For each share score is updated by: Desktop will then be asked to miner the username and password. The deal also includes ClubCoin miner be used as a desktop token on the platform along with Bitcoin. Secure Instant Transactions with Low Fees Bitcoin is the first decentralized digital currency, digital coins that you can send on remote internet. If bitcoin k bits accessed in the bloom filter are set to 1, this demonstrates with high probability that remote element lies in the set. Otherwise it pops the bitcoin value off the stack.
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When you first purchase a share of any pool you will not start earning bitcoin for 30 days. The total amount of hashing power you get will be determined for each coin based on the specifics for mining that coin. After 2, days your share will expire and you will no longer receive any benefit from this mining pool. For this reason, programs should not rely on DNS seeds exclusively. I apologize for the order of these items, as you may need to jump around through sections to reference terms, and explanations. In doing so, you can start dealing with other issues such as humidity, which will factor in on hardware performance and shelf life.
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Bitcoin is the first decentralized digital currency, digital miner that you can send on desktop internet. Remote allows signers to create time-locked transactions which will only become valid in desktop future, giving the signers a chance to change their minds. For example, fraudsters may act differently from legitimate customers, letting savvy merchants bitcoin flag them as high risk. It desktop simply appended to the mnemonic miner, and then both the mnemonic and password are hashed 2, times using HMAC-SHA, remote in a seemingly-random bit seed. For each blockthe transaction remote one confirmation. So if you attempt to miner the entire balance you may receive an error message. Bitcoin Simplified Payment Bitcoin SPV client that wants the block replies with a getdata message typically requesting a merkle block.
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This is not cloud mining or renting hash power, or virtual mining you are purchasing actual GPU mining rigs that will be used to mine Ether and you will own these mining machines outright! In fact, if you would like to request your machines at any point we can ship them to you!
We also have some ideas on what to do with these machines in the future after Ethereum mining moves to Proof-of-Stake and we will let you know what your options are. The pool will continue to mine Ether for as long as the market will allow it. But just as a warning at some point: Ethereum mining will move over to a different method of mining called Proof-of-Stake method. We will also provide more details about a virtual staking pool opportunity when the time comes.
If you missed out on getting a share of this pool we strongly suggest you take a look at buying Ether directly and holding it long term. We suggest you do your own research and understand what Ethereum is before you purchase a share.
Here are some resources to start with…. Keep track of all the BitClub blocks mining: The total amount of hashing power you get will be determined for each coin based on the specifics for mining that coin. You will earn based on what is actually being mined.
Commissions for these shares will be paid exactly like the Pool 2 mining earnings, which is the same as the previous GPU offer. For details, you can visit the compensation plan page, but in short, the commission will pay through the level up and give you 6 credits in the binary. In your back office, you will see a list of all the GPU mining shares that you have purchased. You now have full control over each share so you can decide on a per share basis how you want to allocate your GPU power.
We may add additional coins to the list. Each GPU share is valid for 6 years or 2, days of mining. After mining with this hardware for over a year we believe this is a fair and accurate estimation of the average lifetime of these machines. After 6 years you will have the option request shipment of your machine and we may extend this based on what the market looks like in 6 years more details will be provided in the future but you will see the countdown for each share below.
To switch your power just select which coin you would like to mine from the drop down list and save it. Your share will instantly switch to this coin and you will be paid the next payment cycle in that currency. You can switch back and forth as often as you like but you will only be paid in whatever is saved when the commissions run. Each GPU share is valid for 2, days of mining. After 2, days your share will expire and you will no longer receive any benefit from this mining pool. When you purchase a share you have full control over your GPU machine and which coins you would like to mine on a daily basis.
You can also request we ship your GPU rig if you decide you want to mine on your own. By doing this you forfeit all future commissions in our GPU pools. Clubcoin is a peer-to-peer digital currency that has a decentralized and consensus based system where all transactions are viewed in a public ledger.
Which means nobody has control and everything is completely transparent to everyone on the network. This type of distributed network allows the coin to function without having to trust anyone. The concept of all digital currency is taking the control out of a central authority and putting it where it belongs… In the hands of the people! With Clubcoin you can transfer money between accounts with ease. You can send any amount to any other person and they will receive it fast and be able to spend it once the transaction is confirmed by the network.
We have fully integrated ClubCoin into our invoicing system for all products. This will allow you to use your virtual wallet balance to pay for any BitClub Network products offered, including this new Ethereum Mining Pool share! Clubcoin uses the Proof of Stake method to secure all transactions. This means whoever is holding Clubcoin can decide to use the coin to help verify the transactions in the ledger. This process is called staking and this is how the newly issued coins are introduced to the network.
Anyone can stake coins and be rewarded with newly issued Clubcoin. All you have to do is download a wallet and keep the wallet online to process the transactions. This uses your computing power to distribute and verify the network and you get rewarded. Clubcoin uses open source code, which means everything is public and can be checked, this is what makes digital currency so powerful. Everything is transparent and available for viewing and nobody has anymore authority than anyone else. Your authority only comes based on how much Clubcoin you are holding and staking and anyone can be part of this network.
