Casascius 1000 BTC gold coin - Bitcoin Wiki

What can the earlier days of Bitcoin teach us about holding Ethereum?

Recently, I was thinking back to my first exposure to crypto, after talking with a couple of my coworkers who shared their own, more recent experience with me. It was late 2013 when I first bought BTC, but I had heard about Bitcoin a couple of years earlier. I thought the idea of internet money that nobody controlled sounded like a scam, so I stayed clear. I couldn't really understand the value proposition and didn't take the time to understand how it works (hindsight is 20/20).
That started to change in early 2013. I learned much more about Bitcoin, which at the time was the only blockchain of any consequence, and began to understand the trustless nature of this revolutionary technology and how it would change the world. But what drew me in was the price. For those of you who weren't around then, it's worth taking a minute to open up that chart on Coinbase and see what that bump was in the grand scheme of things.
See what now looks like a relatively little blip there in late 2013? That was when Bitcoin went roughly 10x in a month- from a $100 valuation to a $1000 valuation. I signed up for a Coinbase account shortly before Thanksgiving. Over that Thanksgiving, I spent the whole holiday / weekend talking to my family about how revolutionary this technology was- and wow, were they confused and unable to fathom it. To me, it seemed so obvious. Price increases have a way of "revealing" unassailable logic in situations like these.
It took a while for Coinbase to approve my account, but I could hardly wait for that. I was on eBay, seeing if I could buy Casascius Coins. They were appealing to me at the time, because they merged an asset that was completely virtual with something that was tangible. My brain had still not fully accepted paying so much money for something that "didnt' exist" in real life. But the speculation was soaring so high on those coins (double the BTC value or more) that I decided to pass.
Soon thereafter, I finally got access to Coinbase and bought my first Bitcoin for around $900. And then the price dropped, and it kept dropping. But I kept on buying, knowing that this is how asset markets worked. The price was going down, but for something this revolutionary, it would have to eventually go back up...at least that's what I was hoping. I bought all the way down to prices in the low $400s.
And then in June 2014, I abruptly sold them all, at a sizable net loss. Why did I do that? What was going through my mind to make such a rash decision? Well, open that chart back up. The price had cratered down into the $230s and seemed to be stuck at these new lows- it was a winter that started earlier in that year and never ended. And the Mt Gox debacle was completely soul crushing and I really felt that my hopes for the success of a decentralized currency were completely dashed. And back then, there were no other alt coins to FOMO into. It was Bitcoin or (mostly) nothing.
Besides, I had a major home purchase underway and decided that my money was better going into that rather than holding Bitcoin. In hindsight, I sold at what turned out to be the close to the bottom of Bitcoin. And then just look at that chart. A slow and steady increase over years, with $1000 only being reached again in March of this year.
And as we enter Thanksgiving 4 years later, some of you are going to have these same conversations with your own families about Ethereum. I can tell you what some of them are going to say:
"Internet money? I wouldn't invest in something like that. Who controls it? Isn't this just for criminals?"
"Smart contracts? Even if they do work, what's the point of having them when you have regular contracts? And why does XYZ service even need to be decentralized?"
"This whole thing sounds like a bubble. I hope you don't have much money in this..."
So what does all of this teach us about holding Ethereum?
  1. For many of your friends and family next week, it will be the first time they've heard of concepts like smart contracts or even cryptocurrency in any depth, but if Bitcoin is our teacher, it won't be the last. Take the time to explain it, but don't be pushy about it. Plant the seed, walk away, and send articles to them over the course of the next year.
  2. Bitcoin's $1000 moment reminds me of ETH's $420 moment. Many new buyers FOMO'ed in and are still waiting for their returns, with many likely abandoning the path along the way. Most of the actual buyers of Bitcoin in 2013 then were "nerds" who were fascinated by the technology because they were among the few who took the time to understand it and felt comfortable putting large amounts of money into something on the internet. I would suggest that most recent ETH buyers are still in this "nerd" territory, without real mainstream understanding of what it is.
  3. We are in what seems like a "long winter," with ETH stagnant at around $300. But it is unlikely our next big run will take 4 years to develop. I'm thinking a period of 3 to 12 months. The space isn't what it used to be, with massive institutional money coming and a very vibrant and mainstream-accepted development community. Those among you who were smart bought every token they could during the July depression. If that happens again, you know what to do.
  4. Even if we had another Mt Gox style event (I won't name any exchanges or pegged tokens), it would probably not have the same impact as Mt Gox had. The system is much more diverse and resilient against such events now. There would be a drop, but it would be (hopefully) short lived.
  5. If you just hold long enough, the price is very likely to go up. Possibly substantially up. Maybe even life changing amounts up. You understand the technology and the potential. Don't doubt yourself on your original thesis, like I did with Bitcoin a few years ago. The future picture for ETH has only gotten better in recent months.
So learn from Bitcoin, and don't screw this up for yourselves by taking rash actions- driven by impatience or outsized greed. I am not always one for hyperbole, but I am not exaggerating when I say that you may honestly regret it for the rest of your life.
submitted by DCinvestor to ethtrader [link] [comments]

