Category: Private Keys

IRS Issues New Crypto Tax Guidance After 5 Years – Experts Weigh In

IRS Issues New Crypto Tax Guidance After 5 Years - Experts Weigh InThe U.S. Internal Revenue Service (IRS) has issued long-awaited guidance on the tax treatment of cryptocurrencies. It is generally described by the crypto community as a mixed bag since some parts are useful while others have raised many more questions, particularly how cryptocurrencies from hard forks and airdrops are taxed. Also read: 10 Tax Tools […]

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Expert Witness in Satoshi Case Claims Dr Wright’s Documents Were Doctored

Kleiman's Expert Witness Claims So-Called 'Bitcoin Inventor's' Documents Were DoctoredThe Kleiman v. Wright case continues this week and a slew of new evidence has been submitted to the Southern District of Florida courthouse. A supplemental affidavit stemming from the Kleiman estate’s expert witness, Dr. Matthew Edman, indicates that documents submitted to the court as evidence were “modified” and “backdated.” Also Read: Bitcoin Cash Scaling […]

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Experts Dissect Craig Wright’s ‘Satoshi’ Testimony and Court Documents

Experts Dissect Craig Wright's So-Called 'Satoshi' Testimony and Court DocumentsLast week, Craig Wright, the man who claims he’s Satoshi Nakamoto, appeared in court and testified why he did not have access to his public bitcoin addresses and trust information. Since then a lot of new evidence has been submitted to the court and members of the crypto community have dissected Wright’s recent testimony and […]

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Bitcoin ‘Inventor’ Craig Wright Claims He Can’t Access Coins in Court Testimony

Self-Proclaimed Bitcoin 'Inventor' Claims He Can't Access Coins in Court TestimonyOn June 28, Craig Wright, the Australian native who claims to be Satoshi Nakamoto, spent the day in a Florida court battling with the Kleiman attorney. Wright became emotional when he told the court that he designed the network but didn’t like how it turned out. At one point he told the court he was […]

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Craig Wright Intends to Call Three Expert Witnesses to His Evidentiary Hearing

Craig Wright Intends to Call Three Expert Witnesses to His Evidentiary HearingThe man who claims to have invented Bitcoin, Craig Wright, will be appearing in court on Friday, June 28 in West Palm Beach, Florida for an evidentiary hearing. According to recently filed documents in the Kleiman v. Wright lawsuit, the defense has provided notice that Wright intends to call three witnesses during the hearing. In […]

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Kleiman Attorney: ‘Craig Wright Hasn’t Complied With the Order to List His Bitcoin’

Kleiman Attorney: 'Craig Wright Hasn’t Complied With the Order to List His Bitcoin'A court filing has surfaced in the ongoing Kleiman v. Wright lawsuit that gives details concerning the existence of the alleged Tulip Trust and another trust known as the Tulip Trust II. The filing of Craig Wright’s declaration dated May 8, 2019 is partially redacted but gives a description of the ostensible trusts of bitcoin […]

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Judge Orders Craig Wright to Physically Appear in Florida Lawsuit

Craig Wright, the notorious Satoshi Nakamoto claimant, must appear in court on Monday or be held in contempt. The Florida court granted a motion to compel on June 14, mandating Wright to provide a list of all the bitcoin addresses he’s owned prior to December 2013. Also Read: The Blind Trust Described in the Kleiman […]

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The Blind Trust Described in the Kleiman vs. Wright Lawsuit Is a Real Head-Scratcher

The Complexity Behind the Alleged Blind Trust Described in Kleiman v. Wright LawsuitThere’s been a number of developments in the ongoing Kleiman vs. Wright lawsuit lately. After Craig Wright’s sworn deposition, the plaintiffs contend that Wright’s categorical refusal to answer questions about his bitcoin addresses and his marriage(s) needs to be reevaluated. Wright’s legal team say he’s done everything possible to comply with the court’s orders but […]

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Researchers Find Hundreds of Ethereum Wallets at Risk Due to Weak Key Pairs

Researchers Comb the Ethereum Chain Finding an Abundance of Weak Key PairsOn April 23, the security consulting firm Independent Security Evaluators (ISE) published a document concerning a number of unsound public and private key pairs tied to the Ethereum blockchain. The probability of chance needed to crack 256-bit encryption would take years for hackers to access random private keys. However, ISE recently queried 49,060 ETH transactions […]

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Broken Phone? Don’t Sweat It — Restore a Bitcoin Wallet in Minutes

