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Author Topic: Segwit question  (Read 191 times)
cellard
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January 14, 2018, 06:59:43 PM
 #1

I need to receive Bitcoin payments (for example, the current signature campaign, and any other sources of bitcoin income) and I see how people are having a bad time sending small amounts of less than 4 $figures worth of Bitcoin due fees, let alone 3 $figures worth.

The thing is, I don't feel confident using segwit until at least May when Core will release 0.16

My question is: Is it safe to temporarily use Electrum to receive bech32 payments, and can I send bitcoins stored in a bech32 address back into a legacy address (the ones that begin with 1) while benefiting from the lowered fee, or you can only send bech32 to other bech32 addresses? im not sure about this yet. Im also a bit worried about using Electrum due recent vulnerabilities found but it would be a temporal thing until 0.16 is released.

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January 14, 2018, 07:20:24 PM
 #2

My question is: Is it safe to temporarily use Electrum to receive bech32 payments, and can I send bitcoins stored in a bech32 address back into a legacy address ~?
Yes and yes Smiley
I'm actually planning on doing this myself. But I doubt it'll make $3 transactions possible again, fees are still too high for that.

Quote
Im also a bit worried about using Electrum due recent vulnerabilities found but it would be a temporal thing until 0.16 is released.
I trust Electrum by now, and yet, I'm only running it in a VM. Better safe than sorry.

For small transactions I wouldn't mind risking it, large amounts should be in offline cold storage anyway.

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January 14, 2018, 11:47:05 PM
 #3

My question is: Is it safe to temporarily use Electrum to receive bech32 payments, and can I send bitcoins stored in a bech32 address back into a legacy address ~?
Yes and yes Smiley
I'm actually planning on doing this myself. But I doubt it'll make $3 transactions possible again, fees are still too high for that.

Quote
Im also a bit worried about using Electrum due recent vulnerabilities found but it would be a temporal thing until 0.16 is released.
I trust Electrum by now, and yet, I'm only running it in a VM. Better safe than sorry.

For small transactions I wouldn't mind risking it, large amounts should be in offline cold storage anyway.

Why run it in an VM? I mean, im worried that it has bugs in the sense of what we already saw, that it could have an exploit that could screw up your holdings that belong to the Electrum seed, but it seems you are worried that it would contain malware that would leak into your main OS? I don't think that's a real worry, Electrum team is a legit dev team, but the software itself, SPV and so on, I don't consider safe in the Bitcoin sense, not that the software would contain anything malicious.

I will be using it temporarily to receive smaller payments like sig campaigns I guess, I don't see no alternative, im being forced to do it at this point.

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January 15, 2018, 06:56:25 AM
 #4

Why run it in an VM?
Paranoia! I don't trust most software to run on my system.

Quote
I mean, im worried that it has bugs in the sense of what we already saw, that it could have an exploit that could screw up your holdings that belong to the Electrum seed, but it seems you are worried that it would contain malware that would leak into your main OS?
I'm not really worried about it, but I also don't want to take the risk. It's not only Electrum, I do the same for several altcoin-wallets. If you install enough wallets, at some point you'll get a bad one. I just don't want to risk it, even if the chance of it being compromised is very small.

Quote
I don't think that's a real worry, Electrum team is a legit dev team
I have no reason to believe otherwise, my precaution doesn't mean they're not legit.

Quote
but the software itself, SPV and so on, I don't consider safe in the Bitcoin sense, not that the software would contain anything malicious.
I don't worry about this, for small amounts. Just like I keep small amounts on phone-wallets. But what was small a year ago isn't small anymore now.

Quote
I will be using it temporarily to receive smaller payments like sig campaigns I guess, I don't see no alternative, im being forced to do it at this point.
Take precautions, don't overthink it Smiley

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January 15, 2018, 12:11:21 PM
 #5

I've also been using a newly created bech32 address with Electrum to save up on fees, haven't had any problems at all.
Just to confirm what the previous poster has said, it's possible to send and receive from legacy addresses.

Do keep in mind that a lot of services don't support bech32 yet, so you might run into some trouble if you're trying to send funds from an exchange to your segwit address.


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jargal
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January 15, 2018, 12:16:19 PM
 #6

Same here, Electrum bech32 payments seem to have worked just fine on my side.
cellard
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January 15, 2018, 04:03:38 PM
 #7

Has anyone tried Tails OS? I just got it on a DVD and will try it out later to create my bech32 address, it comes with Electrum pre-install, the problem is, the last Tails build (3.4) is from 9th of january, so im not sure if it comes with the recent 3.0.5 Electrum fix.

