March 12, 2014

Creating a bitcoin paper wallet for cold storage

Using Electrum and other Bitcoin wallets is pretty safe (assuming your computer isn't hacked). But if you're serious about security or want to keep some funds portable, you can use a "paper wallet." The security benefit here is that your private key isn't connected to the internet, so no hacker can get to it. When a private key is stored offline (either on paper or in a non-connected computer), it's considered "cold storage."

A paper wallet is just a public and private key printed out. That's it. All those companies that offer you pretty green fancy-looking paper wallets with holograms are silly – all you need is the public and private key. (It's best practice to encrypt your private key as an added layer of security. We'll get to this below, so be patient. Jeez, why are you so pushy?)

The cool thing is that you don't need to be online to generate a public and private key. In fact, doing it offline is the safest way to generate your keys and be sure nobody's snooping on you. This brings us to an amazing little tool called bitaddress.org. You can actually download the entire site as a single .html file, which you can run in a web browser while disconnected from the web. To download it, visit bitaddress.org, click the GitHub link on the bottom, and click the "Download ZIP" button on the bottom right.

bitaddress-github

As a sidenote, you should be skeptical about trusting the author of this tool (or any tool that generates keys for you), since the author could theoretically generate tainted public/private key pairs they could steal from you in the future. I researched this tool a lot, and apparently enough security people have examined the code and nothing looks nefarious. Also, I found the original thread where the developers are talking about it here . Pretty cool.

Ok, so once you've downloaded the bitaddress html file, open it in a browser. You'll see you have to move your mouse around to generate true random numbers. This is pretty badass.

bitaddress-random

After you've moved your cursor around like an idiot for a few moments, the page will load. Click on "Paper Wallet."

bitaddress-paper-wallet

By default, you see those stupid-looking faux-currency bills. Fuck that. They take up too much space on your printout and are a distraction. Select "Hide Art" and generate 7 Addresses using BIP38 encryption, like this:

bitaddress-bip38

Then, in addition to printing this page, I like to make a PDF and keep it handy. Since I'm still learning/practicing with Bitcoin, it's much easier to copy/paste the addresses from a PDF than it is to scan the QR code and email it to myself.

So now you're free to send BTC to any of the newly-created Bitcoin addresses in the left-hand column. And you can monitor the Address's balance by searching for it on blockchain.info.

To learn how to retrieve the funds in a paper wallet, check out my next post appropriately called "Importing Bitcoin from a paper wallet into Electrum."

Using the Electrum Bitcoin wallet

Ok, so at this point you probably have an account at Coinbase or LocalBitcoins.com. Cool. Maybe you even have some money in there. Even cooler. Now it’s time to pick some wallet software.

Choosing a Bitcoin wallet

There are a few reputable software wallets out there, but I settled on Electrum for the Mac. It's not particularly intuitive or amazing, but enough people in the forums were using it, so I thought what the hell.

(I've also heard good things about Armory, which is constantly raising the bar in terms of security. I heard a podcast with Armory's inventor and he seems like a real honest security buff. There's also Multibit, which I've tried, but the interface seemed a little too complicated for me as a beginner.)

So the overall concept is that you keep your wallet on your computer so that your private keys are safe on your hard drive and not "in the cloooooud" somewhere.

Now of course, you could still be shit out of luck if a) your computer crashes, or b) your computer is hacked. So as a best practice you should create encrypted backups of your wallet and store them somewhere off your computer (this is easily Googleable so I'll leave that in your capable hands). You should also be familiar with creating an offline wallet or paper wallet, which is known as "cold storage." (I’ll get to that in my next post.)

Setting up the Electrum wallet software

So, back to using Electrum. When you launch it, you’ll want to “Create a new wallet.” Then it’ll present you with a bunch of random words.

electrum-seed

This is your “seed” and you can use it to recover your wallet if it becomes lost or damaged. The math that’s doing this behind the scenes is nuts.

electrum-wallet-password

You’ll then be asked to create a password for your wallet. This is to prevent someone with access to your computer from taking your wallet file and stealing your keys. You can leave it blank if you just want to get started. (But don’t forget to add a password if/when you start accumulating some serious money.)

electrum-auto-connect

All this flew over my head, so I just left the default “Auto connect” checked.

electrum-blank-history

Ok! So above you can see your empty Electrum wallet. The default “History” view isn’t particularly helpful, so click over to the “Receive” tab.

electrum-blank-copy

Here, you’ll see a list of addresses. These are yours, so you can start sending money to any of these. Just right-click and choose “Copy to clipboard” to make it easier.

