What are the best practices to move coins out of cold storage?

Question

There are tutorials on how to set a paperwallet but I found nothing on the best practices to recover funds out of a paperwallet.

I imagine it is a critical step too, what is the best way to do? What are the mistakes or practices to avoid?

Thanks,

Answer 1

Excellent question. I suppose the only way, for now, would be to boot into a clean system by using a live CD with network access, syncing the daemon, restoring your wallet*, syncing the wallet and immediately spending what you intended to spend (or send to your "hot" wallet) and then sending the remainder to a new cold storage. This last step is an important one just in case that, even with the precautions, your system was compromised somehow. If you spend and send the change back to a new cold storage immediately, the potential thief probably wouldn't have a chance to steal your funds.

*For added safety, I'd create the wallet file on an offline PC, secure it with a password and copy it to the online PC, sync and spend the funds. This way, the potential thief would need both your password and the wallet file to steal your funds.

Another approach would involve having 2 nodes. One exposed to the internet, and the other firewalled so that it allows only the monero node traffic between your 2 nodes, but for this you need to know your networking to set it up securely (I wouldn't know how to do it).

Eventually, we will have the functionality to do offline signing. It would work like this: you'd get all the data required to build a transaction from the online PC, copy it to the offline PC and use it to sign the transaction with your private keys, copy the signed transaction back to the online PC and broadcast it to the network.

To avoid all the hassle, there is a device (Trezor) which you plug into USB of the online PC and it serves the purpose of the offline PC and signs the transaction, with the tx data going back and forth over USB, saving you the trouble. The firmware for monero is available for testing purposes and we should expect a stable version in the nearby future. This is the most convenient option, and I think it can't come too soon.