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May 16

15 Lesser known facts about Bitcoins

By Admin | Bitcoin News , Crypto Currency News , make money with bitcoin , The Crypto Wealth Formula

15 Lesser known facts about Bitcoins

Cryptocurrencies have been one of the most interesting things in the current generation. Bitcoin is one of the most commonly known among the different types of cryptocurrencies being traded. Recently, Bitcoin has been reaching astounding price levels, attracting many new investors day after day. Yet there are many people who are unaware about the origin and other interesting facts about Bitcoins.

What is lesser known is the way these Bitcoin trading works. Cryptocurrencies have created a huge wonder among the people who are lured by the buzz created by Bitcoins.

15 Lesser known facts about Bitcoins

There are many things that one does not know about Bitcoins. Below are some of the interesting and lesser known facts about Bitcoins and cryptocurrencies –

  • The very first real-world Bitcoin transaction was done to purchase 2 large papa John’s pizzas. It dates back to the year 2010 when Bitcoin was less than a year old, when Laszlo Hanyecz paid a fellow Bitcoin Talk user 10,000 Bitcoins in purchase 2 large pizzas. The amount of the Bitcoins today is worth 27 million dollars.

  • For any great invention, people look for the name of the founder or developer. But in case of Bitcoin, no one knows who the founder of Bitcoins is or who created these Bitcoins. It is rumored that a man named “Satoshi Nakamoto” is the founder of Bitcoin, but no one knows who he is or where he lives.

  • The supply of Bitcoins remains to be fixed. New Bitcoins can come only as rewards paid to Bitcoin miners. So Bitcoins can only be limited. It is researched that the total number of Bitcoins in circulation will never exceed 21 million at any point of time.

15 Lesser known facts about Bitcoins

  • Bitcoins that are generated as rewards to Bitcoin mining (to Bitcoin miners) and are halved every 4 years until all coins are fully mined.

  • Bitcoin is a decentralized monetary system, i.e. there is no central authority to regulate the issue of this currency.

  • Bitcoins are controlled by its own users and no other entity.

  • Currently so far 80% of the Bitcoins have already been mined.

  • The Federal Bureau of Investigation (FBI) owns 1.5% of the total world’s Bitcoins.

  • There are no refund transactions when it comes to Bitcoins. Once transacted, Bitcoins cannot be reversed.

  • It may be surprising fact to know that there are around 1354 Bitcoin ATMs all over the world, spread across 55 counties by 21 ATM producers and 231 operators.

  • The largest transaction ever made on the Bitcoin network was for 194,993 Bitcoins. The transaction was tagged “Shit Load of Money!”

15 Lesser known facts about Bitcoins

  • Bitcoin transactions consume a lot of power. Any Bitcoin transaction however small, medium or big it is consumes electricity power that can be used on an average to power 3 homes for a single day.

  • The Federal Bureau of Investigation (FBI) is said to have the world’s largest Bitcoin wallet.

  • All Bitcoin transactions are done within 10 minutes of settlement time, faster than other real time day to day financial transactions.

  • Bitcoin transactions or trading in Bitcoins remains to be illegal in some parts of the world like Bangladesh, Bolivia, Ecuador and Kyrgyzstan.

There are many other lesser known facts about Bitcoins. The research and findings continue in the cryptocurrencies which comes up with newer and lesser known facts about Bitcoins and other digital currencies.

May 14

Bitcoin Transaction Private key – Encryption and Decryption process

By Admin | Bitcoin News , Bitcoin Transactions , Crypto Currency News , The Crypto Wealth Formula

Bitcoin Transaction Private key – Encryption and Decryption process

Cryptocurrency is the most vulnerable investment medium which is prone to security issues, theft, malware attack and loss of data. Attackers are just waiting for avenues and opportunities to steal the private keys associated with the Bitcoin wallets. As private keys are the core of a Bitcoin transaction done from a Bitcoin wallet, attackers are behind the private key.

The knowledge of private key alone is enough for a person to access and perform operations from the Bitcoin wallet. Hence if one looses the private key data, all the Bitcoins in the wallet are at risk. Private keys associated with Bitcoin wallets can either be stored on the web, on the hardware or on printed paper in case of paper wallets.

Bitcoin Transaction Private key – Encryption and Decryption process

Private keys become vulnerable from storage media’s in case of cold wallets and communication channels in case of hot wallets. The private key is at the risk of attack even while a Bitcoin transaction is being processed from a Bitcoin wallet. Bitcoin wallet owners need to be extremely cautious while storing and transmitting private keys to and from the Bitcoin wallets.

