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"Online wallet services" are an invitation to theft and fraud. Do not use them. I've been saying that since July 2011 (https://bitcointalk.org/index.php?topic=2

"Online wallet services" are an invitation to theft and fraud. Do not use them. I've been saying that since July 2011 (https://bitcointalk.org/index.php?topic=26260.0 https://bitcointalk.org/index.php?topic=26260.0), before MyBitcoin ran off with everyone's money, and it's just as true today as it was then. If you lost money today I feel for you, but seriously, it's your own damn fault. A Bitcoin is only yours if it was last sent to an address that is yours, and an address is only yours if no one else knows what it is - in other words, you have to have generated it anew on a secure, malware-free computer, and avoided ever putting the wallet file on any computer that has malware or that is not yours. Seriously, stop it, you fools.

M4v3R 14y ago
While this is true, it's extremely hard to keep your computer free of any kind of malware. There are many trojans that go undetected for enough time to do serious damage. I personally know a guy that, even with having anti virus installed, had 2500 BTC stolen from his personal computer. So really, so far the most secure way to store Bitcoin is either to encrypt private key and only then store it somewhere, or print it out, store it in a safe and remove all traces from the computer. Better yet - use a locally hosted javascript app to generate the pair and never write it to disk, from where it could be recovered even after deletion. I'm now working on developing a Bitcoin platform that will enable you to do exactly this - your private keys will be generated on your computer, encrypted with PBKDF2-derived passphrase from your password and only then stored on our servers. This way no one except you can ever touch the coins.
- gnarbarian 14y ago
  if I had a stash of bitcoins I'd probably use some hardened Linux variant or OpenBSD to store them and perform transactions.
aquayellow 14y ago
Yes, I learned it the hard way when I had around 200 BTC stolen from the online service I was using. I kept blaming the service but the fact is it's stupid to think of bitcoins = hard currencies and online wallet services = bank.
TranceMan 14y ago
Are you saying stick with the banking cartels?
itcmcgrath 14y ago
Which is essentially saying BTC will never become more than a semi-serious play thing for the tech community. How is the non-tech user ever going to be able to use this with anywhere near level of trust/safety they do with current traditional currencies. Hell, a lot of my tech friends can't keep their computer secure/clean, not to mention backed-up, so how are Joe and Jane Average? Or, alternatively BTC embraces the same banking industry setup it is trying to get away from. That said, I don't disagree with what you are saying (and upvoted) - just pointing out some implications.
- cadetzero 14y ago
  > How is the non-tech user ever going to be able to use this with anywhere near level of trust/safety they do with current traditional currencies. Near everyone I know, regardless of age, does their banking online. I don't see how this is any different than a username/password being stored on some banking server, and getting stolen. Best case? You boot to a clean ISO, make a wallet, generate an address, write down the public/private key, transfer all your btc to it, and call it a day. There is no digital trace, and you have a paper wallet.
  - polemic 14y ago
    This is wrong in so many ways. If your bank is hacked you as the user are not liable for the loss. Online transactions are traceable and reversible. Banks are heavily regulated and the legal regime is well defined. Etc etc etc. Having your online banking hacked is a bit like being mugged on the way out of the bank. Having an online wallet service hacked is like someone driving in a truck, emptying the vault and leaving without a trace.
    - ccrabb 14y ago
      And then the mugger shows up the next day and gives you your money back.
  - TylerE 14y ago
    It's different because FDIC.
fpgaminer 14y ago
This is why I started working on a Hardware Wallet last year. Easy to use, impossible to steal.

M4v3R 14y ago

While this is true, it's extremely hard to keep your computer free of any kind of malware. There are many trojans that go undetected for enough time to do serious damage. I personally know a guy that, even with having anti virus installed, had 2500 BTC stolen from his personal computer. So really, so far the most secure way to store Bitcoin is either to encrypt private key and only then store it somewhere, or print it out, store it in a safe and remove all traces from the computer. Better yet - use a locally hosted javascript app to generate the pair and never write it to disk, from where it could be recovered even after deletion. I'm now working on developing a Bitcoin platform that will enable you to do exactly this - your private keys will be generated on your computer, encrypted with PBKDF2-derived passphrase from your password and only then stored on our servers. This way no one except you can ever touch the coins.

gnarbarian 14y ago
if I had a stash of bitcoins I'd probably use some hardened Linux variant or OpenBSD to store them and perform transactions.

aquayellow 14y ago

Yes, I learned it the hard way when I had around 200 BTC stolen from the online service I was using. I kept blaming the service but the fact is it's stupid to think of bitcoins = hard currencies and online wallet services = bank.

TranceMan 14y ago

Are you saying stick with the banking cartels?

itcmcgrath 14y ago

Which is essentially saying BTC will never become more than a semi-serious play thing for the tech community. How is the non-tech user ever going to be able to use this with anywhere near level of trust/safety they do with current traditional currencies. Hell, a lot of my tech friends can't keep their computer secure/clean, not to mention backed-up, so how are Joe and Jane Average? Or, alternatively BTC embraces the same banking industry setup it is trying to get away from. That said, I don't disagree with what you are saying (and upvoted) - just pointing out some implications.

cadetzero 14y ago
> How is the non-tech user ever going to be able to use this with anywhere near level of trust/safety they do with current traditional currencies. Near everyone I know, regardless of age, does their banking online. I don't see how this is any different than a username/password being stored on some banking server, and getting stolen. Best case? You boot to a clean ISO, make a wallet, generate an address, write down the public/private key, transfer all your btc to it, and call it a day. There is no digital trace, and you have a paper wallet.
- polemic 14y ago
  This is wrong in so many ways. If your bank is hacked you as the user are not liable for the loss. Online transactions are traceable and reversible. Banks are heavily regulated and the legal regime is well defined. Etc etc etc. Having your online banking hacked is a bit like being mugged on the way out of the bank. Having an online wallet service hacked is like someone driving in a truck, emptying the vault and leaving without a trace.
  - ccrabb 14y ago
    And then the mugger shows up the next day and gives you your money back.
- TylerE 14y ago
  It's different because FDIC.

fpgaminer 14y ago

This is why I started working on a Hardware Wallet last year. Easy to use, impossible to steal.