Storing private key in apps and softwares that are local

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Im new to butcoin. I installed an app in my phone called Bread. And another in my computer called Electrum.

Both of them generated a seed(12 words) for me and it seems that seeed is my private key in the bitcoin network.

My question is: these softwares has my private key and i dont know if they stored it in remote servers. This means someone other has my private key and can access my money? This is a safe way in bitcoin culture? They are really local?

I want to use safest way to work with bitcoin and i dont want store my info in any website or app that can access my account, delete my account or any other intervention.

For safest way should i have my own copy of public ledger in a personal server? What is the safest way?

Fcoder

Posted 2017-11-30T08:13:02.420

Reputation: 115

Answers

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BreadWallet & Seed: the seed is not your private key, it is used to generate the private key, and it is stored locally on your phone. However, the level of trust in me (or anyone else) is not sufficient, when saying this. You might want to do a source code review by yourself to be 100% sure. In general I use Bread as well, for daily usage, not for big amounts. It is a fairly well working wallet, and the value in it is comparable to the wallet with FIAT money. There are privacy issues with such wallets like BREAD (they are called SPV wallet), and the risk with these SPV wallets is, you trust someone else that they verify the bitcoin blockchain correctly. E.g. there was the risk to fall victim of the segwit2x fork, and then you would think you are on the original bitcoin, but in fact the provider (and all SPV wallets) would be on a new blockchain, which has changed parameters. So with SPV wallets, only use small amounts of money.

Electrum: this is similiar, the seed is used to generate the privkeys. Electrum is also an SPV type of wallet, and you trust the provider's blockchain. I am not sure about the possibility of code review though.

Wanting to be 100% secure and safe, you need to run a full node (aka bitcoin core client or similiar), and get used to the idea of cold storage. There is lots of links to cold storage here in the forum.

pebwindkraft

Posted 2017-11-30T08:13:02.420

Reputation: 4 568

Thanks for your complete and perfect answer. I have another question. If i install bitcoin core on a safe server, there is a way to communicate with my server from my phone? Something like a mobile client that just send and receive messages to my own server. Apps like bread or electrum can connect my own server and its safe? I want everything in my own control in any scenario. I can protect my own server but its not possible to carry a laptop everywhere. – Fcoder – 2017-11-30T13:35:57.517

1we are going beyond the crypto ccy here, but it somehow relates. And your questions are perfect. What do you want to communicate with your server from mobile? At the end, security is always a trade off. Use case specific. And a windows free zone :-) I have it setup in a way, where "my" server is behind a firewall (OpenBSD, what else!), and the firewall rules are modified in a way, that let me go through from extern with SSH only. On my iPhone or iPad I have installed "reflection". This allows me enough to to "my" things. One could even think of tunneling X... As I said, just my setup. – pebwindkraft – 2017-11-30T13:48:42.337

Thank you. I think i have setup a bitcoin core with accessing via ssh from pc or mobile. And a mobile client like bread for small and daily transactions. Whe i need bitcoin, send it from main account to another in my phone and use it. – Fcoder – 2017-11-30T13:55:35.160

And one last question. In Apps like bread, how can i backup my wallet? I dont see anything related to this. Bread says to me that we can recover tour account if your phone stolen with your seed. But how? Where my bitcon stored? Its in bread’s servers? Im confused. I did not any bitcoin transaction ever and im new to bitcoin. Everytime i get money, i get a code? And i have to protect it? Or my money stored in blockchain and i need only my private key to access it? Whe people says “backup”, what that means? Backing up what? – Fcoder – 2017-11-30T14:17:55.107

Your bitcoins are on the blockchain as Unspent Transaction Outputs (UTXO). You need to use your private key un order to create a transaction and spend your bitcoins. When people say "backup", they mean backup those private keys. As mentioned earlier, your seed is used to genarate your private keys. – ecavero – 2017-11-30T18:33:34.270

Asked: 2017-11-30T08:13:02.420

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Active: 2017-11-30T13:28:11.550