Вредоносный код, запускаемый при входе на веб-сайты, становится все большей проблемой для смартфонов; Opera пытается устранить угрозу для своих пользователей.
Компания, которая уже представила защиту от браузерного майнинга для настольных ПК, сообщила в понедельник, что Opera будет иметь ту же функцию в браузерах для смартфонов. Новая функция будет доступна в Opera Mini и Opera для Android, согласно пресс-релизу, и является частью встроенной функции блокировки рекламы в браузере.
Новая функция анти-майнинга активируется по умолчанию при включении блокировки рекламы в Opera Mini для iOS и Opera для Android. Блокировщик рекламы можно включить, перейдя в «настройки», и он автоматически обнаружит и остановит скрипты для майнинга криптовалюты, записанные в код веб-страниц.
По оценкам Opera, более миллиарда устройств во всем мире уже использовались для майнинга криптовалюты с помощью веб-сайтах, на которых размещается вредоносный код без уведомления пользователей. По мнению специалистов компании, сейчас насчитывается более 3 миллионов веб-сайтов, которые имеют встроенный код для майнинга криптовалюты.
Потребителям сложно узнать о существовании проблем, поскольку на подобных сайтах не предоставляется никакой визуальной подсказки; майнинг происходит без оповещения пользователя.
Майнинг криптовалюты может перегружать процессоры смартфонов, заставляя их использовать 100% вычислительной мощности, что вызывает перегрев телефонов.
И иногда ущерб может быть необратимым. Согласно статье ZDNet, один троянский вирус произвел столько тепла в телефоне, что его батарея распухла, навсегда повредив телефон. В то время как реклама была одной из причин активной выработки тепла, основная причина повреждения заключалась в том, что центральный процессор телефона был занят майнингом Monero. Вирус настолько эффективно использовал устройство, что «повредил телефон в течение 48 часов».
The Business Administration Department of the People’s Bank of China (PBoC) has reportedly issued a document today requiring payment providers in Beijing to stop facilitating cryptocurrency trading activities.
The news, first reported by Securities Times, a state-owned media outlet launched by the Communism Party mouthpiece the People’s Daily, said the document requires payment companies to start internal investigations to ascertain if cryptocurrency trading activities are being conducted via their payment services. If so, they should subsequently cease servicing those accounts, the document states.
Citing sources familiar with the matter, the news source said the document also requires these companies to report on their investigation and implementation by Jan. 20.
The document, if genuine, may come as part of plans to implement a wider ban on China’s crypto trading scene that was reportedly sought by the PBoC’s vice governor Pan Gongsheng.
Another China-based outlet, the Economic Observer, reported that it has confirmed the veracity of the document through another source close to the central bank.
The Business Administration Department is a Beijing-based division within the PBoC that specifically implements monetary polices in the country’s capital.
According to Securities Times, the document requires payment services within its jurisdiction to comply with its request. While it might appear that the rule only applies to services registered in Beijing, the document requires the firms to extend the investigations across their other branches.
It remains unclear at this stage what immediate impact this may have on China’s remaining cryptocurrency trading activity. Following the ban on initial coin offerings by the PBoC last year, China’s cryptocurrency exchange activities have mostly shifted to over-the-counter (OTC) trading.
For example, Huobi and OKCoin, previously two of the biggest order book exchanges in China, now offer platforms where Chinese residents can advertise their buy and sell orders, and the resulting transactions in cryptocurrencies and fiat currencies are separated. Trading partners would send Chinese Yuan through payment tools such as bank transfers, WeChat Pay and AliPay, which appear to be like any normal transactions between two individuals.
Other OTC platforms also exist through the group chat function of messaging giant WeChat and Telegram. With the data center of the latter service being outside the jurisdiction of the Chinese government, it has become a popular venue for OTC trading among Chinese investors.
A CoinDesk telephone call to the Business Administration Department of the PBoC for comment was not answered.
Разработчик Bitcoin Core Грег Максвелл покинул блокчейн-стартап Blockstream, чтобы посвятить свое время «углубленной работе над протоколом», передает CNN.
Greg Maxwell
Максвелл сообщил о своем решении, разослав письмо списку bitcoin-dev.
Грегг Максвелл — не просто сотрудник, но и соучредитель Blockstream. По его словам, его цель при создании компании, разрабатывающей корпоративные решения на блокчейне и предложения с открытым исходным кодом, заключалась в том, чтобы обеспечить развитие и должную финансовую поддержку Биткойну. Теперь же, когда у биткойна есть множество контрибьюторов, а сообщество – активно как никогда, Максвелл принял решение сосредоточиться на углубленной работе над протоколом и других аспектах его развития, таких как повышение конфиденциальности и масштабирования главной цифровой валюты.
