SoylentNews is people
SoylentNews
from the who-said-fake-money-would-never-be-worth-anything dept.
Thanks in part to Argentina's volatile financial markets, bitcoins are helping people there cut out the banks and government entirely in their financial transactions:
That afternoon, a plump 48-year-old musician was one of several customers to drop by the rented room. A German customer had paid the musician in Bitcoin for some freelance compositions, and the musician needed to turn them into dollars. Castiglione [the bitcoin moneychanger] joked about the corruption of Argentine politics as he peeled off five $100 bills, which he was trading for a little more than 1.5 Bitcoins, and gave them to his client. The musician did not hand over anything in return; before showing up, he had transferred the Bitcoins — in essence, digital tokens that exist only as entries in a digital ledger — from his Bitcoin address to Castiglione’s. Had the German client instead sent euros to a bank in Argentina, the musician would have been required to fill out a form to receive payment and, as a result of the country’s currency controls, sacrificed roughly 30 percent of his earnings to change his euros into pesos. Bitcoin makes it easier to move money the other way too. The day before, the owner of a small manufacturing company bought $20,000 worth of Bitcoin from Castiglione in order to get his money to the United States, where he needed to pay a vendor, a transaction far easier and less expensive than moving funds through Argentine banks.
Do any Solentils manage their transactions in bitcoin? What are your experiences?
(Score: 4, Interesting) by JNCF on Saturday May 02 2015, @03:49PM
Of course, somebody will typically come along and say, "But just use $SomeSketchyOnlineServiceRunByUnknownPeople! Then you don't have to use the client!"
That obviously defeats the purpose of using a decentralized cryptocurrency system, plus it's just a dumb thing to do.
Not really. You can generate addresses without having a copy of the blockchain, which means that you can have an offline computer in charge of managing your private keys. You only put the public addresses on a connected computer, and you use $SomeSketchyOnlineServiceRunByUnknownPeople to query the blockchain about account balances. When you need to transfer coins from one of your addresses, you either
a) briefly move the relevant private key to your internet-connected, probably-compromised computer. Immediately build and sign a transaction transferring all of the unspent coins from that address. Propagating this transaction is not dangerous, $SomeSketchyOnlineService can't change it, but there is the potential that somebody who has already compromised your computer could build and propogate a different transaction that spends your coins first. They would have to be moving fast. Still, somebody really paranoid might want to
b) keep the private key from the online computer at all times. Query $SomeSketchyOnlineService for information about unspent coins owned by your address, and then use your offline computer to build and sign a transaction based on that data. Move a copy of the signed transaction to your online computer, and tell $SomeSketchyOnlineService to propagate it. Once again, they can't change the transaction once it has been signed.
If you're using option A, you can keep your private keys on a paper wallet rather than having a secure computer dedicated to them. You only need access to a safe computer on one occasion, to initially generate and print a bunch of key/address pairs. For extra credit, destroy the printer.
I'm not arguing that Bitcoin's ecosystem is ready for mass-adoption, just that using random APIs for basic operations isn't actually dangerous or dumb. That's the whole beauty of their decentralised ledger system, you don't have to trust your peers. If you're using an ECMAScript brain-wallet to store your private keys, that's obviously not a good idea. But it's only slightly worse than keeping them on an internet-connected computer, period. I think that OP's criticism of the core Bitcoin client's user experience is valid, I just think that he probably wasn't the audience originally intended to use that client. We don't need everybody to have a full copy of the blockchain. This is a cutting-edge system, and a polished, safe, easy, consumer-ready interface isn't available yet. It will be, either for Bitcoin or for whatever replaces Bitcoin, but it isn't yet.