Broken Phone? Don't Sweat it — Restore a Bitcoin Wallet in MinutesWith bitcoin ownership, it’s very important to back up your mnemonic seed phrase in order to restore your funds in case of an emergency. For instance, a device holding a wallet can be broken, get lost or stolen and the backup is the only way to retrieve the funds after these mishaps. The following is […]

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Kraken Offers $100K Reward for Help Finding Quadrigacx Funds

Kraken Offers $100K Reward for Help Finding Quadrigacx FundsThe San Francisco crypto exchange Kraken has announced the company is offering a $100,000 reward in exchange for a solid lead toward finding the missing Quadrigacx coins. Kraken has explained the company wants to bring more “awareness and attention” to the case and hopefully locate some of the lost funds. Also read: P2P Exchange Hodl […]

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Samsung Launches Galaxy Series Preloaded With Cryptocurrency Wallet

Samsung Launches Galaxy Series Preloaded With Cryptocurrency WalletOn Wednesday, Feb. 20, the mobile phone manufacturing giant Samsung Electronics released its flagship smartphone, the Galaxy S10. Crypto enthusiasts will be pleased to hear that the new phone comes with the company’s proprietary Samsung Knox security system which stores blockchain-based private keys. Also Read: This ‘Faketoshi’ Signature Tool Lets Anyone Become Satoshi Nakamoto Galaxy S10 […]

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Coinbase Noncustodial Wallet Adds BTC Support and Plans to Add More Assets

Coinbase has announced support for bitcoin core (BTC) in the company’s noncustodial wallet. The wallet was originally originally dedicated to ethereum (ETH), ethereum classic (ETC), ERC721 and ERC20 tokens. The San Francisco based company plans to add more currencies to the wallet in the near future. Also Read: The Daily: F1 Team Gets Crypto Sponsor, Dubai […]

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Trace Mayer Draws Support for Proof of Keys — Celebrating Genesis Block Day

Trace Mayer Draws Support for Proof of Keys - Celebrating Genesis Block DayTrace Mayer is calling for all bitcoiners to participate in a “Proof of Keys” celebration on Genesis Block day. “Not your keys; not your bitcoin,” he emphasized, urging bitcoiners to declare monetary sovereignty by withdrawing all of their bitcoins held with trusted third parties to software for which they control the private keys. Also read: Indian […]

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The Difference Between Custodial and Noncustodial Cryptocurrency Services

The Difference Between Custodial and Noncustodial Cryptocurrency ServicesSince the Bitcoin Cash (BCH) fork occurred recently, it’s a good time to discuss the difference between custodial and noncustodial cryptocurrency services. Newcomers to the digital asset economy often get confused when they hear about a blockchain split and may wonder how they should handle the outcome. Individuals should note that the best solution depends […]

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Follow This Branch: A Guide to Splitting BCH and BSV

Follow This Branch: A Guide to Splitting BCH and BSVSince the Bitcoin Cash (BCH) hard fork on Nov. 15 resulted in a blockchain split, many pre-fork holders are interested in finding out how to split their BCH and BSV into two separate currencies. Over the last week, a few infrastructure providers have released tools and some exchanges have offered to split the two for […]

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Norway Establishes New Rules for Crypto Service Providers

Norway Establishes New Rules for Crypto Service ProvidersThe Financial Supervisory Authority of Norway is enforcing new money laundering regulations that apply to crypto exchange and storage providers in the country. The law will go into effect on Oct. 15 and will affect companies established in Norway including branches of overseas companies. Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals […]

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Wormhole Developers Address Rumors Concerning Protocol Security

Wormhole Developers Address Rumors Concerning Protocol SecurityOn August 1 news.Bitcoin.com reported on the Wormhole project and the BCH burned to create Wormhole Cash (WHC) tokens. Since then there’s been a lot happening in the BCH environment, and Wormhole developers have felt the need to address the public with a statement concerning rumors spreading regarding the security of the protocol. The Wormhole […]

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Testing the Newly Transformed Non-Custodial Coinbase Wallet

A while back, the San Francisco-based exchange Coinbase announced the launch of an ethereum-based wallet called Toshi. The application was a private and secure messaging platform tethered to a non-custodial ETH wallet. Now Coinbase has decided to revamp the application and Toshi will become the ‘Coinbase Wallet’ which will not only offer ETH and it’s […]

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Need Cold Storage? Check Out Bitcoin.com’s Revamped Paper Wallet Generator

Need Cold Storage? Check Out Bitcoin.com's Revamped Paper Wallet GeneratorThere are many ways to store bitcoin cash, and while some people use mobile apps, others use hardware wallets to store their digital assets. Then there are those who use one of the oldest methods in the book — the paper wallet. The tried and true paper wallet technique is a convenient way to store […]

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Crypto Wallets Security: Explained

How to use your crypto wallet safely and spot possible threats to protect your coins against hackers.

