I have a couple of supplementary questions. First, do you have similar confidence in the encryption used by Armory working wallets? As I understand it, Armory keep the live wallet file below appdata somewhere, and this will encrypt private keys (if any) but not public keys.
Second, how do you feel about password managers, especially ones like Keepass that store the password database encrypted in a local file (as opposed to ones that store online)?
My feeling is that password managers are the only sane way to avoid password reuse when so many sites and programs need passwords. And once you are using one, it makes sense to use them for everything, and it's easy to have long (30+ characters) random passwords that ought to be strong enough for Bitcoin use. Given my confidence in the passwords, I think it is OK to back-up encrypted files to sites like DropBox. Like mattbit, I am disinclined to rely on paper backups or anything kept at home.
Topic: Just clarifying, I can backup an Encrypted Digital Backup online? (Read 679 times)
March 14, 2014, 11:18:04 PM
Earthquake zones can do a lot of damage, but it's also not going to utterly destroy everything in a 50 mile-radius. You can be comfortable that some of your fragments will survive if they are appropriately distributed. So something like 2-of-5 would probably suit you well.
I guess I should also say that I live in Japan and we all saw what happened 3 years ago. My area could be devastated by tsunami if an earthquake were to hit in the right area, so yes, this could be a possible scenario for me. My area is expected to have just as large, if not a larger magnitude earthquake within the next 100 years. Thanks for the reply!
March 14, 2014, 09:03:09 PM
We never encourage doing this, but Armory encryption is about as good as it gets for these things. The key-stretching on your password is not only designed to make it expensive to crack passwords, it's actually designed to use tons of RAM so that GPUs have a much smaller advantage brute forcing them. GPUs will probably still be faster at password cracking than CPUs, but probably only 20x faster instead of 1000x.
On our website, we have posted a presentation I gave on security best practices. You might consider looking at slides 41 and 42:
http://media01.bitcoinarmory.com/InsideBitcoins_Present.pdf
It illustrates what key-stretching means, and shows some numbers for what kind of resources would be needed to break a password of a given length. And that's with default settings. If you are going to do this, I recommend that you use the advanced options when you create the wallet, to increase the RAM and compute time.
In conclusion, if you are going to do this, raise the advanced encryption settings, and use a strong password that is more than 12 characters. If you are not so concerned about physical security, write the password down and keep it somewhere that is accessible but not obvious. You really should only use this as a secondary backup method, to other unencrypted methods.
Though, I would still encourage you to skip this exercise and simply manage your backups with M-of-N. You can think of M as the security of the backup, and (N-M) as the redundancy (though I would argue that M=2 is nearly as good as M=3 or M=4--all of which are enormously better than M=1). The point is, you can use a high N-value to protect yourself from losing too many fragments.
Earthquake zones can do a lot of damage, but it's also not going to utterly destroy everything in a 50 mile-radius. You can be comfortable that some of your fragments will survive if they are appropriately distributed. So something like 2-of-5 would probably suit you well.
On our website, we have posted a presentation I gave on security best practices. You might consider looking at slides 41 and 42:
http://media01.bitcoinarmory.com/InsideBitcoins_Present.pdf
It illustrates what key-stretching means, and shows some numbers for what kind of resources would be needed to break a password of a given length. And that's with default settings. If you are going to do this, I recommend that you use the advanced options when you create the wallet, to increase the RAM and compute time.
In conclusion, if you are going to do this, raise the advanced encryption settings, and use a strong password that is more than 12 characters. If you are not so concerned about physical security, write the password down and keep it somewhere that is accessible but not obvious. You really should only use this as a secondary backup method, to other unencrypted methods.
Though, I would still encourage you to skip this exercise and simply manage your backups with M-of-N. You can think of M as the security of the backup, and (N-M) as the redundancy (though I would argue that M=2 is nearly as good as M=3 or M=4--all of which are enormously better than M=1). The point is, you can use a high N-value to protect yourself from losing too many fragments.
Earthquake zones can do a lot of damage, but it's also not going to utterly destroy everything in a 50 mile-radius. You can be comfortable that some of your fragments will survive if they are appropriately distributed. So something like 2-of-5 would probably suit you well.
March 14, 2014, 08:46:18 PM
I live in an earthquake-prone area so even M-of-N paper backups might not be enough should the worse happen. I want to backup my wallets on a backup storage service. I don't know which ones are trustworthy so even if someone were to get a copy of the Encrypted Digital Backup, I can be assured they wouldn't be able to break into it. I'm a little wary of this after reading this article - http://arstechnica.com/security/2013/05/how-crackers-make-minced-meat-out-of-your-passwords/
I think I've chosen a good passphrase but I have doubts now.
I think I've chosen a good passphrase but I have doubts now.
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