HOW are bitcoins stored?

[sobitcoin]

Thanks everyone for the answers, they were really hepful. I am actually curious to know even more details about bitcoin, but right now my priority is how can I buy bitcoin without chance of being robbed. Someone mentioned having an offline computer, but the problem with that is that I have only one computer right now, I can´t have an offline one. So what´s the safest way to buy bitcoin with what I have? Would it be paper wallet or what?

Here's some physical wallet options - http://yocrypto.ca/listing-category/physical-wallets/

I personally use circle to purchase, and send to my woodwallet right away.

There is a whole bunch of free options for paper wallets.  Exchanges thrid party purchasing services, all might be a risk, but also quite important to the ecosystem and funtionality of Bitcoin.  Personally i wouldn't say stay clear 100%, but if you are going to use ANY service that puts a third party in charge of your fund, do your research. If you have to use it, 'get your coins, and withdraw into your paper wallet or w.e fast. If you're trading, make your trades and withdraw before bed. Just keep them close.  2FA wherever possible and just be aware of what is happening with the busines you are trusting your money with...

[BitNerd]

Thanks everyone for the answers, they were really hepful. I am actually curious to know even more details about bitcoin, but right now my priority is how can I buy bitcoin without chance of being robbed. Someone mentioned having an offline computer, but the problem with that is that I have only one computer right now, I can´t have an offline one. So what´s the safest way to buy bitcoin with what I have? Would it be paper wallet or what?

Here's some physical wallet options - http://yocrypto.ca/listing-category/physical-wallets/

I personally use circle to purchase, and send to my woodwallet right away.

There is a whole bunch of free options for paper wallets.  Exchanges thrid party purchasing services, all might be a risk, but also quite important to the ecosystem and funtionality of Bitcoin.  Personally i wouldn't say stay clear 100%, but if you are going to use ANY service that puts a third party in charge of your fund, do your research. If you have to use it, 'get your coins, and withdraw into your paper wallet or w.e fast. If you're trading, make your trades and withdraw before bed. Just keep them close.  2FA wherever possible and just be aware of what is happening with the busines you are trusting your money with...

Can I ask you some questions?

1- What is a woodwallet?

2- How can I be sure my physical wallet won´t be hacked?

3- How to make a paper wallet with absolutely no chance of a hacker figuring out my key?

4- Supposing I already made my paper wallet, do I just buy bitcoins with its "external address"?

5- Shouldn´t I be worried about having a physical wallet, in the sense that if it breaks or is lost, my BTC is lost forever?

[sobitcoin]

Thanks everyone for the answers, they were really hepful. I am actually curious to know even more details about bitcoin, but right now my priority is how can I buy bitcoin without chance of being robbed. Someone mentioned having an offline computer, but the problem with that is that I have only one computer right now, I can´t have an offline one. So what´s the safest way to buy bitcoin with what I have? Would it be paper wallet or what?

Here's some physical wallet options - http://yocrypto.ca/listing-category/physical-wallets/

I personally use circle to purchase, and send to my woodwallet right away.

There is a whole bunch of free options for paper wallets.  Exchanges thrid party purchasing services, all might be a risk, but also quite important to the ecosystem and funtionality of Bitcoin.  Personally i wouldn't say stay clear 100%, but if you are going to use ANY service that puts a third party in charge of your fund, do your research. If you have to use it, 'get your coins, and withdraw into your paper wallet or w.e fast. If you're trading, make your trades and withdraw before bed. Just keep them close.  2FA wherever possible and just be aware of what is happening with the busines you are trusting your money with...

Can I ask you some questions?

1- What is a woodwallet?

2- How can I be sure my physical wallet won´t be hacked?

3- How to make a paper wallet with absolutely no chance of a hacker figuring out my key?

4- Supposing I already made my paper wallet, do I just buy bitcoins with its "external address"?

5- Shouldn´t I be worried about having a physical wallet, in the sense that if it breaks or is lost, my BTC is lost forever?

