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So does a vanity address increase security? If Eugenia generates the vanity address “1Kids33q44erFfpeXrmDSz7zEqG2FesZEN”, users are likely to look at the vanity pat‐ tern word and a few characters beyond, for example noticing the “1Kids33” part of the address. That would force an attacker to generate a vanity address matching at least 6 characters (2 more), expending an effort that is 3,364 times (58 x 58) higher than the effort Eugenia expended for her 4 character vanity. Essentially, the effort Eugenia ex‐ pends (or pays a vanity pool for) “pushes” the attacker into having to produce a longer pattern vanity. If Eugenia pays a pool to generate an 8 character vanity address, the attacker would be pushed into the realm of 10 characters which is infeasible on a per‐ sonal computer and expensive even with a custom vanity-mining rig or vanity pool. What is affordable for Eugenia becomes unaffordable for the attacker, especially if the potential reward of fraud is not high enough to cover the cost of the vanity address generation. Paper Wallets Paper wallets are bitcoin private keys printed on paper. Often the paper wallet also includes the corresponding bitcoin address, for convenience, but this is not necessary since it can be derived from the private key. Paper wallets are a very effective way to create backups or offline bitcoin storage, also known as “cold storage”. As a backup mechanism, a paper wallet can provide security against the loss of key due to a computer mishap such as a hard drive failure, theft, or accidental deletion. As a “cold storage” mechanism, if the paper wallet keys are generated offline and never stored on a computer system, they are much more secure against hackers, key-loggers and other online com‐ puter threats. Paper wallets come in many shapes, sizes and designs, but at a very basic level are just a key and an address printed on paper. Here’s the simplest form of a paper wallet: Table 4-14. A very simple paper wallet - a printout of the bitcoin address and private key Public Address 1424C2F4bC9JidNjjTUZCbUxv6Sa1Mt62x Private Key (WIF) 5J3mBbAH58CpQ3Y5RNJpUKPE62SQ5tfcvU2JpbnkeyhfsYB1Jcn Paper wallets can be generated easily using a tool such as the client-side Javascript gen‐ erator at bitaddress.org. This page contains all the code necessary to generate keys and paper wallets, even while completely disconnected from the Internet. To use it, save the HTML page on your local drive or on an external USB flash drive. Disconnect from the Internet and open the file in a browser. Even better, boot your computer using a pristine operating system, such as a CDROM bootable Linux OS. Any keys generated with this tool while offline can be printed on a local printer over a USB cable (not wirelessly), thereby creating paper wallets whose keys exist only on the paper and have never been stored on any online system. Put these paper wallets in a fire-proof safe and “send” Advanced Keys and Addresses | 105PDF Image | Mastering Bitcoin
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