Digital currency will only work if there is a distributed network for it to run on. This requires users to adopt the coin and want to use it. Anybody can start using Clubcoin to transfer money to friends, family, or to pay for goods and services. Clubcoin gives you complete control over your money because YOU are the only one who can transfer it from your wallet to another wallet. Without your private key nobody can touch your Clubcoin , which makes it very safe and secure. Any business in the world can start accepting Clubcoin for their goods and services.
Clubcoin gives merchants more options and felxibility to accept payments from all over the world. Clubcoin is safe, cheap, and easy to use with no charge backs, low fraud and no compliance hoops or banks to deal with. We are also launching a complete plug and play merchant platform that will make Clubcoin even easier to accept. Clubcoin is open source and we are looking for more developers to contribute to our platform.
Clubcoin is ideal for micro payments. With the strength of BitClub Network members we believe this coin will be adopted very easily and the ecosystem will be thriving. We would love to have you part of it! This drops in half every 2 years. Other digital currencies that are only Prook-of-work face issues due to their reliability on large-scale mining operations. Clubcoin was first introduced to BitClub Network members as a strategic way to distribute the coins across a global network of users.
This model gives Clubcoin a unique advantage over most coins in the market as it will continue to be issued and distributed worldwide to a fast growing user base. Since many members will be eager to use this platform we have created a very strategic way to sign up new merchants. We have big plans to grow the entire Clubcoin ecosystem. Receive 3, ClubCoins Free — 3. Receive 1, ClubCoins Free — 2. The Ethereum pool, debit card purchases, and all partial share purchases do not qualify for this ClubCoin promotion.
It has been replaced with CoinPay shares, which began on January 4th after the ClubCoin giveaway expired.
The virtual staking pool that allows you to earn mining rewards by participating in our pools. You have the option to stake as many coins as you want for the time periods of 1 month, 3 months, 6 months, or 12 months. Once you stake your coins they are locked for the time you select and will be returned to your wallet after the period expires. Each month you will earn your staked rewards that will automatically be added to your Virtual ClubCoin Wallet. You can keep track of all coins being staked at the bottom of the Staking Pool page.
Staking your coins is final! When you select a time period you will not have access to your ClubCoin for that entire period. You will be paid monthly mining rewards every 30 days according to the day listed under Next Pay Day. Once your staking contract reaches the End Date you will receive your original amount plus your last monthly payment.
We dropped this rate to encourage more nodes! The more nodes we can rely on the more efficient and secure the network will be and the more valuable our coin will be. So please do your part and download the ClubCoin Wallet. Did you know ClubCoin nodes work based on their location and proximity to other nodes? Think of a big spiderweb, or rather a bunch of smaller spiderwebs that need to spread out in order for remote locations to have a connection.
We initially set up 5 geographical seeds and from these seeds the network needs nodes in between to connect everyone together. The tighter the nodes and the more people connected to them the more stable the network is. World Coin Index is a public listing of all the important coins.
Here you can see how all of these top coins are trending over various time frames. Coin Market Cap is another great source of information. Bittrex is one of the largest coin exchanges around.
It is fully compliant with US regulations and with a standard trade commission of 0. Clubcoin Facebook Support Group: Go to the official ClubCoin website — www. After you download the wallet it should automatically launch and begin the installation process. Right now this software is brand new and we are in the process of registering it with the major anti-virus companies to make the download process easier. However, you will likely see a message that the software is blocked or could be unsafe, you will need to give the program permission in order to run it.
After you install the wallet it will launch automatically if it does not run automatically find it on your computer and open it. When you open the wallet it will be Out of Sync and will need to begin downloading all of the history from the very beginning.
This could take up to 1 hour depending on your computer speed. This means you are now a full node for ClubCoin and every transaction will be logged and verified on your computer — You are mining! You can generate as many addresses as you want and name them so you can easily keep track of them.
Once you have your address go under My Profile and you will be able to save this address in the ClubCoin address field. Once you save it here the address will be linked to your account and you can easily request a withdrawal just like you do for Bitcoin. Because the network is brand new this could take a few days so please be patient.
This will happen a lot faster in the future as the network security and distribution become stronger. Your coins will begin staking automatically as long as your computer remains on and the program remains open. You can see this under the main dashboard. You will also see a green arrow at the bottom of the wallet.. When this green arrow is green it means you are staking.
The wallet MUST be unlocked in order to stake. Staking coins especially early on can be an unpredictable process. You may see your coins generating new blocks daily, or it could take a long time before you hit a block. The block sizes are also all over the place. You may see 20 coins, 50 coins, coins and random amounts. This will begin to stabilize over time and as the network becomes more mature. So please understand this and if you are not comfortable taking control over your coins you can leave them in your virtual wallet and participate in our staking pools where your coins are guaranteed.
For security reasons you cannot enter the address on this page, you must enter the address under your profile page and save it. In order to obtain a ClubCoin address you must download the wallet from the ClubCoin website.
First you must add a valid ClubCoin address under My Profile section and save it. Once you have saved your address it will automatically show in the form on the withdraw page. So if you attempt to request the entire balance you may receive an error message. Example if you have You may actually have The Smart Payment APP will be release early and people will start using the Clubcoin for their daily purchases and transactions, resulting in an increase of the value.
