Susanna asks, "How safe are mobile wallets, since [they] are constantly [connected to] the internet nowadays?"
"Are mobile phones considered a safe option if one does not own a cold storage wallet?"
Susanna, in my opinion, smartphones are generally more secure than the average desktop [computer].
This is a very broad statement. The average, properly installed and updated smartphone operating system
is more secure than the average modern desktop.
The reason for that has a lot to do with the integration between hardware and software,
the special hardware for security that exists on smartphones, the way updates are delivered,
and differences in the use model.
On the average smartphone, users do not have root access to the operating system.
Yet on most desktops nowadays, users have root access to the operating system;
when they access the internet through a browser and these very big, complex desktop applications...
installed willy-nilly from [many sources], malware can easily get in, have administrator access to the OS,
and backdoor the operating system very effectively.
Are mobile phones secure? The average mobile smartphone is more secure than the average desktop,
especially recent versions of Android and iOS, properly updated versions of those operating systems.
Is [a smartphone wallet] better than a cold storage wallet? No.
Hardware wallets are more secure. They are special- purpose devices with a much smaller attack surface,
designed to do one thing and only one thing -- that is, to securely hold [private keys].
They're not connected to the internet.
They have a very narrow interface through which [a desktop operating system] can talk to it over the USB.
That makes them a lot more robust [than a smartphone or desktop] from a security perspective.
But if you don't have a cold storage wallet, then a smartphone is certainly better than a desktop wallet,
and much better than a custodial exchange, where you have counterparty risk.
Susanna follows up: 'What are the proper steps to take when [installing and creating] a mobile wallet?"
First of all, make sure that your smartphone is properly updated;
follow the manufacturer's software updates as they come out.
Secondly, make sure you install the real wallet software; do not download packages from [just anywhere].
Make sure that you download the correct application from the authorised app store.
There [have been] quite a few attempts to effectively impersonate or forge popular mobile wallets.
Generally speaking, you can see from the number of downloads / users and reviews which one is correct.
When you first set it up, [create a PIN or passphrase for the wallet] and on your smartphone itself.
Make sure that both PINs [or passphrases] are strong and not the same.
Use the encryption capabilities of your smartphone so that its storage system is fully encrypted at all times.
Set it up to lock, remain locked, and require a PIN or passphrase to unlock it.
Do not bypass the passphrase locking mechanism with convenience [features] such as face or fingerprint IDs,
because you can be coerced into unlocking your phone that way.
Use the secondary PIN function to lock the wallet itself.
If your mobile wallet has the capability, make sure the PIN also protects against opening the wallet...
to see the balance, not just sending cryptocurrency.
"In case I have installed a wallet app on my Mac, which has been infected without me noticing,
will a hacker be able to retrieve my private key...
[from] the wallet, [which was] previously generated by the 'getnewaddress' command?
Eduardo, yes. The moment you type in your passphrase and unlock that wallet, that bitcoin [may be] gone.
Just as easily as that. If your passphrase isn't very strong, they can brute-force the passphrase.
The moment you type in the passphrase, for sure that wallet can be compromised.
It's very easy for an attacker who has infected [and gained access] to your operating system...
to do all kinds of things that essentially put them between your keyboard and your operating system,
or your keyboard and your bitcoin wallet application.
They can capture the passphrase as you're typing it. If they have a copy of the wallet,
they can then unlock it on another computer, do a transaction, and send [your bitcoin] away.
Or they can even backdoor the wallet itself, then create a transaction to send all the money away.
This happens quite often. It's very difficult to secure a general purpose operating system such as macOS.
Simon asks, "I have a laptop with factory reset and I intend to never go online with it."
"In case I want to sign transactions with it, I need to install software such as MyEtherWallet."
"If I copy the MyEtherWallet client on to a USB stick and put it on my offline laptop,
will it be compromising my security? The USB drive could contain some sort of malware."
Yes, it [can]. USB drives can transmit malware and a factory-reset laptop isn't necessarily free of malware.