Уход Максвелла из Blockstream вызвал немало волнений и вопросов. Большинство отзывов о его работе были положительными, бывшие сотрудники благодарили его за вклад в развитие сообщества. Вместе с тем, в сети появилось множество альтернативных объяснений его ухода: от распада Blockstream до недоразумений с инвесторами. Некоторые пользователи Twitter даже предположили, что Максвелл ушел, чтобы начать работать с Bitcoin Cash.
Wouldn’t be surprised to hear Greg Maxwell has been working on BitcoinCash soon. pic.twitter.com/Z7QQb6MfT4
— Sheri Serife Ucar (@SheriUcar) 19 января 2018 г.
itcoin Core developer Greg Maxwell has resigned from blockchain startup Blockstream to focus his efforts on open-source protocol development.
Greg Maxwell
Maxwell made this announcement in an email distributed to the bitcoin-dev mailing list, adding that he had submitted his resignation in November but had only just wound down his involvement with the company.
“In order to spend more time working independently on deep protocol work, especially new cryptographic privacy and security technology for Bitcoin, I resigned from Blockstream last November,” Maxwell wrote.
Maxwell, who co-founded Blockstream, said that his goal in starting the company — which provides corporate blockchain solutions but also contributes heavily to open-source development — was to provide Bitcoin development with the level of sustained financial support that Linux and other open-source projects have.
“We hoped that Blockstream could help act as an anchor of support for technology development, and in doing so help grow the community. I think that has been a big success,” he said. “The Bitcoin industry has matured a lot and today Bitcoin Core gets significant regular contributions from many organizations…and a volunteer community much larger and more active than it has ever been before.”
He said that far from stepping back from Bitcoin, his resignation will allow him to spend more time focusing on development itself and less managing the day-to-day operations of a company.
“So for me this means that I can go back to working on the things I find most exciting … without the overhead of managing staff or dealing with the many non-Bitcoin blockchain applications which are important to Blockstream’s business,” he said, adding that he would focus his attention on innovative technologies such as Bulletproofs, Confidential Transactions, and signature aggregation — technologies which could increase bitcoin’s privacy in a more scalable way.
Maxwell and Blockstream have both become lightning rods in the cryptocurrency community, so it is unsurprising that his resignation engendered very different responses among different corners of the ecosystem.
Posts on the Bitcoin subreddit were overwhelmingly positive, with former coworkers praising his leadership and community members thanking him for his continued contributions to the Bitcoin development.
The /r/BTC subreddit — the de facto subreddit for bitcoin cash — meanwhile, attracted a few humorous conspiracy theories. One post, which had 669 upvotes at the time of writing, opined that “Blockstream is falling apart.” Others suggested that he had been forced out by Blockstream investors.
Perhaps the most unique theory came from a Twitter user, however, who said that she “wouldn’t be surprised” if she learned that Maxwell had left Blockstream to begin working on Bitcoin Cash.
Цена биткоина в субботу достигла максимума в $13’000 долларов, но всплеск был недолгим, так как вчера цена снизились до $11’096 в 20:59 UTC.
На момент написания статьи согласно индексу цен биткоин торгуется по 11’450. Тем не менее, криптовалюта за последние 24-часа снизилась на 5,8%, согласно данным CoinMarketCap.
Интересно, что участники сообщества инвесторов считают, что закрытие работы правительства США может повлиять на рост биткоина в эти дни. Однако, если история чему-то нас и учит, то BTC вряд ли получит значительные стимулы для роста из-за политического противостояния в Вашингтоне.
Например, во время последнего противостояния в правительстве США (с 1 по 17 октября 2013 года) BTC вырос на 10%, что немного по стандартам движений биткоин. Кроме того, цены были в основном ограничены диапазонами в преддверии закрытия и начали резко возрастать после завершения ценового тупика.
Технический анализ
Приведенная выше диаграмма (цены в соответствии с Coinbase) показывает:
BTC вырос до $12’500, как ожидалось, и увеличил значение до $13’000 в течение выходных, но не смог преодолеть линию сопротивления нисходящего тренда (отмеченное синим кругом).
Неудача в прорыве линии нисходящего тренда и падение до уровня ниже $12’000 добавляет вероятность продолжения нисходящего движения.
Приведенная выше диаграмма (цены в соответствии с Coinbase) показывает:
Цена закрытия (согласно UTC) оказалась выше 12’500 долларов в субботу, сигнализируя о том, что краткосрочное дно находится на уровне $9’005 и существует потенциал для ралли к отметке $15’000.
Однако последующее движение было очень слабым. Вчера BTC упал до уровня $11’500 и в настоящее время торгуется ниже $11’500.
Разворот ниже $12’500 нейтрализовал бычий прогноз. Между тем, сильная защита уровня $11’004,61 (100-дневная MA + уровень 61,8% Фибоначчи) поддерживает биткоин.
Обзор
Прогноз остается нейтральным, пока цена остается в диапазоне от $11’000 $13’000.
