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  • bitcoin address. The public key's fingerprint representing the person who possess its relevant private key. Given the private key, it is computationally easy to get its public key. Given the public key, it is computationally easy to get its fingerprint. However, it is computationally impossible to do the converse tasks; looks like 1M3FFd4Zirjpk65yGmz4wU1FGjLbXYANRo . There are many methods for the encoding of an address just like the same person can wear different clothes but still the same person. For the above bitcoin address, it is in the legacy encoding. Equivalently, it can be in CashAddress encoding, then it is qrdu704p39y8xry2zfxpeypql0pgqajh0glc5t9l2a without a man-made prefix 'bitcoincash:'. However, it is more convenient for users to use legacy encoding across all bitcoin block chains.
  • bitcoin private key. A secret to claim the ownership of a BTC address and shall be known by you only; looks like cPBn5A4ikZvBTQ8D7NnvHZYCAxzDZ5Z2TSGW2LkyPiLxqYaJPBW4
  • Hierarchical Deterministic. It is convenient to hold a simple secret than a ton of private and public keys when the secret can generate all of the keys pairs with tools like this. Note that all the tools relevant to private keys must be used off-line to guard against fraud.
  • transaction ledger. Take a look at some examples here and you will realize.
  • block. the transaction ledger container. In addition to current happening transactions, it also contains the hash of the previous block and a hash salt found by the finder of the block so that a hash of the above data is a special hash with many leading zeros and serves as the hash for this block. Everyone on earth can easily check the validness of the finding and appreciate the proof-of-work. For example, the hash of block 12345 is 00000000b8980ec1fe96bc1b4425788ddc88dd36699521a448ebca2020b38699
  • blockchain. The public-available transaction ledger storage which no one will argue. Many sites provide this info, for example, One block contains 2~3000 transaction ledgers as well as a hash from previous block and therefore all the blocks are chained one by one to be the blockchain.


A bitcoin wallet differs from a traditional wallet in that the bitcoin wallet contains no money but only the private keys. People's money is stolen not because their wallets are missing but because someone else knows the words string of the private keys in the wallet. Therefore, a wallet could be a paper written the words string of your private key or your brain to memorize the words string of your private key. In fact, the so-called bitcoin wallet app or software or web service in this sense is logically only the ATM to operate with the bitcoin network and shall be named as wallet only happen to be the device to store the private keys. You shall be free to store your private keys wherever you prefer and whatever format you prefer. If a wallet service provider disallows you to move your private keys, it must be a scam or potentially a risk. It is a conceptually trivial task to back up your private keys. If you feel it complicate, the reason is highly possible that in order to provide additional service, the service providers intend to store your private keys remotely in their site and need you to cooperate some additional encryption tasks for safety sake. The number of balance reported by a wallet may be incorrect and miss-leading because a wallet usually sums only the balance contributed by the transaction done through the wallet. The only way to get the correct balance info shall be query through the blockchain directly.

A mistake in bitcoin operation is almost irreversible and there is no toll free phone number to call help; see here and you may wonder so many spikes which are exactly fee-mistake transactions and the spenders cry out loud. Therefore you may try some free fake money to gain some operation experience in the testing bitcoin network testnet rather than the production bitcoin network mainnet first. You can go to here to get some free testing money and try in some testnet wallet.

Different designer of the wallet has different target users. Some are simple but not delicate (for example copay) and some are delicate but not simple (for example Bitcoin Core) or something in between like coinb. By the core API, wallets may have these features:

  • different account. The account is simply a label you define a purpose for a collection of addresses. Using this feature, you can find the address you want to use among tons of addresses easily.
  • multisignature. The address is owned by many, see here for explanation and here for a demo.
  • able to operate in the testnet and mainnet.
  • coin control. Set a specific address to hold the change of a transaction. To protect privacy, the default behavior of a typical wallet is to create new address for each change from the transaction. In this way, it is difficult to know how much money a person has. However, this also means creating new private key every time you spend bitcoin so you'd better back up your wallet every time because your previous backup does not have this new private key. As long as you create the new private keys at the time you think you need, it is suggested to have this feature function. See here for a demo of how to.
  • sign message function. The capability to allow people to assure the message is indeed from the owner of the address.
  • store the private keys local in my device or store the encrypted private keys remote in the vendor's site.
  • able to operate independent of any vendor's service
  • open source or not

For me, I don't like to store or send the private keys (even encrypted) remotely and I don't like to use the program I don't have the source code. So I prefer a local copy of rein project as signature tool and coinb as the ATM. However, this is a personal preference about the risk and convenience.


Any transaction needs fee unless it is a barter. In typical gold banking, the fee is to help the bank to cover the cost of transaction document; without a decent recording of documents, the gold can be double spent. Likewise, the fee in bitcoin transaction is to help the 'digital document' saved in the blockchain from double-spending problem. It is impossible to have global public consensus about "who owns how much" without cost.

The fee can be arbitrary. However, for those who maintain the blockchain (the miners), they will include high fee transaction into their blockchain than low fee transaction. If you insist a tiny fee, you may wait indefinite time for its including into the blockchain. A cautious merchant may not be willing to deliver the service/goods unless there are 6 more blocks deep for your transaction in the blockchain. Therefore, the fee rule is: you want fast, higher fee. The factory default fee of a wallet may not fit your preference. From time to time, you'd better see the page to set a proper fee for your transaction where it shows the fee per byte and the estimated time into the block. A typical two inputs two outputs transaction is 274 byte long. If you think the estimated fee is too expansive compared with your transaction, don't use the bitcoin for it, just like you will never use gold in fast food restaurants because they won't bother to spend the time to measure the weight of your tiny gold.

real usage

  • You can work to gain BTC instead of fiat currency if the employer wants to.
  • Shops whose windows have the icons like this accept BTC. Here is the list of shops who accept bitcoin.
  • Exchange your fiat currency with BTC. Some vendor might have cheaper rate especially they deal with you face to face.
  • Work as a freelancer. opportunity here in btc-otc or
  • Move your money out of a foreign exchange control country.
  • Simply saving.


Explain the philosophy behind BTC to your friends if you can. Too many scams because people don't comprehend. Bitcoin is not about gambling or speculating or cheating. Instead, it was invented for economics welfare. Everyone, not only the 1% people, deserves a better life. The more people appreciate the logic, the more goods will be traded in BTC, the more goods will be valued correctly, the more equally the wealth to be distributed, the less wealth stolen by the 1% people and the country.