1. Wood wallet is one of many physical alternatives. Basically, physical wallets provide offline storage, or remove network connections and back doors.  You can use your physical wallet as a key to access savings, which cannot be taken out unless you scan the physical wallet. Wood wallet is a woodvariety thats roughly ~30 bucks, i chose it because it was cool looking, but there is many free alternatives, metal wallets, or others with screens and such.  Take a browse, some really cool technology coming out right now..


2. Physical wallet puts the security in your hands. As for hacking of them and tracking of them, I am not 100% on all my tech knowledge I would reccomend speaking with someone who's been around for a while and completely understands all the back end happening.

3. - I think this might help, offline address allows you to create a key while offline. https://www.offlineaddress.com/

4. - Purchase coins with w.e service or thorugh a miner, then send to the public or receive address in your physical wallet. NEVER NEVER NEVER NEVER share your private key.

5. - well, yes and no, keep it safe.  IT's physical, more like cash. If you leave it out and someone takes it your frigged, likewise, if your house is set on fire and you have a wood wallet, not looking good, although I know you can make backups, this si something a tech body could help you out with a bit more.  PAper wallet will never break, but it could get exposed to elements and yes, trouble...


I hope someone else reading this can touch base a little deeper with the tech side of things. Anyhow, if you have more Q's send a mesage I can help to extent of my knowledge.  I must say though, you are doing the right thing by coming in here and asking about it before willingly giing money to something that is unknown. Well done, and have a great time with bitcoin, this is a really cool place. Lots to be aware of, but i really enjoy Bitcoin and the community that supports its technology.

[Remember remember the 5th of November]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

[BitNerd]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

The link is very interesting, can I ask a few questions?

1- What does it mean to "f*ck up with the R values"?

2- Why does the impossibility of a computer counting to 2^256 prevent it from attacking bitcoin?

3- And why doesn´t that prevent the computer from generating private keys and making transactions?

4- Which makes me wonder, if private keys are generated randomly, then is there a chance of the same private key being generated twice?

[Remember remember the 5th of November]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

The link is very interesting, can I ask a few questions?

1- What does it mean to "f*ck up with the R values"?

2- Why does the impossibility of a computer counting to 2^256 prevent it from attacking bitcoin?

3- And why doesn´t that prevent the computer from generating private keys and making transactions?

4- Which makes me wonder, if private keys are generated randomly, then is there a chance of the same private key being generated twice?

1. R value is part of the algorithm by which a transaction is signed. If the same value is re-used twice, recovery of the private key is trivial. This only happens with badly written code/programmer errors.

2. Since a computer cannot count to 256 in a timely manner(billions of years even if a super computer was used), it cannot check EVERY private key for a balance.

3. Because there are so many. There are as many private keys as there are atoms in the UNIVERSE(well, slightly less than that in cosmic terms).

4. Nothing prevents it, but so long as entropy is sufficient(these are random bytes generated by your hardware) this is extremely unlikely. Or as somebody said, it's infinitely more likely to get hit by lightning 7 times in a row while winning the lottery 7 times in a row.

[BitNerd]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

The link is very interesting, can I ask a few questions?

1- What does it mean to "f*ck up with the R values"?

2- Why does the impossibility of a computer counting to 2^256 prevent it from attacking bitcoin?

3- And why doesn´t that prevent the computer from generating private keys and making transactions?

4- Which makes me wonder, if private keys are generated randomly, then is there a chance of the same private key being generated twice?

1. R value is part of the algorithm by which a transaction is signed. If the same value is re-used twice, recovery of the private key is trivial. This only happens with badly written code/programmer errors.

2. Since a computer cannot count to 256 in a timely manner(billions of years even if a super computer was used), it cannot check EVERY private key for a balance.

3. Because there are so many. There are as many private keys as there are atoms in the UNIVERSE(well, slightly less than that in cosmic terms).

4. Nothing prevents it, but so long as entropy is sufficient(these are random bytes generated by your hardware) this is extremely unlikely. Or as somebody said, it's infinitely more likely to get hit by lightning 7 times in a row while winning the lottery 7 times in a row.

1- How can I be sure I will never "f*ck up my R values"?

2- So, there are exactly 2^256 private keys total?

