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Can someone walk me through how this happens from a technical perspective? Nicehash must keep their PK at some "super secret place" so they can sign transaction
by nikkwong 9y ago
Can someone walk me through how this happens from a technical perspective? Nicehash must keep their PK at some "super secret place" so they can sign transactions out to their miners. In an ideal situation that PK is unreachable even in a security breach—but if it's not well guarded enough then once that PK is found the floodgates are open. Is that correct? Also, from a technical perspective why would a pool keep so much BTC in a hot wallet? Shouldn't they be constantly distributing rewards out to miners, and just pocketing a % them selves which (you'd assume) they'd move to cold storage?
- stouset 9y agoFundamentally, it is difficult to protect 256 bits of information from a highly motivated attacker. You can make it more difficult by using things like cold wallets with Shamir Secret Sharing schemes, but $70m of seemingly untraceable assets is an attractive target. Even if you require a quorum of ten people to access the cold wallet, that’s still $10m per person if split amongst themselves. And someone has to build that system in a trustworthy way in the first place.