Anyway I could install it on the RAM I guess. I just need to create the seed, save it, get my bech32 address, save it somewhere, and that's all. Whenever I need to create new addresses, I bot from Tails again, this way my seed is never written on a hard disk and never compromised since Tails booted from a DVD has proper isolation also I would disconnect my internet while accessing my Electrum seed. I think I will stick to this until Core 0.16.

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January 15, 2018, 05:00:10 PM
 #8

Do keep in mind that a lot of services don't support bech32 yet, so you might run into some trouble if you're trying to send funds from an exchange to your segwit address.
That's the only inconvenience for now. However, being aware of this makes it pretty much *ok*. You can import a legacy address into your wallet and route through it to your bech32 (at least in Core you can using latest codebase).

Has anyone tried Tails OS?
Yes.

I just got it on a DVD and will try it out later to create my bech32 address, it comes with Electrum pre-install, the problem is, the last Tails build (3.4) is from 9th of january, so im not sure if it comes with the recent 3.0.5 Electrum fix.
You will need to manually update, I believe.

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cellard
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January 16, 2018, 01:59:50 AM
 #9

I was finally able to install Electrum with tails... had to download the .tar file, untar it and run with python, trying to use the app cvar doesn't work. Also struggled a bit to verify the gpg signature because it wasn't connecting to the keypool but managed to get it done. Got a segwit wallet and a bc1 address, will PM now (@Lauda).

Btw, latest Tails has a really, really old Electrum build, like before 3.0.0, I think it's 2.7 or something... it's a bit of a joke tbh, specially now after the big bug I hope they update it.

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January 16, 2018, 02:06:23 AM
 #10

The thing is, I don't feel confident using segwit until at least May when Core will release 0.16
Bitcoin Core 0.16.0 will be released sooner than May. It will probably be released in February as we are already in the feature freeze stage since the segwit wallet PR has already been merged.

cellard
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January 16, 2018, 05:20:45 PM
 #11

The thing is, I don't feel confident using segwit until at least May when Core will release 0.16
Bitcoin Core 0.16.0 will be released sooner than May. It will probably be released in February as we are already in the feature freeze stage since the segwit wallet PR has already been merged.

Very nice. Do you have a screenshot that shows how different wallets will be managed? I mean how the GUI will look like? im curious about that since im used to always using the same wallet with Core. How will the different wallet files be managed? I mean how the filenames will look like if they are all on the same folder? wallet001.dat, wallet.002.dat... or something?

I hope the wallets are properly isolated from each other and so on... I will be using segwit, but I will still remain paranoid until we have a big amount of adoption for a couple of years without no surprises. Yes, you can call me extremely paranoid and how I make no sense and I hope that is the case.

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January 16, 2018, 05:45:02 PM
 #12

I will be using segwit, but I will still remain paranoid until we have a big amount of adoption for a couple of years without no surprises. Yes, you can call me extremely paranoid and how I make no sense and I hope that is the case.
I have the same feeling, just like when I create a paper wallet. Encryption isn't very intuitive, so I literally have to trust it.
What helps (and what I actually do sometimes) is using different wallets (or Bitaddress.org) to test restoring addresses from my private key (on an offline LIVE Linux of course).
Basically it's the same as testing your backups once in a while, to be sure you can use them when needed.

I still haven't tested this for SegWit yet. I plan to make a short howto once I'm confident enough.

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January 16, 2018, 11:10:38 PM
 #13

Very nice. Do you have a screenshot that shows how different wallets will be managed? I mean how the GUI will look like? im curious about that since im used to always using the same wallet with Core. How will the different wallet files be managed? I mean how the filenames will look like if they are all on the same folder? wallet001.dat, wallet.002.dat... or something?
There are no different wallets or wallet files. If you use Bitcoin Core 0.16+, your wallet will automatically begin using segwit unless you tell it not to by setting the addresstype option to legacy.

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January 17, 2018, 03:48:17 PM
 #14

Very nice. Do you have a screenshot that shows how different wallets will be managed? I mean how the GUI will look like? im curious about that since im used to always using the same wallet with Core. How will the different wallet files be managed? I mean how the filenames will look like if they are all on the same folder? wallet001.dat, wallet.002.dat... or something?
There are no different wallets or wallet files. If you use Bitcoin Core 0.16+, your wallet will automatically begin using segwit unless you tell it not to by setting the addresstype option to legacy.