3- And from what you said, I suppose it´s not profitable to get your computers to check one by one for balance, because there are so many and they will probably never find one that has already been used?

4- How many digits has the number 2^256?

[Remember remember the 5th of November]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

The link is very interesting, can I ask a few questions?

1- What does it mean to "f*ck up with the R values"?

2- Why does the impossibility of a computer counting to 2^256 prevent it from attacking bitcoin?

3- And why doesn´t that prevent the computer from generating private keys and making transactions?

4- Which makes me wonder, if private keys are generated randomly, then is there a chance of the same private key being generated twice?

1. R value is part of the algorithm by which a transaction is signed. If the same value is re-used twice, recovery of the private key is trivial. This only happens with badly written code/programmer errors.

2. Since a computer cannot count to 256 in a timely manner(billions of years even if a super computer was used), it cannot check EVERY private key for a balance.

3. Because there are so many. There are as many private keys as there are atoms in the UNIVERSE(well, slightly less than that in cosmic terms).

4. Nothing prevents it, but so long as entropy is sufficient(these are random bytes generated by your hardware) this is extremely unlikely. Or as somebody said, it's infinitely more likely to get hit by lightning 7 times in a row while winning the lottery 7 times in a row.

1- How can I be sure I will never "f*ck up my R values"?

2- So, there are exactly 2^256 private keys total?

3- And from what you said, I suppose it´s not profitable to get your computers to check one by one for balance, because there are so many and they will probably never find one that has already been used?

4- How many digits has the number 2^256?

1. You can't. It all depends on the programmer.

2. No, slightly less than that. Moreso, because of a different part of the address generation algorithm, there are actually 2^160(still a very large number) possible addresses from the ~2^256 private keys.

3. Nope.

4. 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936

5. Don't be confused about the small appearance of this number. I assure you, it's incomprehensibly huge. Most people know how to "count" only to the bolded part.

A quantum computer built using quantum entanglement(one has not been built that uses this only one with quantum annealing which is not the same) can pose a threat to all crypto. But orders of magnitudes more qubits than the D-Wave one.
The other method is to build the best possible computer, quantum or not with 100% efficiency, use a dyson sphere to trap a young star and travel through a wormhole that connects billions of years in the future to obtain the results.

[calci]

I have been using the physical hardware wallet trezor for a while now,
and feel it is the best wallet to buy to secure your funds.

[teukon]

4- How many digits has the number 2^256?

4. 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936

Just to clarify:
2^256 = 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936.
This is a 78-digit number.

[sgravina]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

Your description is correct and helpful but your first point "Bitcoins don't actually exist" in wrong.  Of course you can discuss the ontology of what it means to exist but in the common meaning of the term bitcoins do exist.  Bitcoins are possession of the private keys which are necessary to move bitcoin outputs in the bitcoin network.  You + the private key + the bitcoin network are the bitcoin.  All three exist.

It is in the network that they exist.  By participating in the network you are accepting the promise that the bitcoins are recorded there.  It is in the private key that they exist because that is needed to move them in the network.  But the ultimate place they exist is in you, in your acceptance that the network will allow you to transfer them to another address and that such transfer can be exchanged for goods or services.

In this sense they exist just like dollars exist.  You need the network (The United States), the right to transfer (bank account, cash, your signature, other recognized means of ownership) and the expectation of value (you expect that dollars can be exchanged for goods and services.)

[Remember remember the 5th of November]

Lets summarize or TLDR;

• Bitcoins don't actually exist.
• Wallets store one or more private keys.
• A private key is a very large integer(number). Link to infograph https://i.imgur.com/IL6PV5E.jpg
• Any type of bitcoin malware that has access to a machine where an unencrypted wallet resides CAN steal the bitcoins.

Your description is correct and helpful but your first point "Bitcoins don't actually exist" in wrong.  Of course you can discuss the ontology of what it means to exist but in the common meaning of the term bitcoins do exist.  Bitcoins are possession of the private keys which are necessary to move bitcoin outputs in the bitcoin network.  You + the private key + the bitcoin network are the bitcoin.  All three exist.

