I’m sure we’ve all heard this saying, I apply it to my personal crypto wallet network. This is just an example with arbitrary numbers, but I just wanted to give an example of how you can set things up differently. Most importantly I separate storage and spending leaving smaller amounts in spending wallets and larger amounts in storage wallets. For storage wallets I would choose the most secure wallets and use them very infrequently.
So again, this is just an example and I’m sure you can come up with a better one that works best for you. I just don’t think ANYONE should have a wallet setup like the example on the left.
And then you have 10 sets of recovery seed words that you have to remember and keep secure. Do you keep all of those seed words stored in the same place? Or do you diversify those as well? Hide one under your bed, one in a safety deposit box, one underneath the dog’s water bowl, and so on…
Yes yes, I’m glad you brought this up. This would somewhat add a risk to the user themselves by having to worry about more keys. I just personally feel more comfortable with something like this because there is not one single point at which someone could steal all ada.
Storing the seed words is up to the user really, there are many ways you could do this. Obviously printing a paper wallet and completing the 9 words, folding it up and putting it in a safe somewhere is pretty secure. You could also create redundancies to make sure you still have access to the seed words if maybe your house burns down or something. There are also tons of online digital vaults you could use to store as many seed words as you like. You could also split up the last 9 from the first 18 and store them in separate locations with redundancies. Combine any of these things and create your own configuration that works for you.
There seems to be a wide open market for a trustless service and storage of crypto keys.
Even with time limited access to funds so somebody can’t just hold you family hostage for a Monero transaction. Daily limits like debit cards. Large volume timimg delays, which via smart contract alert 3rd party.
Software to manage keys with all such features. Insurance services, crypto management services.
whilst i see where you’re coming from @joshuaunitus…
this is very debatable. from a infosec perspective, by trying to mitigate a honeypot, you’d have inadvertently increased the attack surfaces, each with various duplicative vectors of their own.
on a separate note, a potential approach could be to retain the immature honeypot (alternative is potentially losing the keys to the divested/diversified wallets, loosing the Ada for good) while it’s not much of a honeypot (at current values) then as the value matures, as “solutions” mature - divest/diversify then.
I see your point there, I’m definitely not an infosec expert but trying to improve my knowledge of it. I suppose a better network would be one that had fewer wallets, maybe just one storage and one spending.
I just like to experiment so I personally have been testing the technology and using pretty much every ada wallet. I’ve gone through the restore process for both regular and paper wallets. I’ve made over a dozen paper wallets and will probably give some as gifts to my niece and nephew. I really think it’s important for people to familiarize themselves with the tech and at the very least learn the basic operations of creating and restoring wallets.
Great point, and especially in the current temperature, this seems to hit home. Although I don’t think the majority of ADA holders use it for spending, and therefore don’t have a need for a separate spending account, we could all benefit from splitting our tokens across multiple wallets.
Now, more than ever, we need cold storage support. Preferably Ledger.
Have we figured out what caused the loss of the two recent wallets? It seemed like they were both reasonably safe with their passphrases and keys from what I have seen…
Agreed, this isn’t a widespread accepted form of payment yet so this isn’t really that necessary at this point. I guess it’s really just more of a quick access wallet that you could use to tip your favourite youtuber or experiment with other wallets.
Thanks for this post. I’m doing the “Bad Wallet Network” thing right now - and I know i’m a day away from getting screwed. Been waiting for Trezor (which I have) to support ADA but who knows how long that really might take… I like your paper wallet solution while waiting for Trezor. I’ll explore this tonight.
I would recommend to anyone who has never created a paper wallet to:
Create a paper wallet
Send a small amount of ada to it
Restore the wallet in Daedalus
Send the small amount back to original wallet
This is a great way to see the whole process and become more comfortable with it. You pay a few cents in fees but I think it’s worth the learning experience.
Hi, I’m also in the ‘bad wallet network’ thing, but I am trying to improve my security skills.
I was wondering if it’d be enough, aside the use of paper wallet, to divide the funds among various wallets inside Daedalus and Yoroi.
There is one thing to consider in my opinion, that is preventing me to use hardware wallet: staking will be possible only using official wallets.
I believe you will be able to stake on both hardware wallets and paper wallets.
If you want to be very safe with Daedalus wallet I would setup a separate OS environment that you just use Daedalus on. You could partition your drive and put Ubuntu on the new space installing just Daedalus. I like the idea of having a dedicated system for Daedalus keeping financial separate from regular use. All up for you to decide what’s best for you. Most of my ada is just being stored on paper wallets. I like paper wallets for holding because it has a 27 word passphrase which is very secure, hardware wallets are great too I just don’t own one personally.
It is a good idea to have a separate environment with Ubuntu for Daedalus, I’ll consider the possibility, thank you.
However, the majority of other altcoins have official wallets that run only on Windows…
couldn’t agree more, would be interested in watching a review/tutorial of your findings.