Bitcoin Bank

[jgarzik]

I'm not sure how MyBitCoin's infrastructure works.

I mean if the BitCoins were on a database, and transactions between MyBitCoin users occured instantly and then were batch processed at the end of the day (ie. transfered into their relevant addresses) this would save processing time, and also provide insta-money.

You got it partially right.

MyBitcoin and similar websites don't batch processing and send to addresses at the end of the day; they keep all BTC internal, until one of their users sends BTC to someone who is not on mybitcoin.com.

A BTC address or transaction on mybitcoin.com is simply an accounting notation in the mybitcoin database.  Transactions between two mybitcoin users never actually reach the bitcoin network.

[wobber]

So this means that there is just 1 wallet.dat and all the guys that have bitcoins in there are just on somekind of list that sais how much each has?

What a about a bitcoin bank? If it's purpose would be to secure people's wallets that means it should act like a bank values box. PGP encrypted and all. Or it would be better to have a single wallet.dat and a "list" that sais how much every person has?

Also, there must be a fee. 1% per year, for storage for the bitcoins. Payable on the first day. But how do you stop people from adding 1 BTC and then 10,000 BTC so they would pay just 1% of 1BTC? Taxing them for both operations is kinda unethical.

[jgarzik]

So this means that there is just 1 wallet.dat and all the guys that have bitcoins in there are just on somekind of list that sais how much each has?

Correct.  The website's database store the balances for each user.

What a about a bitcoin bank? If it's purpose would be to secure people's wallets that means it should act like a bank values box. PGP encrypted and all. Or it would be better to have a single wallet.dat and a "list" that sais how much every person has?

Encrypted data storage already exists in several forms; you should be using one or more of those, if you are running bitcoin.

[Sultan]

jgarzik.

How does one use encryption to secure wallet and use at the same time?

is this impossible.

I am worried because when I remove my wallet.dat file and then encrypt it the BitCoin client won't be able to read it. If I move the wallet then when BitCoin runs, it will show me as 0 balance, so what happen when people send me money? Where does this money go because it isn't in my other encrypted wallet, right?

[ElectricGoat]

With an encrypted file system, your data is deciphered on the fly when you use it (after you entered your account password), but if someone steals your computer, he cannot simply plug the hard drive into another computer to read the data, because without your password, they are encrypted.

[jgarzik]

How does one use encryption to secure wallet and use at the same time?

Software exists that will keep your bitcoin drive / filesystem encrypted always.  The only place it is not encrypted is RAM.

[Sultan]

How does one use encryption to secure wallet and use at the same time?

Software exists that will keep your bitcoin drive / filesystem encrypted always.  The only place it is not encrypted is RAM.

So I take it you use this software in MyBitCoin?

[jgarzik]

How does one use encryption to secure wallet and use at the same time?

Software exists that will keep your bitcoin drive / filesystem encrypted always.  The only place it is not encrypted is RAM.

So I take it you use this software in MyBitCoin?

MyBitcoin is a website.  Presumably they secure their wallet with strong encryption, but I don't know.

There are two ways to use bitcoin:  (1) through a website, or (2) using the bitcoin software.

When using the bitcoin software, you should employ encryption.

[Sultan]

How does one use encryption to secure wallet and use at the same time?

Software exists that will keep your bitcoin drive / filesystem encrypted always.  The only place it is not encrypted is RAM.

So I take it you use this software in MyBitCoin?

MyBitcoin is a website.  Presumably they secure their wallet with strong encryption, but I don't know.

There are two ways to use bitcoin:  (1) through a website, or (2) using the bitcoin software.

When using the bitcoin software, you should employ encryption.

If one encrypts their file, then the BitCoin client will not be able to read them, right? So you can only receive cash when you unencrypt your wallet?

[ElectricGoat]

It can be done automatically in such a way that the file is never stored in clear form on your disk. It is deciphered on the fly when the bitcoin client reads it, and the deciphered data is only stored in RAM for a short while.

[caveden]

So you can only receive cash when you unencrypt your wallet?

You don't need to be online in order to receive a payment. The blockchain logs X bitcoins to address A, and that's it. To send them, then you need to sign your transaction with your private key.

[Sultan]

It can be done automatically in such a way that the file is never stored in clear form on your disk. It is deciphered on the fly when the bitcoin client reads it, and the deciphered data is only stored in RAM for a short while.

How do I do that? Or does it do that currently?

[ElectricGoat]

The bitcoin client doesn't do it yet, but your operating system can do it. It depends on what you're using... I don't know about Windows, but my GNU/Linux offered to encrypt my home directory when I installed it.

[Sultan]

The bitcoin client doesn't do it yet, but your operating system can do it. It depends on what you're using... I don't know about Windows, but my GNU/Linux offered to encrypt my home directory when I installed it.

I use Windows... i know, forgive me, I am evil

[theymos]

I use Windows... i know, forgive me, I am evil

You can use TrueCrypt. TrueCrypt's method is even better than the method that Linux typically uses because the boot loader fits onto track 0, which makes installation more straightforward than creating an additional boot partition. TrueCrypt also supports hidden volumes (which you probably don't need, though they are useful in some cases).

http://www.truecrypt.org/docs/?s=system-encryption

[gohan]

Encrypting your home directory is always a good idea but one must be reminded that it's more likely that the attacker will come through your net connection than through your door (even for a bank, if you are not hosting it on a remote server). I would be happier if the wallet were encrypted on the filesystem. Then again, for the casual user, losing a password is maybe more likely than a stolen wallet so I guess it should be optional.

[DJFC]

Can I and how can I reserve the name BitcoinBank in this community?

And how do I buy the .org or .com domain?

I own bitcoinbank.com

It's for sale.  Accepting bids.  I accept bitcoins ;-)

[wobber]

Can I and how can I reserve the name BitcoinBank in this community?

And how do I buy the .org or .com domain?

I own bitcoinbank.com

It's for sale.  Accepting bids.  I accept bitcoins ;-)

Yes, I have received offers for .eu and .org also. I'd buy both .com and .org, but so far I don't have project.

[Sultan]

Can I and how can I reserve the name BitcoinBank in this community?

And how do I buy the .org or .com domain?

I own bitcoinbank.com

It's for sale.  Accepting bids.  I accept bitcoins ;-)

Yes, I have received offers for .eu and .org also. I'd buy both .com and .org, but so far I don't have project.

I'm not sure what a BitCoinBank could offer that MtGox and MyBitCoin already offer, which is instant transfer between each other, and spread security, ie. not keeping all your BitCoins in one basket (wallet.dat) The only other service I can think of is loaning BitCoins, or savings account, like an Investment Banker, both which introduce the evils of Fractional Reserve Banking.

[FreeMoney]

Can I and how can I reserve the name BitcoinBank in this community?

And how do I buy the .org or .com domain?

I own bitcoinbank.com

It's for sale.  Accepting bids.  I accept bitcoins ;-)

Yes, I have received offers for .eu and .org also. I'd buy both .com and .org, but so far I don't have project.

I'm not sure what a BitCoinBank could offer that MtGox and MyBitCoin already offer

They could let you upload a wallet file and spend from that. Then you could lock away your own copy as your own backup so you don't have to trust them solely. This could also allow someone to maintain the same addresses through a transition from holding themselves to letting the bank manage it, which might be useful for some business.