My noob questions

[pooya87]

That is why we always say verify your Electrum signatures before you install the software. If those who were phished had done that, they would have noticed that the software they installed was fake and is not the original Electrum.

The reason why many people are hacked via Electrum is not only in the fact that users did not verify the signature (but most had no idea it was possible), but also in the fact that this security flaw existed at all and was not previously detected and fixed. Most (at least on this forum) blame users exclusively for not doing something (verify signatures), but it is also a big responsibility of those who have publicly distributed software with such a security flaw.

I don't see that such things can be avoided in the future unless downloading such sensitive programs would only be possible by forcing users to verify downloaded files before installation.

developers have no responsibility, and it is not just because of the MIT license that eliminates that responsibility entirely but because of the simple fact that any software that has ever been released and will ever be released has flaws. there is no escaping that. it doesn't matter how many developers spend how much time on that software, it will have flaws that will be exploited at some point and fixed afterwards.

the blame is on users exclusively in this particular case because they could have protected themselves with very simple and mandatory steps that includes signature verification and using cold storage.

[Pmalek]

...but also in the fact that this security flaw existed at all and was not previously detected and fixed. Most (at least on this forum) blame users exclusively for not doing something (verify signatures), but it is also a big responsibility of those who have publicly distributed software with such a security flaw.

I agree with the part that such a vulnerability shouldn't have existed, but to be fair, it wasn't a vulnerability until bad actors made it one. The developers probably didn't consider it could become a problem since they don't share the same thought of hackers and various scammer and exploiters. Nobody and nothing is perfect.

We as users should do our part in following suggested standards. The blame is still very much on the individuals, not the software, although I agree that some small part is on the developers as well. Because even if those custom messages were present today, if the users verify the signatures, and pay attention that the software updates for the software stem from the genuine site, they would not be phished.

[bob123]

[...] but also in the fact that this security flaw existed at all and was not previously detected and fixed. Most (at least on this forum) blame users exclusively for not doing something (verify signatures), but it is also a big responsibility of those who have publicly distributed software with such a security flaw.

"Such a security flaw" ?

The CVSS score of that vulnerability is somewhere between 2.5 and 3.5 out of 10 and therefore low severity.
It doesn't do anything else than just displaying a message.

If an user visits a fake github page with no source code and installs malware without verifying the signature, they are completely at fault.

It is almost like saying "I received an email in my mail client and clicked the link to install this program. The email client is at fault." That's not exactly the same since, but both is nonsense and comparable.

[Lucius]

"Such a security flaw" ?

The CVSS score of that vulnerability is somewhere between 2.5 and 3.5 out of 10 and therefore low severity.
It doesn't do anything else than just displaying a message.

If an user visits a fake github page with no source code and installs malware without verifying the signature, they are completely at fault.

It is almost like saying "I received an email in my mail client and clicked the link to install this program. The email client is at fault." That's not exactly the same since, but both is nonsense and comparable.

I had no doubt you wouldn't comment this way, and I know very well your position when it comes to things like this. But you only look at these things from the position of someone who is some kind of expert in the IT industry. All those poor people who lost their BTC because the official wallet showed them a fake message don't care what the score is, that low score means nothing when they money is gone.

It is complete nonsense to compare an email client with an Electrum, but if it makes sense to you... This is about someone taking advantage of something that allowed him to cheat a lot of people, and part of the responsibility for that lies with the developer.

But that’s just my opinion, there’s no need to further discuss what someone should or shouldn’t have done.

[bob123]

I had no doubt you wouldn't comment this way, and I know very well your position when it comes to things like this. But you only look at these things from the position of someone who is some kind of expert in the IT industry. All those poor people who lost their BTC because the official wallet showed them a fake message don't care what the score is, that low score means nothing when they money is gone.

I do realize that the victims don't really care about how a specific score is rating that vulnerability.
But with BTC and the whole be your own bank around it, people also need to secure their funds themselves.


And we are not talking about being extremely techy.
It is enough to internalize "simple" things like 1) only downloading from the official website and 2) do not click on random links / do not download random stuff.

