Post
Topic
Board Development & Technical Discussion
Topic OP
warm wallet
by
dnydublin12
on 10/01/2015, 11:23:35 UTC
Use case: People and companies like Bitstamp (and me) who want to have monies in hot wallet and are happy to forgo instant transactions in some of their wallets, in the interest of extra security and a chance to stop transactions within a certain timeframe. Like a half way house in terms of security between an offline wallet and a hot wallet. Works by forcing certain types of wallets to include a zero output zero input transaction in the blockchain a certain range of blocks before notifying its 'intent to move' funds from the wallet. This allows the owner of the wallet a chance to use a second key to insert a second zero input transaction to block 'intent to move'.

Glossary
Warm Wallet - Type of wallet which requires that transactions are flagged a certain number of blocks ahead of inclusion in the chain
Intent to Move - Zero input, zero output transaction which is included in the block chain, the only purpose of which is to validate the content of a subsequent transaction which must occur within a finite number of blocks.
Intent to move block - zero input, zero output transaction which is included in the block chain, the only purpose of which is to negate a 'intent to move' transaction. High priority transaction with high transaction fee

Description: Special type of wallet, transactions of which can only be processed if a transaction notification has being included in the blockchain X numbers of blocks before, but transaction notification cancellation has not. Presuming 10 block interval, transaction which will achieve the actual transfer must happen between 10 and 20 blocks after the notice of 'intent to move'.

Scenario 1 - Normal case
Example: On block 40 transaction is issued indicating intent to move 100 BTC from warm wallet WW to hot wallet HH.
On block 51 transaction moving 100 BTC from WW to HH is confirmed and funds transferred.

Scenario 2 - Stolen key
Example: On block 40 transaction is issued indicating intent to move 100 BTC from warm wallet WW to hacker wallet HK.
On block 45 real owner of the wallet notices the unauthorized intent to move transaction and issues a 'block intent to move' transaction with 0.001 transaction fee (high priority). An external service could be monitoring the blockchain and notifying users of warm wallets, of 'intent to move' transactions. On block 52 hacker attempts to move 100 BTC from WW to HK, transaction is rejected as miners see 'block intent to move' in block 45.

Scenario 3 - Late move
Example: On block 40 transaction is issued indicating intent to move 100 BTC from warm wallet WW to hot wallet HH.
On block 61 transaction moving 100 BTC from WW to HH is rejected as valid intent to move has not being included in the last 20 blocks. User told to try again.

Scenario 4 - Stolen key slow reaction
Example: On block 40 transaction is issued indicating intent to move 100 BTC from warm wallet WW to hacker wallet HK.
On block 52 hacker moves 100 BTC from WW to HK which is confirmed and funds are transferred.
Real owner of the wallet lost their money.