 Hi gang Bruce Wagner again from the Bitcoin show on only one TV calm I want to talk with you now about Security if you go to Bitcoin me calm and click on the security tab This is where I have a lot of information about security for you The thing about Bitcoin is it's very unique in the world of digital currencies or digital money in this age Because it is very cash like it's actually more like gold or silver than any kind of currency that we're familiar with Because of that, it's anonymous. It's untraceable Virtually untraceable and the transactions are irreversible. It's a prime target for theft This is something that many of us in the Bitcoin community in the early pioneering age of the Bitcoin community have learned the hard way This is not like credit cards or pay pals or any kind of banking transactions that can be Reversed or even traced back to find out who the criminal was. This is really cash like It's very very much like the old Wild West where you have stagecoach heists of bars of gold or Railroad train robberies of silver and gold or Wildcat banks that set up a shop and put a shingle out and say bank and Collect everybody's money on deposit and then one morning just disappear in the night So because of all that this has become a primary concern of mine is to educate people about the security of Bitcoin All right first when you have Bitcoin actually any money You I want to break it up into your mind into two different types of money two different quantities Okay, there's the money that you're going to spend within the next month or two or three And then there's money that you're going to just store and save and invest as an investment or a savings Okay, so here's what I want you to do when you're thinking of some money that you're planning to spend that you're going to need to spend in the next One to three months. We're going to call that like checking account money Transactional money. All right money that you're going to invest like for example You're buying Bitcoin as an investment and you're just going to store these bars of gold in a vault so that is Typically something that you're going to leave there a year or six month at least or longer period of time So I'm going to refer to that as an investment amount So you've got your transactional amount of money and your investment amount of money And there's nothing wrong with having both you're going to have some if you're using Bitcoin fully You're going to have some money in your transactional account. That's what you're going to go shopping online for You're going to go to brick-and-mortar retailers Restaurants and so on and that's your pocket money. You're spending money that you're going to pay Bills with or shop or whatever you're going to do and then the other is Investment money. All right. It's very important to keep those separate and clear in your mind All right, so there's two different types of security for the two different amounts of money This is this is where the amounts come in to the security So first I'm going to talk about investment money. That's big money money. You don't want to lose its money You're invested in for the long haul and you definitely don't want anything to happen to it Now I'm going to show you the state of the art and electronic digital currency security for large amounts of Bitcoin money, all right and believe it or not, it's paper We've used paper money all along and I know it's really weird and ironic that we have Gone to a digital electronic currency and now we're coming full circle back to a paper form of it to protect it And here's why what we've discovered is that bitcoins are stored in computer files as you know computer files are Surprisingly easy to copy to steal and to delete or erase even accidentally even by experts We've learned the hard way all of these things However, if you take digital information and print it on paper with literally with ink on paper and barcodes to back it up and so on and make two copies and put them in two secure locations It's impossible for any kind of a computer virus or file erasure or anything Electronic to affect that paper people know how to physically store a piece of paper that has value to protect it It's for this reason that I recommend if you have a large amount of Bitcoin That you or any amount of Bitcoin that you don't plan to spend and that you only bought as an investment Even if it's a small amount if you're planning to leave it into in Bitcoin for six months or a year or more This is how I recommend you store it Also and a reason for this is not only to keep it offline out of the digital form So that it can't be stolen by a virus a hacker someone just stealing your computer or Accidentally erasing it and so on but also there are obviously online websites. We call e-wallets or Currency exchange sites and I mean Bitcoin exchange sites and so on that you can use as an online bank However, ultimately you do have to trust that person who's running that website with your money and why if you don't need to It's not necessary So I'm now going to show you how in just moments to protect that Bitcoin investment that you have first open a new tab on your browser and go to this web page It's called bit address org and notice when I go here See it's generating Bitcoin address move mouse around for extra randomness. I don't know if you notice that it happens Really quickly what it's doing is this website is actually running as it says here a JavaScript Program client side, which means it's downloading the program into your browser and For those who are not technical. This is maybe confusing, but the