Topic: Not Understanding Cold storage (Read 2018 times)

OK thanks all. I think i'm going to try getting a raspberry pi and running the Linux OS on it.

But until then what is up with Electrum not able to create a wallet while offline?

Whenever I disconnect from the internet and try to create a new wallet it gives me this message:

The only thing I'd add to what EcuaMobi said is that it doesn't literally have to be a CD.  These days linux on a thumb-drive is a lot more common (from what I've seen) and a lot of  newish computers don't even have optical drives anymore (my laptop from 4 years ago doesn't have a CD drive).  However, if you:

:%s/CD/thumb drive/g

Then I agree completely!

You could use electrum; 1 online wallet that broadcast signed transactions and offline computer. This can be done with raspberry pi

Also you could use the same scheme with armory; raspberry pi handles armory quite well in offline mode (no blockchain) and then you generate addresses sign the transaction and the moe it to the computer.

Another scheme would be

Get a mycelium entropy and generate papaer cold wallets from a safe printer and store your btc, when you want to use them, use a live usb with latest tails version and import the private key send the funds and then reboot and elimite the old cold wallet since you just spent your bitcoins.

A proper cold storage system should run on a separate airgapped machine. The private keys should never touch a computer that has been connected to the internet since they were generated.

You can't make a "proper" cold storage system with just one machine. It is possible for malware to live in the BIOS and firmware of your computer, which would allow it to spread to the live OS and steal from your wallet. Disconnecting from the internet is no good either, the malware can steal your Bitcoins without an internet connection. This is done by inserting a backdoor into the random number generator used when creating new Bitcoin addresses and signing transactions.

While your system may be safer than just a hot wallet on your everyday OS, it is significantly less safer than a real cold storage system. A smart hacker who's compromised your everyday OS can still steal your Bitcoins.

This is why I don't like calling systems like this cold storage, because it's not. It reminds me of BTER's "cold storage system" that was hacked, apparently they thought connecting to the internet is OK for your cold storage.

If you want a proper cold storage system, get a cheap second PC and setup Armory or electrum on it. Messing around with live OS's will only complicate things and doesn't provide any real security.

sure..
you can use live linux on usb or use and VMWare USB image to run Windows live if you do not
know linux operating system...
but i think linux use a very small amount of Gb

Electrum combined with a linux live cd should is the best "cold storage" method for you. Download and bootup a live cd, disconnect from internet, run electrum, mark down the 13 words (the newest electrum version uses 13 words), copy a few of your addresses into a text file. Then test your 13 words by rebooting with the live cd and recover your wallet with those 13 words. If you get the same addresses, you are safe to use them.

i think the best solution it is to store your wallet.dat in 2 o 3 USB.
it is enough, oldest 512mb UBS pen.
I bet, you already have one or more, at home in some drawer.

 

You can try to buy a Raspberry pi its cheap but you can't install on it any kind of wallets , use something lite , like Multi-bit
and try to have always a backup encrypted . That will be the best choice 

Kind Of Respect ,
Bitcoin Boy .

If you want to write me a tutorial i'd really appreciate that!

However I only have 1 computer now and want to save my bitcoins on a USB disk. If that is possible...

But if I have a paper backup i'm ok with that.

Also I highly suggest having second USB of it or paper wallet.   You want to have a backup.  It would be a sad day if you only have 1 copy and the USB craps out.

blockchain.info itself offers cold storage address.  Receive Money-> at bottom More acrions->New Cold Storage Address. If someone explains the difference with normal address would be more useful.

I understand where these suggestions coming from but I highly and absolutely and based on a personal experience, recommend a PAPER wallet

i think you should keep it simple, put the wallet in a usb and leave it there, you are done

to use those btc again just plug the usb in a safe desktop, (old laptop formatted and used only for bitcoin, don't do nothing else on this laptop/desktop)

Use electrum. Create a new wallet and put those 12 words on a piece of paper. Then you can use the master public key on the computer. You can generate addresses and reciee on any of them but no one can touch your coins without that piece of paper. I would love to write you a tutorial if you are interested.

Cheers

Here -> https://bitcoinarmory.com/cold-storage/ armory's way to explain the cold storage is pretty good.

Yeah OK, thanks. I also watched a video that showed the guy running the Javascript offline. So that makes sense. But why can't Electrum do this? Is there a way to do this with Electrum?

Please read my post again, both options I mention are 100% offline. This is an important step:
You need to download the code of the wallet generator and then run it completely offline on your disconnected live CD. You are not generating the wallet online. I hope it's clear now.

CaneryInTheMine is selling a item that lets you plug it into printers that can read usb.  It prints paperwallets offline.  You might give it a look: https://bitcointalksearch.org/topic/closed-mycelium-entropy-group-buy-709936

Side topic, I saw the tutorials using bitaddress.org. but... seems kinda odd that one would start on the internet, to generate a wallet, that you intend to keep off the internet... especially a website... which are notorious for being spied on.

Is there no way to create a wallet while offline?

The biggest problem I see with what your doing is it sounds like your computer you will use for everyday things.  Let's say it get's compromised once you load your cold storage it's possible it gets compromised to.

You might look into a raspberry pi.  With it you can get a computer you can keep wallet on and just don't use to surf web, or other things like that.   You can get the raspberry pi set up and put entire unit away. (Make sure to make backups on USB of wallet file and treat them like gold).