Anyone can help me uderstand how this works?

[dltconnected]

The process of the following paragraph in Dash White paper is a bit unclear to me.

"A cold mode is made possible by utilizing the secondary private key on two separate machines. The primary “hot” client signs the 1,000DASH input including the secondary signing private key in the message. Soon after the “cold” client sees a message including its secondary key and activates as a Masternode. This allows the “hot” client to be deactivated (client turned off) and leaves no possibility of an attacker gaining access to the 1,000DASH by gaining access to the Masternode after activation."

Could anyone help me understand how this process works? Or plz suggest me any additional readings on it?

 

[strophy]

Good question! It's not written very clearly, or the terminology we use has changed since the whitepaper was written. I think we would usually use the word "wallet" these days, but the whitepaper still uses "client".

Basically, the process of starting a masternode requires two running instances of dashd: one that stays online all the time, but holds no balance ("cold") and one that holds 1000 DASH balance and is only connected to the network when it is necessary to create/sign transactions ("hot"). Because the two clients share a secret (this is the masternode privkey, different to the privkey that controls the Dash balance), it is possible to operate a masternode without any risk of losing the 1000 DASH, because it is not stored on the masternode or on any wallet that is connected to the internet. In the past, this was usually Dash Core wallet, now it is recommended to sign the start masternode transaction from a hardware wallet.

 

[dltconnected]

Good question! It's not written very clearly, or the terminology we use has changed since the whitepaper was written. I think we would usually use the word "wallet" these days, but the whitepaper still uses "client".

Basically, the process of starting a masternode requires two running instances of dashd: one that stays online all the time, but holds no balance ("cold") and one that holds 1000 DASH balance and is only connected to the network when it is necessary to create/sign transactions ("hot"). Because the two clients share a secret (this is the masternode privkey, different to the privkey that controls the Dash balance), it is possible to operate a masternode without any risk of losing the 1000 DASH, because it is not stored on the masternode or on any wallet that is connected to the internet. In the past, this was usually Dash Core wallet, now it is recommended to sign the start masternode transaction from a hardware wallet.

Thanks a lot for your reply. It is much clearer.