Questions about Bitcoin security and wallets

I was looking for a safe storage solution for bitcoin and came across the Trezor hardware wallet.

It looks like it generates a seed, which is a code to use to recover your bitcoin in case you lose the hardware wallet.

Correct me if I am wrong, but is it the case that say you left it in you desk drawer and somebody happened to take your seed code without you knowing, that they can recover and take all your Bitcoin?

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I am also looking at Bread on iPhone. Would you save a lot of Bitcoin on Bread?

Is it also the same case where somebody can take your recovery, key words and take all your coin?

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Basically it sounds like you are hiding gold bullion under your bed with these things.. correct me if I'm wrong.

Also any thoughts on:

Ledger Nano S vs. KeepKey vs. Trezor

originally posted by: nOraKat
Correct me if I am wrong, but is it the case that say you left it in you desk drawer and somebody happened to take your seed code without you knowing, that they can recover and take all your Bitcoin?

That's why you write the code down and put it somewhere nobody will ever find it, or put it in a text document on your computer or phone and encrypt it. If you're really paranoid, get a little waterproof stash container and stick it in there and bury it somewhere. It's way safer than carrying around a credit card in your wallet which could get stolen or have its information stolen from a skimmer.

originally posted by: nOraKat
Basically it sounds like you are hiding gold bullion under your bed with these things.. correct me if I'm wrong.

Sure, if the gold bullion under your bed was kept in a container which was literally impossible to break into without the correct password which was so complex that it would take trillions times trillions of years for all of the computing power in the world combined to figure out, and upon loss of the container, you could just get a new one and have all of the gold magically teleported into it from the old one.

a reply to: trollz

Thanks for the reply.

It still sounds crazy, if one were to store their entire life savings this way (say in the future).

If you keep the file on a computer, now you are dependent on that computer not crashing and losing its files. And say you had two computers or a dongle, now you are dependent on those things, so say you lost your house in a California blaze/fire and your house burnt to ashes, there goes your life savings.

Also if someone wanted to, they can threaten you for your codes and take all your money.

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Another thought is that secure passwords - with symbols which are long are hard to memorize so you end up writing them down somewhere or keeping it somewhere that is less secure anyway.

originally posted by: nOraKat
I was looking for a safe storage solution for bitcoin and came across the Trezor hardware wallet.

Buy a bar of gold. Cut it in half. Put the piece of paper with your bitcoin details in the center of the bar.

Fuze the halves of the gold bar back together.

People will think it's just a bar of gold, and ignore it.

They would never dream that you'd have your prescious bitcoin hidden in the middle of that relatively worthless gold bar.

They'll think, instead, this guy invested in the wrong asset, gold was yesteryear's primary commodity, he should have switched over to bitcoin before the crypto boom.

And they'll bypass your gold, and your hidden bitcoin.

originally posted by: nOraKat
a reply to: trollz
If you keep the file on a computer, now you are dependent on that computer not crashing and losing its files. And say you had two computers or a dongle, now you are dependent on those things, so say you lost your house in a California blaze/fire and your house burnt to ashes, there goes your life savings.

Also if someone wanted to, they can threaten you for your codes and take all your money.

Another thought is that secure passwords - with symbols which are long are hard to memorize so you end up writing them down somewhere or keeping it somewhere that is less secure anyway.

It sounds more complicated than it is.
Basically for any important data whatsoever, you want AT LEAST 2 backups. So, say you keep your code in an encrypted text file... One file on your phone that you usually have with you, one on a pc, one on a flash drive that's buried somewhere or that you carry with you on your key ring, etc.
You can make an encrypted file container on a flash drive that nobody would ever be able to decrypt and access, keep the code file in that, and then bury the flash drive in a container.
No matter what happened, you'd always have access to one of your code files.

I'm very paranoid about having backups of my data, which is why I have multiple backups, including a damage-resistant waterproof flash drive that I carry on me at all times. If you have any questions about those things, I'm definitely a person to ask.

originally posted by: nOraKat
Also if someone wanted to, they can threaten you for your codes and take all your money.

That's why you never tell anyone you have cryptocurrencies. In all fairness though, they could do the same thing with your bank account information and drain your entire life savings from that, too.

This is a very good topic, I just got into buying cryptocurrency and was having a long discussion last night with my friend on how to store it safely.

Right now, I am using a desktop wallet called Exodus that has a backup system involving your e-mail address (I think?). What is a good wallet that would hold currencies like iota, ripple, bitcoin, ethereum, and lightcoin? If you store your coins in an online wallet, can they be hacked? Can the wallet company take everyone's coins and shut down? If the wallet company goes out of business, do you lose your coins?

a reply to: darkbake

A close friend of mine was an early backer of Ethereum (ETH), and has said not to, in any circumstances keep any of your cryptos in an exchange. Keeping them in a paper wallet is best, followed by offline storage or air gap security protocols, a VPN, not using your computer for porn or other sketchy sites, etc.


Best of luck!

a reply to: nOraKat

Get one that will take a duress password to not open up your full portfolio if someone is trying to force you out of your passwords and funds. It will allow a small portion of funds to be lost in case of emergency, as compared to losing it all upon said drama.

a reply to: trollz

T:”they could do the same thing with your bank account information and drain your entire life savings from that, too.”

They sort of can’t because when you go to the bank window, you have to show ID, especially for a big withdrawal. Also from the ATM there are withdrawal limits. With Bitcoin, you can have a Million dollars stolen in one shot.

a reply to: FamCore

The downside of a paper wallet - I don’t have too many guests especially ones I can’t trust, but let’s say somebody gets access to that code.. they can take everything in one shot. And I mentioned earlier - to protect against a fire or something like that, you need to stash the code somewhere other than your home.

Another downside - it is not liquid or movable/exchangeable, right away like if it were sitting in an exchange account balance.

Does anyone know what happened during the Mt Gox incident when Bitcoin got stolen? Did anyone lose their Bitcoin?

Do exchanges insure your Bitcoin, like a bank?

a reply to: nOraKat

I'm really dubious with the lack of customer service in these websites, I ended up deleting my coinbase account after running into difficulty. I'm glad I didn't proceed any further.

get an old floopydrive..
put it on a disk...

NO ONE uses those anymore

a reply to: hopenotfeariswhatweneed

Yeah, I've asked questions to their support team and haven't had a response for over a week.

What if I had an urgent issue..

We're probably better off going with a smaller outfit.

a reply to: Miccey

Yeah I'm gonna risk a million dollars on an unreliable floppy disk.

That is if I had a million dollars, which I don't.

a reply to: nOraKat

I don't think you will get a reply either, other than that bot.

originally posted by: nOraKat
Does anyone know what happened during the Mt Gox incident when Bitcoin got stolen? Did anyone lose their Bitcoin?

Do exchanges insure your Bitcoin, like a bank?

Here's a story about bitcoin losses in another exchange, apparently not insured:

Hacked Bitcoin exchange Bitfinex will reduce balances by 36% to distribute losses amongst all users

Since the exchange used a service to individually segregate each customer’s funds in unique wallets, only some customers’s funds were drained, while others retained their full balances. The question then became would Bitfinex limit losses to only users whose wallets were compromised, or distribute them equally amongst all users (since the attack was essentially indiscriminate amongst random wallets).

We now have an answer, as the company has posted that they will distribute losses amongst all users to the tune of 36.067%, which is the total loss experienced by Bitfinex.

So all users suffered 36% losses instead of some users suffering 100% losses and others zero losses which is what happened in the hack.

a reply to: Arbitrageur

Now that is some serious wealth distribution!