Lightning Network Will Likely Fail Due To Several Possible Reasons

ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS
The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
  1. BTC fees have been trending higher all year and will be higher by the time LN is ready
  2. When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal.
But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN.
Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
  1. they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
  2. they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN.
ROAD BLOCKS FROM INSUFFICIENT FUNDS
Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is a like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION
According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
  1. Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
  2. LN’s security and usability relies on 100% uptime of relaying parties
  3. Only large hubs with a lot of liquidity will be able to make money
  4. Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
What will the impact be on censorship-resistance, trust-less and permission-less?
NEED TO BE LICENSED AS MONEY TRANSMITTER
Advocates for LN seem to talk a lot about the technology, but ignore the legalities.
FinCEN defines money transmitters. LN hubs and intermediary nodes seem to satisfy this definition.
Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
“…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…”
"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…”
"FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.””
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
FinCEN’s regulations for IVTS:
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.”
“…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements.
“Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins.
ARGUMENTS AGAINST NEED FOR LICENSING
Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain.
Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole?
So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges.
Will the banks want this? Likely. Will they lobby the government to get it? Likely.
Some may be wondering about miners. FinCEN has declared that miners are not money transmitters:
https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters
Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this?
Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML.
Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo.
Say goodbye to a censorship-resistant, trust-less and permission-less coin.
For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission.
This would be the antithesis of why Satoshi created Bitcoin.
NEED TO REPORT TO IRS
The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS.
Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges?
To read about the discussion, go to:
Lightning Hubs Will Need To Report To IRS
COMPLEXITY
All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you.
LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands:
“On Chain”
“In Channels”
“In Limbo”
“Your Channel”
“Create Channel”
“CID”
“OPENING”
“PENDING-OPEN”
“Available to Receive”
“PENDING-FORCE-CLOSE”
There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet.
Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well:
Scaling Bitcoin Might Require A Whole 'Nother Layer
How many additional steps does a user need to learn?
ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK
Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst.
BLOCKSTREAM'S GAME PLAN IS ON TRACK
Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here.
Why is Blockstream so adamant on small blocks, high fees and off-chain scaling?
Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die.
One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal.
Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg".
SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING
Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding.
Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling:
1 GB block running on testnet demonstrates over 10,000 transactions per second:
"we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary”
"Preliminary Findings Demonstrate Over 10,000 Transactions Per Second"
"Gigablock testnet initiative will likely be implemented first on Bitcoin Cash”
Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.)
Bitcoin Cash plans to fix malleability and enable layer 2 solutions:
The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed.
GOING FORWARD
The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read:
Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained
It will be interesting to see how they scale going forward.
Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.)
The ability to scale will be key to the long term success of any coin.
submitted by curt00 to btc [link] [comments]

Lightning Network Will Likely Fail Due To Several Possible Reasons

ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS
The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
  1. BTC fees have been trending higher all year and will be higher by the time LN is ready
  2. When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal.
But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN.
Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
  1. they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
  2. they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN.
ROAD BLOCKS FROM INSUFFICIENT FUNDS
Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION
According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
  1. Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
  2. LN’s security and usability relies on 100% uptime of relaying parties
  3. Only large hubs with a lot of liquidity will be able to make money
  4. Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
What will the impact be on censorship-resistance, trust-less and permission-less?
NEED TO BE LICENSED AS MONEY TRANSMITTER
Advocates for LN seem to talk a lot about the technology, but ignore the legalities.
FinCEN defines money transmitters. LN hubs and intermediary nodes seem to satisfy this definition.
Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
“…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…”
"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…”
"FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.””
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
FinCEN’s regulations for IVTS:
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.”
“…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements.
“Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins.
ARGUMENTS AGAINST NEED FOR LICENSING
Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain.
Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole?
So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges.
Will the banks want this? Likely. Will they lobby the government to get it? Likely.
Some may be wondering about miners. FinCEN has declared that miners are not money transmitters:
https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters
Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this?
Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML.
Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo.
Say goodbye to a censorship-resistant, trust-less and permission-less coin.
For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission.
This would be the antithesis of why Satoshi created Bitcoin.
NEED TO REPORT TO IRS
The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS.
Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges?
To read about the discussion, go to:
Lightning Hubs Will Need To Report To IRS
COMPLEXITY
All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you.
LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands:
“On Chain”
“In Channels”
“In Limbo”
“Your Channel”
“Create Channel”
“CID”
“OPENING”
“PENDING-OPEN”
“Available to Receive”
“PENDING-FORCE-CLOSE”
There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet.
Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well:
Scaling Bitcoin Might Require A Whole 'Nother Layer
How many additional steps does a user need to learn?
ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK
Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst.
BLOCKSTREAM'S GAME PLAN IS ON TRACK
Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here.
Why is Blockstream so adamant on small blocks, high fees and off-chain scaling?
Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die.
One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal.
Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg".
SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING
Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding.
Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling:
1 GB block running on testnet demonstrates over 10,000 transactions per second:
"we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary”
"Preliminary Findings Demonstrate Over 10,000 Transactions Per Second"
"Gigablock testnet initiative will likely be implemented first on Bitcoin Cash”
Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.)
Bitcoin Cash plans to fix malleability and enable layer 2 solutions:
The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed.
GOING FORWARD
The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read:
Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained
It will be interesting to see how they scale going forward.
Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.)
The ability to scale will be key to the long term success of any coin.
submitted by curt00 to Bitcoincash [link] [comments]

