Cryptocurrency: Security vs Convenience


Welcome, welcome to One Minute Crypto! I’m your host, Chronos, and today we’re going
to talk about the trade off between security and convenience, in storing cryptocurrency. For a long time, I thought of this as a linear
relationship: the more convenient a storage method is, the less secure it is. Let’s take the simplest example: running Electrum
on your home computer. Now, the Electrum wallet software is very
convenient. Any time you need access to your coins, they’re
right there on your desktop. But on the other hand, it’s not very secure. Any malware on the computer would be able
to steal your private keys and spend the money right out of your wallet. And since you probably use your computer for
more than just storing bitcoin, it’s very possible that you might pick up some malware
without even noticing it. On the other end of the spectrum, you could
make your own private key by flipping a coin 256 times. This is fantastically secure, especially if
you don’t post a video of yourself writing down your new private key. But, spending these coins is going to be,
shall we say, inconvenient. But I’ve actually come to realize this is
not a one-dimensional continuum. It’s actually a fully two-dimensional graph. Yes, most options have a trade off between
security and convenience, but if you work hard enough, you might be able to come up
with an option that is both inconvenient AND insecure. How about putting your private key in a tattoo
on your forehead. Anyway, I want to hear from you: what do you think
is the right trade off between security and convenience? Post below. I’m Chronos. Thanks for watching!

4 thoughts on “Cryptocurrency: Security vs Convenience”

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  2. Is there malware that can actually steal my private keys from my electrum wallet file if they don't know my password or seed?

    I can understand a keylogger discovering my password or something like that, but is there another way?

  3. I;ve been pondering a tradeoff that works a bit like this:

    The user creates a keypair (xpriv, xpub) with a dedicated hardware device, stores it on an NFC tag and then touches his wallet. The wallet imports the xpub and shows a convenient history, but cannot spend unless you, once again, hold up the NFC tag to it.

    At no point in time is the xpriv written to disc, it stays exclusively in memory. This setup is a tad bit inconvenient and not at all as fast as having all the stuff in the same place, all automated – but it might suit some niche of people that want to apply physical security to an otherwise digital ecosystem.

  4. Of course, the converse extremes also exist: you can find optimizations that maximize security and convenience in combination. Plus, as technologies and product designs are improved, the best security you can get for a given convenience (or the best convenience you can get for a given level of security) goes up!

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