Bitcoin Self-Defense, Part I: Wallet Protection

The article argues that Bitcoin wallet security still has a long way to go, since a single user mistake can cause large losses that cannot be reversed, and that defense in depth is the only viable strategy. It describes incidents including the 2011 theft of 25,000 BTC from Bitcointalk member "allinvain" after an intruder gained access to his computer, and Stefan Thomas's loss of 7,000 BTC after he erased two wallet backups and forgot the password to the third. Other examples include a 2013 Java application that captured a victim's wallet password and emptied his wallet, and a brainwallet user who lost 88 BTC when deleting a wallet file removed the private key for a change address.