Basic Bitcoin security guide

Hello,
This post is to give you a quick introduction into Bitcoin security. While nobody can guarantee you 100% security, I hope to mitigate some problems you can run into. This is the “20% of effort to get you to 80% safe”.
First of all, you have to determine how much money you want to hold in Bitcoin and how much effort are you willing to put in. If you are happy just holding a few dollars worth and don’t care if you lose them, that’s one approach to take. For everyone else, lets get started.
Password strength
A lot of the times how secure your money is will be determined by the strength of your password. Since in the worst case scenario we are talking about someone trying to brute force your wallet, casual online passwords are too weak. Under 10 characters is too weak. Common words and phrases are too weak. Adding one number to a password at the end is too weak.
Moreover, you can consider your password much weaker if you:
If you want a really strong password:
Wallet security
Now we are getting to the meat of things.
There are a number of wallets available to store your hard earned bitcoins. If you have a decent amount of coins to store, you should look into software wallets - BitcoinQT, MultiBit, Armory or Electrum. They are among the best place to store your money safely (provided your computer is secure as well). Chose one you think best suits you, install it and encrypt your wallet file with your strong password. You should take your wallet file and back it up (location of the file is different for different clients, so you have to do some research as to where to find that file). Back it up on a CD, safe USB drive or the like. Keep them safe. If you lose that file, you will lose your money.
A quick word on deterministic wallets. Electrum and Armory allow you to create wallets from a seed. If you use the same seed later, you can recreate your wallet on other machines. With deterministic wallets, you only need to keep that seed secure to have access to your money.
In comparison, in BitcoinQT's traditional wallet, every address you use is random, meaning that after you send 50-100 outgoing transactions your backups can be obsolete. Always keep an up-to-date backup of such wallet file if possible.
Okay, sometimes you need to have your Bitcoins with you when you leave your computer. In this case, you should look into either online or mobile wallets. A staple for both of those is Blockchain.info, but there are others to chose from.
A good rule of thumb with these is to not store more money in them than you can afford to lose. They are best used as a convenient way of accessing some money, not storing your savings. Online wallets are especially vulnerable to their servers getting hacked and people’s money getting stolen.
What to keep in mind while using online wallets:
  • Use a secure password (the more money you have in them the stronger the password should be)
  • Always keep a backup of your wallet in case you need to recover your money
  • Whenever possible, enable two factor authentication
  • Don’t use your online wallets from unsafe computers
Cold storage
Sometimes you want to store your bitcoins for a long time in a safe place. This is called “cold storage”. There are a few ways one can do this.
First of all, paper wallets. They are nice for giving people small bitcoin gifts, but also for long-term storage if properly used. What you want to do is generate and print them offline. You can save the linked page for example and run that offline. If you are really paranoid, you can put it on read-only media and access that from a different computer. For really long term storage, use archival-grade paper.
Another approach to take is using a separate computer for storing your money that is offline 99+% of the time. You could set one up easily by buying an old laptop, reformatting it, installing Linux and a Bitcoin client. Generate an address on that machine and send money to it from your main wallet. Depending on how paranoid you are you can connect that computer to the Internet afterwards to synchronize data with the Bitcoin Network and then turn it off and put it away somewhere safe until it’s needed.
Brain wallets
Don’t. They are not for you. Unless you are a security-conscientious programmer, those are not for you.
Diversifying
Keeping all of your eggs in one basket is never a good thing. You should look into diversifying some of your Bitcoin assets in case your other storage methods fail. Some ways you can diversify:
  • Buy a physical Bitcoin. As long as you trust the coin creator such coins can be an effective cold storage
  • Invest - I wouldn’t recommend this for more than some trivial amount unless you know what you are doing, but investing in some Bitcoin stocks could be a way to get more money out of your bitcoins
How not to diversify:
  • Avoid keeping your bitcoins at exchanges or other online sites that are not your online wallets. Such sites can be closed down or disappear along with your money.
  • Alt-coins - there are few cryptocurrencies that are worthwhile, but most of them are just Bitcoin clones. If a currency brings nothing new, it’s worthless in comparison to Bitcoin. Namecoin is a distributed domain name server (although recently it had a fatal flaw uncovered, so be warned), Ripple is a distributed currency exchange and payment system. Litecoin will only be useful in case Bitcoin’s hashing algorithm gets compromised (very unlikely at this time). Beyond that there are few if any alt-coins that are a worthwhile way of diversifying.
Accepting payments and safety
We’ve covered safe ways to store money, now a quick note about bitcoin payments and their safety.
First of all, when you are sending a transaction, pay your fees. Transactions without fees can take forever to propagate, confirm and clear. This can cause you a lot of stress, so pay your fees.
Secondly, when accepting large Bitcoin payments (say you want to suddenly cash in a gold bar into bitcoins), wait for at the very least 1 confirmation on those transactions. 6 is best, but having even 1 confirmations is a lot better than having none. This is mainly a rule of thumb for the paranoid (I wouldn’t be doing this for most casual transaction), but maybe it will save you if you are dealing with some shady people.
Wrapping up...
That should cover the basics. If you want to read more about Bitcoin’s security in general, here is my master thesis on the subject. A lot of questions about Bitcoin and security have also been answered on Bitcoin StackExchange - be sure to check it out.
Comments and improvement suggestions welcome.
EDITS:
  • Removed link to insecure site
  • Removed random article section
  • Added information about deterministic wallets
submitted by ThePiachu to Bitcoin [link] [comments]

'What's wrong with my current cold storage method?' - an examination of potential weaknesses in the most common cold storage methods

Today we are going to discuss cold storage and some specific problems with cold storage. While this applies directly to the Secret Key portion of a key-pair; it also applies to the seed used to back up HD wallets and hardware wallets.
The best way to keep you seed/secret key safe is to have multiple copies in multiple locations perhaps with multiple formats and even better if the keys are split. However not everyone has access to multiple locations, or access to land long term, or more than one place to store their things. This is an examination of faults with individual methods; and not a comprehensive plan, obviously.
Not to say everything is all bad but there are many potential weakness out there, and some in the Bitcoin and crypto community like to know the edge cases of things.
I will also highlight some of the aspects of the Keyois Capsule which is a 'physical bitcoin'.
A physical Bitcoin is a cryptographic key pair, a physical key printed and affixed to what has always been before a coin. The first physical bitcoin coin was the Casascius coin, since then the world of physical bitcoin coins has blossomed as a fun part of the Bitcoin world.
We will focus on mediums relating to cold storage and not ones designed for more everyday use, but this applies to the seed you save to keep your everyday spending wallets safe and backed up.
We will assume you generated your keys securely and that you already have them on some medium. We will also have to ignore endpoint physical security because they can all be carried away the same. Remember your cell phone /hardware wallet/ computer client are only as good as where you put the backup seed phrase, which can be thought of as data much like the SK discussed below.
Written on a piece of paper
Printed on a piece of paper
On laminated paper
Engraved / etched/ ablated/ stamped on a piece of metal
Stored digitally on a computer
Stored digitally on CD, floppy disk, laserdisc, or mini-disc
Stored digitally on a flash drive
Backups are essential for digital data Computer code for performing operations can be corrupted in transfer or in operation. Special systems exist and procedures help data to last longer. For ideas, see this archive.gov page Remember to store in multiple locations. You can lose everything in single structure
A physical bitcoin coin
**What can solve most of these problems? A combination of good backup procedures and encryption. **
If you have permeant access to more than one location (people who live in big cities, without family or cars have a hard time with this) or have people you trust with your money (don't) then look into using some form of Multi-signature option.
The Keyois Capsule is a crypto piggy bank; it can be funded from the outside but you to break it open to get them out. You give me a BIP38 encrypted key pair (well the address not the public key) and I engrave it in this tamper evident and time resistant package. You still have to hold on to the pass phrase that allows you to decrypt it; that is however the same problem as all methods with BIP38 encryption. How to store this without having to trust anyone but still being assured of it's security?
  • Engraving, embossing, or stamping on a sheet of metal is one option; however the metals that are easiest to stamp are ones that melt in a house fire. They could be put in a glass jar that's filled with aerogel and buried. These is the best readily available option for most people but it really can be tedious. - This puts you back at anyone who can see it can steal it so dip in plastic dip, wrap in duct tape, bake in clay, encase in concrete, whatever just don't leave unencrypted keys visible!
  • The cryptosteel is another ready-made option
  • Have the words etched onto glass at home with off the shelf products; but be carful of this idea because the glass can shatter from impact and heat or even sudden temperature changes
  • Anodize the words yourself on a pieces of metal, there used to be a service to help use your home printer to print the words with some chemicals you can buy
  • Bake them in clay, then encase that in epoxy resin so it can't shatter. then paint the outside, in the future you can solvent the paint off and see the written seed
  • Use a combination of techniques to split the seed so that it is safe(because split and separated) and redundant (because backed up).
The most cost effective way for a 'normal' person (without their own land, without more than one location, and who cannot trust anyone else with their funds) to keep their backup seed/ secret key safe from damage from the elements would probably to buy a stamping kit and hammer and some stainless steel sheet or bar, Aluminium can be okay if you have the right alloy but better safe than sorry.
submitted by ProfBitcoin to Bitcoin [link] [comments]