Taking regular back up of the Bitcoin wallets can help to a certain extent, but there are more secure ways that one needs to adopt in order to prevent misuse of private keys from the Bitcoin wallets.

Encryption and decryption of Private keys –

Cryptography of public and private keys takes place through a mathematical algorithm. A public key is derived from a private key by addressing a set of mathematical operations defined in a set of Elliptic Curve Cryptography (ECC). A public key can be derived from a private key, but a reverse action is not possible in this mechanism as these are based on mathematical trapdoor where a function is easy to perform in one direction but practically impossible in another direction. Hence a public address is derived from a public key and a public key is derived from a private key. The private keys can then be encrypted which will secure the Bitcoin transactions. The user will need to decrypt the private key in order to perform sending or receiving transactions from the Bitcoin wallets.

Bitcoin Transaction Private key – Encryption and Decryption process

A highly reliable solution to secure private keys is encryption. Bitcoin wallets or software wallets offer the mechanism to encrypt the private keys. Encrypted private keys will require being decrypted before use, hence even if there is a loss or theft of private keys, if the user is not able to decrypt the encrypted file for the private key, then the private key remains to be safe and unused. The difficulty of the decryption depends on the level of encryption done on the file. The user needs to adopt high standards to encrypt the private key file in the Bitcoin wallets.

The simplest way to encrypt a wallet file is using a password. Another way to perform encryptions is when the private key is encrypted using the master key which is entirely random. The master key is then again encrypted using a key which is derived from a passphrase using the open SSL technology. This is known as multiple encryptions of the software wallets.

As the public and private key pair is mathematically related, what can be encrypted with a public key can be decrypted only with a private key.

Bitcoin Transaction Private key – Encryption and Decryption process

Encryption can only reduce the risk to a certain level but not eliminate in total. Cryptocurrencies are at the highest degree of vulnerability in spite of a number of mechanisms involved to protect and ensure safe cryptocurrency transactions. There are newer ways that are being detected that shows different ways in which the private keys are stolen or attacked by malware. Trading and investing in cryptocurrencies requires vast amount of knowledge about the technology and the way transactions are taking place. Amateur users who indulge in cryptocurrency trading and investments often end up losing all of their money. Hence one is advised to take precautions and adopt secure means while dealing in cryptocurrencies.

May 14

Bitcoin Transaction Private Key

By Admin | Bitcoin News , Bitcoin Transactions , Crypto Currency News , The Crypto Wealth Formula

Bitcoin transactions and the private key

Bitcoin transactions are carried out through Bitcoin wallets. Bitcoin wallets are authorized by a public address and a private key for sending and receiving Bitcoins from the Bitcoin wallets. Private keys play a vital role in Bitcoin transactions. There are different types of Bitcoin wallets based on characteristics and functionalities, but all Bitcoin wallets have a private key for authenticating transactions. Bitcoin is secured through digital message signatures created with a unique private key. Bitcoin transactions are carried out using the public address and the private key, and the private key allows users to identify each other when a Bitcoin transaction is carried out.

The role of public and private keys in Bitcoin transactions –

The public and private keys in a Bitcoin wallet are mathematically linked through a signature algorithm.

  • The public key or the public address is used to identify a sender or a recipient. Just like the email address, the public key can be distributed to others for identity purpose.
  • On the other hand, the private key is used together with the public key to create a non forgeable message signature.

The private key is highly important and should be kept as a secret unlike the public key which can be distributed to others. The private key requires a lot of security measures as it is the underlying base for Bitcoin transactions.

Bitcoin transactions and the private key

Bitcoin transactions and the private key – all you need to know!

The knowledge of private key is the only requirement for one to conduct Bitcoin transactions; hence private keys should be kept a secret. Features of private keys include –

  • Private keys are just a number between 1 and about 10 selected from a very large range.
  • Private keys play a fundamental role in securing the Bitcoin network.
  • Private keys are nothing but a digital signature that prevents forgery in Bitcoin transactions.
  • Public addresses are derived from public keys which are in turn derived from private keys
  • Bitcoin transactions are nothing but messages signed with a private key.
Different Formats of the Bitcoin Private Key –

Bitcoins can be easily stolen from a Bitcoin wallet if the private key is easy to guess or in cases when the private key is lost or stolen. Hence it is highly important to choose a secure private key that is hard to crack by a third party. Private keys are generated in different formats that come with encryption and decryption mechanisms.