I believe that you don't have to be techy or be working in the IT field to actually do that.

But a lot of people still fall for simple scam mails (e.g. nigerian prince or whatever the current equivalent of that is).
And those people are not ready yet for keeping their money safe - all on their own.

BTC does not have a system yet which is that fool-proof. And i doubt we will ever get that far.
So people actually have to learn new things. They have to learn basic IT stuff like not clicking on every random link.

We can just hope that the victims learnt it this way. And that their loss wasn't too huge.

[Folio]

Ok but the fake link came from the wallet itself as far as I understood, so that's not exactly like a scammy email.

[Lucius]

~snip~

I completely agree that a very large number of crypto users have a completely wrong attitude when it comes to crypto, it is a combination of ignorance and misunderstanding of the very idea on which BTC was created. There is no doubt that most are not ready to be their own bank, this is shown by all examples of hacking - but also the fact that millions of BTC are kept on crypto exchanges and online wallets.

There is also no doubt that all Electrum users are responsible for what happened to them, primarily because they were unaware that Electrum does not have an official update option from the program itself, and secondly that there is something that allows them to check the legitimacy of a file before installing.

But it’s also a fact that Electrum existed as much as 3 years before someone took advantage of this vulnerability, and that’s the only reason I say that part of the responsibility is also on those who didn’t discover it in time. Of course, what pooya87 wrote should also be taken into account, and that is that the license was issued by the MIT and that there is no material or criminal liability.

According to research from 2019, the value of BTC stolen in this way is measured at about $ 4 million, but it should be noted that at the end of 2018 the price of BTC was at least three times lower than today, and that all those who still have vulnerable versions remain potential victims. So far, the biggest known loss was $140,000, which is big money anywhere in the world.

Ok but the fake link came from the wallet itself as far as I understood, so that's not exactly like a scammy email.

This is true, and because of that you should never trust anything blindly, but check and verify every thing related to crypto.

[Pmalek]

primarily because they were unaware that Electrum does not have an official update option from the program itself...

I think this was also changed, not sure if with version 3.3.8 or an older one. I remember reading that it became possible for Electrum to check if you were using the latest version and if updates are available. I assume if they are, it would let you download and install them. I never used that option or care for it that much as that is not the way I plan to update my Electrum anyways.

[bob123]

primarily because they were unaware that Electrum does not have an official update option from the program itself...

The vulnerability allowed the server to show a message to the client.
It wasn't really an update function. It was a warning message saying that the current version is vulnerable and that an update should be performed (with an link to the fake version of electrum).

I remember reading that it became possible for Electrum to check if you were using the latest version and if updates are available. I assume if they are, it would let you download and install them.

It would only show that there is an update available. You still would have to visit electrum.org to download and install it.

[Folio]

Question 6: can you help me understand how the transactions work?

So for example I sent 73,5 € to myself in May, this is the transaction as displayed by the wallet.
By this image, I can see that I sent 0.00853949 bitcoin, of which 0.00066542 bitcoin have been spent on the fees.





Now when I check the transaction on the blockchain, I would expect to see something like

from X (x= address of the sender) to Y (y = address of the receiver).

And the amount without fees, so 0.00787407 bitcoin.


Instead, if I look at the transaction on the blockchain, this is what I see.




What I don't understand:

1. Why is the "input total" 0.02253233 btc? What I sent was 0.00853949. Is this "input total" the total amount I had in my wallet when I made the transaction? If so, why on Earth would I want to show that to the person receiving the payment?

2. What do the numbers 1, 2, 3 and 4 indicate? I expected to see the amount of money I sent from my address to his address, instead I see 4 addresses and 4 different amounts of bitcoin.


How come the images don't show? I used the tag properly.

[o_e_l_e_o]

Think of bitcoin transactions like physical cash you hold in your hand, rather than like electronic cash you send via a bank transfer. If I have a 20 euro note, and I want to pay you 15 euros, then I have to use the whole 20 and get 5 back as change. If I have two 10 euro notes, and I want to pay you 15, then I have to use both of them, again getting 5 back as change. You can't cut a 10 euro note in half and call it 5 euros.