'What is wrong with my current cold storage method' - an examination of potential weaknesses in the most common cold storage methods

Today we are going to discuss cold storage and some specific problems with cold storage. While this applies directly to the Secret Key portion of a key-pair; it also applies to the seed used to back up HD wallets and hardware wallets.
Not to say everything is all bad but there are many potential weakness out there, and some in the Bitcoin and crypto community like to know the edge cases of things.
I will also highlight some of the aspects of the Keyois Capsule which is a 'physical bitcoin'.
A physical Bitcoin is a cryptographic key pair, a physical key printed and affixed to what has always been before a coin. The first physical bitcoin coin was the Casascius coin, since then the world of physical bitcoin coins has blossomed as a fun part of the Bitcoin world.
We will focus on mediums relating to cold storage and not ones designed for more everyday use, but this applies to the seed you save to keep your everyday spending wallets safe and backed up.
We will assume you generated your keys securely and that you already have them on some medium. We will also have to ignore endpoint physical security because they can all be carried away the same. Remember your cell phone /hardware wallet/ computer client are only as good as where you put the backup seed phrase, which can be thought of as data much like the SK discussed below.
Written on a piece of paper
Printed on a piece of paper
On laminated paper
Engraved / etched/ ablated/ stamped on a piece of metal
Stored digitally on a computer
Stored digitally on CD, floppy disk, laserdisc, or mini-disc
Stored digitally on a flash drive
Backups are essential for digital data Computer code for performing operations can be corrupted in transfer or in operation. Special systems exist and procedures help data to last longer. For ideas, see this archive.gov page Remember to store in multiple locations. You can lose everything in single structure
A physical bitcoin coin
What can solve most of these problems? A combination of good backup procedures and encryption.
If you have permeant access to more than one location (people who live in big cities, without family or cars have a hard time with this) or have people you trust with your money (don't) then look into using some form of Multi-signature option.
The Keyois Capsule is a crypto piggy bank; it can be funded from the outside but you to break it open to get them out. You give me a BIP38 encrypted key pair (well the address not the public key) and I engrave it in this tamper evident and time resistant package. You still have to hold on to the pass phrase that allows you to decrypt it; that is however the same problem as all methods with BIP38 encryption. How to store this without having to trust anyone but still being assured of it's security?
  • Engraving, embossing, or stamping on a sheet of metal is one option; however the metals that are easiest to stamp are ones that melt in a house fire. They could be put in a glass jar that's filled with aerogel and buried. These is the best readily available option for most people but it really can be tedious.
  • The cryptosteel is another ready-made option
  • Have the words etched onto glass at home with off the shelf products; but be carful of this idea because the glass can shatter from impact and heat or even sudden temperature changes
  • Anodize the words yourself on a pieces of metal, there used to be a service to help use your home printer to print the words with some chemicals you can buy
  • Bake them in clay, then encase that in epoxy resin so it can't shatter. then paint the outside, in the future you can solvent the paint off and see the written seed
  • Use a combination of techniques to split the seed so that it is safe(because split and separated) and redundant (because backed up).
Characters stamped on Aluminium is probably the most cost effective way to keep a secret key or seed safe from fire and rot.
submitted by ProfBitcoin to btc [link] [comments]

It Seems That I Am Stupid Because I Am Not Selling My Casascius Coins. Here Is Why:

Inspired by THIS I recently asked myself why am I holding to my (unopened) Casascius Coin in the first place?
Why should I NOT sell my Casascius coins?
At the moment, when I sell a 1 BTC Casascius coin (unopend untampered hologram) I will get about 2 BTC worth of fiat (=$2000) because it is a collectors item. That's a premium of $1000 or 100% over the face value.
However, if Bitcoin keeps on increasing in price, will the 1BTC Casascius coin keep the 100% premium? Will it have a $10,000 premium if 1 BTC = $10,000? I do not think so, I think in that case the premium will be $2000 or $5000 but certainly the premium will not increase at the same pace as the price itself. And thinking even further, will it have a $100,000 premium if 1 BTC = $100,000? No, in all probability not. Will it have a $1,000,000 premium if 1 BTC = $1,000,000? Almost certainly not. Why not? Because there is a certain risk for the buyer of my Casascius coin that I have read out the secret key in an advanced manner without violating the hologram. So the buyer is risking a lot when buying a $1,000,000 coin from me - he is risking $1,000,000! So the premium might even become negative when I am trying to sell my 1BTC Casascius coin at a BTC price of $1,000,000. Today this is different. Today 1BTC is only $1000, and the buyer is only risking $1000, and he also knows that the effort for me, the seller, to engage in an advanced and costly method to read out the private key is probably not worthwhile for only $1000. $1000 is no life changing amount. But $1,000,000 is.
So it is absolutely plausible that the Casascius coin premium percentage will decrease as Bitcoin price increases.
So the Casascius premium is going to decrease (in percent of BTC face value, not in fiat units) as BTC price increases. So if I assume that BTC price will rise, the best I can do is to sell my Casascius 1 BTC coin now and invest the $2000 into two "proper" digital bitcoins (2BTC), thereby doubling my BTC holdings.
Only if Bitcoin price drops (maybe from $1000 to $100 and further down to $10) the premium of Casascius coin (in percent of face BTC value) is going to increase, for the same reasons, just inversely.
So, it seems that ...:
Why am I still keeping my Casascius coins then? Because I like having them. Stupid me! Strange... I thought I am rational, but I am not.
Update: From the discussions it turns out there is some pragmatic justification for keeping the casascius coins: The strategy "keep the Casascius coin" is a middle path between the two alternative strategies "sell it now and buy pure bitcoins from the revenues" on the one hand, and "sell it now and keep the fiat" on the other hand. In both cases, case of rising or case of falling BTC prices, the strategy "keep the Casascius coin" turns out to be the middle path of the three strategies, so it is not that bad after all.
submitted by Amichateur to Bitcoin [link] [comments]