Медвежий сценарий: закрытие (по UTC) ниже $11’004 откроет двери для более глубокого снижения к уровню $8’000.
Бычий сценарий: прорыв уровня в $13’000 может привести к росту до уровня $15’733 (уровень 61,8% Фибоначчи).
Morgan Stanley теперь очищает фьючерсы Биткойн для своих клиентов, а это означает, что Goldman Sachs больше не является единственной компанией Wall Street, которая делает это. Morgan Stanley присоединяется к Goldman Sachs, TD Ameritrade, E * Trade и другим в расчистке фьючерсов CME и Cboe Bitcoin.
Реакция сообщества биткойнов была разделена на создание регулируемых фьючерсов на биткойн, некоторые из которых предполагали манипулирование базовым рынком биткойнов. Тем не менее, ясно, что чем больше фирм Уолл-стрит, вовлеченных во все, что связано с Биткойном, тем больше легитимности он дает цифровой валюте.
Инвесторы института
Финансовый директор Morgan Stanley Джонатан Прузан сказал, что брокерство в основном было связано с обслуживанием своих институциональных клиентов: «Я бы не сказал, что это была большая активность, но для основных институциональных клиентов, которые хотят участвовать в транзакции с производными инструментами».
Учитывая признаки того, что институциональные инвесторы начинают играть гораздо большую роль на рынках биткойнов, это важно. Если такие институты заинтересованы в приобретении Биткойна, цена, безусловно, взлетит. Действительно, Coinbase нацеливается именно на таких клиентов с их продуктом Coinbase Custody. Генеральный директор Coinbase Брайан Армстронг считает, что институциональные инвесторы могут быть готовы инвестировать до 10 млрд долларов.
[:en]Morgan Stanley is now clearing Bitcoin futures for their clients, meaning that Goldman Sachs is no longer the sole Wall Street firm doing so. Morgan Stanley joins Goldman Sachs, TD Ameritrade, E*Trade and others in clearing CME and Cboe Bitcoin futures.
The reaction of the Bitcoin community has been divided over the creation of regulated Bitcoin futures, with some suggesting manipulation of the underlying Bitcoin market. However, it’s clear that the more Wall Street firms that get involved in anything related to Bitcoin, the more legitimacy it gives to digital currency.
Institutional investors
Morgan Stanley Chief Financial Officer Jonathan Pruzan said the brokerage was mostly concerned with servicing its institutional clients::
“I wouldn’t say it’s been a lot of activity, but it’s for core institutional clients who want to participate in a derivatives transaction.”
Given indications that institutional investors may be starting to play a much greater role in the Bitcoin markets, this is significant. If such institutions become interested in acquiring Bitcoin, the price will certainly soar. Indeed, Coinbase is targeting just such clients with their Coinbase Custody product. Coinbase CEO Brian Armstrong believes institutional investors may be ready to invest as much as $10 bln.
Bitcoin (BTC) is a digital currency, which is used and distributed electronically.
Bitcoin is a decentralised peer-to-peer network. No single institution or person controls it.
Bitcoins can’t be printed and their amount is very limited – only 21 mln Bitcoins can ever be created.
Who created Bitcoin?
Bitcoin was first introduced as an open-source software by an anonymous programmer, or a group of programmers, under the alias Satoshi Nakamoto in 2009. There has been a lot of rumours about the real identity of BTC’s creator, however all of the people mentioned in those rumours have publicly denied being Nakamoto.
Nakamoto himself once claimed to be a 37-year-old male living in Japan. However, because of his perfect English and his software not being labeled in Japanese, there are reasonable doubts about this. Around mid-2010, Nakamoto moved on to other things, leaving Bitcoin in the hands of a few prominent members of the BTC community. Also Satoshi named Gavin Andresen a lead developer.
It has been estimated that Nakamoto owns around one mln Bitcoins, which amounts to approximately $3.6 bln as of September 2017.
Who controls Bitcoin?
According to Gavin Andresen, the very first thing he focused on after Nakamoto moved on from the project was further decentralisation. Andersen wanted Bitcoin to continue its existence autonomously, even if he would ‘get hit by a bus’.
For a lot of people, the main advantage of Bitcoin is its independence from world governments, banks and corporations. Not one authority can interfere into BTC transactions, impose transaction fees or take people’s money away. Moreover, the Bitcoin movement is extremely transparent – every single transaction is being stored in a massive distributed public ledger called the Blockchain.
Essentially, while Bitcoin is not being controlled as a network, it gives its users total control over their finances.
How does Bitcoin work?
A user sees only amount of Bitcoins on his or her wallet and and transaction results.
Behind the scenes, the Bitcoin network is sharing a public ledger called the “block chain”. This ledger contains every transaction ever processed. Digital records of transactions are combined into “blocks”.
If someone try to change just one letter or number in a block of transactions, it will also affect all of the following blocks. Due to it being a public ledger, the mistake or fraud attempt can be easily spotted and corrected by anyone.
