New Hack-Protection Idea/Concept

With the recent turmoil among the markets, I have been looking at methods to protect money that sites hold in case they are hacked.

Just to clarify a few things:

1) I think Silk Road 2 was an inside job or scam, not a hack.

2) I agree Multi-Sig is safer, but the reality is most buyers are less inclined to use it.

3) This does not protect you from the site owner doing a run or scam. It aims to minimize damage hackers can do by locking the funds away from them.

https://cdn.anonfiles.com/1392450943593.jpg

Any feedback welcomed.


Comments


[1 Points] ropiatesthrowaway:

You're not going to get any responses because your diagram makes little sense. I am not following anything at all with your little arrows and PGP encrypted labels.. And I'm very well versed with the technology


[1 Points] mdparity:

Howdy,

I think I understand your concept; feel free to correct me if I am wrong. Instead of having one wallet, there would be several encrypted wallets per person. I had an idea of wallet rotation for Bitcoin tumbling that was similar (without encryption).

I haven't experimented with many clients yet, but with the native bitcoin builds, each wallet requires an instance of bitcoin to handle. This would start to get really complicated as then you would need one bitcoin process per person; if you plan to rotate the wallets like the tumbler concept with one instant of bitcoin, then there can't be concurrent users. There would be a queue, and suffer from speed issues. You would need to find a way to handle concurrent users.

Another issue to overcome is if the hacker already compromised the system, the first time the user sends a key to the server, the hacker could steal the key used to decrypt the wallet. One solution to that would be to have the wallet sent to the user, which defeats the purpose of having a server for the wallet.

I think if you would like to attempt something like this, the key has to change every time the wallet was accessed, so if it was compromised, the hacker would not have access after the user.

It's a great idea for securing a wallet.
Cheers and good luck!