Quote from: bob123 on May 04, 2018, 10:51:21 AM

This quote from DannyHamilton answering a question regarding hosted wallets (on an eventually non-secured provider) may already answer your question.
It seems to be a sweat approach.

Quote from: DannyHamilton on May 03, 2018, 02:45:19 PM

Have a separate smaller system which is not hosted for sending funds out. The users can place requests for funds on the hosted server where the requests can be stored. The non-hosted server can retrieve the requests, run them through a set of sanity checks to make sure nothing unexpected is happening, and then can send out the funds in scheduled batches (reducing transaction costs).

The non-hosted server can be secured behind a firewall allowing NO incoming connections at all, and ONLY allowing the 1 outgoing connection to the hosted server.

Quote from: bigselenium on May 04, 2018, 10:21:45 AM

but are there any commonplace security protocols/techniques that should be employed in order to minimise risk of hot wallet funds being stolen

To name the most obvious ones: Set up a proper firewall (only allowing connections/ports you need), make any sensitive calculations server-side, make sanity checks before withdrawals / crediting.
With those basic steps you are already better secured than roughly 50% of online services.

Quote from: bigselenium on May 04, 2018, 10:21:45 AM

or is there really not much I can do other than regularly move fnuds out of the hot wallet to the cold wallet?

You should definetely move funds out of your hot wallet (or don't even receive them to you hot wallet; use an maste public key to derive public keys / addresses) regularly.
Only keep the amount in your hot wallet you need to run your business successfully. Anything above should be withdrawn to your cold storage.

That seems like a good solution to me in regards to the second server. I'm not quite sure what is meant be a "non-hosted" server however. Do you mean a server rack of my own and not a third party server or? Otherwise that seems like solid advice in ters of batching and firewalls. What sort of schedule would you suggest? Hourly? I feel the schedule would have to be frequent. The only issue I can see with the batching is that users would have to wait longer for their withdrawals instead of having them processed instantly?

As for sanity checks and important calulations, etc the practice seems similar to running non-crypto sites which is something I'm already familiar with so its nice to know those practices copy over.

I wasn't actually aware yo ucould use one public key to generate further public keys/addresses. I assume that is how most crypto sites generate their deposit addresses? Sorry if that sounds outright noobish but I'm not currently that well versed in the actual technical aspects of bitcoin hence why I'm asking the questions I am. Thanks for all the help and advice though, I really appreciate it a lot!