Wired has an excellent piece up on a Raspberry Pi based device that makes bitcoin wallets out of paper in order to prevent them from being hacked online.
The PiperWallet is a small black box that does little more than generate numbers and spit out paper. But if you invest in bitcoin — the popular digital currency — it could be a lifesaver.
When you own bitcoins, they’re stored at a particular address on the internet, and if you want to spend them or move them, you’ll need a cryptographic private key associated with that address. Many people store their keys in “wallets” that sit on their personal computer or on a website somewhere. Some companies, such as Coinbase or Blockchain, now offer free online wallets that are pretty convenient. But those who hold a large number of bitcoins don’t like to use conventional wallet services. They’re worried these services will be hacked.
In fact, it’s good to be a little paranoid when it comes to storing bitcoins. There’s a lot of malicious software out there that sniffs around on computers for ways to steal the digital currency. That’s why PiperWallet takes a different tack. Based on the popular Raspberry Pi hardware kit, this $200 device makes bitcoin wallets out of paper. That way, no one can hack them.
In the online world, stealing bitcoins is pretty darned simple. Just ask Bloomberg TV’s Adam Johnson. A few months back he quickly had $20 worth of bitcoin stolen when he briefly flashed a private key on television. It’s one of the big security problems with bitcoin — the internet’s version of cash. If someone steals your coins, they’re gone forever.
So, when they own serious amounts of bitcoin, investors go to some pretty extreme lengths to protect their private keys. Charlie Shrem, the now-indicted CEO of the Bitinstant bitcoin exchange, saves his on a ring that he wears on his finger. Others generate their private keys on brand new computers that they never connect to the internet. PiperWallet wants to help anyone store their keys in a similarly secure way — but with dead trees as the medium.
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