Monthly Archives: March 2016

Paper Wallets and General Bitcoin Security

With every security breach making it into the news, some people get the impression that Crypto currencies “weren’t safe” or even “had failed” or similar. Depending on the nefarious intent behind these headlines (as in the case of established banks bashing Bitcoin as part of their agenda) this may or may not scare potential users from even thinking about using Bitcoin.

The reality is that in the Credit Card Industry over 40% of profits have to be spent for “fraud prevention” (meaning they cannot prevent most cases of fraud anyway and need the amount for compensation). Still, this hasn’t prevented anyone from using credit cards nor similar “electronic” forms of payment — yet.

Crypto coins are quite different though. The level of security only depends on whether or not prudent steps are taken by the user individually. Unlike credit cards where trust has to be given to third parties, the very nature of peer-to-peer technology means that everyone is in control of their own funds and security.

Increasing security for your Bitcoin holdings is always easiest through the use of Paper Wallets: simply move all portions of your savings to Cold Storage (i e into your paper wallet) and only keep smaller amounts needed for spending in a Desktop wallet, online wallets, or less-secure exchange portfolios and similar places.

(A paper wallet is a simple piece of paper run from your printer — preferably a “dumb” one without Wi-Fi or similar security loopholes — containing your public address for deposits along with its private key for retrieval.)

That way, you are not only “your own bank” but (at least!!) as safe as one as well.

Forbes: BoE’s “RSCoin” Useless for Banking

Written by Guest Contributor for Bitcoin Financial.

The Bank of England boasted to have developed “their own Crypto currency”. The think they have found a good way of firing up a few nodes operating some blockchain-like network. Claims like these have been met with caution though.

Even from Forbes, there is far-going criticism of “RSCoin” with the magazine’s Tim Worstall pointing out that the requirements of payments processing and banking are quite different and that “RSCoin” has no use at all for the latter, http://www.forbes.com/sites/timworstall/2016/03/14/the-bank-of-englands-rscoin-would-be-useful-for-payments-but-not-banking/#63750357373f

Essentially, this means that our own initial view of “RSCoin”– published here, http://bitcoinfinancial.info/central-planners-rscoin-bank-england-now-laughing-stock-technology-experts-worldwide/ — is (strangely enough) shared beyond “just Technologists”, and the same views are held even in banking and the general  Wall Street vicinity (albeit less polemic, maybe).

Worstall explains in Forbes that a payments system needs to be “fast, cheap, makes sure that the person the payment is flowing from actually has the resources to make payment, gets the payment to the right person, doesn’t allow double payments and records who ends up with the payment”. He observes that “Bitcoin has its attractions in this sense”.

Thus far, he is right, but it suddenly ends here.

He then claims that “RSCoin” looked even better than Bitcoin in these respects and then claims that “RSCoin” seemed to “scale up to the size and speed of the Paypal or Visa networks without too much effort”. The latter proves the overall ignorance of conventional “wisdom” when it comes to Bitcoin. Claiming PayPal, Visa, and now “RSCoin” to be effortless is a joke: credit card processors spend over 41% of their revenue on “fraud prevention”, including stolen cards, forgery, fraudulent cancellations and refund requests, and much more.

The only valid point that can be raised against Bitcoin is its relatively slow network and limited transaction volume per second and limitation to a total of 21 million bitcoins, along with the infamous 51%-attack problem.

All these issues have long been addressed, and solved, though by people who are far more competent than your average central banker cashing in top salaries every month. There are Alternative coins that have different parameters and even different methods of securing their block indeces, like proof-of-stake and other variants, resulting in both faster transactions and an elimination of the risk of 51% attacks as known in proof-or-work blockchain systems.

Whether or not Bitcoin-the-coin succeeds in the end or will one day stop working does not really matter because Bitcoin-the-idea can always been improved and re-deployed. There are literally hundreds of Alternative cryptocoins. New coins can be set up literally in a matter of hours.

By comparison, BoE officials have said that the “expect” their “RSCoin” to be “ready within 18 months”.

This is further proof of Wall Street and banks in general, let alone governments, still not getting it: they still fail to understand the true implications of Bitcoin (which is a good thing) and are trying to build Bitcoin-clones in cloudcookooland. We wish them a lot of fun doing so.

Trouble is, they’re blowing taxpayers’ money in the process.

“RSCoin”: BoE Now Laughing Stock of Tech Experts Worldwide

The Bank of England has announced it is planning its very “own” Crypto currency, called RScoin.

The coin would be “so much better than Bitcoin” for the alleged advantage of being “backed by the trust of governments”. Exactly the “assurance” everyone needs these days.

Proving to know little more than what some central-bank controlled press office has fed them, Britain’s Daily Telegraph writes on what is actually just the latest wet dreams of the banking elites in a poorly researched article, http://www.telegraph.co.uk/business/2016/03/13/central-banks-beat-bitcoin-at-own-game-with-rival-supercurrency/. Just like the BoE itself, The Daily Telegraph has failed to understand what they’re actually doing, or talking about respectively.

If you want to read something really stupid about the very central bankers responsible for 2008’s economic crisis, then you might want to read that article. No one there is even getting the first thing about Bitcoin’s true innovation for being trustless and peer-to-peer decentralised in nature. The article entirely fails to even scratch on the implications of Satoshi Nakamoto’s solving the Byzantine General’s problem and thereby succeeding with managing distributed consensus for the first time in history. As every mathematician or computer scientist will confirm, this is the actual importance of “Bitcoin” and “Blockchain technology” though. Introducing some central-planners-controlled “RScoin”, the Bank of England’s latest brain fart, proves to only be yet more of the same: namely another attempt of the state at humanity, at freedom, and thus at everyone of us — backed by yet more state-control, central planning and government power. It also proves that governments are having a very hard time moving beyond the technological level of horse-drawn carriages and gunpowder.

With the alleged “trust” of RScoin, sold to us as an “advantage”, the real trouble proves to be the lack of this very trust when people are supposed to put it in governments once again, and after  governments and banking elites have empoverished the world for much more than merely the Federal Reserve’s 103 years of existence now.

At least, a “competing currency” RScoin is though. So let us see how this will play out. Let us see how, and if so, it really can compete with Bitcoin and Alt coins at the end of the day.

PPC (Peercoin) Advancing Further

Peercoin, the first proof-of-stake Crypto coin, is advancing further in price both in US dollar terms and against bitcoins.

Earlier today, peercoins traded over $.49 and around BTC .0012500 on many Crpyto coin exchanges, while briefly hitting 150’000 satoshis (BTC .00150000) on Malta-based Bitcoin exchange “The Rock”.

This development is quite in line with earlier expectations of Peercoin being under-valued (read our earlier report http://bitcoinfinancial.info/litecoin-and-peercoin-may-be-undervalued-now/ of 20 Feb 2016).

Peercoin had reached and exceeded the BTC .00150000 level briefly in January on Cryptsy before the troubled exchange’s breakdown, but that notation (topping at 159’0000 satoshis) had to be taken with a grain of caution. So whether or not the BTC .00150000 mark is of any technical significance may be uncliear in light of the nature of Cryptsy and the goings on around that outfit.

If today’s BTC .00150000 price at The Rock is exceeded, this would mark a possible breakout of Peercoin to the upside, a development that has gradually been preparing and building for Peercoin over the last few months.