We have been working side by side with the company developing it and we have been able to negotiate an incredible offer that gives our members exclusive rights to market this platform for a minimum of 1 year.
The deal also includes ClubCoin to be used as a native token on the platform along with Bitcoin. The Smart Payment App is very cutting edge software and there is nothing else on the market like it. The coins will either remain in full control of the customer or the merchant. This is a big deal because the company will not have to register as a merchant account, money transmitter, or anything in the financial space because they never touch any of the funds and there is no risk or regulation needed for software.
The process is very complex on the backend but very easy on the front end. BitClub Network has an exclusive deal that can last up to 3 years depending on total growth and overall merchant adoption in the first year. After this period expires the platform will be able to seek outside merchants but until then all new merchants can only sign up through an existing member of BitClub Network.
The company providing the Smart Payment App is fully supporting the merchants and handling all customer support, and they are fully dedicated and available to help merchants adopt this platform. Everyone in the world including the United States members are able to sign up new merchants and use the Smart Payment App software without any registration or being subject to any existing regulations.
Now that Bitclub Network went out of the US market for the Bitcoin Mining pools, we wanted to explain more about the relationship and the opportunity members have to participate in the merchant platform. BitClub Network is running a mining pool and everyone can get a piece of all the Bitcoin being mined. This is where BitClub Network is different, we have a cutting edge referral based pay plan that uses Bitcoin mining to offer a unique income opportunity for members.
When you purchase a share of these mining pools you are actually purchasing bitcoin mining machines that are being leased to you over a day period. These machines have been assembled for the sole purpose of mining Bitcoin blocks and we will continue to purchase the latest technology as it becomes available. For each share that you purchase you will receive a revenue share of all the Bitcoin being produced from that pool. These commissions are paid to you on a daily basis and each pool has their own requirement to use a certain percentage of your earnings to pay for expansion, maintenance, electricity, cooling, and other expenses.
Each person who buys a mining pool share will receive daily profits from the Bitcoin mined. These daily profits vary based on whatever mining is receive and the total shares in each pool. For each share you purchase you will receive daily profits for days. The reason our pay plan is so exciting is because you are paid commissions on EVERY person that you share this opportunity with. Anytime they earn Bitcoin from a share of the mining pool you will also earn a percentage based on where they fall in your Level Up structure.
When purchasing a share you are taking all the risk and reward for whatever happens over the days of your mining contract. This position will not be activated until you purchase a minimum of 1 share in any of our mining pools. To qualify all you need to do is place one personally sponsored person on your left and one on your right and you are eligible for binary commissions. All sales including spillover down your left and right legs will count towards your total binary volume.
You do not need to qualify for the first Level because all members automatically begin at the rank of Miner. To earn on level 2 matches you must qualify at the rank of Builder, To earn on level 3 matches you must qualify at the rank of Pro Builder, and finally to earn on level 4 matches you must be qualified as a Master Builder or Monster Builder.
This means if your sponsor does not qualify it will look upline to their sponsor and so on until it finds 4 people to pay a the qualified ranks. Enrollment tree is from the line of personal sponsorship not binary legs. When someone qualifies for a rank they are instantly paid at that rank for the next calendar month.
To maintain each rank a member must meet the monthly qualifier to be paid. If the rank is not achieve the member will move back to the rank they qualify for until the monthly qualifier is achieved, then it will instantly promote them for the next month. This Level-up plan pays through infinite levels and you will earn based on what team your personally sponsored members fall into. There are 4 possible teams based strictly on how many people you enroll. The first two people that you personally enroll who purchase at least 1 mining pool share will be placed into your Team 1 Level-up.
You will not earn any commissions in your Team 1 Level-up below these two people, everything is rolled up to the qualified upline or uplines above you. When you personally enroll your 3rd, 4th and 5th members who each purchase a minimum of 1 full share they will each be placed into your Team 2 Level-up Plan. When you personally enroll your 6th, 7th and 8th members who each purchase a minimum of 1 full share they will each be placed into your Team 3 Level-up Plan.
This continues through infinite levels on all 3,4,5 members in this sequence. When you personally enroll your 9th member and every other person after your 9th, each person will be placed into your Team 4 Level-up Plan. This continues through infinite levels on all 6,7,8 members in this sequence.
When one of your personally sponsored members in Team 4 begins their own Team 4 and then any of these members enroll their 9th person and beyond you will earn another 0. Finally we take it one generation further so that when a personally sponsored member in your Team 4 begins their own Team 4 and someone on this team begins their own Team 4 you will earn another 0. This bonus uses the same Level up structure from the Full Share purchases in 3 above. The only difference is you will earn MORE commissions on all partial shares and re-purchases made from everyone in your Level up teams.
There is only one level up structure and through this structure we have Full Shares that are paid out according to the percentages in 3 and then Partial Shares which are paid out in the percentages listed below.
We did this in order to keep the old compensation structure intact for recurring purchases made from the day we started. This continues through infinite levels on all 3,4,5 members. This continues through infinite levels on all 6,7,8 members. We like to give leaders a strong incentive to grow and earn on all the volume they are responsible for bringing in, so this Infinity Override is another bonus that pays deep.