WARNING: coinguard.org is a scam

I have been shocked to see this site floating around, and even more shocked to see people using it.
Coinguard.org claims to use the Casascius Escrow Scheme for trust-free transactions, but this is an obvious LIE.
The site emails codes to each party and requires both codes to redeem funds, but that means the server can spend from the escrow address at any time.
Even more obviously, upon redemption they take a 1% fee and send the rest of the balance to an address you choose. How do you think they can do this, unless they control the private key to the bitcoin escrow address?
Closer inspection of the source also reveals none of the client-side javascript required for this type of system.
This is not trust-free escrow.
The FAQ is a lie.
This site is a scam.
They are likely waiting for someone to try a larger amount before running off with the money.
Hopefully this helps someone and prevents future victims.
submitted by firepacket to Bitcoin [link] [comments]

[Serious] Is there any legal difference between a Casascius coin and a hardware wallet?

I am not sure that I see a legal difference between the Casascius coin and a hardware wallet like OpenDime.
If there a difference? Anyone know a lawyer that would be able to discuss this with me?
submitted by Semocratic_Docialist to Bitcoin [link] [comments]

An Ark: Bitcoin marketplace with trust-free escrow

Hi Reddit!

Introduction

We all know that we should never trust bitcoins to sites with hotwallets, but up until now there has not been a good way to do trades without one. Multi-sig promises to deliver trust-free escrow, but so far it has been difficult to make widely accessible due to wallet fragmentation and a confusing user experience.
After doing some research, I discovered that we could make a much more user-friendly system that is functional today while still achieving trust-free escrow similar to multi-sig. The alternate method we are using is called the Casascius Escrow Scheme and it was invented by Mike Caldwell. You can read about it here: https://en.bitcoin.it/wiki/User:Casascius/Escrow_scheme_draft It is similar to Shamir's secret sharing, but it was specifically designed for escrow. The javascript implementation can be found at www.bitescrow.org (this is what I used).
Using this scheme we are able to perform escrow functions (like refunds) while never actually touching the bitcoins. There is no hot-wallet, meaning funds cannot be lost or stolen from our servers. Keys are generated separately in each user's browser and on the server in a way that prevents the server from ever having all the keys needed to spend the bitcoins. In fact, once the seller accepts a purchase request, the entire transaction can be completed offline by manually exchanging escrow codes with the other party.
This method is trustfree because all the important code is client-side and can be reviewed. Additionally, all the HTTP requests can be examined to ensure there is no sensitive data being passed to the server.

Pros and Cons

The major limitation of this method is that partial refunds from escrow are not possible, the escrow address is winner-take-all fund. Also, the transaction types cannot be very complex.
On the other hand, there's no sending long and confusing blocks of text back and forth to be deciphered and signed. There's no worrying about how to publish your transaction to the bitcoin network, and there's no waiting for confirms. You can load the private key into your wallet (wif) and see the funds immediately.

Usage

So we went ahead and created a basic market place around this escrow system. Making an account is as easy as signing up with an email. The email you sign up with WILL BE SHARED with users you contact, or users who request to purchase your listing. For security reasons, we do not want to handle user communications at this time. We want to focus on providing the most secure marketplace and would encourage you to find alternate channels of communication beyond email if needed.
Every time you create or accept a transaction, you must make an Escrow Transaction Password. This password protects the sensitive bits of the transaction from the server, meaning if you lose it you will have to release the escrow funds to the other party. If both people lose it, the funds in the escrow address will be lost.
Right now we are looking for feedback and have made no decisions about account limits or pricing. Currently the system is 100% free to use. Please let us know your thoughts! If you have any questions, concerns, or ideas just reply to this thread or email [email protected] and I will get back to you asap.
https://www.anark.re - Buy and sell anything including fiat, real estate, and more!
Bitcointalk: https://bitcointalk.org/index.php?topic=520047.0
submitted by firepacket to Bitcoin [link] [comments]

Want some personalized vanity addresses for your currency of choice? Check out Vanity Pool

I run a small project called Vanity Pool, it lets you outsource generation of cool vanity addresses through a split-key address algorithm - this means that your private key and thus your money is secure, even though other people mined for your address. This also means that you can get some nice vanity addresses and not have to spend a lot of your GPU time mining for the address instead of mining for your coin of choice.
So if you want some cool vanity address, like DDogeWowAA2EFcGmipzDjQBYQFXiqC8QFs or 1PiachuEVn6sh52Ez7o6Fymvw54qvQ4RBm , head on over to https://vanitypool.appspot.com/ , request a pattern you wish created (shorter patterns area cheaper and take a lot less time to generate), put in a public key that you own (you will need to use it later), when asked for network prefix, put in the decimal version of your coin-specific net-byte. Afterwards, you will be requested to pay a bounty in BTC (creating coin-specific pool would make the mining power a lot smaller; miners prefer being paid in BTC). After the payment is confirmed, any miner connected to the pool will start looking for the solution to your pattern.
Once you have the solution, either use Casascius' Address Utility, or head on over to our online tool (use coin-specific hex NetByte and hex Prefix Byte). After that you can import your new vanity address to your client by going through those steps (example using Dogecoin client).
Have fun!
submitted by ThePiachu to CryptoCurrency [link] [comments]

Bitcoin POS code for VeriFone machines by Casascius is open-sourced, but it's incomplete. Anyone interested on helping out?

