Most people are not capable of keeping their wallets safe? - page 2.

theboos

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We can expect Joe Sixpack and Grandma to learn about computer security if they own a computer. If I buy a house, it's perfectly reasonable to expect me to learn how to lock the doors and set an alarm. I agree that Bitcoin should be made more accessible so the security skills involved in computer usage transfer over, but a sufficiently stupid user will lose his bitcoins, and that seems perfectly fair.

The essentials of Bitcoin security are:

Wallet.dat contains your money. If someone else has it, he will be able to use your bitcoins. If you lose it, your bitcoins are gone forever. If you keep it secure, NOBODY but you will be able to use your bitcoins.
If you encrypt wallet.dat, keep the password secure. If someone else has your password and your encrypted wallet.dat, he will be able to use your bitcoins. If you lose your password, your bitcoins are gone forever. If you keep your password secure, NOBODY but you will be able to use your bitcoins.

All else follows. If you get a virus, your wallet.dat is vulnerable. If you don't back up your wallet.dat, you won't be able to get it back. If you tell someone your password or make an easily crackable password, someone will be able to spend your bitcoins. It's our job to make the essentials of Bitcoin security obvious, but nothing more. If someone doesn't understand the basics of computer security, they shouldn't be using one in the first place.

k

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would it be possible or useful to back up everyones wallet somehow in an encrypted form in the block chain such that it would always be an up to date backup and also accessible from anywhere running bitcoin. you would be forced to use a strong password/phrase somehow.

maybe a completely stupid idea. just seems appealing that you could go to any computer with bitcoin on it, enter you're passphrase and voila, you have access to your wallet. actually just writing this now thinking that this would be pretty stupid as there could be all sorts of spyware/key loggers on an unknown computer.

rebuilder

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Quote from: brocktice on April 28, 2011, 09:44:04 AM

I think it's a great idea to store an encrypted backup of your wallet in dropbox. HOWEVER, this only solves the I-lost-my-money-because-of-a-hard-drive-crash-or-fire problem, not the someone-hacked-my-computer-and-took-my-money problem.

If you store the wallet directly in an encrypted container and only mount that it when you need to send coins, that mitigates the risk. It still won't help against keyloggers, though. At the very least it's probably a good idea to schedule password changes for the container, and you'd probably want to do that change with a livecd. In fact, only mounting that container in an OS run off a CD should, provided that OS is clean, give a lot of peace of mind. There's hardware keyloggers of course, but I at least think it's unlikely someone would break into my home and install one without me noticing.

Bottom line, keep at least two wallets, one for spending and one as a vault, following more stringent security practices. You don't want to have to go home and boot up from a CD every time you want to spend some coins, so having small sums more readily available is a good idea.

newguy05

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Someone is sitting in the shade today...

Quote from: Alex Beckenham on April 23, 2011, 10:37:29 AM

If Alice owes Bob 100 btc and her wallet contains exactly 100 btc, she may just email him her wallet.dat.

Now it's stored unencrypted in both parties email accounts...

Plus Bob possibly now gets any future money intended for Alice as he has those old keys.

You cant fix stupid, that's like saying if alice owe bob $1000 and her bank account contains exactly $1000. She may just email her bank account login/password + debt card to him. Then continue to deposit money into the bank account. Does that make any sense?

All average joe needs to do is install the bitcoin client on a usb dongle, plug it in when need to use and unplug immediately when done. It's no safer/riskier than logging into your bank account from your pc. It's expected the average user has antivirus running and keep their computer reasonably secure, if your computer is completely exposed with tons of virus/trojans, then anything on it gets compromised.

I think bitcoin is just fine the way it is.

RodeoX

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The revolution will be monetized!

Quote from: cypherdoc on April 28, 2011, 12:10:37 PM

r u not worried about that encrypted wallet on your computer while u surf?

Yes. yes I am. Cry

However I only fire up bitcoin when sending/receiving money. hope that mitigates my risk somewhat.

Quote from: Alex Beckenham on April 28, 2011, 12:12:30 PM

Quote from: RodeoX on April 28, 2011, 11:46:11 AM

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

Well, if you're using truecrypt, you could follow the paranoid recommendations in their docs and never file-copy a container (Instead, you should make 3 different containers from scratch, then copy your files into each of them separately).

That's good advice. I actually take some other steps that I will keep secret here. My most effective precaution is my Bit-poverty.
Grin

Alex Beckenham

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Quote from: RodeoX on April 28, 2011, 11:46:11 AM

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

Well, if you're using truecrypt, you could follow the paranoid recommendations in their docs and never file-copy a container (Instead, you should make 3 different containers from scratch, then copy your files into each of them separately).

cypherdoc

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Quote from: RodeoX on April 28, 2011, 11:46:11 AM

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

r u not worried about that encrypted wallet on your computer while u surf?