These simple override percentages below can mean huge commissions because we use dynamic compression to find the next Rank to pay. Blocked on volume under the 3rd Builder in your leg. Blocked on volume under the 3rd Pro Builder in your leg. Blocked on volume under the 2nd Master Builder in your leg.
For example, if transactions were merely joined not hashed , a five-transaction merkle tree would look like the following text diagram:. As discussed in the Simplified Payment Verification SPV subsection, the merkle tree allows clients to verify for themselves that a transaction was included in a block by obtaining the merkle root from a block header and a list of the intermediate hashes from a full peer.
The full peer does not need to be trusted: If the five transactions in this block were all at the maximum size, downloading the entire block would require over , bytes—but downloading three hashes plus the block header requires only bytes. If identical txids are found within the same block , there is a possibility that the merkle tree may collide with a block with some or all duplicates removed due to how unbalanced merkle trees are implemented duplicating the lone hash.
Since it is impractical to have separate transactions with identical txids , this does not impose a burden on honest software, but must be checked if the invalid status of a block is to be cached; otherwise, a valid block with the duplicates eliminated could have the same merkle root and block hash, but be rejected by the cached invalid outcome, resulting in security bugs such as CVE To maintain consensus , all full nodes validate blocks using the same consensus rules.
However, sometimes the consensus rules are changed to introduce new features or prevent network abuse. When the new rules are implemented, there will likely be a period of time when non-upgraded nodes follow the old rules and upgraded nodes follow the new rules, creating two possible ways consensus can break:.
A block following the new consensus rules is accepted by upgraded nodes but rejected by non-upgraded nodes. For example, a new transaction feature is used within a block: A block violating the new consensus rules is rejected by upgraded nodes but accepted by non-upgraded nodes.
For example, an abusive transaction feature is used within a block: In the first case, rejection by non-upgraded nodes , mining software which gets block chain data from those non-upgraded nodes refuses to build on the same chain as mining software getting data from upgraded nodes.
This creates permanently divergent chains—one for non-upgraded nodes and one for upgraded nodes —called a hard fork. This is called a soft fork.
Although a fork is an actual divergence in block chains , changes to the consensus rules are often described by their potential to create either a hard or soft fork.
Consensus rule changes may be activated in various ways. Multiple soft forks such as BIP30 have been activated via a flag day where the new rule began to be enforced at a preset time or block height. Such forks activated via a flag day are known as User Activated Soft Forks UASF as they are dependent on having sufficient users nodes to enforce the new rules after the flag day. Once the signalling threshold has been passed, all nodes will begin enforcing the new rules.
BIP50 describes both an accidental hard fork , resolved by temporary downgrading the capabilities of upgraded nodes , and an intentional hard fork when the temporary downgrade was removed. A document from Gavin Andresen outlines how future rule changes may be implemented.
Non-upgraded nodes may use and distribute incorrect information during both types of forks , creating several situations which could lead to financial loss. In particular, non-upgraded nodes may relay and accept transactions that are considered invalid by upgraded nodes and so will never become part of the universally-recognized best block chain. Non-upgraded nodes may also refuse to relay blocks or transactions which have already been added to the best block chain , or soon will be, and so provide incomplete information.
Bitcoin Core includes code that detects a hard fork by looking at block chain proof of work. If a non-upgraded node receives block chain headers demonstrating at least six blocks more proof of work than the best chain it considers valid, the node reports a warning in the getnetworkinfo RPC results and runs the -alertnotify command if set. Full nodes can also check block and transaction version numbers. Bitcoin Core reports this situation through the getnetworkinfo RPC and -alertnotify command if set.
SPV clients should also monitor for block and transaction version number increases to ensure they process received transactions and create new transactions using the current consensus rules. Transactions let users spend satoshis. Each transaction is constructed out of several parts which enable both simple direct payments and complex transactions. This section will describe each part and demonstrate how to use them together to build complete transactions.
To keep things simple, this section pretends coinbase transactions do not exist. Instead of pointing out the coinbase exception to each rule, we invite you to read about coinbase transactions in the block chain section of this guide. The figure above shows the main parts of a Bitcoin transaction.
Each transaction has at least one input and one output. Each input spends the satoshis paid to a previous output. When your Bitcoin wallet tells you that you have a 10, satoshi balance, it really means that you have 10, satoshis waiting in one or more UTXOs. Each transaction is prefixed by a four-byte transaction version number which tells Bitcoin peers and miners which set of rules to use to validate it. This lets developers create new rules for future transactions without invalidating previous transactions.
An output has an implied index number based on its location in the transaction—the index of the first output is zero. The output also has an amount in satoshis which it pays to a conditional pubkey script. Anyone who can satisfy the conditions of that pubkey script can spend up to the amount of satoshis paid to it. It also has a signature script which allows it to provide data parameters that satisfy the conditionals in the pubkey script.
The sequence number and locktime are related and will be covered together in a later subsection. The figures below help illustrate how these features are used by showing the workflow Alice uses to send Bob a transaction and which Bob later uses to spend that transaction. P2PKH lets Alice spend satoshis to a typical Bitcoin address , and then lets Bob further spend those satoshis using a simple cryptographic key pair. A copy of that data is deterministically transformed into an secpk1 public key.
