: Confused on how cold wallets work. (Read 1629 times)

legendary
Activity: 3388
Merit: 4615
August 21, 2014, 11:45:22 AM
#22
The only time the network sees an address is when it is in the output of a transaction, regardless of whether a wallet containing it is online or offline.

Which transaction types have actual addresses in the outputs of the transactions?  As best as I could remember, addresses were only used by humans.  I thought wallets translated addresses into public key hashes which were then used in output scripts.

I believe you are referring just to the base-58 form of the address. The binary form is in the output script:

OP_DUP OP_HASH160 OP_EQUALVERIFY OP_CHECKSIG

At this point, I think we're just disagreeing on semantics.

I generally consider a pubKeyHash and an Bitcoin Address to be two different things.  You are using them interchangeably.

When I look at that scrip, I see:

  • Hash the public key provided in the input
  • Compare that value to the hash provided in the output
  • Verify the signature with the public key that was given in the input

I don't see any addresses in that script at all.

Addresses are more than just a base58 representation of a public key hash.  Addresses also have a built in checksum and a version number that indicates specifically what script is to be written (which is why an address that starts with a 3 results in a completely different script than an address that starts with a 1).
legendary
Activity: 4298
Merit: 3209
August 21, 2014, 11:22:42 AM
#21
The only time the network sees an address is when it is in the output of a transaction, regardless of whether a wallet containing it is online or offline.

Which transaction types have actual addresses in the outputs of the transactions?  As best as I could remember, addresses were only used by humans.  I thought wallets translated addresses into public key hashes which were then used in output scripts.

I believe you are referring just to the base-58 form of the address. The binary form is in the output script:

OP_DUP OP_HASH160 OP_EQUALVERIFY OP_CHECKSIG

Edit: I guess you are right. is the main component of an address, but not actually an address itself.
legendary
Activity: 3388
Merit: 4615
August 21, 2014, 09:08:39 AM
#20
The only time the network sees an address is when it is in the output of a transaction, regardless of whether a wallet containing it is online or offline.

Which transaction types have actual addresses in the outputs of the transactions?  As best as I could remember, addresses were only used by humans.  I thought wallets translated addresses into public key hashes which were then used in output scripts.
full member
Activity: 182
Merit: 101
August 21, 2014, 03:41:24 AM
#19
wallet offline means that you don't have it in any computer and can't be hacked
it is recognized when you have an income transaction
are you sure keep your wallet safe online? and can not be hit by hackers?
legendary
Activity: 4298
Merit: 3209
August 20, 2014, 10:55:28 PM
#18
Oh ok.  And when it goes back online, that is when everything gets settled.  Am i right?

Settled?

I don't think bitcoin works the way you seem to think it works.

When you create and address offline, the network obviously hasnt recognized it yet.  So thats why i use the word settled.

The only time the network sees an address is when it is in the output of a transaction, regardless of whether a wallet containing it is online or offline.
newbie
Activity: 14
Merit: 0
August 20, 2014, 11:10:09 AM
#17
You can buy a Trezzor device.
legendary
Activity: 3388
Merit: 4615
August 20, 2014, 11:03:25 AM
#16
Oh ok.  And when it goes back online, that is when everything gets settled.  Am i right?

Settled?

I don't think bitcoin works the way you seem to think it works.

When you create and address offline, the network obviously hasnt recognized it yet.  So thats why i use the word settled.

The network never recognizes addresses.

Addresses are something that we humans use to make it easier to talk about the transfer of control of value.

At the network and blockchain level, there are no addresses.  Scripts are used to encumber outputs with a requirement that must be met to use the value from the output to fund a transaction that re-assigns that value to new outputs with new requirements.

sr. member
Activity: 332
Merit: 254
August 20, 2014, 10:42:28 AM
#15
Oh ok.  And when it goes back online, that is when everything gets settled.  Am i right?

Settled?

I don't think bitcoin works the way you seem to think it works.

When you create and address offline, the network obviously hasnt recognized it yet.  So thats why i use the word settled.
sr. member
Activity: 644
Merit: 260
August 15, 2014, 04:36:02 PM
#14
Take a look at this wiki page on securing your bitcoin savings:

https://en.bitcoin.it/wiki/How_to_set_up_a_secure_offline_savings_wallet

I followed it to make my cold wallets, the only thing I didn't do was the wuala part.
legendary
Activity: 3388
Merit: 4615
August 15, 2014, 03:28:32 PM
#13
Oh ok.  And when it goes back online, that is when everything gets settled.  Am i right?

Settled?

I don't think bitcoin works the way you seem to think it works.
sr. member
Activity: 332
Merit: 254
August 15, 2014, 03:27:04 PM
#12
It means we save data in the wallet offline on our computer than we can use it for transactions without having to connect to the third party, to other wallet with the same enscription  and same structure of the protocol.

for example bitcloin wallet offline can be transaction with other bitcoin wallet offline still using internet connection.

that's the explain have i know.