The same is true for bitcoin. All the coins in your wallet are part of discrete "unspent outputs" or "UTXOs". When you want to spend part of an output, you have to spend the whole output and get some of it back as change. Spending the output like this create two new outputs - one being sent to the person or address you are paying, and another being sent back to you with the change.

1. Why is the "input total" 0.02253233 btc?

Your wallet has combined two outputs, one with 0.00034433 BTC and one with 0.02218800 BTC.

Is this "input total" the total amount I had in my wallet when I made the transaction? If so, why on Earth would I want to show that to the person receiving the payment?

You wouldn't, but all bitcoin transactions are public, and so viewable to anyone. If you want to pick and choose which UTXOs to include in your transaction, then you need to use a wallet such as Electrum which allows you to do that.

2. What do the numbers 1, 2, 3 and 4 indicate?

Numbers 1 and 2 are two different UTXOs which you used in that transaction. Number 3 is the output you sent, and number 4 is the change being returned to your wallet.

How come the images don't show?

Newbies can't post images. You need to rank up by spending more time on the forum.


As an aside, although you have blanked out the transaction ID and the addresses, simply showing the amounts involved is enough for someone to find that transaction on a block explorer in the space of a couple of minutes.

[Folio]

Thanks but I am still confused, what a weird way of processing the transfer. So basically every time I send money I have to send my entire wallet and then I receive back the change? Who is sending me back the change? The miner? Does he have to pay fees on that transfer too?

So I sent him the 2 amounts that are shown on the left, the 3 arrived to him and the 4 is what comes back to me (without the fees).

But why did I have to send him 1 and 2? Number 2 alone was way more than sufficient to make the payment. I don't get it.

[Coin_trader]

Thanks but I am still confused, what a weird way of processing the transfer. So basically every time I send money I have to send my entire wallet and then I receive back the change? Who is sending me back the change? The miner? Does he have to pay fees on that transfer too?

So I sent him the 2 amounts that are shown on the left, the 3 arrived to him and the 4 is what comes back to me (without the fees).

But why did I have to send him 1 and 2? Number 2 alone was way more than sufficient to make the payment. I don't get it.

Don't make it too much complicated. All the balance at address 1,2,3 and 4 belongs to your general wallet. So it will just sum up at the end that's why total balance is what you are viewing on your electrum wallet. You can disregard the technical side if you are too confused. The most important thing to consider is your total balance. And you can deposit to any of your previous address since it was all connect and it will just sum up.

Mining fee will be deducted to your total balance at all. Just protect your private key and everything will be fine.

[o_e_l_e_o]

So basically every time I send money I have to send my entire wallet and then I receive back the change?

No, not at all. You only have to send the entire output, whereas your wallet likely contains multiple different outputs (one from each transaction you received).

Who is sending me back the change? The miner? Does he have to pay fees on that transfer too?

The change is built in to the transaction automatically. Technically you are sending it to yourself. The miner does not have control of it at any point, and the fee for it is built in to the fee you pay for the transaction.

So I sent him the 2 amounts that are shown on the left, the 3 arrived to him and the 4 is what comes back to me (without the fees).

Correct.

But why did I have to send him 1 and 2? Number 2 alone was way more than sufficient to make the payment. I don't get it.

Yeah, this is a bit strange and not typical. Which wallet software did you use to make this transaction?

The reason this likely happened is to "consolidate" inputs. By using two inputs, the change from both is combined in to one output. Having fewer outputs saves fees in long run. To go back to my earlier analogy, it's like I have a 10 euro note and 1 euro in coins, and I owe you 6 euros. I could give you the 10 and get more coins in change, or I could give you 10 plus the coins to make 11, and then get a nice 5 euro note back as change.

[Folio]

Don't make it too much complicated. All the balance at address 1,2,3 and 4 belongs to your general wallet. So it will just sum up at the end that's why total balance is what you are viewing on your electrum wallet. You can disregard the technical side if you are too confused. The most important thing to consider is your total balance. And you can deposit to any of your previous address since it was all connect and it will just sum up.