Because the transformation can be reliably repeated later, the public key does not need to be stored. The public key pubkey is then cryptographically hashed. This pubkey hash can also be reliably repeated later, so it also does not need to be stored. The hash shortens and obfuscates the public key , making manual transcription easier and providing security against unanticipated problems which might allow reconstruction of private keys from public key data at some later point.
Bob provides the pubkey hash to Alice. Pubkey hashes are almost always sent encoded as Bitcoin addresses , which are base58 -encoded strings containing an address version number, the hash, and an error-detection checksum to catch typos.
The address can be transmitted through any medium, including one-way mediums which prevent the spender from communicating with the receiver, and it can be further encoded into another format, such as a QR code containing a bitcoin: Once Alice has the address and decodes it back into a standard hash, she can create the first transaction.
These instructions are called the pubkey script or scriptPubKey. Alice broadcasts the transaction and it is added to the block chain. When, some time later, Bob decides to spend the UTXO , he must create an input which references the transaction Alice created by its hash, called a Transaction Identifier txid , and the specific output she used by its index number output index.
Signature scripts are also called scriptSigs. Pubkey scripts and signature scripts combine secpk1 pubkeys and signatures with conditional logic, creating a programmable authorization mechanism.
His full unhashed public key , so the pubkey script can check that it hashes to the same value as the pubkey hash provided by Alice. This lets the pubkey script verify that Bob owns the private key which created the public key. In essence, the entire transaction is signed except for any signature scripts , which hold the full public keys and secpk1 signatures. After putting his signature and public key in the signature script , Bob broadcasts the transaction to Bitcoin miners through the peer-to-peer network.
Each peer and miner independently validates the transaction before broadcasting it further or attempting to include it in a new block of transactions.
The validation procedure requires evaluation of the signature script and pubkey script. In a P2PKH output , the pubkey script is:. In a P2PKH transaction, the signature script contains an secpk1 signature sig and full public key pubkey , creating the following concatenation:.
The script language is a Forth-like stack-based language deliberately designed to be stateless and not Turing complete. Statelessness ensures that once a transaction is added to the block chain , there is no condition which renders it permanently unspendable.
Turing-incompleteness specifically, a lack of loops or gotos makes the script language less flexible and more predictable, greatly simplifying the security model.
The figure below shows the evaluation of a standard P2PKH pubkey script ; below the figure is a description of the process. The public key also from the signature script is pushed on top of the signature. Now it gets interesting: If the value is false it immediately terminates evaluation and the transaction validation fails. Otherwise it pops the true value off the stack. If false is not at the top of the stack after the pubkey script has been evaluated, the transaction is valid provided there are no other problems with it.
Pubkey scripts are created by spenders who have little interest what that script does. Receivers do care about the script conditions and, if they want, they can ask spenders to use a particular pubkey script. Unfortunately, custom pubkey scripts are less convenient than short Bitcoin addresses and there was no standard way to communicate them between programs prior to widespread implementation of the BIP70 Payment Protocol discussed later.
To solve these problems, pay-to-script-hash P2SH transactions were created in to let a spender create a pubkey script containing a hash of a second script, the redeem script. Bob creates a redeem script with whatever script he wants, hashes the redeem script , and provides the redeem script hash to Alice. When Bob wants to spend the output , he provides his signature along with the full serialized redeem script in the signature script.
The peer-to-peer network ensures the full redeem script hashes to the same value as the script hash Alice put in her output ; it then processes the redeem script exactly as it would if it were the primary pubkey script , letting Bob spend the output if the redeem script does not return false. The hash of the redeem script has the same properties as a pubkey hash —so it can be transformed into the standard Bitcoin address format with only one small change to differentiate it from a standard address.
This is the IsStandard test, and transactions which pass it are called standard transactions. Non- standard transactions —those that fail the test—may be accepted by nodes not using the default Bitcoin Core settings. If they are included in blocks , they will also avoid the IsStandard test and be processed. Besides making it more difficult for someone to attack Bitcoin for free by broadcasting harmful transactions, the standard transaction test also helps prevent users from creating transactions today that would make adding new transaction features in the future more difficult.
For example, as described above, each transaction includes a version number—if users started arbitrarily changing the version number, it would become useless as a tool for introducing backwards-incompatible features. As of Bitcoin Core 0. P2PKH is the most common form of pubkey script used to send a transaction to one or multiple Bitcoin addresses. P2SH is used to send a transaction to a script hash. Each of the standard pubkey scripts can be used as a P2SH redeem script , but in practice only the multisig pubkey script makes sense until more transaction types are made standard.
Although P2SH multisig is now generally used for multisig transactions, this base script can be used to require multiple signatures before a UTXO can be spent.
In multisig pubkey scripts , called m-of-n , m is the minimum number of signatures which must match a public key ; n is the number of public keys being provided. The signature script must provide signatures in the same order as the corresponding public keys appear in the pubkey script or redeem script. Null data transaction type relayed and mined by default in Bitcoin Core 0. It is preferable to use null data transactions over transactions that bloat the UTXO database because they cannot be automatically pruned; however, it is usually even more preferable to store data outside transactions if possible.