Oh ok.  And when it goes back online, that is when everything gets settled.  Am i right?
newbie
Activity: 9
Merit: 0
August 15, 2014, 03:30:44 AM
#11
It means we save data in the wallet offline on our computer than we can use it for transactions without having to connect to the third party, to other wallet with the same enscription  and same structure of the protocol.

for example bitcloin wallet offline can be transaction with other bitcoin wallet offline still using internet connection.

that's the explain have i know.
member
Activity: 112
Merit: 10
August 14, 2014, 09:29:47 PM
#10
What is paper wallet and how safe is paper wallet?
Paper wallet is same as cash (Metaphorically speaking), a person keeps the funds in a cold storage while they can check and receive bitcoins without risk of losing them or trusting third parties such as online wallets.
This is possible because bitcoin uses a private key. A private key is unique and it is used to create public key. BUT same could not be done in reverse. In other words, with current technology, public key can not be used to find private key! This is why it is safe to share public key to receive funds and check balance while keeping private key secured.

You may wanna grasp difference between private vs public key and then you will understand how to create private key on a offline pc and use public key to receive bitcoins.

My site has user friendly guides with pictures for new users on this subject such as how to create paper wallets using Canton Becker's wallet generator or you can use other guide on my site on "How to create offline wallet with Electrum Bitcoin Client..." and spend bitcoins without ever exposing your private key.

Before you start using bitcoins, make sure you know how it works so you can protect your bitcoins. I suggest you read about common frauds/mistakes other users made so you dont repeat same faith. All of these are available on here

one more thing, always use Multi-factor authorization on all bitcoin sites!
hero member
Activity: 714
Merit: 503
August 14, 2014, 08:51:32 PM
#9
wallet offline means that you don't have it in any computer and can't be hacked
it is recognized when you have an income transaction
hero member
Activity: 602
Merit: 500
August 14, 2014, 06:28:17 PM
#8
There's a few videos you can take a look at on youtube they are showing examples of paper wallets and also how to make them without using a automated system they basically prevent viruses etc because they are not connected to the internet.
legendary
Activity: 4298
Merit: 3209
August 14, 2014, 04:53:25 PM
#7
i heard it has something to do with cold wallets and offline wallets and bitaddress.org.  My question is how do you create an address without ever being online?  How does the network know or recognize your address?

This site shows how a bitcoin address is constructed step-by-step. None of the steps require a connection to the network.

http://gobittest.appspot.com/Address
legendary
Activity: 3388
Merit: 4615
August 14, 2014, 03:07:09 PM
#6
One would bring cold wallet online only when making rare payouts from it, and later store it safely offline again after that.

No.

A cold wallet should never be "brought online".  Any wallet that is ever connected to the internet can no longer be considered to be a "cold" wallet.

I am talking on what an average user is considering a cold wallet to be, including me.

If that's true, then the average user doesn't know what they are talking about.  A "cold wallet" is a specific thing.  What you are talking about is keeping a hot wallet mostly offline.

Anyways, after putting your cold wallet online and sending part of the funds you need to do, one could send the remaining funds to a new, non-online wallet, and keep being safe.

Yes.

In that case, the previously "cold wallet" becomes a "hot wallet", and the funds are sent to a brand new "cold wallet".

legendary
Activity: 1722
Merit: 1000
Satoshi is rolling in his grave. #bitcoin
August 14, 2014, 02:51:55 PM
#5
One would bring cold wallet online only when making rare payouts from it, and later store it safely offline again after that.

No.

A cold wallet should never be "brought online".  Any wallet that is ever connected to the internet can no longer be considered to be a "cold" wallet.

I am talking on what an average user is considering a cold wallet to be, including me.

Anyways, after putting your cold wallet online and sending part of the funds you need to do, one could send the remaining funds to a new, non-online wallet, and keep being safe.
Afterwards, just deleting/not using the wallet that was brought online.

cheers
legendary
Activity: 3388
Merit: 4615
August 14, 2014, 02:24:49 PM
#4
One would bring cold wallet online only when making rare payouts from it, and later store it safely offline again after that.

No.

A cold wallet should never be "brought online".  Any wallet that is ever connected to the internet can no longer be considered to be a "cold" wallet.
legendary
Activity: 1722
Merit: 1000
Satoshi is rolling in his grave. #bitcoin
August 14, 2014, 02:21:53 PM
#3
i heard it has something to do with cold wallets and offline wallets and bitaddress.org.  My question is how do you create an address without ever being online?  How does the network know or recognize your address?

Long story short:
When people are talking about a cold wallets, they refer to a local wallet that is located on a removable storage device
and stored safely offline.

One would bring cold wallet online only when making rare payouts from it, and later store it safely offline again after that.

cheers
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