Quote from: Thom on April 20, 2016, 02:47:13 am

Thanks for taking the time to comment arhag. I'm no expert on cryptography, but it sounds like you and @bytemaster disagree about the viability and security of using the blockchain as the wallet backup medium. My perspective was similar to what you said in your first few sentences above, until BM came along the other week and said the encryption wasn't that safe against brute force methods.

When bytemaster says encryption isn't safe against brute force methods, he is talking about encrypting using a user-chosen password and publishing the (poorly encrypted) data to the public. If you do not allow the user to set the password but force them to use a key with 256 bits of computer generated entropy that they keep safe locally, then there is no brute force issue. It just means recovery is slightly more annoying than typing in your password in a new client. You are forced to get out your paper backup and type in a longer sequence of random dictionary words into the new client.

Quote from: Thom on April 20, 2016, 02:47:13 am

He explained an important difference was the delays imposed between each guess attempt by front door time outs and other measures which wouldn't exist in a blockchain backup scenario. It makes sense on the surface, but if such measures are so important in the security of the encryption which is the core security mechanism of the entire blockchain, it's far weaker than I thought. Frankly that seems highly unlikely.

So that is in the context where you trust a third-party server with your (poorly encrypted) backups. The server can then enforce rate limits on guessing passwords so that your weak password is good enough to prevent attackers from getting your (poorly encrypted) backup under their local control in the first place to then brute force. The problem with relying on third parties is that the third party may then be liable (at least morally if not legally) if their security is not good enough to prevent others from getting access to your (poorly encrypted) backups. And that isn't the only problem with third-party server backups. You need to trust that the third party won't brute force your poorly encrypted backup themselves. And what is even more of an issue is that if you are solely relying on the third-party server backups to not lose stealth funds (for example), what happens if the third-party company goes under (or loses all their data somehow) and does not or cannot offer you to download your backup even one last time? Unless you had other recent manual backups you might lose some of your funds in that scenario.