hazek,

I don't think that anything you said is outrageous or unreasonable, with minor exception.  My point was more that there is a gap between the supply and the demand on the end-user-software spectrum.

The caveat is that any system that is online has an order of magnitude more attack surface than one that isn't.  I'm not saying that there's no security to an online system, I'm saying that this thread is about "securing your savings wallet" which many users don't consider secure unless there's a physical/manual gap between the internet and your keys.   I misread your statements, thinking that you were like other users who wanted the cold-storage, but also wanted all the other features that haven't been combined into any existing cold storage solution, yet.  Since that's not the case, your options are significantly wider.  I was simply trying to bridge your understanding between "reasonable" and "reasonable-but-doesn't-exist-yet-you-might-need-to-find-a-compromise."  

If you are interested in simply a more-secure online solution, then that's a discussion worth having.  And it probably won't include Armory (eventually it will have a lite mode, though).

The problem is that encryption doesn't protect you from a Bad Person that obtains access to your system.  Your wallet may be encrypted, but it has to be decrypted for a moment in order to sign transactions.  That means that, at some point (unless you never spend any coins, only receive them), your private keys will be sitting unencrypted in RAM.  If someone has root access to your system, they can write a program to copy the program's memory space as soon as it detects you've unlocked it.

It's not easy for an attacker to do.  Not every attacker gets root/admin access.  But there's also a lot of nasty viruses/malware out there, and people get infected all the time.  And part of the reason it's so difficult to secure computers against them is because they're constantly changing and developing new ones.  In fact, the threat vectors are the ones you don't know about yet (because the ones we do know about have generally been patched already).

If you really want to do the online computer thing, I recommend it be done on a system or OS that has good A/V and is not used for web-surfing.  It should have a minimal amount of software installed, and minimal interaction with the internet.   It's sole purpose should be for your Bitcoin software.   And in fact, that's very much like what you're asking for...

I just wanted to point out that for most users, hearing the phrase "Securing your savings wallet" is synonymous with "I want to keep a couple hundred dollars worth of BTC online, but I want to store my $30k in savings in the most secure way possible."  For most people, $30k is not something you compromise with, you just get the best thing out there, even if it's a little inconvenient.  I'd like to believe that Armory is not only "the best thing out there", but also rather convenient once you get past the load times

Unfortunately, it's very difficult to quantify what the security difference is, because most of it is based on what we don't know -- Bad People are finding new ways to attack systems, all the time ...

how do you keep the A/V up to date?  don't most have to update every day or so online?

No I meant the encryption pw could be keylogged..

IMHO there are a lot of attacks possible. Even if your firewall does block ALL traffic, some bugs in the kernel might be exploited. If you actively use some browser, etc. there is an even bigger attack vector. The firewall cannot protect you from attacks to the browser (because the browser has to be allowed in the firewall). Additionally, as long as you have some kind of storage, which holds modifications to your whole system (so you can install new packages, etc.), there is a chance that malware can hide somewhere (except you check every dir/file before booting).

The solution to this is having a read only system. It has to be checked only once. The wallet often must be read/write, but for the sole purpose of signing offline tx it would be enough to have it writable only at time of creation. This is also the reason, why I think, that encryption for a pendrive solution for bitcoins is overkill. All that has to be protected is integrity (which can be done without encryption of the whole live-system) and confidentiality of the wallet private keys (which most clients do already).

This is what I have now:
- up to date Ubuntu 12.04.1 on a USB stick
- home directory encrypted with a very strong pw
- UFW blocking everything in both directions except 53,80/tcp,443/tcp out
- noscript addon for firefox intalled
- blockchain javascript verifier addon installed
- always browsing in private mode


My plan for use now is to either install electrum or multibit for my savings wallet and use those two in combination with blockchain.info which is the only website I'm ever going to connect to again.


How secure am I? How much money would you store like this?

Ugh.. this is so frustrating. How am I going to lose my coins if blockchain.info won't hold more than what I need for my spending money. And how can a bug get exploited if I'm not going to be actively using my browser.


One more time: I'm going to use my setup as follows. When I want to fund my savings wallet I'm going to reboot to my ubuntu stick, open electrum or multibit(haven't decided yet) open either an exchange page or blockchain.info and transfer the money to my thin client's wallet. After I do this I'm going to close and reboot. If I need to spend my savings money I'm going to reboot to my ubuntu stick, open electrum and open blochchain.info and fund one of my spending addresses. I wont do anything else with my USB stick.

Where exactly is the risk in doing this and how big is it? Is linux really this unsafe that I can't even do the above without risking getting hacked? Is there really no other option but an air gap?! I mean this starting to be too much..

No, I'm prepared to hear any answer. I just am frustrated with incomplete answers. Telling me it's not safe despite all these precautions is an incomplete answer. I know it's not 100%, I already said this. I already said I'm willing to forgo complete security for some convenience but what you told me is that you wouldn't trust my setup at all which I just can't take as anything but bullshit. Yes I can lose my money, but here's a newsflash for you, you can also lose your paper wallet if a thief breaks into your safe. Perfect security does not exist and I'm not asking for it. All I'm asking is for a setup that is reasonable safe but you are telling me that my setup is inherently unsafe which I just cannot understand without any further explanations.

I already said that most of what I'm afraid of is a keylogger because I'm already very careful, have keepass and strong, uniquie passwords for any service I use, I have noscript installed, I have an antivirus running...  My windows setup is already a lot safer than what most have but I'm not happy with it because I realize I'm actively browsing on this OS and a keylogging threat exists. All I wanted to do with my USB ubuntu setup is protect myself against that. Why? Because encryption takes care of the rest. And now you're telling me my USB Ubuntu setup will not even protect me against keylogging?

Put it this way, there is nearly always the potential for you to be hacked or get a virus, but you have to under the % chance of this happening and put it in context, just because there is a 0.0001% chance doesn't mean it's going to happen (numbers maybe made up but they wouldn't be far off for any tech savy user).

I've been on the web for over 24 years. Sure my computer has caught a virus or two, but my personal computer was never purposefully attacked or hacked into. Most of the virus' I got was when I was a child or I let someone else on the computer and they did something stupid and it got compromised because they downloaded something they shouldn't of done and yes all of these were windows machines.
Btw the few linux based PC's I've had and never to my knowledge had either a virus or been hacked into, I use the same level of protection on these as my servers.

I've owned a server, vps, shared hosting of some sorts for around 10 years, those have a nice big target on them, no virus' but do get hack attempts all the time. They were all Linux machines very public, since they are servers and host a few relatively popular websites.
Most hacking attempts are pretty basic, so it's easy to prevent with a properly setup firewall.

If you want to go towards server like protection against hacking attempts, that is what you need to look into how to setup your firewall. One method, limiting outside access by IP address to specific ports, anyone else, gets a denied instantly. Figure out what might need to access you from the outside, make note of it's IP address and put that on a white list. Don't add more than you need to.

So if blockexplorer is the only site you go to, make it so that port will only be open for that IP address of that site.
Same applies for electrum and it's blockchain servers and the ports it uses.

Linux really does not need the same sort of anti-virus protect as windows, so as long as you have something, that is usually enough.

That was my plan. Right now (I'm still not done setting it up) everything in is denied and only ports 53,80/tcp,443/tcp are allowed out. Once I figure out what ports electrum needs (probably what I'm going to end up using) I'll add that to the rules and that's it.