Bitcoin Forum

I read a lot of think about the private key on the forum and I believe that it causes a lot of misconceptions in the debate.

A private key is a random number from 0 to very large number.
A public key is a X and Y on a graph.

The reason I write this here is because people think of it as an account #, wallet, etc ... which screw up the debate with lawmakers.

Theo Chino
http://www.article78againstNYDFS.com/testimony.php (http://www.article78againstNYDFS.com/testimony.php)

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This is a Private Key, 100 dices randomly selected; it can't be property ... it's knowledge.
http://www.article78againstnydfs.com/docs/Example/PrivateKeyDices.png

The technical explanation is on this page but a picture is worth a thousand words: https://en.bitcoin.it/wiki/Elliptic_Curve_Digital_Signature_Algorithm (https://en.bitcoin.it/wiki/Elliptic_Curve_Digital_Signature_Algorithm)

Nifty... I hadn't seen that dice image before but have read about rolling dice to create pk -> btc addresses before. I like this image myself:

https://i.stack.imgur.com/AcXYt.png

It might seem like a problem to lawmakers but to layman users like my non tech savvy friends the hashes are simply wallet addresses or wallets. It would be a problem telling such people that it is their public key. The moment they hear that, I have to explain the whole process of pki  /cryptography / hashes every single time to convince them that it is near impossible to reverse (with current tech)

That is a very nice and concise example though

Very informative and has useful links. This will be a very good example for newbies and less tech savvy people that are willing to understand the difference between private key and public key. I myself found it very useful because I'm still a newbie in this side of cyptocurrency and I don't deny it.

I just read the other day where someone said that all private keys were was a 50 character password and that someone will crack it at some point. They couldn't be more wrong. If I find them again I'll redirect them here as my answer was just basically "nope, wrong. Google it."

Legally, knowledge could be a property.

You will need to argue that the bitcoins are not in your possession at any time.
The Bitcoin blockchain never assigns rights to the bitcoins over to you as property.
Bitcoin does not grant or assign any rights and is use at your own risk.

Technically, the blockchain is transferring the bitcoins only to itself and within itself.
In the event a privatekey is lost, there is no remedy. The blockchain doesn't care.
It is always in possession of the coins. You have no true property rights.

That is the secret of Satoshi's success in Bitcoin. To prevent seizure of your "property",
it is placed into a system (the "blockchain") to prevent legal property rights, in the
current legal understanding. To prevent this loophole in the future, governments will
need to specifically legislate that bitcoins and other crypto-currencies are a "special property",
but acknowledge that they can not enforce all the normal rights and remedies that property
was designed to convey.

Ability to control the coins movements does not constitute property or rightful ownership.
Then you could argue simple bank tellers have those same property rights over your bank
account. Normally, property must be registered with government systems in order to even
claim rights to such property. Bitcoin specifically is designed to circumvent this normal legal
system of ownership registration.

Privatekey grants the temporary ability to reassign entries, but not grant a right to possess
as a property. That is an illusion and if anyone has that privatekey as well, would be entitled
to that property equally under the law. Since that is insane for property law, it must be wrong.

Law has not caught up to what Bitcoin actually is and what it is actually performing.


* The above is my opinion and should not be regarded as a legal opinion or legal advice.

Furthermore...

There is no such thing as "a bitcoin" that gets sent or received anywhere.

Transactions in the blockchain just list "outputs" which are encumbered with a requirement that must be met if you want to use that output as an input to another transaction.  Once an output is successfully used as an input in a transaction in the blockchain, it can never be used as an input to any other transaction again. Typically the hash of the public key is used with a small script (effectively a small computer program embedded in the output) to describe what requirement must be met.

It is also possible to use that scripting language (effectively a programming language) to encumber outputs with other requirements that have nothing to do with a public key at all.  In many cases, those requirements can't currently be represented as a bitcoin address. So, while that value (those bitcoins?) may be useable in transactions, it isn't stored at an "address" and it isn't spent "from" an address.

In other words...

While many may use this system of programs and data that describe access to the blockchain as "currency" or "commodity".  Really all that technically exists is computer programs stored in a database that describe who else is allowed to add more computer programs to that same database, and what the rules are for adding such programs. There is no "currency", there is no "commodity".  It's all imaginary in our heads.  There are only those that have programming rights, and their ability to reassign some of those programming rights to others.