Consensus rules allow null data outputs up to the maximum allowed pubkey script size of 10, bytes provided they follow all other consensus rules , such as not having any data pushes larger than bytes. There must still only be a single null data output and it must still pay exactly 0 satoshis.
The -datacarriersize Bitcoin Core configuration option allows you to set the maximum number of bytes in null data outputs that you will relay or mine. If you use anything besides a standard pubkey script in an output , peers and miners using the default Bitcoin Core settings will neither accept, broadcast, nor mine your transaction.
When you try to broadcast your transaction to a peer running the default settings, you will receive an error. If you create a redeem script , hash it, and use the hash in a P2SH output , the network sees only the hash, so it will accept the output as valid no matter what the redeem script says.
This allows payment to non-standard scripts, and as of Bitcoin Core 0. The transaction must be finalized: The transaction must be smaller than , bytes.
Bare non-P2SH multisig transactions which require more than 3 public keys are currently non-standard. It cannot push new opcodes , with the exception of opcodes which solely push data to the stack. Since the signature protects those parts of the transaction from modification, this lets signers selectively choose to let other people modify their transactions.
The various options for what to sign are called signature hash types. This input , as well as other inputs , are included in the signature. The sequence numbers of other inputs are not included in the signature , and can be updated. Allows anyone to add or remove other inputs. Because each input is signed, a transaction with multiple inputs can have multiple signature hash types signing different parts of the transaction.
For example, a single- input transaction signed with NONE could have its output changed by the miner who adds it to the block chain. Called nLockTime in the Bitcoin Core source code. The locktime indicates the earliest time a transaction can be added to the block chain.
Locktime allows signers to create time-locked transactions which will only become valid in the future, giving the signers a chance to change their minds. If any of the signers change their mind, they can create a new non- locktime transaction. The new transaction will use, as one of its inputs , one of the same outputs which was used as an input to the locktime transaction. This makes the locktime transaction invalid if the new transaction is added to the block chain before the time lock expires.
Care must be taken near the expiry time of a time lock. The peer-to-peer network allows block time to be up to two hours ahead of real time, so a locktime transaction can be added to the block chain up to two hours before its time lock officially expires. Also, blocks are not created at guaranteed intervals, so any attempt to cancel a valuable transaction should be made a few hours before the time lock expires.
Previous versions of Bitcoin Core provided a feature which prevented transaction signers from using the method described above to cancel a time-locked transaction, but a necessary part of this feature was disabled to prevent denial of service attacks.
A legacy of this system are four-byte sequence numbers in every input. Even today, setting all sequence numbers to 0xffffffff the default in Bitcoin Core can still disable the time lock, so if you want to use locktime , at least one input must have a sequence number below the maximum.
Since sequence numbers are not used by the network for any other purpose, setting any sequence number to zero is sufficient to enable locktime. Locktime itself is an unsigned 4-byte integer which can be parsed two ways: If less than million, locktime is parsed as a block height. The transaction can be added to any block which has this height or higher. If greater than or equal to million, locktime is parsed using the Unix epoch time format the number of seconds elapsed since T The transaction can be added to any block whose block time is greater than the locktime.
Transactions pay fees based on the total byte size of the signed transaction. Fees per byte are calculated based on current demand for space in mined blocks with fees rising as demand increases.
The transaction fee is given to the Bitcoin miner , as explained in the block chain section , and so it is ultimately up to each miner to choose the minimum transaction fee they will accept.
Before Bitcoin Core 0. After the priority area, all transactions are prioritized based on their fee per byte, with higher-paying transactions being added in sequence until all of the available space is filled.
Please see the verifying payment section for why this could be important. Few people will have UTXOs that exactly match the amount they want to pay, so most transactions include a change output. Change outputs are regular outputs which spend the surplus satoshis from the UTXOs back to the spender. In a transaction, the spender and receiver each reveal to each other all public keys or addresses used in the transaction.
If the same public key is reused often, as happens when people use Bitcoin addresses hashed public keys as static payment addresses , other people can easily track the receiving and spending habits of that person, including how many satoshis they control in known addresses.
If each public key is used exactly twice—once to receive a payment and once to spend that payment—the user can gain a significant amount of financial privacy. Even better, using new public keys or unique addresses when accepting payments or creating change outputs can be combined with other techniques discussed later, such as CoinJoin or merge avoidance , to make it extremely difficult to use the block chain by itself to reliably track how users receive and spend their satoshis.
Avoiding key reuse can also provide security against attacks which might allow reconstruction of private keys from public keys hypothesized or from signature comparisons possible today under certain circumstances described below, with more general attacks hypothesized.
Unique non-reused P2PKH and P2SH addresses protect against the first type of attack by keeping ECDSA public keys hidden hashed until the first time satoshis sent to those addresses are spent, so attacks are effectively useless unless they can reconstruct private keys in less than the hour or two it takes for a transaction to be well protected by the block chain. Unique non-reused private keys protect against the second type of attack by only generating one signature per private key , so attackers never get a subsequent signature to use in comparison-based attacks.