User’s wallet can verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses.
Because of the verification process and depending on the trading platform, it may take a few minutes for a BTC transaction to be completed. The Bitcoin protocol is designed so that each block takes about 10 minutes to mine.
Characteristics of Bitcoin
Decentralised
One of Satoshi Nakamoto’s main objectives when creating Bitcoin was the network’s independence from any governing authorities. It is designed so that every person, business, as well as every machine involved in mining and transaction verification, becomes part of a vast network. Moreover, even if some part of the network goes down, the money will keep moving.
Anonymous
These days banks know virtually everything about their clients: credit history, addresses, phone numbers, spending habits and so on. It is all very different with Bitcoin, as the wallet doesn’t have to be linked to any personally identifying information. And while some people just simply don’t want their finances to be governed and tracked by any kind of an authority, others might argue that drug trade, terrorism and other illegal and dangerous activities will thrive in this relative anonymity.
Transparent
The anonymity of Bitcoin is only relative, as every single BTC transaction that ever happened is stored in the Blockchain. In theory, If your wallet address was publicly used, anyone can tell how much money is in it by carefully studying the blockchain ledger. However, tracing a particular Bitcoin address to a person is still nearly impossible.
Those who wish to stay anonymous with their transactions can take measures to stay under the radar. There are certain types of wallets that prioritise opaqueness and security, but the simplest measure would be to use multiple addresses and not transfer massive amounts of money to a single wallet.
Fast
The Bitcoin network processes payments almost instantaneously, it normally takes just a few minutes for someone on the other side of the world to receive the money, while normal bank transfers can take several days.
Non-repudiable
Once you send your Bitcoins to someone, there is no way of getting them back, unless the recipient would want to send them back to you. This ensures the reception of a payment, meaning that whoever you’re trading with can’t scam you by claiming that they never got the money.
What can I buy with Bitcoin?
Back in 2009, when Bitcoin was first introduced, it wasn’t very clear how and where you could spend it. Now, you can buy virtually everything. For example, giant companies like Microsoft and Dell accept payments in BTC for a variety of their products and digital content. You can fly with airlines such as AirBaltic and Air Lithuania, buy theatre tickets through UK’s Theatre Tickets Direct, get a few bottles of craft beer from Honest Brew, and so on.
Other options include paying for hotels and buying property, picking up bills in various bars and restaurants, joining a dating site, buying a gift card, placing a bet in an online-casino and donating for a good cause. There is also a flurry of diverse online marketplaces, trading in everything from illegal substances to high-end luxury items.
Bitcoin is a relatively new and quite complex form of payment, so it is only natural that the spending options are still limited, but every day more and more businesses – from small local coffee shops to industry giants – are accepting payments in BTC.
Moreover, due to its constantly fluctuating exchange rate, Bitcoin became a prime opportunity for investment. Despite still being an unstable and to some extent unrecognised currency, it became seven times more valuable over the last year, almost reaching a rate of $5000 for one BTC.
How to get Bitcoin?
The simplest way of getting Bitcoins is to buy them. Bitcoins are available from various exchanges, but you can also buy them directly from other people via marketplaces. They can be paid for with cash, credit and debit card transfers or even with other cryptocurrencies. But first, you’ll need a Bitcoin wallet.
There is a variety of options, but the main ones can be reduced to an online wallet and a software wallet on the hard drive of your computer. Neither option is completely safe, as a hard drive can become corrupted, while an online wallet might be prone to a hacker attack. There are also mobile wallets, which are very simplified due to an enormous storage capacity required to carry the entire Blockchain; dedicated devices called hardware wallets and paper wallets with two QR-codes that are not stored digitally anywhere, making them immune to standard cyber-attacks and hardware failures.
And, of course, there’s mining. Just a few years ago, anyone with a powerful enough computer could mine Bitcoins, but this is not the case anymore. The BTC’s ever-increasing popularity as well as its exchange rate caused big companies to step into the game armed to the teeth with mining-specific devices, hence why the difficulty and energy required to mine worthwhile amounts of Bitcoins has skyrocketed. What’s more, the amount of Bitcoins still to be mined decreases constantly and drastically.
Pros
Freedom
BTC was designed with freedom in mind. Most importantly, freedom from governing authorities controlling the transactions, imposing fees and being in charge of people’s money. When it comes to buying things, cryptocurrency became just as legitimate as flat currency in recent years, and considering the existence of numerous deep-web markets that only accept Bitcoins, you may be able to buy some things easier with BTC than with any other currency.
High portability
One of the distinct characteristics of money is portability, meaning it should be easy to carry and use. Since Bitcoin is completely digital, practically any sum of money can be carried on a flash drive, or even stored online.
Cryptocurrencies give people freedom to send and receive money with just a scan of a QR-code or a click of an online wallet. It takes little to no time, there are no outrageous fees and the money goes from person to person without any unnecessary intermediates; all you need is Internet access.