  • Basic format private key –

A very basic format example of a private key –

basic format example of a private key

The basic format private key is derived from a 256-bit number that can be represented in many ways. It can be in the range of 0-9 or A to F or any 32, 64 or 256 hexadecimal bits.

  • HD wallet format private keys –

Hierarchical deterministic wallets use the BIP 32 seed to generate private keys. The HD wallet consist of a master extended key that consist of a 56-bit private key and a 256-bit chain code, for 512 bits in total.

  • Wallet Import format private keys –

An alternative format for private keys is the wallet import format (WIF). The Wallet import format is the most common way to represent private keys in Bitcoins. The wallet import format private keys begin with the number 5 and are followed by a sequence of letters and numbers. Example of a WIF private key –

 Example of a WIF private key

  • The mini private key format –

Some Bitcoin wallets use the mini Bitcoin private key format. This format is not so common with Bitcoin wallets, but is used in cases where the space is less or with physical Bitcoins. The mini private key is a key associated to the private key of the Bitcoin wallet. Example of mini private key format –

Example of mini private key format

Bitcoins can be spent only once and when they are spent using the private key, the private key becomes worthless. Private keys play a very fundamental role in Bitcoin transactions. Hence one is required to take every possible step to keep the private key safe and secure. One should use the format of the Bitcoin that is the most safe and secure.

 

May 14

How to secure your Bitcoin Wallet?

By Admin | Bitcoin News , Bitcoin Wallet , Bitcoin Wallets Online , Crypto Currency News , The Crypto Wealth Formula

How to secure your Bitcoin Wallet?

Investing in Cryptocurrency or Cryptocurrency trading might sound really exciting. The hot buzz that Bitcoin has created is driving in many investors for cryptocurrency trading. People are buying Bitcoin wallets which allow you to send and receive the Bitcoins, thus enabling trading and other related transactions in cryptocurrencies like Bitcoins.

With the entire buzz around, comes a list of measures that one needs to adopt in order to carry out secure transactions in cryptocurrencies.

Bitcoins are completely different from the other traded stocks in the share market. Before you start trading in cryptocurrencies using the Bitcoin wallet, you need to choose the type of your Bitcoin wallet wisely from the different types of wallets available, based on your requirements. It is highly important for one to take appropriate steps that are required for the security of his or her Bitcoin wallet.

Bitcoin wallets are highly vulnerable to security issues, hence one need to adopt all good practices that will help secure money stored in the wallet.

Secure your Bitcoin Wallet

So how do you secure your Bitcoin wallet?

Below listed are some of the security measures that will help you secure your Bitcoin wallet –

  •   Keep small amounts –

It is advisable to have smaller amounts of Bitcoins in your Bitcoin wallets. More the number of Bitcoins, greater the loss! Hence it is advisable to keep small number of Bitcoins in the Bitcoin wallet and the rest in a safer environment.

  • Back up Bitcoin wallets –

Online Bitcoin wallets are prone to data loss issues, computer failures and other common types of human mistakes, hence it is highly recommended to back up the Bitcoin wallet. A backup of the wallet will be handy in case of theft of computer device or mobile phones. It is a good practice to regularly back up the Bitcoin wallet if the user is highly active and has frequent cryptocurrency trading transactions.

  • Encrypt Bitcoin wallets –

While storing offline Bitcoin wallets or back-up copies of Bitcoin wallets, it is highly recommended to encrypt the Bitcoin wallet files. This will prevent unauthorized access to the Bitcoin wallet.

How to secure your Bitcoin Wallet?

  • Use offline wallets –

For a trader who is more of an investment person in cryptocurrencies, it is highly recommended to go for cold wallets also known as offline wallets. These are less vulnerable to the risks that are associated with an online wallet.

  • Enable the 2 factor authentication –

With security being the utmost priority, all Bitcoin wallet apps are allowing the 2 factor authentication. This can be in the form of a finger print or a 6 digit code that is often updated regularly. This two factor authentication for your online wallets is a highly secure practice to follow.

  • Change wallets –

Yes, this might sound contradicting but it is highly recommended to change the Bitcoin wallets as a whole during regular intervals. Doing this will prevent the wallet security from getting vulnerable.

In spite of carrying out various security measures, there are lot of Bitcoin wallets that are prone to security issues, loss of data, malware attack and so on. Unfortunately, there is no magic wand that will entirely protect the Bitcoin wallet from financial crisis. But in order to protect your financial digital assets, one needs to ensure that all components of the system are equally protected and interact in a secure way by all means.