My wallet has been hacked. Help!

Since it’s already happened there is not much you can do.

Imagine that you’re entering your wallet and seeing no coins and several transactions to unfamiliar addresses. That likely means you’ve been hacked.

Due to the anonymous nature of cryptocurrency ‘ownership’ is determined by whoever holds the codes for it. So if it’s gone – in majority cases – it’s gone. You may track the address of the last wallet but it will give you nothing. Notify the company – it’s possible you are not the only one – and review your wallet and PC/smartphone security, if it has significant flaws.

Although if you kept your coins at a crypto exchange wallet and that exchange was hacked, there is a possibility that some kind of compensation will follow. The best thing you can do to protect your wallet is to make sure you’re aware of possible threats and you use your wallet correctly.

How could this ever happen? How can hackers steal cryptos?

Hackers use simple human weaknesses

The most popular type of fraud is phishing. Hackers may sent you a fake email from behalf of your wallet service, containing a fake URL, which may differ by one or several letters from the real URL of your wallet service. Or hackers even may redirect the right URL to fake URL when you’re entering the online wallet. The latest huge phishing scam occured on April 24 2018 to My Ether Wallet users, who lost in total $150,000 worth of Ethereum in a DNS hack.

Besides of phishing, hackers use simple human mistakes, such as keeping private keys in mail, exposing the keys at public, using public unprotected networks that allows hackers to sniff all the information and find the password. Big amounts of tokens and large transactions may attract hackers to hack exactly your wallet.

Where should I keep the keys, then?

The shortest answer here is that offline is better than online.

A popular mistake is to keep crypto wallet keys in email, Google Drive or Dropbox, or any notes app in your smartphone. These are the first places hackers usually try to get in. In order to save your coins, you can relocate keys to any less obvious storage. You may record it to an USB stick, or just write it down and keep it in your drawer – you obviously shouldn’t expose it to anyone else.

What if I lose my keys?

It depends on the type of wallet you use.

For most popular software wallets, it’s ok to know only your backup phrase, a mnemonic phrase, consisting of 12 words. In case you forget your pin, you should just delete the app, install it again using the backup phrase, and create a new pin.

There are wallets that provide access via Touch/Face ID instead of pin-codes. For example, in the Lumi app, you should just switch on Touch/Face ID in the app settings. The good thing about apps like Lumi is that the only thing you need to know is a backup phrase. The bad thing is that once you’ve lost the backup phrase, you’ve lost an access to your wallet. In this case, technology is helpless. The last hope for such luckless crypto owners is hypnosis.

I noticed that my wallet sets a new address every time I sign in – is it ok?

Yes, it’s for your wallet safety.

This method is called HD-safe, or “hierarchical deterministic”, and means that every time you send or receive funds, a new address will be generated for your wallet. That’s a useful option, because it makes your transactions harder to track, and impossible for hackers to calculate the actual amount of money you keep at your wallet. If you need to transfer a big amount of coins you better split it to several transactions.

Is there an ideal wallet type with the best security level?

No. All wallets differ by online and offline types, and the security mechanisms differ respectively.

The majority of existing online cloud wallets, or so called ‘hot’ wallets, use two-factor authentication, in case hackers try to enter your email. ‘Warm’ wallets, the ones that you install as a software to your computer, or as an app to you smartphone, use 12-word backup phrase and pin-codes. ‘Cold’ wallets are hardware ones, that are located at a USB stick or a special gadget — it seems like the most secure way so far, but, according to a recent report, even hardware wallets are not foolproof. Regular updates and careful key management are still vitally important. Whatever kind of wallet you use, you should make sure that your laptop or smartphone doesn’t contain malware.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Bitcoin.com Celebrates 2.5 Million Wallets Created in Less Than a Year

This week Bitcoin.com reached a milestone of a whopping 2.5 million Bitcoin.com Wallets created in less than a year. Since we started our web portal we’ve focused on providing people with world-class resources that fit every bitcoiner’s needs and our simple-to-use wallet is no different. Also read: Bitcoin.com and Purse.io Bolster Spending Giving New Shoppers $10 […]

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A Look at the Long and Annoying Process of Claiming Bitcoin Forks

Over the past year, there has been a lot of forked coins based on the Bitcoin Core (BTC) codebase in various forms and with all types of interesting names. There are anywhere between 40-70 forked coins in the ecosystem that are worth a few bucks, while some of them are worthless and not worth the […]

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