bottom line is it's it's downloading a program into your browser And this program is running inside of your browser to come up with Bitcoin addresses for you to use So it's coming up with it with a from based on a random number That's generated by your mouse movement literally moving the mouse around when the page loads, okay? So it's a complicated story, but the bottom line is this number that's created is not present anywhere Except in the memory of this browser that you're running right at this moment and the reason that's important is it's not stored on any computer It's not bit address org doesn't even have a copy of it Nobody has a copy of it except you on your screen and I'll show you what we're going to do with that on This bit address org when you load it move your mouse around a bit when it loads click the second tab here paper wallet Okay, when you click paper wallet it defaults to printing seven addresses on a page and you scroll down and you see what it looks like There's just seven rows of a Bitcoin address and a private key Okay, all right next up is click over here where it says print now make sure your printer is a laser printer Or an inkjet, but it should have very very good new ink cartridge Test the printing and make sure that the printer is printing in perfect tip-top shape before you do this. It's very important Then click this print button right here Now your printer normal printing is going to come up change copies to two We want to definitely print two copies all pages, right and just hit print Okay, so now by this point you should have two pieces of paper That look just like this. They have seven rows, okay And make sure that the numbers on both pieces of paper are identical Check the first few letters, you know one prt One hkj etc hold the paper rows up side by side and make sure that they in fact are an exact identical duplicate of each Okay, i'm now going to explain What these are and what they're for when you close your browser This information is going to be deleted completely from your computer and not stored anywhere on your computer These numbers are stored only on the two pieces of paper in your hand. All right. Now. Here's the point each one of these is a separate Bitcoin address and we'll refer to it sort of if you think of it like A box like a like a safety deposit box for example, all right, so each one of these is a separate box It's an address where you can store bitcoins. All right now on the left These these numbers on the left where it says bitcoin address This is the actual bitcoin address, which is the public Well, let's say non secret address And this square barcode the qr code on the left Contains this number. So this number is contained within this code All right for each of these so this number is contained within this code and so on Now each of these bitcoin addresses has a corresponding private key. We call it. That's this longer number All right, and the matching qr code now this qr code Contains this private key. All right. So each one of these is a separate entity Now the bitcoin address is a number that is used only for making deposits And the private key is the number used the only number you can use to make withdrawals The bitcoin address can also be used to check transactions So the bitcoin address again is the number that you use to send deposits to this bitcoin address And you can also check all the transactions with this number You can see all the deposits and withdrawals and balance and you can send payments to this address Okay, the only way to withdraw it or spend it as we call it is to have this private key So this number here on the bottom where it says private key and this qr code is absolutely top secret Now because it's not an electronic form anymore It's on paper You have to guard this paper as if it was a stack of cash Because all the bitcoin that you attach to this bitcoin address Will be stealable if anyone gets a hold of this private key or this qr code And don't forget that they can get a hold of it with a camera a scanner a photocopy anything So this is not this is exposed on this piece of paper. All right So here's what I recommend Take these pieces of paper and um, you'll fold them like fold right on that line Two down and fold right on this line two up from the bottom And when you fold this piece of these pieces of paper each of them should fit into a normal business Number 10 envelope. All right And what you'll want to do is store one of them mark the envelope clearly what it is And uh, then you'll want to store one envelope in for example Uh, a safety deposit box at your bank and the other envelope for example in a vault or safe at home Or somewhere where you would normally keep a large amount of cash So the basic idea is That you want to take whatever wealth whatever total amount of bitcoins you want to store in this way Whatever that number is divide it by seven. Okay, so let's just say hypothetically you have 7 000 bitcoins Okay, so if that were the case just to make the numbers round Divide by seven and you'll put 1 000 bitcoins on the first address 1 000 on the second 1 000 on the third 1 000 on the fourth and so on right now the reason I suggest seven addresses And putting an equal amount on each one is that let's say in the future You need some of this money or you want to withdraw to spend it or something You have 7 000 bitcoin and you need to spend 2 000 bitcoins You can just redeem the first one and the second one without ever touching the remaining five So you don't have to redeem them all. Okay, so just makes it sort of denominations so that you