Wallets don't technically "move" bitcoins.  They simply write the computer programs for those that don't understand how.
 
When you "acquire bitcoins", what you are actually doing is acquiring the right to add a computer program to the database from someone else that is giving up some of that right in exchange for some product or service.

Thanks.

The reason I did it was to show Private Key -> Public Key ...
The public key is really a point using the y² = x³ + 7 graph.

Just to say, the dice2key.sh script is here; it's not mine but it's really:
https://github.com/swansontec/dice2key


It's just a conversion from base 6 (0 to 5) into a base 16 (0 to 16)
It's really so simple.

After that, the rest is just conversions to make it user friendly.

Thank you for sharing! I learned a lot.

are you able to simplify the ECDSA Algorithm? What is its actual function in creating a public key out of a private key?

https://blog.cloudflare.com/a-relatively-easy-to-understand-primer-on-elliptic-curve-cryptography/

Quick note: it's actually 99 dice, but basically yes the picture is the same. Another note: all 6's are actually 0's in this method. It's called B6 and if you look up some really easy to remember numbers or pattern of numbers on bit address you'll find some addresses made by people in the past.

When you put it like that, it's actually not much different from modern banking. It's all just ledgers and transaction protocols with trusted human oversight -- Bitcoin's innovation being getting rid of the latter and replacing it with trustless automation.

Point being, the law is very well able to handle socially constructed property rights, regardless of technical implementation. Everything else is just talking semantics, as you can know the private key of Bitcoins you don't own and lose the private key of Bitcoins you do own.

That being said, it's a great infographic.

please find it so I can plaster it on my wall and laugh every morning at it

You ignored a fundamental aspect of the Bitcoin system in order to claim that it still
conforms to current laws and legal interpretation. The reality is that with the modern
banking system, it is true that it is a ledger/settlement system with human oversight,
and could be compared to a blockchain type system, but you ignore that the entry
representatives in the banking version are actually owned and regulated by its
government. That is where your legal rights stem, only by its enforceability.

With that in mind, the entries within a properly functioning blockchain, prevents
government or etc, who is empowered either by law or force, to seize or control the
tokens in which they do not have control rights over, unlike in the banking system.
What this really means on a legal level is that it can not be a "legal property" as long
as the tokens remain within the users control and within the blockchain. If you move
those coins into a regulated exchange or service (like the banking system), then "legal
property rights" can be applied since the third-party systems are mandated by their
governments and it's crafted laws, to provide those users with those rights.

Within a properly functioning blockchain, there are no rights or remedies, as designed.
For example, with the regulated exchange, if they lose user's coins, who in the Bitcoin
or blockchain system do they refer to for remedy? In fact, they can't even win a suit
against the developers, even if the loss was do to a significant flaw in the system.
This is very contrary to legal theory of property rights and responsible parties, and
stems partly due to its open source and voluntary nature. Goverments force you,
but grant you rights. Bitcoin does not force, and thus grants you no rights.

This was intended to prevent legal liabilities to all parties that could exist within this
system type. There is no responsible party when it is functioning as originally designed
(though in some circumstances, due to mining centralization, miners could be held liable
in certain jurisdictions). For this type of system to actually proceed and be tested
without government stepping in and stopping it (since they, and the financial system
they created and enforce, are incentivized to do so) it needs to essentially exist within
its own sovereign territory, and that was manifested by the full system that Satoshi
envisioned and pieced together. Bitcoin is a country within a country. The only way
for the "outside country" to enforce upon in the inside, in any way including rights,
is to declare war and attack the inside and its participants, publicly.

If your opinion was correct that "the law is very well able to handle socially
constructed property rights, regardless of technical implementation", Bitcoin
and "the experiment" would have fundamentally failed in a significant area. In short,
Bitcoin only exists today because the tokens are not an actual form of property that
law currently anticipates, whether you wish them to be or not. Tokens are only
representations of the network itself and you can not have rights from or
in the network, by the nature of the network, unless it has been captured.

I fully agree with everything you wrote except for one thing: Legal and property rights have nothing to do with enforceability. Even with tangible goods you can own property that you don't have access to and have access to property that legally is someone elses.

Very informative, thanks for this!

