How to create and use a cold wallet on Hive

in LeoFinance2 months ago (edited)


If you have any significant amount of money, you should do whatever you can to protect it. In a decentralized economy, you are your own bank and no one else is going to protect it for you.

In crypto, there is a concept of a hot and cold wallet.

Think of a hot wallet as the wallet you carry in your pocket day to day, you have enough to buy coffee, lunch, maybe buy a few things. Most of your money though is in a bank and not available to you without some sort of checkout process. A cold wallet is more like your savings account, really easy to deposit funds into but a little more difficult to take out.

If one day you get mugged, all they can steal what is in your (hot) wallet. Your savings are generally safe and secure. You can accomplish the same thing on Hive by using a second account that acts as your cold wallet. It is really that simple, but there is a little more to how you use it.

On Hive there are lots of opportunities to send money, you can send tips, gamble it with one of the few Hive casinos, buy Splinterlands cards, or participate in @hivetorch.

Hive has a built in savings feature that allows you to lock up your funds with a 3 day delay to remove them. This feature serves gives you a little bit of protection against yourself spending it and a potential hacker stealing it before you can recover your account. It functions pretty good for this purpose, but it is a rarely used feature on the Hive.

Using a second account you can send funds to when your main account gets over your acceptable risk threshold. In fact, anyone can send you money and if you are expecting a large amount of Hive from someone for doing work on a project or any other reason, you can have them send directly to your (cold wallet) second account.

The main advantage of this is you can continue to use your main high profile account to participate in apps like Splinterlands and games without great risk to your account. If you properly set up your recovery account to someone you trust, you should be able to recover your account before any major damage is done. If some how your account is compromised, your funds are safe.

By using Hive in this manor, you will not frequently need to log in to your cold wallet account further reducing the risk that the keys will be compromised. You can even create barriers to having access to this account by storing keys off site, or making them more difficult to get to.

As always, you should always take great precaution when working with your active, master, and owner keys. Only using those keys when it is absolutely necessary. Recent modifications to Hive Wallet has minimized using these keys as you can no longer login to using them. There are services like Hive Signer that will ask for them to add posting authority and other features to your account.

You should get in the habit of always second guessing yourself when pulling out your owner, master, and active keys. Check your browser and make sure you are where you expect to be, you have a valid signed certificate, and you really need this level of access at the time.

Be safe out there.

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Posted Using LeoFinance Beta


Thanks a lot for the tip here. I've never considered having a second account to store my funds in as I figured just having everything powered up with 13 week powerdown period, setting account recovery to a second trusted account (shared with friends) and not connecting to many dapps is safe enough but you got me thinking Mark.

I only use private and active key (and memo) via keychain so is that considered "safe enough" as I have owner and master offline?

Nice post. Lately this theme really got into me. Right now I am having some issues with paypal, like two days ago i got stolen around hundred dolars from my accound, in payments to uber, for no reason, never used it, nothing, someone, somehow used I guess my info etc, but how I dont know. Right now trying to get the money back. It is so simple to steal money im amazed

Multiple account key permissions is what I would expect to greatly enhance this when the SMTs arrive.

Having a rule (with an activation process) for a certain amount of keys to be required for the "unlocking" factor of something like the savings account of a certain account would be a feature much more interesting. Could even (on deeper complexity) include the ability to lock just a certain amount. Similar to the code already implemented on the conversion of HBD to HIVE and the savings account unlocking system (a mix of both situations in some sense), along with a time to broadcast a 2nd or even 3rd key to start the unlocking process... would perfectly protect an account.

Then, because accounts can still be stolen, and you don't wanna for your funds to be stolen on that situation, while the new owner forges new keys... an automatic process would move the "savings" amount to the account that DID NOT yet change owner keys, simulating the reset of the MFA account system back to the normal basic system, giving the opportunity for the real owner to plan for some more protection.

Simpler then EOS, and could reuse most of the current HIVE code with some extra tweaks...

Hive does support multi key just no tooling exists to make it easy to use and it isn't granular.

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@iliyan90 check it ;)

I tried to do this but found I started using a few alts for different jobs. Recently got more strict about the cold-storage account and that one there's a lot more effort needed for me to access the keys.
It's a good idea.

Posted Using LeoFinance Beta

I think I understand why people create alt accounts here on Hive.

Posted Using LeoFinance Beta

Ah that's smart.

you can have them send directly to your (hot wallet) second account.

That's cold wallet right?

Fixed. Thanks.

Thanks for the advice my friend, it is of great value to safeguard our income more effectively.

See you later, success !