It is in the network that they exist.  By participating in the network you are accepting the promise that the bitcoins are recorded there.  It is in the private key that they exist because that is needed to move them in the network.  But the ultimate place they exist is in you, in your acceptance that the network will allow you to transfer them to another address and that such transfer can be exchanged for goods or services.

In this sense they exist just like dollars exist.  You need the network (The United States), the right to transfer (bank account, cash, your signature, other recognized means of ownership) and the expectation of value (you expect that dollars can be exchanged for goods and services.)

My TLDR was a summary of what was discussed here. First post https://bitcointalk.org/index.php?topic=892752.msg9832308#msg9832308

However even the Core developers have stated that same thing.

[BitNerd]

1- How can I be sure I will never "f*ck up my R values"?

2- So, there are exactly 2^256 private keys total?

3- And from what you said, I suppose it´s not profitable to get your computers to check one by one for balance, because there are so many and they will probably never find one that has already been used?

4- How many digits has the number 2^256?

1. You can't. It all depends on the programmer.

2. No, slightly less than that. Moreso, because of a different part of the address generation algorithm, there are actually 2^160(still a very large number) possible addresses from the ~2^256 private keys.

3. Nope.

4. 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936

5. Don't be confused about the small appearance of this number. I assure you, it's incomprehensibly huge. Most people know how to "count" only to the bolded part.

A quantum computer built using quantum entanglement(one has not been built that uses this only one with quantum annealing which is not the same) can pose a threat to all crypto. But orders of magnitudes more qubits than the D-Wave one.
The other method is to build the best possible computer, quantum or not with 100% efficiency, use a dyson sphere to trap a young star and travel through a wormhole that connects billions of years in the future to obtain the results.

2. Which means each address can be accessed by 2^94 private keys? But that doesn´t matter because the chance to find an address with money is still like finding an atom in a galaxy?

[BitNerd]

Thanks everyone for the answers, they were really hepful. I am actually curious to know even more details about bitcoin, but right now my priority is how can I buy bitcoin without chance of being robbed. Someone mentioned having an offline computer, but the problem with that is that I have only one computer right now, I can´t have an offline one. So what´s the safest way to buy bitcoin with what I have? Would it be paper wallet or what?

Here's some physical wallet options - http://yocrypto.ca/listing-category/physical-wallets/

I personally use circle to purchase, and send to my woodwallet right away.

There is a whole bunch of free options for paper wallets.  Exchanges thrid party purchasing services, all might be a risk, but also quite important to the ecosystem and funtionality of Bitcoin.  Personally i wouldn't say stay clear 100%, but if you are going to use ANY service that puts a third party in charge of your fund, do your research. If you have to use it, 'get your coins, and withdraw into your paper wallet or w.e fast. If you're trading, make your trades and withdraw before bed. Just keep them close.  2FA wherever possible and just be aware of what is happening with the busines you are trusting your money with...

Can I ask you some questions?

1- What is a woodwallet?

2- How can I be sure my physical wallet won´t be hacked?

3- How to make a paper wallet with absolutely no chance of a hacker figuring out my key?

4- Supposing I already made my paper wallet, do I just buy bitcoins with its "external address"?

5- Shouldn´t I be worried about having a physical wallet, in the sense that if it breaks or is lost, my BTC is lost forever?

1. Wood wallet is one of many physical alternatives. Basically, physical wallets provide offline storage, or remove network connections and back doors.  You can use your physical wallet as a key to access savings, which cannot be taken out unless you scan the physical wallet. Wood wallet is a woodvariety thats roughly ~30 bucks, i chose it because it was cool looking, but there is many free alternatives, metal wallets, or others with screens and such.  Take a browse, some really cool technology coming out right now..


2. Physical wallet puts the security in your hands. As for hacking of them and tracking of them, I am not 100% on all my tech knowledge I would reccomend speaking with someone who's been around for a while and completely understands all the back end happening.

3. - I think this might help, offline address allows you to create a key while offline. https://www.offlineaddress.com/

4. - Purchase coins with w.e service or thorugh a miner, then send to the public or receive address in your physical wallet. NEVER NEVER NEVER NEVER share your private key.