Under law, if you "own property that you don't have access to", the law still grants
you rights to that property, because the law is able to enforce itself by its regulation.

For example, if you "own property" like a vehicle that is in a parking garage in an
another city, that "vehicle" and its storage would fall under many different aspects
of the law to "enforce" your property rights, as to that vehicle. This type of property
and its rights are only attributed to you because you have registered it with a
governmental registration system, in whatever form.

Another example, if you "own virtual property" like land or items within a video game
that you paid real money to purchase, the law mandates that the company who made
the game do one of two things: (1) in the ToS, provide notice that the purchases and
items are temporary and only exist at the discretion of the company and are property
of the company at all times, and the users are only purchasing a temporary license
(like almost all video games, especially on cell phones) or (2) required to give the
game users rights and remedies for the property or items they own within the game
and maintain the game indefinitely to preserve those rights (most never do this).
So, in the case of "virtual property", majority of the time people are only purchasing
a "temporary license" because the companies don't want to be required to provide
rights and etc, that other businesses are required to do. If they provide rights to you
about your "vitual property", they could bring a successful suit against the developers
for failures in the game that could damage your "virtual property" (though in most
cases, due to developer intervention within the game, could remedy the damage
prior to court action).

The issue here is that bitcoins are not physical, but a type of virtual, which we all call
"digital". This means that it falls under certain types of enforcement that assumes
there is a "controller" or "responsible party" to that "virtual environment" or "digital
network", whether a company, government, bank, or etc. In order to enforce someone's
rights to bitcoins, there needs to be someone who is empowered to give them or take
them away, and in Bitcoin we call those people a third party, which Bitcoin was designed
to specifically prevent from occurring within the blockchain.

So, when the bitcoins remain in your privatekey control and are still represented
within the Bitcoin blockchain, in actuality the only entity who owns and has property
rights to those coins are the Bitcoin blockchain itself. Essentially, the blockchain has
provided you a "temporary license" to move the coins within itself, BUT does not
provide you a ToS by law, or any normal rights mandated by law, since the Bitcoin
blockchain is not "controlled" or have "responsible parties" who are required to enforce.
All participants are voluntary and expendable, and thus are not bound by law to
provide rights or attempt to provide rights. Only third party systems that attach
themselves to Bitcoin's blockchain and directly connect to the "outside" financial
world, do property rights come into existence since the "outside" governments
mandate that they provide that to their users.

So, Bitcoin and its blockchain is a "special environment" specifically crafted with the
intention to circumvent the current understanding of law and the way it enforces. This
type of system can not exist in the normal world framework since it would be violating
multiple laws. That is why node decentralization is most important above all other
things, not because it is a "buzzword" or because it could be used to "scare others
about on-chain scaling", but is because it truly is the one piece that if removed,
brings the whole network into compliance with the outside world, and thus
controllable and destroyable.

Human markets always give way to human laws. For example, China just announced
that ICOs are illegal or something to that effect, and now the markets react. The human
laws supersedes the human markets, and actually controls them. Markets are not a public
good or right, but a privilege that your governments allow, due to current human economic
theories and understanding. There is no such thing as free markets, and though Satoshi
designed the Bitcoin system to participate in the human markets in certain aspects, it
actually assumes them corrupted and maladjusted, and thus the actual design of his
"special environment".

For the Bitcoin experiment to succeed, it assumes everything outside itself is flawed
and in some systems, immoral and irredeemable. In some ways if you wish, you could
argue that Satoshi hated the human markets more than all other things.

excellent explanation of a private key!!
But then again, what is the wallet if its now the public address?

Nice way of looking at it. The math behind the world and the things that can be seen when viewing them just right are pretty amazing. It is like playing with golden numbers and things like that and watching the results. I know that mining bitcoin itself is useless, but it would be nice to have the process graphically seen, like with the old BOINC projects.

The wallet can be seen as a container for your private keys and the derived public keys, and this container has special locks to open it (seeds, passwords, ...). Once you opened it, you can create with the wallet software a bitcoin transaction, that confirms to the rules of he network, and the wallet has software to send a transaction into the network. Also it is able to request data from the network (with light wallets), or it stores the blockchain itself  on a local drive (full node).
So the wallet is a piece of software that makes it easy for the enduser, to communicate/participate in the network.