Timo Y

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bitcoin - the aerogel of money

Quote from: tomcollins on April 23, 2011, 09:25:40 AM

[...] and we cannot expect Joe Sixpack or Grandma to ever learn anything about computer security or backing up files.
[...]

Well maybe we should expect them to learn about it.

Basic computer literacy should be considered just as important as the three Rs these days.

I've not saying that Joe Sixpack should be expected to understand the mathematics of encryption, but he should have a conceptual notion of what comprises a good password, the most common attack scenarios, what a firewall does, backup strategies, redundance, etc .

Almost everybody can learn those basic concepts if they want to. The problem I see with a lot of older people especially is not a lack of ability but a lack of motivation to deal with computers. If a computer is suddenly more than just a novel way of shopping and mailing letters, and a big part of their savings is at stake, I bet that the motivation will appear.

RodeoX

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The revolution will be monetized!

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

Timo Y

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bitcoin - the aerogel of money

The problem is that it's extremely hard to achieve user friendliness and strong security at the same time. It might even be impossible. There seems to be a fundamental law that greater security must always come at the cost of less user friendliness.

The best compromise I can think of is a piece of hardware, perhaps a smartphone, used exclusively for bitcoin. This device takes the user's fingerprint and a password before every transaction. It has an extremely restrictive firewall. The advantage of using a separate device is that it's simple to use and the amateur user can't compromise system security by installing software from third parties.

Automatic wallet encryption is not very secure at all, because the trojan/virus only has to sit and wait for the next time the user sends some bitcoins for the unencrypted version to appear on the OS. There is also the problem that modern operating systems are getting increasingly complex and who knows where cached copies of the unencrypted wallet might be hiding, even if the copy visible to the bitcoin client is encrypted?

Giving users a false sense of security is worse than no security.

The market will no doubt one day offer solutions for non-geek users, such as my example of the "bitphone". Demand for them will soar once there are a few highly publicised cases of bittheft. I fear that the fear is what it will take for a decent product to emerge. Unfortunately that's the way humans work. They grossly underestimate the risk from events that have never occurred (yet).

cypherdoc

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Quote from: ribuck on April 28, 2011, 09:40:07 AM

Quote from: cypherdoc on April 28, 2011, 09:32:32 AM

i don't leave my Bitcoin client open while i'm browsing and just to make sure

Don't keep Bitcoin (i.e. wallet.dat) in the same login account that you do your browsing from.

thank you.

Alex Beckenham

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Quote from: chooseusername10 on April 28, 2011, 09:16:14 AM

Encryption wont solve this problem, because the hackers will steal the keys.
From another thread

Quote

I would change it so vital parts of the protocol can be preformed with out a connection to the internet, and only encrypted blocks of cipher text / already signed data would need to touch the internet. People could decrypt and verify signatures on a different machine with no connection to the internet, and the data to try to hash also transferred this way and then coins mined for and stored completely offline prior to a signed/ciphertext transfer of value. This would prevent hackers from being able to attack the network with buffer overflows and similar, root all of the clients and destroy the value of Bitcoin. This could be done either with flaws in the programming of the bitcoin client used, or flaws in the programming of other applications used in a shared environment. I doubt many Bitcoin users are taking security measures capable of defending from intelligence agency / military / super l33t hackers in general and such an attacker could likely take over the network. By removing critical processes from the internet entirely and having only secured/signed/encrypted data online, you can completely remove the risk of hackers 100%. This is the only way to remove such risk 100% as well, but most users are not even securing themselves near as well as they could be while connected to the internet, and the technical expertise required to do this is significantly beyond that of the average computer user.

I should also add that data should be transferred between the internet connected machine and the disconnected machine via CD which is discarded, so an attacker can not use the CD as a compromise vector to communicate data from the disconnected machine to the connected machine and then back to the attacker. Also, at least one back up of the drive of the disconnected drive should be made periodically, incase a compromise attempts to wipe the drive rather than steal the wallet

I think this is the only solution. Also I would like to point out that even if you are a security expert, as long as you are connected to the internet there is always the risk of some hacker. There are probably hacker groups out there right now that would be capable of taking over 99% of the bitcoin network and stealing all wallets, and adding encrypted wallets isn't going to change that since they could just steal the key.

Your main wallet could be in the offline machine, then you just update it's blockchain via CD.

As most people know, you can easily send to an offline account, so that's no problem, but how do you spend from it securely?

The answer I think is in wallet surgery... upcoming tools that will allow you to split off say $49.95 from your wallet while completely OFFLINE. Then transfer that new $49.95-value wallet.dat to the net-connected machine via CD for spending. This will probably be a bit dependent on your savings wallet consisting of many small-value addresses, rather than a few large-value addresses.

brocktice

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Apparently I inspired this image.

