On Mar 5, 2014, at = 2:17 PM, James Hartig <fastest963@gmail.com> = wrote:

On Wed, Mar 5, 2014 at 2:39 PM, Peter = Todd <pete@petertodd.org> wrote:
&= gt; More important though is you shouldn't be using single factor = Bitcoin

> addresses. Use n-of-m multisig instead and architect your = system such
> that that every transaction that happens in = your service has to be
> authorized by both the "online" = server(s) that host your website as well

> as a second "hardened" server with an extremely limited = interface
> between it and the online server.

This adds a = very minor amount of security, if any, if someone manages to hack into = your "hot wallet" server they can just initiate a non-multisig = transaction and still steal all your bitcoins in that wallet. You can't = give the argument that the RPC API is password protected because the = password is stored in plain-text in the config so all someone has to do = is first grep for the file. There doesn't appear to be a way to force = ALL outgoing transactions to be multisig and even if there was one, = would you be able to force one of the addresses to be the "hardened" = server? That still wouldn't prevent anyone from just stopping bitcoind, = changing the config, then restarting it.

Unless = you're using your own custom wallet software there doesn't seem to be = any sufficient way to prevent someone from stealing all your money once = they have access to your server. Other software, like MySQL has access = controls so I can prevent ALTERs, DROPs, DELETEs, etc for all "live" = accounts limiting the scope of any attack if they manage to get into the = server. Maybe this is beyond the scope of bitcoind, not sure.

Thanks,
--
James Hartig
Software Engineer @ Grooveshark.com
http://twitter.com/jameshartig

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