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Offline storage - Ultimate Security

One of the most secure forms of storing bitcoins is via a cold wallet also known as offline storage. With a cold wallet you use a computer, like a $200-300 netbook, that never has an Internet connection to generate the private keys to the wallet and store encrypted. Armory innovated this entire space in a very easy to use way and has a large number of tutorial videos.9 Using html/javascript code completely offline you can create private keys and generate transactions. Here are seven easy steps to apply this 101112 principle of using a cold wallet:

(1)Transfer the address and transaction generator code via USB to the offline computer.

(2)Create the private keys and store them in a .pdf, .txt, etc. file.

(3)Create a TrueCrypt volume and if desired a hidden volume.

(4)Place the files containing the private keys into the TrueCrypt volume. I like to place the public keys in the main folder, along with some dummy private keys, and the other private keys in the hidden folder.

(5)Transfer the TrueCrypt volume via USB to an online computer.

(6)Store the TrueCrypt volume in many places such as Dropbox, Amazon Cloud, Google Drive, Gmail, multiple USB sticks, email to friends, etc.

(7)With Armory’s watching only wallet you can watch wallet balances without exposing private keys. There are many applications for this such as with having a ‘savings’ wallet and a ‘checking’ wallet where you move bitcoins. Even more advanced would be estate planning or asset protection strategies. Of course, this is premised on the html/javascript code not being compromised and there not being a virus or any type of hidden program, like a keylogger, that gets transferred via the USB device. So be sure to practice good computer hygiene. Beware when creating transactions; any unused inputs go to miners.