There is malware that can infect firmware, BIOS, and other low-level [areas] that cannot be removed...
through a factory reset.
There are vulnerabilities inside the hardware, as we've discovered with Intel and AMD processors.
[Keeping] a general purpose computer offline is not easy. Connecting it to a USB [can] compromise your security.
[Though] is this better than running MyEtherWallet [or another desktop wallet] on your Windows10 machine,
that you use to browse through all kinds of questionable websites?
Yes, it is better. But it's not foolproof, and it is also pretty difficult for the average person to do.
Buy a hardware wallet so that you can actually achieve [sufficient] security in a way that is better than...
anything else you can do on your own.
Second question from Simon: "How would I get signed transactions from my offline, air-gapped laptop...
to an online client for propagation? Would I have to type it in manually?"
See? This is another one of those problems.
One way you can do it, [which] we've seen with air-gapped systems, is to display a QR code...
on the screen that contains the transaction, scan that from a smartphone or camera from another computer,
to transfer the transaction to the online system from the air-gapped machine [without directly connecting them].
This is the kind of operation which becomes very technically complex. Most people can't do it securely.
"Hardware wallets versus the Glacier Protocol."
"Do you think the Glacier Protocol is a good alternative to a hardware wallet?"
Silver says, "The Glacier Protocol is a step-by-step protocol for storing bitcoin in a highly secure manner,
but it is not being widely tested by the global community."
"Would you recommend similar processes, in addition to storing your keys on a hardware wallet?"
I don't recommend that. The reason I don't is because, while the Glacier Protocol is an interesting approach..
and a detailed, step-by-step instruction on how to build an air-gapped, offline, quarantined machine...
that hasn't touched the internet and [should] never touch the internet...
This is the kind of technical document which requires a lot of expertise in command line, operating systems...
[to understand], and it's very easy to do it wrong.
If you do it wrong, then you've exposed yourself...
to a variety of risks, which can then lead to your funds being compromised.
I think for the vast majority of users,
all but maybe a few thousand out of the twenty- five million people who own cryptocurrencies...
Maybe two or three thousand people can implement the Glacier Protocol effectively and securely...
without messing it up and actually [understand] what they are doing.
For the vast majority of people, it is way too complex.
A hardware wallet may not be as secure as a perfectly executed implementation of the Glacier Protocol,
but maybe it is 95% as secure and yet far easier to do effectively.
In security, it really matters how usable a security mechanism is.
From an operational perspective, whether you can execute the required [steps] correctly, [matters].
There's a few other considerations as well.
One of the critical considerations is, how do you ensure that your heirs or dependents can access your funds...
if something happens to you?
The more complex, custom, and esoteric the technique you use, the harder it [will] be for anyone to figure out...
what you did [in order to] help your heirs access your funds.
Generally speaking, I think the Glacier Protocol is interesting and I can implement it.
I build and have built air-gapped computers as a security professional for years, back in the 1990s.
It is hard to build an air-gapped computer correctly.
Nowadays, we know a lot of the hardware in your average laptop has a ton of vulnerabilities.
We also know of all kinds of exfiltration techniques that can be used, including ultrasounds and things like that.
To build a properly air-gapped computer, you have to modify the hardware quite heavily...
and strip out a lot of devices, including: microphones, speakers, infrared receivers, Bluetooth connections,
wireless connections, and glue USB ports shut.
If you can do that, maybe you can build an air-gapped computer.
For the vast majority of people, that is what a hardware wallet is: [an air-gapped computer].
Despite what you might hear about vulnerabilities being discovered, it's [usually] quite difficult to exploit [them]...
without physical access to the hardware.
It is still far easier, and less expensive, for the vast majority of people to implement a hardware wallet.
I recommend a hardware wallet.
If you want to try and play with something like Glacier Protocol, be my guest. It's a great learning opportunity.
You're going to learn a lot about hardware security, UNIX command line, and building operating systems.
Great learning opportunity; for the vast majority of users, it is not relevant [for secure storage of bitcoin].