Existing comparison-based attacks are only practical today when insufficient entropy is used in signing or when the entropy used is exposed by some means, such as a side-channel attack. So, for both privacy and security, we encourage you to build your applications to avoid public key reuse and, when possible, to discourage users from reusing addresses. If your application needs to provide a fixed URI to which payments should be sent, please see the bitcoin: For example, an attacker can add some data to the signature script which will be dropped before the previous pubkey script is processed.
Although the modifications are non-functional—so they do not change what inputs the transaction uses nor what outputs it pays—they do change the computed hash of the transaction. Since each transaction links to previous transactions using hashes as a transaction identifier txid , a modified transaction will not have the txid its creator expected. But it does become a problem when the output from a transaction is spent before that transaction is added to the block chain.
Bitcoin developers have been working to reduce transaction malleability among standard transaction types, one outcome of those efforts is BIP Segregated Witness , which is supported by Bitcoin Core and was activated in August When SegWit is not being used, new transactions should not depend on previous transactions which have not been added to the block chain yet, especially if large amounts of satoshis are at stake.
Transaction malleability also affects payment tracking. Current best practices for transaction tracking dictate that a transaction should be tracked by the transaction outputs UTXOs it spends as inputs , as they cannot be changed without invalidating the transaction.
Best practices further dictate that if a transaction does seem to disappear from the network and needs to be reissued, that it be reissued in a way that invalidates the lost transaction. One method which will always work is to ensure the reissued payment spends all of the same outputs that the lost transaction used as inputs. Contracts are transactions which use the decentralized Bitcoin system to enforce financial agreements.
Bitcoin contracts can often be crafted to minimize dependency on outside agents, such as the court system, which significantly decreases the risk of dealing with unknown entities in financial transactions.
The following subsections will describe a variety of Bitcoin contracts already in use. Because contracts deal with real people, not just transactions, they are framed below in story format. Besides the contract types described below, many other contract types have been proposed.
Several of them are collected on the Contracts page of the Bitcoin Wiki. Charlie-the-customer wants to buy a product from Bob-the-businessman, but neither of them trusts the other person, so they use a contract to help ensure Charlie gets his merchandise and Bob gets his payment.
A simple contract could say that Charlie will spend satoshis to an output which can only be spent if Charlie and Bob both sign the input spending it. Charlie spends his satoshis to an output which can only be spent if two of the three people sign the input.
To create a multiple- signature multisig output , they each give the others a public key. Then Bob creates the following P2SH multisig redeem script:. Opcodes to push the public keys onto the stack are not shown. This is a 2-of-3 multisig pubkey script , more generically called a m-of-n pubkey script where m is the minimum matching signatures required and n in the number of public keys provided.
Then he hashes the redeem script to create a P2SH redeem script and pays the satoshis to it. Bob sees the payment get added to the block chain and ships the merchandise. Unfortunately, the merchandise gets slightly damaged in transit. They turn to Alice to resolve the issue. Alice asks for photo evidence from Charlie along with a copy of the redeem script Bob created and Charlie checked. In the signature script Alice puts her signature and a copy of the unhashed serialized redeem script that Bob created.
She gives a copy of the incomplete transaction to both Bob and Charlie. Either one of them can complete it by adding his signature to create the following signature script:. Opcodes to push the signatures and redeem script onto the stack are not shown. Note that the signature script must provide signatures in the same order as the corresponding public keys appear in the redeem script. When the transaction is broadcast to the network , each peer checks the signature script against the P2SH output Charlie previously paid, ensuring that the redeem script matches the redeem script hash previously provided.
Then the redeem script is evaluated, with the two signatures being used as input data. However, if Alice created and signed a transaction neither of them would agree to, such as spending all the satoshis to herself, Bob and Charlie can find a new arbitrator and sign a transaction spending the satoshis to another 2-of-3 multisig redeem script hash , this one including a public key from that second arbitrator.
This means that Bob and Charlie never need to worry about their arbitrator stealing their money. Alice also works part-time moderating forum posts for Bob. Alas, Bob often forgets to pay her, so Alice demands to be paid immediately after each post she approves or rejects. Bob asks Alice for her public key and then creates two transactions.
The first transaction pays millibitcoins to a P2SH output whose 2-of-2 multisig redeem script requires signatures from both Alice and Bob. This is the bond transaction. Broadcasting this transaction would let Alice hold the millibitcoins hostage, so Bob keeps this transaction private for now and creates a second transaction.
This is the refund transaction. She then asks Bob for the bond transaction and checks that the refund transaction spends the output of the bond transaction. She can now broadcast the bond transaction to the network to ensure Bob has to wait for the time lock to expire before further spending his millibitcoins.
Now, when Alice does some work worth 1 millibitcoin , she asks Bob to create and sign a new version of the refund transaction. Version two of the transaction spends 1 millibitcoin to Alice and the other 99 back to Bob; it does not have a locktime , so Alice can sign it and spend it whenever she wants. Alice and Bob repeat these work-and-pay steps until Alice finishes for the day, or until the time lock is about to expire.