Choose your own commission
Another indisputable advantage of the Bitcoin network is a possibility of choosing the transaction fee amount, or choosing not to pay it at all. The transaction fee is received by the miner, after a new block is generated with a successful hash. Usually, the sender pays the full fee, while deducting this fee from the recipient could be considered an incomplete payment.
Transaction fees are completely voluntary and they serve as an incentive for the miners to make sure that the particular transaction will be included in the new block being generated. This incentive also works as an income source for the miners, often bringing them more money than the traditional mining would have, especially considering that the mining activity will stop completely in the future, when the limit of Bitcoins will be reached.
Thus, the cryptocurrency market asks users to chose between the cost and the waiting time. Higher transaction fee would mean quicker processing, while users without any time constraints can save money.
No PCI
PCI stands for Payment Card Industry and it denotes the debit, credit, prepaid, e-purse, ATM and POS cards and associated businesses. It consists of all the organisations that store, process and transmit cardholder data, there are strict security regulations in place and most major card brands are part of it.
While unified rules and regulations can be good for big companies, they might not be taking every person’s needs into consideration. When using Bitcoin, there is no need to comply with PCI standards, which can allow users to branch out into new markets, where credit cards are not available or the fraud levels are unacceptably high.
As a result, users get lower commissions, an opportunity to expand their markets and lower their administrative expenses.
Safety and Control
Bitcoin users are able to control their transactions; no one can withdraw money from your account without you knowing and agreeing to it, like sometimes happens with other ways of payment, and no one can steal your pay information from merchants.
BTC users can also protect their money with backup copies and encryption. Moreover, their identities and personal information are always protected, as none of it needs to be disclosed to make a payment.
Transparent and neutral
Every single transaction as well as every single bit of information about it is always available for everyone in the Blockchain, which can be checked and used in real time. The BTC protocol is encrypted, hence why no human being or an organisation can control or manipulate it. The network is decentralised, so no one will ever fully control it. This is why Bitcoin is always going to be neutral, transparent and predictable.
It can’t be counterfeited
One of the most popular ways of counterfeiting in the digital world is using the same money twice, rendering both transactions fraudulent. It is called a ‘double spend’. To counter this, Bitcoin, just like most other cryptocurrencies, uses Blockchain technology as well as the various consensus mechanisms built into all BTC algorithms.
Cons
Legal questions
Bitcoin’s legal status varies drastically from country to country. In some countries the use and trade of BTC is encouraged, while in others it is banned and outlawed.
There has been a lot of concerns regarding Bitcoin’s appeal to criminals, some news outlets have even stated that its popularity rests entirely on the ability to spend it on illegal goods. Indeed, when the infamous web black market Silk Road was shut down, Bitcoin instantly decreased in value (wired.com).
Level of recognition
Bitcoin is recognised and is perfectly legal in a lot of countries, however some of the world’s governments still don’t have any regulations regarding BTC, while others have outright banned it.
The majority of businesses, no matter how big or small, are still completely oblivious to it. It is nearly impossible to abandon all other currencies and start using BTC exclusively.
Lost keys
A key is a unique alphanumeric password necessary to access a Bitcoin wallet. Losing that key essentially means losing your wallet. However, most current wallets have backup and restore mechanisms, but obviously the user needs to set them up before being able to use them.
Volatility
The price of Bitcoins has had its ups and downs, going through various cycles of skyrocketing and plummeting, referred to by some as bubbles and busts. Throughout its history BTC has been conquering new heights, only to sustain a massive drop straight after. Its value is unpredictable, it changes rapidly and drastically, which can cause significant financial damage to an imprudent investor.
Continuous development
The future of Bitcoin is rather unclear. Currently, governments and banks are not able to control BTC, it’s almost unregulated. However, the bigger and more popular it gets, the more world governments will try to take it under control. A regulated and governed Bitcoin would be an entirely different sort of currency.
Is Bitcoin a pyramid scheme?
A billionaire investor Howard Marks has recently stated that digital currencies are nothing but a pyramid scheme. He elaborated saying that the current success of digital currencies is based on nothing but willingness to ascribe value to something that actually has no value beyond what people will pay for it (cointelegraph).
Those investing in a pyramid scheme get their returns from their own money or from subsequent investors’ money, instead of from profit made by the individuals running the business. When it comes to Bitcoin, however, the gains and its value come from limited supply of coins. As more people acquire the coins, the supply gets rarer, thus making each coin more and more valuable. Bitcoin simply has nothing in common with a standard pyramid scheme.
Is Bitcoin a bubble?
Robert Shiller, a Nobel Prize winning economist, proposed a checklist which helps determine if something is a bubble. Said checklist includes sharp increases in the price of an asset, great public excitement, media frenzy, stories of people getting rich and growing interest in the asset among the general public. Bitcoin checks all of those boxes.