don't have to Redeem the entire thing to use or spend part of it. Okay, so I hope I'm clearly explaining this and you're getting the gist of it Now before you actually fold these up put them in the envelopes and lock them away in the safe You're going to need to get a copy of these public addresses these non-secret bitcoin addresses Into a convenient form like email them to yourself They're not secret if anybody gets this address The only thing they can do is send you money or check your balance or check your transactions They're not that secret the private key is the one you really have to guard and make sure no one sees ever So what we want to do is grab a copy of each of these bitcoin addresses and send it to ourselves Before we lock up these pieces of paper But we do not keep a record of these private keys in any place in any way shape or form except on this paper itself All right, so if you still have your browser window open and you have the The file open on the screen then you can actually highlight the number And email it to yourself copy it and email it to yourself Or an easier way is if you happen to have the mount gox mobile app on your android phone You can scan this qr code right into it And actually you don't even need the mount gox mobile app All you need is any qr code barcode reader on an iphone or an android phone And you want to scan the bitcoin address only not the private key Now just to be safe to make sure you're scanning the correct one that you think you are Take an envelope or a white piece of paper and block the bottom And use another piece of paper to block the top And another piece of paper and block the right hand side So you know for sure this is the bitcoin address that you're scanning Before you begin scanning, I would write on the piece of paper One, two, three, four, five, six, seven Number each of them then as you scan each one of these Hit the share button and email yourself this number and verify that what you're sending is the actual number One prtd and so on you can see it and verify that that's the number you're sending yourself And then when you email it to yourself just put in the subject line one Okay, and then scan this one Covering all the other barcodes with white paper so that you know for sure you're scanning this one And then double check be very very anal about it one hkjp and make sure that's the number you're sending yourself And then send an email with subject two Okay, and in the end you should have emailed yourself seven emails with seven barcodes And each one should be numbered one through seven and they should correspond with these numbers Okay, very important to double check and triple check your work Okay, now once you're sure you've received those seven emails and they are matching those corresponding Bitcoin addresses on the left you can fold up these pieces of paper again two down And two up from the bottom on those lines. You don't want to crease the qr code Put them inside two separate envelopes. They're both identical But you'll put them in two very very secure spots For example your safety deposit box at your bank and your vault at home or wherever you would hide a large amount of cash Okay, then you don't need to touch them again You are not going to need these pieces of paper again You will not need to access them again Until if and when you are ready to spend or sell or retrieve these bitcoins You'll be able to make deposits to this these addresses And you'll be able to check the balances and the transactions all without ever accessing the piece of paper because you have These bitcoin addresses have a record of them in your email Of course, if you still have the page open on your browser An easier way might be to actually just highlight the address very carefully and Copy it only the bitcoin address not the private key and then email it to yourself Okay, as another way to get these addresses into your email And the only reason I say to email it to yourself is that it's a it's a good convenient way that you know For sure it's in your email and you would be able to find it if you need to without having to retrieve the papers Okay, so the next thing I want you to do is actually Copy the first bitcoin address to your clipboard again And then in a new tab, we're going to go to that address block chain dot info slash address Slash and then paste in that first bitcoin address. Okay, so Again, it's block chain dot info slash address Slash and then paste in your bitcoin address and it'll look like that So you can see this this first bitcoin address starts one pr and ends 58 b So now on that page that I put in you can see this address one pr and it ends in 58 b It shows right here under the address line Now I want you to bookmark this page And you can save it as just call it number one if you want so that you'll remember what this is The point of this page is this is going to show you your bitcoin balance on this address And it's going to show you every transaction when you deposit bitcoins to it Or if you retrieve some off with a private key all of the ledger will show up here Okay, of course nothing's here because it's a brand new address And the total balance number of bitcoin stored on it will show up right here So if you bookmark this and call it number one Then you go back Catch the second one on your clipboard Okay, and Do the same thing go block chain dot info slash address But replace that address with the second one Now you have the second one here Then bookmark this one and call it two Etc etc etc down the list Okay, you should end up with seven bookmarks one two three four