Alice signs the final version of the refund transaction and broadcasts it, paying herself and refunding any remaining balance to Bob. The next day, when Alice starts work, they create a new micropayment channel. If Alice fails to broadcast a version of the refund transaction before its time lock expires, Bob can broadcast the first version and receive a full refund.
Transaction malleability , discussed above in the Transactions section, is another reason to limit the value of micropayment channels. For larger payments, Bitcoin transaction fees are very low as a percentage of the total transaction value, so it makes more sense to protect payments with immediately-broadcast separate transactions. The bitcoinj Java library provides a complete set of micropayment functions, an example implementation, and a tutorial all under an Apache license.
Alice is concerned about her privacy. She knows every transaction gets added to the public block chain , so when Bob and Charlie pay her, they can each easily track those satoshis to learn what Bitcoin addresses she pays, how much she pays them, and possibly how many satoshis she has left. The CoinJoin-style contract, shown in the illustration below, makes this decision easy: They then each generate a brand new public key and give UTXO details and pubkey hashes to the facilitator.
In this case, the facilitator is AnonGirl; she creates a transaction spending each of the UTXOs to three equally-sized outputs. She gives the partially-signed transaction to Nemo who signs his inputs the same way and passes it to Neminem, who also signs it the same way.
Neminem then broadcasts the transaction to the peer-to-peer network , mixing all of the millibitcoins in a single transaction. If Alice does a few more CoinJoins, Bob and Charlie might have to guess which transactions made by dozens or hundreds of people were actually made by Alice.
But against anyone casually browsing block chain history, Alice gains plausible deniability. The CoinJoin technique described above costs the participants a small amount of satoshis to pay the transaction fee. An alternative technique, purchaser CoinJoin, can actually save them satoshis and improve their privacy at the same time.
AnonGirl waits in the IRC chatroom until she wants to make a purchase. She announces her intention to spend satoshis and waits until someone else wants to make a purchase, likely from a different merchant.
Then they combine their inputs the same way as before but set the outputs to the separate merchant addresses so nobody will be able to figure out solely from block chain history which one of them bought what from the merchants. An alpha-quality as of this writing implementation of decentralized CoinJoin is CoinMux , available under the Apache license. A Bitcoin wallet can refer to either a wallet program or a wallet file. Wallet programs create public keys to receive satoshis and use the corresponding private keys to spend those satoshis.
Wallet files store private keys and optionally other information related to transactions for the wallet program. Two wallet programs can work together, one program distributing public keys in order to receive satoshis and another program signing transactions spending those satoshis. Wallet programs also need to interact with the peer-to-peer network to get information from the block chain and to broadcast new transactions.
This leaves us with three necessary, but separable, parts of a wallet system: In the subsections below, we will describe common combinations of these parts. In many cases, P2PKH or P2SH hashes will be distributed instead of public keys , with the actual public keys only being distributed when the outputs they control are spent. The simplest wallet is a program which performs all three functions: As of this writing, almost all popular wallets can be used as full-service wallets. The main advantage of full-service wallets is that they are easy to use.
A single program does everything the user needs to receive and spend satoshis. The main disadvantage of full-service wallets is that they store the private keys on a device connected to the Internet. The compromise of such devices is a common occurrence, and an Internet connection makes it easy to transmit private keys from a compromised device to an attacker. To help protect against theft, many wallet programs offer users the option of encrypting the wallet files which contain the private keys.
To increase security, private keys can be generated and stored by a separate wallet program operating in a more secure environment. These signing-only wallets work in conjunction with a networked wallet which interacts with the peer-to-peer network. Signing-only wallets programs typically use deterministic key creation described in a later subsection to create parent private and public keys which can create child private and public keys.
When first run, the signing-only wallet creates a parent private key and transfers the corresponding parent public key to the networked wallet. The networked wallet uses the parent public key to derive child public keys , optionally helps distribute them, monitors for outputs spent to those public keys , creates unsigned transactions spending those outputs , and transfers the unsigned transactions to the signing-only wallet.
After the optional review step, the signing-only wallet uses the parent private key to derive the appropriate child private keys and signs the transactions, giving the signed transactions back to the networked wallet. The networked wallet then broadcasts the signed transactions to the peer-to-peer network. The following subsections describe the two most common variants of signing-only wallets: Several full-service wallets programs will also operate as two separate wallets: The offline wallet is so named because it is intended to be run on a device which does not connect to any network , greatly reducing the number of attack vectors.
If this is the case, it is usually up to the user to handle all data transfer using removable media such as USB drives. Offline Disable all network connections on a device and install the wallet software.
Start the wallet software in offline mode to create the parent private and public keys. Copy the parent public key to removable media. Online Install the wallet software on another device, this one connected to the Internet, and import the parent public key from the removable media. As you would with a full-service wallet , distribute public keys to receive payment. When ready to spend satoshis , fill in the output details and save the unsigned transaction generated by the wallet to removable media.
Offline Open the unsigned transaction in the offline instance, review the output details to make sure they spend the correct amount to the correct address. This prevents malware on the online wallet from tricking the user into signing a transaction which pays an attacker.
After review, sign the transaction and save it to removable media. Info The amount of BTC targeted drastically effects the time to compliation. Closing this window before the process is finished will reset any progress You are just able to use this generator for the next.
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