Hey bitcoiners! I got a VeriFone Vx510 machine by accident, and googling I found out that casascius was working on the project of making software for this machines (Vx510 and Vx570).
https://en.bitcoin.it/wiki/Casascius_Bitcoin_POS_system
https://en.bitcoin.it/wiki/Casascius_Bitcoin_POS_system/Protocol
Code at https://github.com/casascius/vfbitcoin
As it says in the wiki
The POS system and its server are an open source project that is mainly in the planning stage. The POS system is not fully functional.
I'm interested on continuing this, cause these machines seem not so expensive and would allow individuals or organizations to buy or sell bitcoin on the spot, by getting one of this machines, loading the software and start using em.
Is anyone interested besides me? Would you donate? Do you know why development was stopped? I imagine resources...
I published an issue on github you can find in
https://github.com/casascius/vfbitcoin/issues/2
Feel free to contact me on this matter, I'll be trying to go forward on setting up an environment and checking how to load the software in the machine.
submitted by p0ns to Bitcoin [link] [comments]

What is wrong with my current cold storage method?

Today we are going to discuss cold storage and some specific problems with cold storage. While this applies directly to the Secret Key portion of a key-pair; it also applies to the seed used to back up HD wallets and hardware wallets.
The best way to keep you seed/secret key safe is to have multiple copies in multiple locations perhaps with multiple formats and even better if the keys are split. However not everyone has access to multiple locations, or access to land long term, or more than one place to store their things. This is an examination of faults with individual methods; and not a comprehensive plan, obviously.
Not to say everything is all bad but there are many potential weakness out there, and some in the Bitcoin and crypto community like to know the edge cases of things.
I will also highlight some of the aspects of the Keyois Capsule which is a 'physical bitcoin'.
A physical Bitcoin is a cryptographic key pair, a physical key printed and affixed to what has always been before a coin. The first physical bitcoin coin was the Casascius coin, since then the world of physical bitcoin coins has blossomed as a fun part of the Bitcoin world.
We will focus on mediums relating to cold storage and not ones designed for more everyday use, but this applies to the seed you save to keep your everyday spending wallets safe and backed up.
We will assume you generated your keys securely and that you already have them on some medium. We will also have to ignore endpoint physical security because they can all be carried away the same. Remember your cell phone /hardware wallet/ computer client are only as good as where you put the backup seed phrase, which can be thought of as data much like the SK discussed below.
Written on a piece of paper
Printed on a piece of paper
On laminated paper
Engraved / etched/ ablated/ stamped on a piece of metal
Stored digitally on a computer
Stored digitally on CD, floppy disk, laserdisc, or mini-disc
Stored digitally on a flash drive
Backups are essential for digital data Computer code for performing operations can be corrupted in transfer or in operation. Special systems exist and procedures help data to last longer. For ideas, see this archive.gov page Remember to store in multiple locations. You can lose everything in single structure
A physical bitcoin coin
**What can solve most of these problems? A combination of good backup procedures and encryption. **
If you have permeant access to more than one location (people who live in big cities, without family or cars have a hard time with this) or have people you trust with your money (don't) then look into using some form of Multi-signature option.
The Keyois Capsule is a crypto piggy bank; it can be funded from the outside but you to break it open to get them out. You give me a BIP38 encrypted key pair (well the address not the public key) and I engrave it in this tamper evident and time resistant package. You still have to hold on to the pass phrase that allows you to decrypt it; that is however the same problem as all methods with BIP38 encryption. How to store this without having to trust anyone but still being assured of it's security?
  • Engraving, embossing, or stamping on a sheet of metal is one option; however the metals that are easiest to stamp are ones that melt in a house fire. They could be put in a glass jar that's filled with aerogel and buried. These is the best readily available option for most people but it really can be tedious. - This puts you back at anyone who can see it can steal it so dip in plastic dip, wrap in duct tape, bake in clay, encase in concrete, whatever just don't leave unencrypted keys visible!
  • The cryptosteel is another ready-made option
  • Have the words etched onto glass at home with off the shelf products; but be carful of this idea because the glass can shatter from impact and heat or even sudden temperature changes
  • Anodize the words yourself on a pieces of metal, there used to be a service to help use your home printer to print the words with some chemicals you can buy
  • Bake them in clay, then encase that in epoxy resin so it can't shatter. then paint the outside, in the future you can solvent the paint off and see the written seed
  • Use a combination of techniques to split the seed so that it is safe(because split and separated) and redundant (because backed up).
The most cost effective way for a 'normal' person (without their own land, without more than one location, and who cannot trust anyone else with their funds) to keep their backup seed/ secret key safe from damage from the elements would probably to buy a stamping kit and hammer and some stainless steel sheet or bar, Aluminium can be okay if you have the right alloy but better safe than sorry.
submitted by ProfBitcoin to Keyois [link] [comments]

Question About Physical Lealana Coin I Bought

I purchased a Lealana 1LTC Litecoin on eBay. I have a few Bitcoins, but don't really know much about Litecoin. (It was an impulsive purchase.)
My questions:
  1. Where do I check to make sure the coin is "loaded"? With physical Casascius bitcoins, I can go to a site and enter the first digits to check a coin's status (loaded/redeemed/not activated). Is there a similar site for Lealana's coins?
  2. I was researching general information on Lealana coins, and I sure couldn't find much. I was hoping to find how many were made, which different types/series were produced, and when she produced them.
  3. Not sure if anyone here updates the Litecoin wiki, but if you do, an article with some basic information on these coins would be appreciated.
Thanks in advance for any help. Looking forward to learning more about litecoins.
UPDATE:
I emailed Smoothie. His response was as follows:
I've made approximately 4,000 of the 1 LTC brass coins (in circulation).
They were made in 2013. I've stopped selling coins for now.
I've created 1 oz 25 LTC, 1/2 oz 10 LTC, and 1/4 oz 5 LTC coins. All made in 2013. Quantities are 500, 1000, and 2000.
You can type in the first bits into explorer.litecoin.net to check balance.
Hope this helps.
Aloha Smoothie
Thanks for your help everyone!
submitted by marfalump to litecoin [link] [comments]

