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How safe is my LTB Companion Wallet?

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Avarice

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Posts: 5
Location: London, UK

Hello,

I'm quite new to the crypto-currency party, and after attending events, listening to LTB podcasts and reading news articles about bitcoin, cryptocurrencies and the Blockchain I've developed an (unfounded?) paranoia about the security of online Wallets.

I've nevertheless dipped my toe in the water and as part of the process of creating a LTB account, created a LTB Companion Wallet - via a Chrome extension.

On the wallet settings tab there is a button that says "encrypt wallet". This seems to imply to me that currently it is sitting around on my PC somewhere unencrypted - and vulnerable... is my understanding correct? Should I encrypt my wallet if I intend to store any amount of value in it?

Where exactly does my new LTB Companion wallet (which I created through a Chrome extension) reside at the moment?

I've often heard that you should treat online wallets similar to real wallets - and only carry around pocket change in them; is this still the case?

Thanks!

Posted on April 27, 2016 at 3:10 PM

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• loon3

  

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  Posts: 243
  Location: Rhode Island, USA

  Whoop, thought I had answered this. This answers below...

  @avarice

  Where exactly does my new LTB Companion wallet (which I created through a Chrome extension) reside at the moment?

  The wallet data (passphrase, address labels, etc.) is stored locally on your hard drive. The actual location of the files is in the Chrome Application folder if you download from the Chrome Web Store.

  On the wallet settings tab there is a button that says "encrypt wallet". This seems to imply to me that currently it is sitting around on my PC somewhere unencrypted - and vulnerable... is my understanding correct? Should I encrypt my wallet if I intend to store any amount of value in it?

  It's up to you to encrypt your wallet if you want that layer of protection. The passphrase is on your computer and never leaves your computer (transactions are constructed and signed locally, then sent to the bitcoin network). The encryption layer is primarily for a physical intrusion (someone at your computer trying to access your wallet). It's something you need to remember, so keep that in mind. If you forget the encryption password, you will not have access to your wallet.

  I've often heard that you should treat online wallets similar to real wallets - and only carry around pocket change in them; is this still the case?

  Analogies aside; the thing that you need to keep safe is your 12-word passphrase. If you think you can do that by keeping your computer itself safe, then you can keep more than pocket change in your wallet.

  Consider trying Tokenly Pockets (http://pockets.tokenly.com). It has all the same functionality as LTB Companion and is more up to date.

  Posted on May 12, 2016 at 7:20 AM
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• Avarice

  

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  Posts: 5
  Location: London, UK

  Thank you for the clear and details response; that really helps to alleviate some of my concerns!

  I see that on Counterparty's wallets page (http://counterparty.io/counterparty-wallets/) that they have similar advice:

  "Tokenly Pockets for Chrome is an open source wallet for the storing and sending of Bitcoin and Counterparty assets which stores your secret passphrase locally in the browser with the option of client-side password encryption... Transactions are assembled and signed locally then pushed to the network as a raw transaction through Blockchain.info’s pushtx API."

  I believe that I am able to keep my PC secure from physical intrusion. However, it feels like there is an elephant in the room - that there is always the risk of Malware stealing unencrypted keys/key phrases. Right now it is not something that I am particularly concerned about, but to me it feels like if there is a huge adoption of cryptocurrencies in the future that more of these sorts of attacks will become prevalent and there is the potential for users to get burned badly if they aren't aware of the risks.

  @loon3 Consider trying Tokenly Pockets (http://pockets.tokenly.com). It has all the same functionality as LTB Companion and is more up to date.

  Excellent, thank you for the link - it's really useful to know that there is a successor to the Companion Wallet.

  I have installed Tokenly Pockets now and I notice that the UI is very similar. Digging around it seems that the two wallets were developed by the same developer / team - and if the github address (https://github.com/loon3/Tokenly-Pockets) is anything to go by, it would seem that it was you. Good work!

  Posted on May 14, 2016 at 6:15 AM
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