Quote from: cypherdoc on April 28, 2011, 09:32:32 AM

i don't leave my Bitcoin client open while i'm browsing and just to make sure, i offload the wallet.dat file after i encrypt off to my Blackberry with another copy in Dropbox. how do u guys feel about storing a Truecrypt file in Dropbox.

I think it's a great idea to store an encrypted backup of your wallet in dropbox. HOWEVER, this only solves the I-lost-my-money-because-of-a-hard-drive-crash-or-fire problem, not the someone-hacked-my-computer-and-took-my-money problem.

ribuck

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Quote from: cypherdoc on April 28, 2011, 09:32:32 AM

i don't leave my Bitcoin client open while i'm browsing and just to make sure

Don't keep Bitcoin (i.e. wallet.dat) in the same login account that you do your browsing from.

allinvain

legendary

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Yeah the bitcoin clients needs and should encrypt the wallet.dat file like RIGHT NOW..PRONTO!! This is a huge security risk. If we want bitcoin to become more widely adopted it has to be more than a e-currency for geeks..it has to be almost idiot proof and as secure BY DEFAULT as possible..ok..enough shouting :p

I think storing an encrypted file on Dropbox should be ok. If you want to be super paranoid store another copy on another cloud storage provider as well.

cypherdoc

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i don't leave my Bitcoin client open while i'm browsing and just to make sure, i offload the wallet.dat file after i encrypt off to my Blackberry with another copy in Dropbox. how do u guys feel about storing a Truecrypt file in Dropbox.

RodeoX

legendary

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The revolution will be monetized!

I agree this should be a priority. At least encrypting the wallet file and requiring a strong passphrase to open it for spending.
Remember bitcoins are money, this is not like protecting a forum account from practical jokes. Enough coins in your wallet could bring out the not f-ing around crew.

chooseusername10

newbie

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Encryption wont solve this problem, because the hackers will steal the keys.
From another thread

Quote

I would change it so vital parts of the protocol can be preformed with out a connection to the internet, and only encrypted blocks of cipher text / already signed data would need to touch the internet. People could decrypt and verify signatures on a different machine with no connection to the internet, and the data to try to hash also transferred this way and then coins mined for and stored completely offline prior to a signed/ciphertext transfer of value. This would prevent hackers from being able to attack the network with buffer overflows and similar, root all of the clients and destroy the value of Bitcoin. This could be done either with flaws in the programming of the bitcoin client used, or flaws in the programming of other applications used in a shared environment. I doubt many Bitcoin users are taking security measures capable of defending from intelligence agency / military / super l33t hackers in general and such an attacker could likely take over the network. By removing critical processes from the internet entirely and having only secured/signed/encrypted data online, you can completely remove the risk of hackers 100%. This is the only way to remove such risk 100% as well, but most users are not even securing themselves near as well as they could be while connected to the internet, and the technical expertise required to do this is significantly beyond that of the average computer user.

I should also add that data should be transferred between the internet connected machine and the disconnected machine via CD which is discarded, so an attacker can not use the CD as a compromise vector to communicate data from the disconnected machine to the connected machine and then back to the attacker. Also, at least one back up of the drive of the disconnected drive should be made periodically, incase a compromise attempts to wipe the drive rather than steal the wallet

I think this is the only solution. Also I would like to point out that even if you are a security expert, as long as you are connected to the internet there is always the risk of some hacker. There are probably hacker groups out there right now that would be capable of taking over 99% of the bitcoin network and stealing all wallets, and adding encrypted wallets isn't going to change that since they could just steal the key.

brocktice

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Apparently I inspired this image.

I understand and agree that currently bitcoin wallets are not very secure, and that that should change in the future, (or yesterday, as suggested).

That said, I am curious. Have there been any reports *yet* of bitcoin theft directly from an individual's wallet (and not from some hacked web service)?

tomcollins

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Quote from: mewantsbitcoins on April 23, 2011, 10:29:41 AM

I suspect that the biggest problem will be trojans/viruses/exploits if wallet remains unencrypted. This should be addressed ASAP.

As to the other two points, backing up and remembering your password are trivial tasks. It's not 80's anymore - computers are here to stay and will become increasingly bigger part of our lives. We should learn to interact with them.

Should and reality are two different things. I have probably 50 different passwords for different things, different logons, etc... I'll forget them every once in a while and have been bailed out by the "forgot your password" link on things all the time.

I'm not sure what the answer is, but if any significant wealth is stored on bitcoin, with no way to ever recover money, that's a big deal. Even if I get hit by a bus, it's gone unless I left the information in my will or a trust or something.

Topic: Most people are not capable of keeping their wallets safe? - page 2. (Read 6090 times)