Want some personalized vanity addresses for your currency of choice? Check out Vanity Pool

I run a small project called Vanity Pool, it lets you outsource generation of cool vanity addresses through a split-key address algorithm - this means that your private key and thus your money is secure, even though other people mined for your address. This also means that you can get some nice vanity addresses and not have to spend a lot of your GPU time mining for the address instead of mining for your coin of choice.
So if you want some cool vanity address, like DDogeWowAA2EFcGmipzDjQBYQFXiqC8QFs or 1PiachuEVn6sh52Ez7o6Fymvw54qvQ4RBm , head on over to https://vanitypool.appspot.com/ , request a pattern you wish created (shorter patterns area cheaper and take a lot less time to generate), put in a public key that you own (you will need to use it later), when asked for network prefix, put in the decimal version of your coin-specific net-byte. Afterwards, you will be requested to pay a bounty in BTC (creating coin-specific pool would make the mining power a lot smaller; miners prefer being paid in BTC). After the payment is confirmed, any miner connected to the pool will start looking for the solution to your pattern.
Once you have the solution, either use Casascius' Address Utility, or head on over to our online tool (use coin-specific hex NetByte and hex Prefix Byte). After that you can import your new vanity address to your client by going through those steps (example using Dogecoin client).
Have fun!
submitted by ThePiachu to Bitcoin [link] [comments]

Integrated Bitcoin POS system for a restaurant?

I am a partner in a new restaurant group that will rolling out a few locations of small sandwhich style shops in the Chicagoland area next year. I am a huge fan of Bitcoin and would like to offer Bitcoin payment at our sites. Right now we are putting together budgets and I said I would research POS solutions. The two other partners in the group have no idea what Bitcoin is and could care less as long as it's not more expensive to offer it.
These are small 1500 square foot sites with only a couple employees so there is no need for an extravagant and expensive restaurant POS system. There will only be one location to checkout and no servers.
I am aware of the tablet style solution that is common that sites like Bitpay offer but personally I don't like this idea. I know there will be a strong contingent of people that will disagree but something like this is not for us. Between training employees, dead tablets, spilled drinks I just don't see it fitting well in the long run.
I came across this solution from SoftTouch which I will investigate further but it seems like it may be a little too much for what we need and therefore probably costly.
http://www.coindesk.com/softtouch-pos-helps-restaurants-turn-bitcoins-dollars/
http://www.softtouchpos.com/
I also came across this idea which is a little more of what I was thinking.
https://en.bitcoin.it/wiki/Casascius_Bitcoin_POS_system
The problem is the price of XBT on this wiki is $5.00 which dates it and I couldn't find anything else on it.
Does anyone know of any other POS systems that integrate Bitcoin? Any help is greatly appreciated.
Thanks guys
PS... I left just enough in the design to hopefully install a Bitcoin ATM if they ever become available in the US.
submitted by Plumbum27 to Bitcoin [link] [comments]

