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I just bought some Ethereum and I'm in the process of moving my ethereum off my exchange into a wallet.

Now the recommendation around the web seems to be to get your key file (which contains your address and encrypted private key) and put it on two USB keys and put them in two separate physical locations.

That just sounds awfully primitive for a solution and seems only a few steps up above storing money under my blanket.

Why wouldn't I just put the keyfile in my Dropbox / Google Drive etc? It's all encrypted anyway so it's not like the file is useful if anyone can get a hold of it. I believe putting it on the cloud holds several advantages.

  1. Two Factor Authentication - If anyone gets access to it, I'll know about it. If anyone accesses one of my USB flash drives, I won't know.

  2. A cloud computing solution is less likely to suffer a hardware failure. USB flash drives could fail. Maybe I buy a defective batch that all fail after a certain number of years.

  3. After some number of years, I may forget where they are, lose them or lose access to them.

Overall, since my key file is protected by a password, what use is it hiding its location? Doesn't that just increase the risk of me losing it?

NOTE - I've put it here on security instead of on the Ethereum stack exchange because it's applicable for any encrypted file and I'm interested in hearing answers throwing from modern best practice security principles.

alecxe
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Wills McLeod
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1 Answers1

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This question comes down to how much you really trust service providers like google and dropbox to properly secure your data. If you trust google to keep your information secure and safe, then by all means store it with them.

You ask:

Overall, since my key file is protected by password, what use is it hiding its location? Doesn't that just increase the risk of me losing it?

This is why most people store their "private key" to their crypto wallets in a secure location (like a lockbox at a bank). The private key isn't password protected, it is usually a string of 12 words that can be used to restore a wallet.

Mrdeep
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