Topic: New Type of Disposable Wallet Stops Rogue Admins From Stealing Wallet.dat files (Read 1198 times)

Disposable Wallet Method:

Just what is a "disposable wallet"? Its not just a wallet you use then throw away. Its way more complex than that.

A "Disposable wallet" is a one-time use wallet whose contents are in an un-redeemed state in the blockchain. Once the private key is imported into the Bitcoin client and a transaction has occured the wallet is then discarded. Any coins left over from the transaction are sent to a new "Disposable wallet" and those coins also remain in a non-redeemed state in the blockchain as well.

Disposable wallets are brain wallets that you generate using something like bitaddress.org.

If you click on the brain wallet tab of the site and enter a passphrase:


the javscript will output this:



After the wallet is generated. You can immediately send money to that address:

Bitcoin Address: 1Fcf6bCJWt2UGkK9fnTWnynY9dMcoA2v3v

If you send money to that address and do not use or import the private key into any bitcoin client then the transaction will be added to the blockchain and the coins will have a status of NOT-REDEEMED.

As long as you do not import the private key in to any Bitcoin client the status will not change.

A "Disposable wallet" is a one-time use wallet whose contents are in an un-redeemed state in the blockchain. Once the private key is imported into the Bitcoin client and a transaction has occured the wallet is then discarded. Any coins left over from the transaction are sent to a new "Disposable wallet" and those coins also remain in a non-redeemed state in the blockchain as well.

How does that help secure the p2p exchange servers from rogue admins?

The answer is simple:

After generating the private key, you split the key into multiple parts and then store them on multiple servers in the p2p network.

With this scenario, there are no wallet.dat files even stored on the server. All that is stored are partial private keys.

If a rogue admin tries to access the wallet banks all he will be able to retrieve are partial private keys.



So how do you conduct a transaction? 

With something I call a "wallet-virtual-server" or "transaction-server" or "wallet-bot".

I will tell you about "wallet-bots" in the next post.


(I AM WRITING THIS WHILE YOU READ IT... CLICK REFRESH TO UPDATE THIS POST.)

Disposable wallet method can be further secured using the following means:

1. Add a TTL (Time To Live) to the disposable wallet. Whether there is a pending transaction or not, set a TTL on the disposable wallet. This way a rogue admin would only have a limited time to try an attack to collect all of the partial key pieces from the servers in the p2p network.

2. Because there are replicated virtual servers keep more than one online. I know I said earlier to keep one virtual server online and the replicated copies offline. But now I have changed my configuration and design. Keep more than three virtual servers online at a time. Split the partial keys up between the online copies, offline copies, and other semi-offline virtual servers that are not linked to that particular virtual server. for example:

NY-p2p-Server
home-virtual-server-002......online......wallet-key-home-virtual-server-002-bank-001-wallet-004.dat-segment-A-XXXXXX-A-segment-end
home-virtual-server-005......offline......wallet-key-home-virtual-server-005-bank-005-wallet-002.dat-segment-G-XXXXXX-G-segment-end
home-virtual-server-007......offline......wallet-key-home-virtual-server-003-bank-001-wallet-001.dat-segment-M-XXXXXX-M-segment-end
home-virtual-server-009......online......wallet-key-virtual-server-009-bank-003-wallet-003.dat-segment-P-XXXXXX-P-segment-end

This way a rogue admin would have to hunt the keys down outside of his home-virtual-server groups. The final key he may need may be on a home-virtual-server that he doesn't even know exists on a physical server on the other side of the globe.


3. Rotate newly generated disposable wallet partial keys among the home-virtual-servers.

4. Make sure each generated key is large enough to be split into 25 parts. Split then label each part from A through Y or B through Z.

5. NEVER KEEP MORE THAN $1000 IN ANY WHOLE DISPOSABLE WALLET.  I will explain why later when I explain about wallet-servers or wallet-bots. I will also introduce you to another wallet called an insurance-wallet.

6. Set hierarchies for the wallet-bots with most handling transactions of less than $100 USD.  Higher more secure wallet-bots from more trusted admins (with higher insurance fees) can handle larger amounts. Again never allow any single wallet-bot to handle more than $1000 USD. Period.