So, in a way, Bitcoin is a bubble and it has burst before. After the infamous closure of Mt.Gox, a Chinese exchange that was handling more than 70% of all the Bitcoin transactions worldwide, BTC’s prices were falling for about a year and a half. It took the prices exactly 3 years to recover. Of course, it is hard to predict what will happen in the future and there is a possibility of Bitcoin’s prices plummeting again. However, Bitcoin has recovered before and it is currently stronger than it ever was.
Difference of Bitcoin from traditional currencies
Decentralisation
Every currency in the world, apart from cryptocurrencies, is governed by some kind of authority. Every transaction goes through a bank, where people are charged enormous fees, and it normally takes a long time for money to reach the recipient.
Bitcoin, on the other hand, is not controlled by anyone. It’s a decentralised network and it’s built on the cooperation and communication of all the people taking part in it. Because of that, even if some part of the network goes offline, transactions will still be coming through.
It can’t be counterfeited
Bitcoin was designed as a currency that can withstand counterfeiting attempts. The legitimacy of BTC is ensured by the Blockchain technology, as well as by various different defence mechanisms built into every algorithm.
Most other traditional currencies are extremely prone to counterfeiting and those who control them seem to be doing close to nothing to fix it.
Durability
Bitcoins don’t exist in physical form, which means they cannot be damaged. Every single Bitcoin is essentially eternal, unlike paper money or coins.
Once sent, cryptocurrencies can’t be recalled
If someone makes a mistake and sends money to the wrong wallet and wishes to get it back, they can’t. Like many other Bitcoin features, this was done in order to prevent fraud. Unfortunately, when it comes to traditional currencies, most transactions can be recalled, all it takes is one phone call.
Fungibility
While there are some traditional currencies like the dollar and euro that are accepted in multiple countries, most of the world’s currencies can only operate within the geographical borders of their country of origin. In contrast to that, BTC is an online currency, meaning that its authorised operating environment is worldwide.
How is Bitcoin taxed?
Bitcoin is yet to obtain a legal tender status in most jurisdictions, but some tax authorities have acknowledged its significance and proposed specific regulations. Those regulations vary significantly from country to country.
For example, the U.S. Internal Revenue Service treats Bitcoin and all other prominent digital currencies as a property rather than a currency. Every taxpayer selling goods and services for Bitcoins has to include the value of the received Bitcoins in their annual tax returns. Miners are also subject to U.S. taxation, but only if the mining proves to be successful.
According to the European Court of Justice, Bitcoin is a currency, not a property. Although it is exempt from VAT, Bitcoin can still be subject to other taxes. The UK tax authorities treat Bitcoin as a foreign currency, with every BTC-related case considered on the basis of its own individual facts and circumstances. As of July 2017, the sale of Bitcoins is exempt from consumption tax in Japan, where it’s officially recognized as a payment method.
So, as Bitcoin is a relatively new currency, the regulations frameworks governing its taxation significantly differ depending on a country. Moreover, in many jurisdictions there are no specific laws or regulations regarding the cryptocurrency.
@aantonop. Andreas. M. Antonopoulos is an author of Mastering Bitcoin and The Internet of Money books.
@adam3us. Adam Back is a Co-Founder and CEO at Blockstream, that provides funding for the development of Bitcoin Core, reference client of bitcoin.
@alextapscott. Alex Tapscott is a co-author of ‘Blockchain Revolution’ book. CEO of Northwest Passage Ventures, an advisory firm building blockchain businesses.
@barrysilbert. Barry Silbert is a founder and CEO of DigitalCurrencyGroup, a venture capital company focusing on the digital currency market.
@BrettKing. Brett King leads Breaking Banks, global fintech podcast
@brian_armstrong. Brian Armstrong is a co-founder & CEO at @Coinbase.
@CharlieShrem. Charlie Shrem is a founder of Bitcoin Foundation and Business Developer at Jaxx, mobile cryptocurrency wallet.
@dtapscott. Don Tapscott is the father of Alex Tapscott and a co-author of ‘Blockchain Revolution’ book.
@ErikVoorhees. Erik Voorhees is a writer, entrepreneur and armchair economist. СEO of Coinapult, a service that enables bitcoin users to send the currency to any cell phone number in the US or Canada, or to any email address.
@gavinandresen. Gavin Andresen is lead developer for bitcoin and chief scientist of the Bitcoin Foundation.
@jonmatonis. Jon Matonis is a Founding Director at Bitcoin Foundation. CEO of Hushmail, a secure email service that lets users to send and receive private, encrypted emails.
@NickSzabo4. Nick Szabo is a computer scientist who designed a mechanism for a decentralized digital currency called “bit gold” in 1998.
@OverstockCEO. Patrick Byrne is a founder and CEO of Overstock, first major retailer which accept bitcoin as payment.
@pwuille. Peter Wuille is a Bitcoin Core developer and the co-founder of Blockstream. He is responsible for important improvements to Bitcoin.
