Quote from: etotheipi on February 21, 2012, 01:55:41 AM

Quote from: cypherdoc on February 21, 2012, 12:50:32 AM

Quote from: gmaxwell on June 23, 2011, 04:18:42 PM

Yep. That is the compromise. The current wallets unsteal themselves.

can someone explain this to me?

If someone steals your wallet, they get all your old addresses and the next 100, but no more. When you start using addresses, the key pool keeps getting refilled with random addresses based on the random number generator on your computer. The attacker will generate different (and thus useless) addresses. Therefore, if someone steals your wallet, it "unsteals" itself after you go through 100 addresses.

Since the point of deterministic wallets is to produce the same sequences of addresses every time, the attacker will always generate the exact same addresses until the end of time. They have permanently stolen your wallet, and could wait years before executing an attack, if they knew you were going to keep using it.

However, I'm of the opinion that this is basically irrelevant. The severity of attacks on both types are not much different, and many cases they are the same -- because if the attacker has access to your system to steal it, they can install a process to continue stealing your wallet. I firmly believe that users' not having sufficient backups is a tremendously more significant risk to their wallets. As such, deterministic wallets are superior since they only require one backup at time of creation.

so this paper backup i generated from Armory consists of a Root Key and a Chain Code. is the Root Key the same as the Master Private Key discussed here earlier? whats the Chain Code and where is the Seed?