If you are reading this or printing this out then you might want to re-read or re-print this thread. I have made changes to the configuration and security practices. Most of the changes are on from the Disposable Wallet Section.


ALT-COIN SECURITY

USE WORTHLESS ALT COINS TO DO TRANSACTION VERIFICATION BETWEEN NODES.

All of these new alt coins being created everyday are not necessarily a bad thing. Crypto-coins and their corresponding blockchains can be used for other things besides money. Like securing transactions between P2P nodes. You can use worthless alt coins as transaction verifiers throughout the entire p2p network; and its more secure than using CA certs, pre-shared keys, or other more complicated security setups.

For high security, don't use other alt coins. Make your own customized alt coin for the same purpose. You don't have to worry about double spend attacks because you are only using it for the purpose of securing transactions for the p2p network and you are the only one with access to the coin. Make a coin that is fast and can be mined easily. Afterward, pre-mine it with enough coins to support the entire network. You wont have to worry about it retaining a monetary value because its pre-mined. Don't give any coins out to anyone except server admins. It shows the users on the exchange that a server admin is validated because no one should have the coins except for server admins.


The good thing about alt-coin security is that no one will have your coin except you. As long as none of the admins don't send their coins to other people. If they do you can find out by doing an blockchain analysis. If no one has your coins except for you then that makes it much harder for a hacker to compromise the p2p network integrity.


Security-Coin Validation
Use the blockchain to verify where the security-coins came from. If a server node sent you security-coins from a wallet address of ABCDEFG1234567 to validate a specific transaction you can verify the where the security-coins came from by doing a blockchain analysis. The analysis will show where the security-coins came from. If the security-coins came from an address that you do not know or is not listed in the security list you know not to perform the said transaction. It that simple. No ACLs, no certs, no keys, just alt-security-coins.

High Level Security-Coins
For sensitive servers such as high level wallet-bots use a different security-coin than that which is used by the rest of the network. Only give it out to server admins that are high level. This provides an additional layer of security within the p2p network.

Keep Track Of Every Coin
The head of the p2p network can disburse security-coins to the server admins for transaction verifications and tolls on the network.  As the security-coins travel from the server admins to other nodes, you can make nodes to collect the security-coins and bring them back to you. A security-coin audit can show if any security-coins were lost and where they went and who lost them. This provides better security than other methods; in addition, if a server admin and his nodes are booted or fired from the p2p network you can blacklist his wallet address or refuse to give him more security-coins to perform transactions and pay tolls on the network.

Transaction Tolls
Transaction Tolls provide a way to control and maintain the p2p network. Certain nodes require certain security-coins and a specific amount. For example, a high level transaction involving a large sum of money might require a larger amount of security-coins before the transaction will take place. Only admins with that amount of security-coins will be able to perform the said transaction.

Security-Coin Dual Wallet Application
I recommend coding a dual-wallet application for the wallet-bots. Code the wallet application so that the Bitcoin/Litecoin wallet will not send cryptocurrency to anyone unless there is a sufficient amount of security-coins to perform the said transaction. You can hard code the security-coin amounts based on how much cryptocurrency is sent. This would make it much harder for a hacker to get the bot to send coins to an illegal wallet address.

Append the Sec-Coin Wallet Address To The Name Of The Node
Name the sever nodes on the network with their corresponding sec-coin wallet address appended so that users and end-user clients can view the sec-coin blockchain to verify that the server performing the transaction actually has sec-coins and enough of them to perform the task. If a rogue server-node spoofs a sec-coin wallet address and attempts to perform a transaction on the p2p network, the transaction will be denied because the rogue node doesn't have any or enough sec-coins to complete the transaction.  Verify the transaction afterward by examining the sec-coin blockchain to see if the balance has changed.  If the balance is still the same then you know a rouge server was spoofing a valid servers wallet address.  When the transaction confirmation comes back to you, deny the confirmation.  If you know that a sec-coin transaction costs five sec-coins and the balance has changed by four; again, deny the transaction confirmation when it arrives.

(I AM GOING TO TAKE A BREAK... BE BACK LATER)