Mining fee will be deducted to your total balance at all. Just protect your private key and everything will be fine.

I want to know as much as possible (without studying computer programming and cryptography).
I don't know my private key nor have I written it anywhere, I only stored the seed physically.

So basically every time I send money I have to send my entire wallet and then I receive back the change?

No, not at all. You only have to send the entire output, whereas your wallet likely contains multiple different outputs (one from each transaction you received).

Who is sending me back the change? The miner? Does he have to pay fees on that transfer too?

The change is built in to the transaction automatically. Technically you are sending it to yourself. The miner does not have control of it at any point, and the fee for it is built in to the fee you pay for the transaction.

So I sent him the 2 amounts that are shown on the left, the 3 arrived to him and the 4 is what comes back to me (without the fees).

Correct.

But why did I have to send him 1 and 2? Number 2 alone was way more than sufficient to make the payment. I don't get it.

Yeah, this is a bit strange and not typical. Which wallet software did you use to make this transaction?

The reason this likely happened is to "consolidate" inputs. By using two inputs, the change from both is combined in to one output. Having fewer outputs saves fees in long run. To go back to my earlier analogy, it's like I have a 10 euro note and 1 euro in coins, and I owe you 6 euros. I could give you the 10 and get more coins in change, or I could give you 10 plus the coins to make 11, and then get a nice 5 euro note back as change.

Thank you. Can you define "output"? It seems weird that I have outputs. It would seem normal that the money I receive are inputs and the money I send are outputs, but by the way you speak it seems like it's the opposite.
How do I know how many "outputs" there are in my wallet?

I don't understand why these "outputs" must be moved altogether as one... given that it's completely digital wasn't it easier to consider every satoshi as a singular movable unit?

[o_e_l_e_o]

Can you define "output"? It seems weird that I have outputs. It would seem normal that the money I receive are inputs and the money I send are outputs, but by the way you speak it seems like it's the opposite.

Transactions have both inputs and outputs. Bitcoin which are not being spent in a transaction are called unspent outputs.

Let's say I have 2 bitcoin in my wallet in a single unspent output. I then spend that unspent output by using it as the input to a transaction. With that transaction I create two new outputs - one output of 0.5 BTC to you, and one ouput of 1.5 BTC as change back to myself. These two new outputs are unspent outputs (also known as UTXOs short for "unspent transaction outputs") until such a time as they are used as inputs in a transaction.

How do I know how many "outputs" there are in my wallet?

It depends on the wallet you are using. Good ones will let you view individual outputs, whereas custodial or web wallets are unlikely to have this feature.

Here's a good resource that might help you understand if more thoroughly: https://learnmeabitcoin.com/beginners/outputs. I'd recommend all the beginner's guides on that site as good sources of info in general.

[Folio]

Can you define "output"? It seems weird that I have outputs. It would seem normal that the money I receive are inputs and the money I send are outputs, but by the way you speak it seems like it's the opposite.

Transactions have both inputs and outputs. Bitcoin which are not being spent in a transaction are called unspent outputs.

Let's say I have 2 bitcoin in my wallet in a single unspent output. I then spend that unspent output by using it as the input to a transaction. With that transaction I create two new outputs - one output of 0.5 BTC to you, and one ouput of 1.5 BTC as change back to myself. These two new outputs are unspent outputs (also known as UTXOs short for "unspent transaction outputs") until such a time as they are used as inputs in a transaction.

How do I know how many "outputs" there are in my wallet?

It depends on the wallet you are using. Good ones will let you view individual outputs, whereas custodial or web wallets are unlikely to have this feature.

Here's a good resource that might help you understand if more thoroughly: https://learnmeabitcoin.com/beginners/outputs. I'd recommend all the beginner's guides on that site as good sources of info in general.

Oh ok, now I got it, thank you!
I guess they are called outputs because those coins originally came from the miners who mined them.