five six and seven And you can actually just click each of those bookmarks and see the balance you can check your balance Of those seven addresses anytime you want without accessing your paper So these paper copies with their secret private keys remain extremely secure You never need to access them until you're actually going to withdraw all that money And your bookmarks show you the balance and ledger anytime you want that you can access And with that address that you've emailed yourself and you also have it here You can actually send bitcoins to this address And since this is actually Uh paper line two if you send bitcoins to this address You'll actually be adding bitcoins to this address right here Without ever accessing the piece of paper and the transactions will show up here and the balance will be reflected here Also, by the way, the reason we printed two identical copies Is because in case you were a victim of a robbery Let's say you kept one copy somewhere in your home and your home was robbed And that copy was stolen and you knew about it You found out right away you could run to the other copy wherever you keep the other copy And retrieve these private keys and then withdraw these bitcoins into a safe place Very quickly hopefully before the robber could figure out what they are and how to retrieve them So the point is that just that there's a chance that with your backup copy in another location having two You could retrieve them and move those bitcoins to somewhere else Before the criminal would be able to figure out what they are what to do with them and how to retrieve them Of course another scenario where the backup copy is very important is if there were a fire and everything was destroyed Or a flood or anything like that where one copy was destroyed. You would always have the other copy But makes no mistake about it once your bitcoins are sent to these addresses They do not exist Anywhere at least access to those bitcoins does not exist anywhere ever Online anywhere except in these private keys So basically that piece of paper is like bars of gold Or gold coins if you drop them off the edge of a cruise ship to the bottom of the sea never to be seen again That's what will happen if you lose or destroy Uh these pieces of paper you know you've destroyed all access to that money So that concludes how I recommend saving offline in kind of uh cold storage bitcoins that you're going to have purchasing For investment purposes now the second amount we talked about is what I call transactional Amounts of bitcoin. This is money that you would spend pocket money spending money checking account money Money that you would use for transactions for shopping You know for commerce so you want to uh, you know regular utilities or bills or rent or whatever And or shopping online shopping in stores restaurants anything like that for that type of security I recommend mount gox having a mount gox account. You go to m t gox.com create a free account And you're all set you can uh upload bitcoins to it obviously under funding You can add funds bitcoin and send bitcoins to this address And your bitcoins will show up here in the balance up here. You can also sell bitcoins for dollars and vice versa Mount gox is very very versatile. Now when you have a mount gox account You click this fort gox. This is what I recommend for security For a mount gox account because even though it is transactional money It could be one two three months worth of spending money. It could still be very significant So if you click on this button, they call it fort gox fortify It tells you about this item called a yubi key And it's very economical. I think it's $29 or something like that. You can buy this yubi key It's uh, it's shown here enormous, but it's actually really really tiny little FAB that is on your key ring It's almost like one of those little plastic ones that the drug stores and grocery stores give you It's that small, but it actually is a usb Dongle so what happens is when you log on to your mount gox account You'll put in your user ID your password Then you'll be asked to insert this yubi key and touch the button on it And it'll put a new password in that is only good for two seconds So it's an extra layer of security that even a keyboard capture virus that steals your passwords cannot Get in to your account because this password is only good for two seconds So they can steal your password, but they still won't get in So I highly recommend that you order a yubi key You can get one with the mount gox logo or one without if you have two mount gox accounts You're going to have one with and one without Or just get one without the mount gox account. They won't know what it's for But I highly recommend that you get one of these and secure your mount gox account with a yubi key So in conclusion for bitcoin money, you're buying as an investment No matter how much it is or any money that you're going to hold in bitcoin for six months or a year or more I recommend using bit address.org print out two copies of paper bitcoins Divide the total by seven and put one seventh on each one of these and then lock them up in two safe secure spots For any sort of transactional amount of bitcoin that you're planning to spend in the coming weeks or months One two three months even up to six months You can keep the bitcoin safely in mount gox if you secure it with this device called a yubi key So that's it. That's the state of the art in bitcoin security to protect your money Thanks for joining me and don't forget to subscribe On only one tv.com to the bitcoin show and i'll see you there