@rogerkver. Roger Ver is an angel investor in Bitcoin startups including Bitcoin.com, Blockchain.com, Zcash, BitPay, Kraken and Purse.io.
@SatoshiLite. Charlie Lee is a creator of Litecoin. Ex-Director of Engineering at Coinbase.
@tylerwinklevoss. Tyler Winklevoss Co-Founder and CEO at Gemini, bitcoin exhange. One-half of the Winklevoss twins, who sued Mark Zuckerberg over the Facebook concept.
@VitalikButerin. Vitalik Buterin is a co-founder of Ethereum and a co-founder of Bitcoin Magazine.
Bitcoin, unlike most traditional currencies, is a digital currency. Thus, the approach to this kind of currency is completely different, particularly when it comes to acquiring and storing it. As Bitcoins don’t exist in any physical shape or form, they can’t technically be stored anywhere. Instead, it’s the private keys used to access your public Bitcoin address and sign for transactions that need to be securely stored. A combination of the recipient’s public key and your private key is what makes a Bitcoin transaction possible.
There are several different forms of Bitcoin wallet, catering for different requirements and varying in terms of safety and security, convenience, accessibility and so on.
Types of wallets
Paper
A paper wallet is essentially a document which contains a public address that can be used to receive Bitcoins and a private key, which allows you to spend or transfer Bitcoins stored at that address. Those are often printed in a form of QR-codes so that you can quickly scan them and add the keys to a software wallet to make a transaction. A paper wallet can be generated using services like BitAddress or Bitcoinpaperwallet that allow users to create a completely random Bitcoin address and a private key to it. The generated document can then be printed, with some services offering a tamper-resistant design or even an option of ordering holographic labels, and it is ready for use.
The main advantage of a paper wallet is that the keys are not stored digitally anywhere, which makes it completely immune to hacker attacks, malware that can log the user’s keystrokes and basically any form of digital theft. However, some precautions when creating a wallet still need to be taken. Obviously, before generating a paper wallet you need to make sure that no one is watching you do it. To rule out the risk of any spyware monitoring your activities, it is recommended to use a clean operating system, such as Ubuntu, running from a USB flash drive or DVD. Furthermore, once the paper wallet is set up, the website code should be able to run offline, which allows you to disconnect from the Internet before actually generating the keys. Finally, use a printer that is not connected to a network.
Moreover, it’s important to understand that you are printing valuable private information on a piece of paper. So, you need to take certain measures to protect that piece of paper. For instance, it is recommended to keep it in a sealed plastic bag to protect it from water, damp and general wear and tear. Some people prefer laminating it and storing it in a safe, a deposit box or entrusting it with a solicitor.
Physical Bitcoin
Physical Bitcoin is usually pre-loaded with a fixed amount of BTC, and the intention is that its value cannot be spent as long as the private key remains hidden. This is normally achieved through implementation of a tamper-evident seal.
The first of its kind, Bitbill was shaped like a credit card, but most alternatives that followed were shaped as a round medal. Mike Cadwell, a cryptocurrency enthusiast nicknamed ‘Casascius’ created the first of the popular Casascius physical Bitcoins in 2011. Private keys were hidden under a peelable hologram, when removed it left a tamper-evident pattern. When redeemed, the coin lost its digital worth. Since then, there have been several new coin manufacturers.
Physical Bitcoins are a very convenient way of storing your funds more safely and can be extremely useful when trading offline. On top of that, they’ve recently become a prized collector’s item. The main disadvantage, however, is a serious one. In November of 2013, Mike Cadwell was asked to cease operations by the Financial Crimes Enforcement Network, as his work was considered a money transmitter. The regulations for this activity were unbearable, so he was forced to stop the sales of items containing digital Bitcoins. As BTC is still a legal grey area in a lot of countries, such items might even be considered counterfeit money by authorities.
Mobile
For those actively using Bitcoins on a daily basis, paying for goods in shops or trading them face-to-face, a mobile BTC wallet is an essential tool. It runs as an app on your smartphone, storing your private keys and allowing you to pay for things directly from your phone. Moreover, some apps enable users to use their smartphones’ near-field communication feature, which means they can simply tap their phone against the reader, without having to provide any information at all.
Any full Bitcoin client requires access to the entire Blockchain ledger, which is constantly growing and requires several gigabytes of storage. Hence why, mobile wallets take advantage of simplified payment verification (SPV) technology. They only work with very small subsets of the Blockchain, relying on trusted nodes in the Bitcoin network to ensure that they have the correct information.
Despite being a convenient on-the-go solution for Bitcoin storage, mobile wallets are very prone to hacker attacks. Moreover, you can lose control of your wallet if someone simply gains access to your mobile device. There’s a big variety of Bitcoin wallet apps for devices running on Android. Apple banned Bitcoin wallets from the AppStore in February 2014, but reversed its decision several months later.