Really? so when you open Core 0.16+ with a brand new wallet, and you click to generate a new address by clicking on "New", it will create a bech32 address by default? So if I want to create legacy addresses when I click "New" I have first to go to the console and use a cvar called "addresstype" and set it "legacy"?

Can I change the "addresstype" on the GUI?

Also, on the list of addresses, legacy and segwit addresses will be mixed? I mean in this list:



Can we have a way to filter addresses there by legacy or segwit? I would also like a column that shows the date of creating of the addresses.

I remember someone said how generation of new addresses should be bech32 by default to incentivize segwit use but I also remember some dev saying it would be too controversial, and default would remain legacy but apparently this is not the case anymore.

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January 17, 2018, 05:54:07 PM
 #15

Really? so when you open Core 0.16+ with a brand new wallet, and you click to generate a new address by clicking on "New", it will create a bech32 address by default?
No. Default is encapsulated SegWit (in P2SH, starting with a 3).

So if I want to create legacy addresses when I click "New" I have first to go to the console and use a cvar called "addresstype" and set it "legacy"?
You specify this as '-addresstype=legacy' in your shortcut, or 'addresstype=legacy' in the bitcoin.conf.

Can I change the "addresstype" on the GUI?
Not with the GUI support PR by sipa. That is being worked on by Sjors.

Also, on the list of addresses, legacy and segwit addresses will be mixed? I mean in this list:
..
Yes.

Can we have a way to filter addresses there by legacy or segwit?
No. The starting prefix makes this trivial.

I would also like a column that shows the date of creating of the addresses.
Learn C++ and go code it yourself. Nobody there is obligated to listen to anyone's wishes.
Note: The default keypool is now over 1k (can't remember the exact number), and therefore all these addresses are going to have the same date of creation (unless you want the date the key gets used from the pool).

I remember someone said how generation of new addresses should be bech32 by default to incentivize segwit use but I also remember some dev saying it would be too controversial, and default would remain legacy but apparently this is not the case anymore.
That is not controversial. Bitcoin Core will use encapsulated SegWit as default. Electrum uses bech32 (native SegWit) as default. Samurai wallet us es encapsulated as default as well. Legacy should be avoided unless explicitly necessary (not that I can find a valid reason to do this).

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cellard
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January 20, 2018, 12:43:32 AM
 #16

I see, so what is the specific reason that Bitcoin Core will be using encapsulated aka nested aka "starting with a 3" addresses and not the bech32 addresses? don't bech32 addresses save more space and are also backwards compatible?

In your transaction, I saw that one of the outputs was still a legacy address and the bitcoins got still sent to this person still using legacy to receive the payment, so I was now confused wondering why.



Maybe it means that if I wanted to do the opposite (send from a legacy address into a bech32) it wouldn't work? would the bitcoins be lost or the client wouldn't allow me to even make the transaction?

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January 20, 2018, 02:20:21 AM
 #17

I see, so what is the specific reason that Bitcoin Core will be using encapsulated aka nested aka "starting with a 3" addresses and not the bech32 addresses? don't bech32 addresses save more space and are also backwards compatible?
Bech32 addresses save more space but are not backwards compatible.
P2PWKH-P2SH are more backwards compatible because it's P2PWKH wrapped in P2SH, and P2SH has been supported in bitcoin for years now.

Quote
In your transaction, I saw that one of the outputs was still a legacy address and the bitcoins got still sent to this person still using legacy to receive the payment, so I was now confused wondering why.
Both segwit"formats" (P2PWKH-P2SH and Bech32) are backwards compatible in sending bitcoins to legacy addresses.
Legacy addresses can receive bitcoin from segwit addresses and can send to them also (if the wallet software supports sending to Bech32 addresses)


Quote
Maybe it means that if I wanted to do the opposite (send from a legacy address into a bech32) it wouldn't work?
It will work if the wallet supports sending to Bech32 addresses.
Bech32 is a new address format entirely so most current wallet softwares do not recognise it as a valid bitcoin address type.
If the wallet supports it (eg Samourai wallet for Android), then you can send from legacy to Bech32.

 
Quote
would the bitcoins be lost or the client wouldn't allow me to even make the transaction?
Wouldn't recognise it as a bitcoin address so won't allow you to send to it.
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