Published on: 2018-02-08T20:22:38+00:00
Two different approaches to improving Bitcoin wallet security have been proposed recently. The first proposal involves running a Bitcoin Core instance either with internal support for the proposed interface or via an external script (Python bridge). This approach allows for the creation of new wallets, the addition of addresses to a wallet as watch-only, and the creation of new transactions through the interface using fundrawtransaction with watch-only-addresses in the background.The second approach is Electrum Personal Server, which is an implementation of the Electrum server protocol that allows users to use the Electrum UI with full node verification and privacy, but without the heavyweight server backend, for a single user. This means users can benefit from all of Bitcoin Core's resource-saving features like pruning, blocksonly, and disabled txindex, while still being able to use Electrum's feature-richness like hardware wallet integration, multisignature wallets, offline signing, mnemonic recovery phrases, and more.One of the main issues with the widely used bitcoin wallet, Electrum, is that it relies on third-party servers for synchronization, posing potential security risks. These servers can trick Electrum wallets into accepting fake bitcoin transactions and can also compromise user privacy since wallets send all their bitcoin addresses to the server. To avoid these problems, users can run their own Electrum server and connect their wallets only to it. However, this requires significant resource usage and the server must always be online.To address these challenges, Electrum Personal Server has been introduced. It allows users to enjoy the resource-saving features of Bitcoin Core, such as pruning, blocksonly, and disabled txindex, while using their own full node. By configuring Electrum Personal Server with their master public key and importing those addresses into Bitcoin Core as watch-only, users can continue to use Electrum's features without relying on third-party servers.Although using Electrum Personal Server trades away Electrum's "instant on" feature for full node verification and privacy, it remains the most resource-efficient way to use a hardware wallet connected to your own full node. An alpha version of Electrum Personal Server is available on the repository for users to try.In addition to Electrum, similar ideas could be applied to other lightweight wallets. For example, a full node running on smartphones with pruning and blocksonly could be connected to Samourai Wallet, Breadwallet, or GreenAddress app using a similar script. This would provide users with enhanced security and privacy while still enjoying the convenience of lightweight wallets.Overall, these proposed approaches aim to improve Bitcoin wallet security by allowing users to run their own full nodes and connect their wallets directly to them. This reduces reliance on third-party servers and enhances user control over their funds and privacy.
Updated on: 2023-08-01T22:37:09.996851+00:00