Maand: april 2013

Here is my current understanding of Bitcoin:

I have 10 bitcoins in my wallet.

If I send 5 bitcoins to someone else, I am sending the private key from my wallet to somebody’s public key address.

Those are combined into a new transaction that is later confirmed by miners. The miners confirm that I owned the bitcoins by checking my private key, and that the receiver’s public key is valid.

Then, the miners create a new private key that is sent to the receiver’s wallet.

On a simple True/False basis, is everything I have said right so far?

If so, what happens to the remaining 5 bitcoins in my wallet? Do they magically get a new private key, or what? How does my wallet know how many I have left, and how do the remaining bitcoins get a new identity?

I’m trying to close my account by withdrawing all my XRP into a new account. But the Ripple client insists on keeping a minimum balance of 50 XRP. How can I properly close this account?

I want to see the balance of some address using bitcoind.

I set txindex=1 and did a -reindex to get all transactions indexed.

But still, there doesn’t seem to be a way to get balances of an address. getreceivedbyaddress doesn’t work with addresses out of your own wallet (I hoped it would after a -txindex=1 -reindex, but it didn’t).

I’m wondering why blockexplorer.com’s getreceivedbyaddress can do this for any address but the default client cannot. If you download and sync the whole blockchain, you should be able to query it for any information, right?

Whenever I send bitcoins from one wallet or one exchange to the next there is always a fee. This makes sense with the exchange sites, they are just collecting the fee so they can make a living. What about the open source wallets that I’ve installed on my computer?
Surely, nobody is collecting my bitcoins because my transactions are too long! So, is the “fee” part of the Bitcoin algorithm? Do the coins that are confiscated in the fee go to Bitcoin miners?

Also, when does the fee start? I noticed, if I send like 0.05 bitcoins there is no fee, but if I send 0.1 bitcoins there is a fee.
What if I just sent 0.05 bit coins twice? Or is it if they are in the same block I will get a fee, so I’d have to send them twice (and 10 minutes apart)?

Imagine if a few miners who together control more than 50% of the network hash power decided to charge higher transaction fees just for addresses containing really large sums.

For example, this address here has 69,471.08443061 BTC:

http://blockchain.info/address/1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx

Now the miners could decide to reject any transaction going out of that particular address (no matter how small the amount) unless it included a 25% transaction fee. You could call it extortion.

Question:

1. Is it “illegal” (see below) under the rules of Bitcoin?
2. How would the rest of the network detect such a problem (given it involves only one particular address)?
3. How would such a problem be resolved?

By “illegal” I don’t mean the network would reject such behavior, because that it wouldn’t, but that it would be rejected by most participants in the Bitcoin economy based on an implied understanding of what’s fair and what isn’t.

[UPDATE]

OK, let’s say the mining cartel publishes their new policy on their website and word goes around.

Also, as an incentive to the rest of the participants in the economy, it is announced that part of the higher transactions fees will be distributed to everyone. This is achieved by setting up a single address (a la SatoshiDice) where you can send any amount and in return you’ll receive the same amount plus the bonus. You can only do this once per address, because the program checks that the funds don’t cross the same address twice.

You could call this a wealth tax or a “Robin Hood tax.”

I’d like to archive all my coins in a single address (specifically the address for a “brain wallet”).

What is the most effective way to combine all the outstanding balances into a given address?

If the creator of BitCoin, whoever he/she is, was the one that started the block-chain and with every cryptographic operation deriving from that initial key, would the network be under the complete control of the creator? The only way I could see this not being the case if the key was disseminated into the network, but I am unsure if that is the case.
If the key is control over the block-chain and if the key generator still holds the key, then regardless of the fact that it is decentralized in operation, it is still centralized in control, like a bank.

Any thoughts?

Update:

I guess I’m really asking basically is whether the creator had/has any advantage in the network (i.e reversing transactions, creating new coins). I mean unless he specifically programmed the network not to be under his control, it would be right? I mean he IS the creator of the network and unless we have proof (source code inspection?) that the network has been ‘turned over’ so to speak to the users, we cannot guarantee safety can we?

I have done the whole synchronization and now it should be mining bitcoins from what I understand but I don’t see anything showing that it is actually mining for bitcoins nor any activity from my cpu… Is this normal ?

Do I need to enter a command to start the mining process or is the process done automatically without having to do anything ?

Bitcoin decides on a global clock by the blockchain – every mined block is another tick of that clock.

In Ripple, there is a global ledger that keeps advancing in time – the ledger number keeps increasing all the time, and the ledger represents the state of the system at time t.

What synchronizes this ledger? How do different Ripple nodes know when they should advanced their ledger counter?

Based on the following link: https://en.bitcoin.it/wiki/Wallet_import_format , a private key of 256 bits gets transformed into a WIF address that is stored in the wallet.

However, my question here is how did we convert step 6 into step 7? In step 6, the address consists of 74 hexadecimals characters (or 74*4= 296 bits). If we convert this 296 bits address using the code58, we need to divide 296 bits by 6.. ? I believe that some details are not mentioned, any ideas?