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myarbrough@oreilly.com 2014-11-18 12:58:16 -08:00
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@ -53,9 +53,9 @@ Over the past three years, as a direct result of bitcoin adoption, we have seen
==== Hardware Wallets
((("hardware wallets")))((("user security","hardware wallets")))((("wallets","hardware")))In the long term, bitcoin security increasingly will take the form of hardware tamper-proof wallets. Unlike a smartphone or desktop computer, a purpose-built bitcoin hardware wallet has only one purpose and function—holding bitcoins securely. Without general-purpose software to compromise and with limited interfaces, hardware wallets can deliver an almost foolproof level of security to nonexpert users. I expect to see hardware wallets becoming the predominant method of bitcoin storage. For an example of such a hardware wallet, see the((("Trezor wallet"))) http://www.bitcointrezor.com/[Trezor].
((("hardware wallets")))((("user security","hardware wallets")))((("wallets","hardware")))In the long term, bitcoin security increasingly will take the form of hardware tamper-proof wallets. Unlike a smartphone or desktop computer, a bitcoin hardware wallet has just one purpose: to hold bitcoins securely. Without general-purpose software to compromise and with limited interfaces, hardware wallets can deliver an almost foolproof level of security to nonexpert users. I expect to see hardware wallets become the predominant method of bitcoin storage. For an example of such a hardware wallet, see the((("Trezor wallet"))) http://www.bitcointrezor.com/[Trezor].
==== Balancing Risk (Loss Versus Theft)
==== Balancing Risk
((("risk, security")))((("user security","risk, balancing")))While most users are, rightly, concerned about theft, there is an even bigger risk of loss. Data files get lost all the time, but if they contain bitcoin the loss is much more painful. In the effort to secure their bitcoin wallets, users must be very careful not to go too far and end up losing the bitcoin. In the summer of 2010, a well-known bitcoin awareness and education project lost almost 7,000 bitcoins. In an effort to prevent theft, the owners had implemented a complex series of encrypted backups. In the end they accidentally lost the encryption keys, making the backups worthless and losing a fortune. Like hiding money by burying it in the desert, if you do it too well you might not be able to find where you buried it.