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I am building an exchange for crypto currency. I need to be able to transfer tx from cold storage(offline) to hot wallet(online system) for submission. Usb stick is suitable for an individual user mining but is not suitable in an exchange environment.

One option I am proposed is to build an api that sends tx over ethernet cable to and from cold/hot storage. But in this case the cold storage wont really be offline, it would still be connected. So what other options do I have that could work well for an exchange?

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    If the coins need to be able to be sent without human intervention, then by definition they cannot be in cold storage. – Nate Eldredge May 5 '14 at 0:28
  • that is exactly what im struggling with. coldstorage means an offline system that is not connected. what do you mean by coins though? there are only public and private keys. private keys being stored in cold storage and tx being signed there manually. – Syler May 5 '14 at 1:24
  • agree with @nate I think anything you do will risk the cold storage becoming hot. Having considered this the only reliable way to do this is with a Trezor. The transaction is contstructed in a hot environment, and the Trezor simply signs the inputs. It's this minimal functionality and isolation from other software that makes it a suitable "luke warm storage" device. – T9b May 8 '14 at 15:27
  • i spent the last few days brainstorming ideas and have decided to go with a three tier system, a hot wallet, warm wallet and a cold wallet. – Syler May 9 '14 at 3:17
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I would reroute all incoming deposits to cold storage, which I would keep in small portions on different addresses.

Then I'd import some cold storage addresses to my hot wallet whenever my hot wallet is running low, keeping the amount in my hot wallet in the range between "not empty" and "what I'm comfortable having in the hot wallet".

As Mike mentioned, multi-signature addresses could provide additional security, and accountability.

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I'd recommend using multisig for your 'hot' wallet (selfish plug to bitgo). Then you can periodically manually transfer from your cold storage savings, but have most of your coins be protected with signatures from at least 2 systems.

  • that would work. but please read the topic carefully. im trying to find a manual method to transfer from coldstorage(offline) to hot storage. in an exchange environment it may not be feasible to use usb-sticks due to the volume of transactions. so what other methods are available? – Syler May 5 '14 at 19:10

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