Getting money into your wallet

This is actually pretty easy. Coinbase and LocalBitcoins both have online wallets where it’s easy to send money from. Just use any of your Electrum addresses as the “to” address and you’re all set.

So that’s it. The more you play with sending and receiving money from Electrum, the more familiar you’ll get.

In my next post, I’m going to show you how to make a paper wallet for cold storage.

Getting started with Bitcoin

Getting started with Bitcoin is a huge pain in the ass. There's so much information out there it's hard to know what's trustworthy and what's a scam. And there are lots of scams.

But I was determined to figure this thing out, so I rolled up my sleeves and spent the last 2 weeks researching Bitcoin, mostly on reddit.com/r/bitcoin and bitcointalk.org.

So here's some information on getting and using Bitcoin. By the way, it goes without saying, but please proceed carefully. I can't guarantee my techniques are 100% foolproof (although they've been working fine for me), so I don't want to be blamed if you lose money. Ok, now that I've covered my ass let's proceed.

Buying Bitcoins

In terms of purchasing Bitcoins with US dollars, Coinbase is the best option. At first I felt a little uncomfortable hooking up my bank account info, but the more I read about Coinbase and its staff the better I felt. There's a lot of venture capital invested in this company and they intend to grow exponentially, so they're doing everything right.

The only downside to Coinbase is it takes about a week for your purchased Bitcoins to show up in your account. (From what I understand, this is because they follow banking regulations and only keep enough cash and Bitcoins on hand to cover all their customers – in other words, to guarantee they can never be insolvent.)

Then there's LocalBitcoins.com, where you can get Bitcoins right away. Honestly, this website scares the crap out of me. The idea of meeting total strangers and exchanging envelopes full of cash sounds absolutely horrifying. Luckily, I found a way to use the site that I'm comfortable with, and is decidedly less sketchy.

First, find a seller with a perfect rating (ie, 100+ transactions and 100% positive feedback. Just like eBay.) Then make sure the payment method is "Cash deposit" in a major bank with a location close to you. When you initiate a transaction with the seller, the seller places your bitcoins in escrow and provides you with a bank account number. Then you head to the bank and make a cash deposit into that account with a teller. You'll get a receipt, which you then photograph and upload to LocalBitcoins as proof you deposited the money. Then the seller releases the Bitcoins from escrow, and the funds show up in your account. Nice.

Securing Your Bitcoins

You've probably heard of the concept of a "Bitcoin Wallet." A wallet is just a collection of bitcoin addresses and the secret keys that enable you to send from those addresses. Sites like Coinbase and Localbitcoins automatically create wallets for you when you sign up, and they're pretty easy to use since everything happens behind the scenes.

But if you're paranoid about security (or to put it another way, smart), you shouldn't keep large amounts of money in those online wallets because you're not in control of them. If those sites have a security breach or shut down, you're shit out of luck (like the people who had money at Mt Gox).

So to secure your Bitcoins you need to take matters into your own hands and download some wallet software for your computer.

To learn more about using and transferring money into a Bitcoin wallet on your computer, check out my next article, Using the Electrum Bitcoin wallet.

March 6, 2014

Is that a MacBook charger on the top of the World Trade Center?

While browsing the fantastic GigaPan image in Time.com’s amazing story about the new World Trade Center, I zoomed into the junk at the top of the spire and discovered what looks like a MacBook charger! Maybe they’re using some Apple hardware to control the lights? Or maybe it’s just a similar looking cable… Can anyone confirm this?

Here are some screenshots, followed by what the actual charger looks like.

mac-charger-wtc-1

mac-charger-wtc-2

mac-charger-wtc-3

mac-charger-wtc-4

HT1630_11

March 1, 2014

How Bitcoin Works Under the Hood

I’ve been fascinated with bitcoin lately, and this video is the best overview I’ve seen yet. Fascinating stuff.

February 20, 2014

The Cool To Do Drugs Pencil

This is an old story, but it still cracks me up. A classic tale of fail.

DSC_4961_1500-640x424

February 14, 2014

Manhattan Time-Lapse Video

Some really great work here. Watching it without audio, I can practically hear the “House of Cards” theme music in the background.

February 12, 2014

Javascript “World” Simulation

This is brilliant. View the source to see what’s happening.

February 10, 2014

Creepy Texting Gag

This is an extremely simple yet fiendishly creepy gag to play on a friend. Via Jake Lambert on Twitter:

February 5, 2014

Upstairs Downstairs

Here’s the view from the elevator in my new building – from the basement and the first floor. Mesmerizing and nauseating at the same time!

upstairs-downstairs