[Pmalek]

Those screenshots and the way the transaction was put together is why coin control is so important. What I mean with that is being able to select which outputs you want to spend.
You sent 0.00853949 BTC. You could have used only the 0.022188 output. There was no reason to include the 0.00034433 output in the transaction.

Since o_e_l_e_o used Euros as an example, I am going to do the same. Lets say you want to spend €6. In your wallet you have a €5 bill and a €10 bill. I assume you would pay using the €10 bill, am I correct? And you wouldn't touch the €5 bill. But what you did with your Bitcoin transaction is that you gave the cashier both bills to pay for your €6 item. That wasn't necessary.      

Additionally, the 180 sat/vbyte fee is very high and unless you are very much in hurry such a fee is not needed. Even if you are in a hurry, a lower fee would have probably server you equally as good.  

[Folio]

Those screenshots and the way the transaction was put together is why coin control is so important. What I mean with that is being able to select which outputs you want to spend.
You sent 0.00853949 BTC. You could have used only the 0.022188 output. There was no reason to include the 0.00034433 output in the transaction.

Since o_e_l_e_o used Euros as an example, I am going to do the same. Lets say you want to spend €6. In your wallet you have a €5 bill and a €10 bill. I assume you would pay using the €10 bill, am I correct? And you wouldn't touch the €5 bill. But what you did with your Bitcoin transaction is that you gave the cashier both bills to pay for your €6 item. That wasn't necessary.      

Additionally, the 180 sat/vbyte fee is very high and unless you are very much in hurry such a fee is not needed. Even if you are in a hurry, a lower fee would have probably server you equally as good.  

Yes indeed, the fact that it used both outputs to send the money doesn't make any sense. I didn't choose it, it was automatic and the fee is high due to the wallet I think. I must have sent that money using Exodus which doesn't allow you to select the fees. What's a reasonable fee?

I now see how I can select which output to spend from Electrum. Thanks!

By the way that website is awesome, he even has a youtube channel with very clear explanations. Thanks guys!

[o_e_l_e_o]

What's a reasonable fee?

So the fee rate is calculated based on the size of your transaction in virtual bytes. Transactions with more inputs and outputs take up more virtual bytes than transactions with fewer inputs and outputs. The actual monetary value of the transaction is irrelevant as far as the fee goes. If you had a transaction of 500 vbytes, and you paid 5000 sats in fee, then your fee rate is 10 sats/vbyte. You might have a larger transaction which uses multiple inputs and ends up as 3000 vbytes, and you could pay a higher fee of 9000 sats, but your rate then would only be 3 sats/vbyte. So although your second transaction costs you more, it actually has a lower fee rate than your first. Since miners are always looking to maximize their own profits, they will generally pick the transaction with the highest fee rate. This lets them squeeze the maximum profit out of the finite space in each bitcoin block.

With that in mind, a reasonable fee depends on how many other transactions are waiting to get confirmed at the time, and what fee rates those transaction have paid. If the mempool (the mempool is the pool of unconfirmed transactions waiting to be mined) is empty, than a fee rate of 1 or 2 sats/vbyte will be more than enough to be confirmed quickly. If the mempool is very full, then a fee rate of 1 or 2 sats/vbyte will put you right at the bottom and you may have to wait many hours or even days to be confirmed. In those cases, you would want to pay a higher fee to get closer to the tip of the mempool if you are in a hurry.

If you want a site to just tell you what would be a reasonable fee to use, I would suggest using this one: https://www.coinb.in/#fees. You can ignore all the sliders and just use the small number at the bottom of the blue box "XX Sat/Byte".

If you want to have more control over what fee you set (and likely save some money along the way), then I would suggest using the bottom graph on this site, titled "Mempool Size in MB": https://jochen-hoenicke.de/queue/#1,8h. This is a bit more difficult to get your head around. Essentially each colored band shows how many megabytes of transactions at each fee rate are currently waiting to be confirmed, and so you can choose where you want to place your transaction. 1miau has written a good guide to using this site here: Make sure to avoid wasting BTC for too high fees – step by step guide (Electrum)