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Does anyone here use Bitcoins?
phitsc:
Communications of the ACM had an interesting article titled 'Bitcoin: Under the Hood' a while back. I found it a very worthwhile read (I knew basically nothing about how Bitcoins work). I'm afraid I can't post it here but you can find it like so (as a pdf):
'bitcoint under the hood Aviv Zohar'
@Renegade
Does that mean by posting that address above you can now no longer do private transactions? or does one usually own multiple addresses? or is there such a thing as private and public addresses?
Concerning addresses: as long as I write down my address (or addresses) somewhere, I can always get back my bitcoins? (even if the machine 'hosting' my wallet dies)
Does one usually install multiple wallets on different machines/devices, all working with the same address? Is it possible to manage / work with multiple addresses using the same wallet?
Renegade:
@Renegade
Does that mean by posting that address above you can now no longer do private transactions?
-phitsc (November 09, 2015, 07:58 AM)
--- End quote ---
Well, if anyone looks at that address, they can see what goes in and out of it. However, that doesn't mean that they know where it comes from, or where it goes.
or does one usually own multiple addresses?
-phitsc (November 09, 2015, 07:58 AM)
--- End quote ---
Yes. A wallet contains many addresses. However, once you start getting up into the thousands of addresses, it's a good idea to create a new wallet to "clean out" your old one.
or is there such a thing as private and public addresses?
-phitsc (November 09, 2015, 07:58 AM)
--- End quote ---
All addresses that have transactions associated with them are listed on the blockchain. However, that doesn't mean that you know who owns them.
So, it's "pseudononymous" as opposed to anonymous.
e.g. I can create an address and not tell anyone about it, so nobody knows it. However, if I do a transaction with that address, then it is listed on the blockchain, but nobody knows that I own it.
Concerning addresses: as long as I write down my address (or addresses) somewhere, I can always get back my bitcoins? (even if the machine 'hosting' my wallet dies)
-phitsc (November 09, 2015, 07:58 AM)
--- End quote ---
Yes and no.
No, because you're describing it the wrong way.
But, yes... with the following qualifications.
You need to write down your private keys -- those will "unlock" your addresses, and then you can always get your bitcoins back.
Make certain to back up your wallet (it contains your private keys) multiple times. You can never be too paranoid. :)
Does one usually install multiple wallets on different machines/devices, all working with the same address?
-phitsc (November 09, 2015, 07:58 AM)
--- End quote ---
That's possible, but please, please, please... don't even think about that until much later when you understand everything much, much better. I'm not going to explain any of that because it's just too much to go over.
But yes... it is possible.
The practical answer is "no". You would create multiple wallets with different addresses.
e.g.:
1) "Big" wallet with 100 BTC -- This wallet is offline in "cold storage"
2) Desktop wallet with 5 BTC -- This wallet has a small amount of BTC. It's the equivalent of keeping $2,000 or so in your sock drawer or home safe at home.
3) Mobile wallet with 0.82 BTC -- This is just like your normal wallet that you take with you everywhere. It doesn't have "all" your money/BTC, but it has enough for you to buy gas, groceries, lunch, beer, etc.
Is it possible to manage / work with multiple addresses using the same wallet?
-phitsc (November 09, 2015, 07:58 AM)
--- End quote ---
Yes. Wallets actually create new addresses behind the scenes, and you'd never even know that they were there unless you started to dig down deep.
e.g. I have address ABC with 1 BTC in it. I spend 0.4 BTC on something, so that 0.4 BTC goes to Joe's address (XYZ), and the remaining 0.6 BTC goes into a new address in my wallet (DEF) that collects "unspent change".
You can think of "addresses" a bit like "envelopes of money" that you keep in your wallet. Or imagine that your wallet is a magic wallet that can create infinite "pouches" inside of itself with infinite space, kind of like Dr Who's TARDIS.
Deozaan:
@Deozzan - Check your wallet. I just sent you about $10 in bitcoins. By the time you see this message, it will be in your wallet.
-Renegade (November 09, 2015, 01:30 AM)
--- End quote ---
Wow, thanks!
I only asked that you PM me so that the transaction would be just between you and me.
Bitcoin is "pseudoanonymous". That means that it's not 100% anonymous, but close. As long as nobody knows our addresses, they can't track us.
[...]
Here's an address for me where you can send some just to test:
1F1Eiruf9yzCH49jvjxtajVuzV6mBP3tef
-Renegade (November 09, 2015, 01:30 AM)
--- End quote ---
If you privately send me some bitcoins, and then I turn around and send some of it back to one of your public addresses, won't that link your public address to the private addresses, just by following the chain back a bit?
I guess there's a link there, but there's no proof that a payment to that public address came from me unless I publicize the address I'm paying from. And there's no proof who the owners of the other addresses belong to. Right?
But I wonder do the "Full Node" wallets get paid anything - like from the transaction fees - for their troubles (space usage etc.)?
-Stoic Joker (November 09, 2015, 06:58 AM)
--- End quote ---
No. They don't get paid anything. It would be nice if they did, even if it was only a satoshi (0.00000001 bitcoins) now and then. But I think that's all down to the trust model. Really the only person who can be trusted to have done what they say they have done is a miner who successfully finds the hash. And that is why whichever miner finds the hash gets the reward. They provide proof (the hash) that they've done the work, and in the work, they include the transaction that gives themselves their reward.
Or at least that's my understanding of it. I could be wrong about some of the details, but I'm pretty sure about the answer to your question: No, nodes do not get paid for their service.
Deozaan:
I'm confused about transaction fees. I've read that they're completely optional, but I can't figure out how to make a transaction without including transaction fees. Maybe that's because the client I'm using (Bitcoin Core) doesn't allow that? It has an option I've checked to "send as zero-fee transaction if possible" but when I click send the confirmation screen shows the fee added in there automatically anyway.
The fees are fairly minimal. But when I'm only sending a few cents (in USD) anyway to get a feel for how it works, it kinda sucks losing even a penny of it in fees. Feels kind of like handing a dollar bill to a friend, then having him hand it back and it only being worth 98 cents.
tomos:
I'm confused about transaction fees. I've read that they're completely optional, but I can't figure out how to make a transaction without including transaction fees. Maybe that's because the client I'm using (Bitcoin Core) doesn't allow that? It has an option I've checked to "send as zero-fee transaction if possible" but when I click send the confirmation screen shows the fee added in there automatically anyway.
The fees are fairly minimal. But when I'm only sending a few cents (in USD) anyway to get a feel for how it works, it kinda sucks losing even a penny of it in fees. Feels kind of like handing a dollar bill to a friend, then having him hand it back and it only being worth 98 cents.
-Deozaan (November 09, 2015, 11:52 AM)
--- End quote ---
still a whole lot better than e.g. paypal ...
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