Сold storage, hierarchical deterministic, open source software
Web
Web wallets store your private keys on a server of a company providing such services. The server is constantly online and is controlled by someone else. Different services offer different features, with some of them linking to mobile and desktop wallets, replicating your addresses across the devices you own.
Much like mobile wallets, e-wallets enable their users to access their funds on-the-go from any device connected to the Internet. But unless implemented correctly, the organizations running the website might gain access to your private keys, thus getting total control of your funds. Moreover, some e-wallets are operating on the base of exchanges, and there have been instances of exchanges shutting down and running away with their users’ funds.
A simple Bitcoin wallet, with the added security of a cold-storage vault.
Desktop
Desktop wallets are downloaded and installed on your computer, storing your private keys on your hard drive. By definition, they are more secure than online and mobile wallets, as they don’t rely on third parties for their data and are harder to steal. They are still connected to the Internet, which makes them inherently insecure. However, desktop wallets are a great solution for those trading small amount of Bitcoin from their computers.
There is a variety of different options of desktop wallets that cater for different needs. Some focus on security, some on anonymity and so on.
Name
Operating system
Features
Electrum
Mac OS, Windows, Linux
One of the most popular, robust, effective and secure desktop wallets; open source; allows you to replace a transaction fee on an already broadcasted transaction, which speeds up the confirmation process; address tagging; encryption
Exodus
Mac OS, Windows, Linux
Very user-friendly and easy to understand, reliable wallet.
Bitcoin Core
Mac OS, Windows, Linux
Full node wallet, you need to download the entire blockchain to use it. It allows you to independently verify transactions and not rely on anyone else in the system.
Copay
Mac OS, Windows, Linux
Multisignature wallet; mobile and desktop; open source.
Armory
Mac OS, Windows, Linux, Ubuntu, RaspberriPi
Prioritizes safety and security; features a variety of encryption and cold-storage options.
Hardware
A hardware wallet is a rather unique type of Bitcoin wallet that stores the user’s private keys in a secure hardware device. It is the most secure way of storing any amount of Bitcoins, there have been no verifiable incidents of money being stolen from a hardware wallet. Unlike paper wallets, which must be imported to software at some point, hardware wallets can be used securely and interactively. Moreover, they are immune to computer viruses, the funds stored cannot be transferred out of the device in plaintext and in most instances their software is open source.
Some hardware wallets even have screens, which add another layer of security, as they can be used to verify and display important wallet details. For instance, a screen can be used to generate a recovery phrase and to confirm the amount and address of the payment you wish to make. So, as long as you invest in an authentic device made by a trustworthy and competent manufacturer with a good reputation, your funds will be safe and secure.
Name
Price
Features
Ledger Nano S
58 €
Screen; two buttons that you need to press simultaneously to confirm a transaction, which prevents hackers from hacking into it and confirming payments; PIN code; box ships with an anti-tampering seal.
TREZOR
$99
Screen; two buttons; wallet can be backed up with up to 24 words + passphrase; PIN code.
KeepKey
$99
Screen; digital screen and metal body; PIN code; number randomization; can be backed with up to 24 words; recovery can be done with Chrome extension.
Ledger HW.1
$17
No screen, so must be setup on bootable USB or offline computer; backed up with a 24-word seed; PIN code; security card that provides extra two factor authentication.
Bank
Rainer Michael Preiss, an executive director at Taurus Wealth Advisors, has recently stated that all large US banks are most probably afraid of Blockchain, Bitcoin and other cryptocurrencies. He also mentioned, that given the uncertainty from banking’s lack of transparency, cryptocurrencies can present investors with a viable alternative (CNBC). Indeed, the vast majority of banks do not accept Bitcoin as a currency, some of them even refuse to manage funds obtained through operations with cryptocurrency.
In the light of banks’ reluctance to accept Bitcoin as a viable currency, a Bitcoin Crypto Bank was recently established. First of its kind, it is a privately owned company operating on the Bitcoin trade market. They accept and manage Bitcoin deposits, stating that they know the market through and through. On their website they claim to be a no-risk, secure and certified platform for investment, with high chances of making huge profits.
Bitcoin wallets and security
Possible problems
Catching malware. Malicious software can scan your disk and find your private keys. Seconds later, all your Bitcoins can be gone.
A trojan can encrypt all the files on your hard drive. Afterwards, it might find all links to your wallets, realize how much money you own and demand that exact amount of Bitcoins to decrypt your hard drive.
A virtual exchange can run away with your money.
You can lose your laptop or your phone with your wallets installed on them.
Pieces of advice
Avoid using any kinds of wallets that require Internet connection; use cold storage options instead.
Always be cautious and double-check everything. For instance, you could receive an email made to look like it’s from BlockWallet, but it is actually from BlokcWallet. If you authorize it, your Bitcoins will disappear immediately.
