Bitcoin News – Bitcoin Security May Be a Matter of Old School Technology

NEW YORK (InsideBitcoins) – Bitcoin is a high tech innovation, no doubt. But perhaps the safest place to store your bitcoin is by converting your digital currency to a low-tech convention of common currency: paper.

myceliumPaper wallets aren’t a new form of storage, but haven’t yet gained widespread acceptance among bitcoin users. In August, Austrian-based Mycelium raised more than $30,000 on Indiegogo toward their Entropy project, a USB device that plugs into a computer to print bitcoin onto paper wallets, similar to traditional currency banknotes. These paper wallets can then be traded in person and the recipient can take the bitcoin from the paper wallet by scanning the QR code and using the provided, yet hidden, private keys.

After missing sales for the holiday season, the product is nearly set to ship.

In a recent interview with Inside Bitcoins, Dmitry Murashchik, community manager at Mycelium, said the Entropy devices are in the late stages of assembly at the factory — everything is final “except for the devices themselves.”

“We finally received an update from the factory on Monday,” Murashchik said in a statement on Reddit. “They let us know that production is still going, but that they won’t be able to ship before the 25th of December. At this point, we were told to expect them any time from 26th onward, without any explicit dates.”

Once received from the factory the company will “flash” and package the devices, then forward them to distribution centers.

“We are very anxious to get it out to our users, since we have been working on it since September of a year ago,” Murashchik told Inside Bitcoins. “It will also be the first product we can actually sell, so it will be nice to finally get rewarded for all out work.”

What are paper wallets?

Paper wallets provide an added level of security, since they are not connected to the Internet. In essence, a paper wallet is considered among the highest levels of safety for bitcoin, commonly referred to as “cold storage” devices.

Anyone can make a paper wallet, as there are services online that allow for custom wallet creation coupled with unique designs. One online service called bitcoinpaperwallet.com provides customers with a trifold layout. To hide the private keys, the website offers tamper-evident, serialized hologram stickers for purchase.

Bitcoincards also “on the way”

bitcoincardMycelium is also creating another product called Bitcoincard, a radio-enabled smart card that acts as an electronic wallet outside of a computer.

Bitcoin wallets are stored as files on computers, automatically making them susceptible to cyber theft. If a hacker or virus gains control of a computer holding a wallet file, they can simply steal the bitcoins. By utilizing a device like Bitcoincard, the digital currency is kept offline but is still accessible by the user.

The company describes the product as “a universal payment card that combines the functionality of a hardware bitcoin wallet with a traditional banking card.” Murashchik said that Bitcoincards are currently in the final stages of development, but are non-laminated; they look like ordinary circuit boards, rather than the slick credit card device pictured above. Production is expected to begin within two months.