Guia de Segurança Básico para Bitcoin

Guia de Segurança Básico para Bitcoin
Olá, Este post é para lhe dar uma rápida introdução em segurança de Bitcoin. Enquanto ninguém pode garantir a você 100% de segurança, eu espero mitigar alguns dos problemas que você pode ter. Este é um “20% de esforço para conseguir 80% de segurança”.
Em primeiro lugar, você tem de determinar quanto dinheiro você quer investir em Bitcoin e quanto esforço você está disposto a colocar nisso. Se você está feliz em investir uns poucos dólares e não se importa em perdê-los, esta é uma abordagem a se adotar. Para todos os outros, vamos começar.
Força da Senha
Muitas vezes o quão seguro seu dinheiro está é determinado pela força de sua senha. Uma vez que no pior cenário nós estamos falando sobre alguém tentando invadir sua carteira, senhas online casuais são muito fracas. Senhas com menos de 10 caracteres são muito fracas. Palavras comuns ou frases são muito fracas. Adicionar um número ao final da senha é muito fraco.
Além disso, você pode considerar sua senha muito fraca se você:
Se você realmente quer uma senha forte:
Segurança da Carteira
Agora estamos chegando ao cerne das coisas. Há um grande número de carteiras [http://bitcoin.org/en/choose-your-wallet] disponíveis para guardar seus tão suados bitcoins. Se você tem uma quantia decente de moedas para guardar, você deve buscar softwares de carteiras - BitcoinQT, MultiBit, Armory ou Electrum. Eles são alguns dos melhores lugares para guardar seu dinheiro de forma segurança (uma vez que seu computador seja seguro também). Escolha um que você ache que melhor se adeque a vocvocê, instale-o e criptografe o arquivo de sua carteira com uma senha forte. Você deve fazer back-up de seu arquivo (a localização do arquivo é diferente para diferentes clientes, então você deve fazer alguma pesquisa para descobrir como achar aquele arquivo). Faça back-up em um CD, um USB seguro ou algo do tipo. O guarde em um lugar seguro. Se você perder esse arquivo, você perde seu dinheiro.
Uma palavra rápida sobre carteiras determinísticas [https://en.bitcoin.it/wiki/Deterministic_wallet]. Electrum e Armory permitem que você crie carteira de um “seed” (semente). Se você usar o mesmo “seed” depois, você pode recriar sua carteira em outras máquinas. Com determinadas carteiras, você só precisa manter o “seed” seguro para acessar seu dinheiro. Em comparação, nas carteiras tradicionais do BitcoinQT, cada endereço que você usar é randômico, o que significa que depois que você enviar entre 50 ou 100 transações de saída seus backups podem ficar obsoletos. Sempre mantenha back-up atualizado de tal arquivo carteira se possível.
Ok, às vezes você precisa ter seus Bitcoins quando deixa seu computador. Nesse caso, você deve procurar por carteiras online ou via mobile. Um exemplo para ambos é o Blockchain.info, mas existem outros para serem escolhidos. Uma regra de ouro para essas carteiras é não guardar nelas mais dinheiro do que você esteja disposto a perder. Elas são melhores usadas como uma forma conveniente de ter acesso ao seu dinheiro, mas não para guardar suas reservas.
O que ter em mente quando for usar carteiras online:
Armazenamento Frio (Cold Storage)
Às vezes você quer guardar seus bitcoins por um longo período de tempo em um lugar seguro. Isso é chamado de “cold storage”. Existem umas poucas maneiras de se fazer isso.
Em primeiro lugar, carteiras de papel [https://www.bitaddress.org/]. Eles são legais para dar pequenas quantias de bitcoin como presentes, mas também para armazenamento a longo termo se for usado propriamente. O que você precisa fazer é gerar e imprimi-los offline. Você pode salvar o link da página e a abrir offline, por exemplo. Se você for realmente paranoico, você os pode salvar como mídias de apenas leitura e os acessar de um computador diferente. Para armazenamentos realmente longos, use papeis especiais para arquivos.
Outra abordagem a se tomar é usar computadores separados para armazenar seu dinheiro que ficam a maior parte do tempo offline. Você pode facilmente comprar um velho laptop, formatá-lo, instalar nele o sistema operacional Linux e um cliente Bitcoin. Gere um endereço nessa máquina e envie seu dinheiro para ela através da sua carteira principal. Dependendo de quão paranoico você seja você pode conectar esse computador à internet depois para sincronizar suas informações com a rede Bitcoin e então desligue e deixe-o de lado em algum lugar seguro até que você precise dele.
Carteira na memória (Brain Wallets) Não. Essas não são para você. A não ser que você seja um programador em segurança consciente, essas não são para você. (Este tipo de carteira consiste em se guardar a senha da carteira na memória, logo caso a pessoa esqueça, morra ou fique incapacitada mentalmente, o dinheiro se perde)
Diversificando Manter todos os ovos em um só cesto nunca é algo bom. Você deve buscar diversificar alguns de seus ativos em Bitcoin para o caso de um de seus métodos de armazenamento falharem. Algumas formas para você diversificar:
Como não diversificar:
Aceitando pagamentos com segurança
Nós tratamos formas seguras de se armazenar dinheiro, agora uma nota rápida sobre pagamentos com bitcoins e sua segurança.
Em primeiro lugar, quando você estiver fazendo uma transação, pague suas taxas. Transações sem taxas podem levar uma eternidade para se propagarem, confirmarem e finalizarem. Isso pode gerar um monte de estresse, então, paga suas taxas.
Em segundo lugar, quando aceitar pagamentos altos em Bitcoin (digamos que você, de repente, deseje vender uma barra de ouro em Bitcoins), espere a confirmação de pelo menos uma dessas transações. Seis é o melhor, mas tendo pelo menos uma confirmação é muito melhor do que não ter nenhuma. Esse é a regra de ouro para os paranoicos (Eu não faria isso para transações casuais), mas talvez isso irá protegê-lo se você estiver lidando com pessoas suspeitas.
Resumindo… Isso deve servir para o básico. Se você quiser ler mais sobre segurança Bitcoin no geral, aqui está minha tese de mestrado no assunto[https://bitcointalk.org/index.php?topic=88149.0]. Um monte de perguntas sobre Bitcoin e segurança podem também ser respondidas no Bitcoin StackExchange [http://bitcoin.stackexchange.com/] – faça questão de dar uma olhada nele. Comentários e sugestões são bem vindos.
Traduzido por: Sarah Alexandre Original em: http://www.reddit.com/Bitcoin/comments/1pxy4w/basic_bitcoin_security_guide/
submitted by allex2501 to BrasilBitcoin [link] [comments]

How to redeem litecoin from a physical coin by Lealana - English What is Blockchain  Blockchain Developer How to redeem bitcoin from a physical coin by Casascius - English TOR compromised by Javascript -- Casascius Coins Hacked -- Mt.Gox Status Update The Bitcoin Game #56: Paper Wallet Inventor Peter Kroll

Casascius physical bitcoins, also called Casascius coins, are physical metal coins created by Bitcoin user Casascius (Mike Caldwell, Sandy, Utah, USA) and sold until Nov 26, 2013, that contain an embedded piece of paper with digital Bitcoin value, covered by a tamper-resistant hologram.Casascius coins are available in 1, 10, 25, 100, and 1000 BTC increments. Casascius Physical Bitcoins, auch Casascius-Münzen genannt, sind physische Metallmünzen, die vom Bitcoin-Benutzer Casascius (Mike Caldwell, Sandy, Utah, USA) erstellt wurden und bis zum 26.November 2013 verkauft wurden und ein eingebettetes Stück Papier mit digitalem Bitcoin-Wert enthalten ein manipulationssicheres Hologramm. The Casascius Bitcoin POS system is a desktop retail point-of-sale acceptance system for Bitcoin "in a box". The system is based on a VeriFone Vx510 or Vx570 payment terminal, and allows merchants to easily accept Bitcoin payments from customers. It can optionally allow merchants to dispense (sell) Bitcoins. The POS system features an Ethernet network connection, a 128x64 pixel backlit ... As of July 12, 2020, there’s approximately 45,764 BTC still active in the Casascius physical bitcoin collection. For instance, on Ebay there’s two Casascius coins selling for far more than the ... From Bitcoin Wiki. Jump to: navigation, search. Casascius gold 1000 BTC. Denomination: 1000 BTC: Diameter: 30mm: Gold: 1 troy oz: Minted: 2012: Mintage: At least 7: Designer: Casascius: The Casascius 1000 BTC gold coin is the highest denomination coin ever produced by Casascius. It is also the most valuable physical bitcoin ever produced, with one selling for $1 million in 2013. The token is ...

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How to redeem litecoin from a physical coin by Lealana - English

This video is unavailable. Watch Queue Queue. Watch Queue Queue Welcome to episode 56 of The Bitcoin Game, I'm Rob Mitchell. I met Peter Kroll at a Bitcoin conference about a year ago. When I asked Peter what his involvement was with Bitcoin, he told me he ... Semirah Dolan Explains Blockchain Understand Blockchain in Less Than 10 Minutes! Digital Currency Buzzwords Cryptocurrency and more! ♡Share with a f... This video shows how to import mini private key step-by-step In this video I use method 1 described below to convert and import a key from a physical coin. This video is also available in Swedish ... This video shows how to import mini private key step-by-step In this video I use method 2 described below. I used Armory wallet to import my mini private keys but the process should be similar ...

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