5. - well, yes and no, keep it safe.  IT's physical, more like cash. If you leave it out and someone takes it your frigged, likewise, if your house is set on fire and you have a wood wallet, not looking good, although I know you can make backups, this si something a tech body could help you out with a bit more.  PAper wallet will never break, but it could get exposed to elements and yes, trouble...


I hope someone else reading this can touch base a little deeper with the tech side of things. Anyhow, if you have more Q's send a mesage I can help to extent of my knowledge.  I must say though, you are doing the right thing by coming in here and asking about it before willingly giing money to something that is unknown. Well done, and have a great time with bitcoin, this is a really cool place. Lots to be aware of, but i really enjoy Bitcoin and the community that supports its technology.

3. Ok, I went to this site, you have to be offline and then it will give you a private key, I note it down on paper and that´s it? No one will ever be able to figure it out, except from reading my physical note on paper? But, when I want to send money from my address to another one, I will have to write my private key on computer, at those few seconds, when I do that, how can I be sure a malware will not save it and then send to hacker? And having an offline computer is not an option for me.

Also, even being offline, the code will have to appear on the screen before I note it down. Is it possible that a malware will save it offline and later send to hacker? If yes, it means I feel there is no secure way for me to generate a private key.

[Remember remember the 5th of November]

Right now your safest bet is to use the hardware wallet Trezor.

[BitNerd]

Right now your safest bet is to use the hardware wallet Trezor.

1. By which means does one know it´s the safest?

2. Is there any case of bitcoins being stolen from it?

3. Are there known bad hardware wallets, from which BTC has been stolen? (so that I remember never to buy them)

4. What if some day, some company makes a hardware wallet that secretly sends all keys to a guy and one day when this guy has enough keys he decides to transfer all the BTC to himself?

[rz20]

Right now your safest bet is to use the hardware wallet Trezor.

But for that normal people need to invest money, and the average person is not going to spend 100$ just to have bitcoins.

[BitNerd]

Right now your safest bet is to use the hardware wallet Trezor.

But for that normal people need to invest money, and the average person is not going to spend 100$ just to have bitcoins.

That´s right. Is there a no-cost way to generate and use my private keys, without ANY chance of they being stolen?

[teukon]

2. Which means each address can be accessed by 2^94 private keys?

We hope that this is at least approximately true.

But that doesn´t matter because the chance to find an address with money is still like finding an atom in a galaxy?

Perhaps more like finding a particular atom in the ocean.

3. - I think this might help, offline address allows you to create a key while offline. https://www.offlineaddress.com/

3. Ok, I went to this site, you have to be offline and then it will give you a private key, I note it down on paper and that´s it? No one will ever be able to figure it out, except from reading my physical note on paper?

Hopefully.

Just being offline doesn't guarantee that the algorithm used by that site isn't designed to select a small subset of private keys which the site creators know.  Using well-established code written by reputable people will help here; I personally can't vouch for this site.

If after writing down the private key you ever reconnect to the internet you're leaving a window for a trojan of some kind to note down the private key and upload it once you reconnect.  This can be mitigated a bit by power-cycling before reconnecting, or mitigated a huge amount by formatting all drives and reinstalling the OS before reconnecting.  You can also gain some small advantage in this area by creating a separate user just for handling Bitcoin.

If you print it you have another device to worry about.  You gain a little something by writing the private key down by hand.

None of these attack vectors is especially likely here so you should be fine to try it out with small amounts.

But, when I want to send money from my address to another one, I will have to write my private key on computer, at those few seconds, when I do that, how can I be sure a malware will not save it and then send to hacker? And having an offline computer is not an option for me.

If you have no offline computer (and are incapable of performing all of Bitcoin's various cryptographic functions manually on paper) then you'll have to settle for "almost sure".  This then becomes a question of how secure your computer is.

[BitNerd]

2. Which means each address can be accessed by 2^94 private keys?

We hope that this is at least approximately true.

But that doesn´t matter because the chance to find an address with money is still like finding an atom in a galaxy?

Perhaps more like finding a particular atom in the ocean.

3. - I think this might help, offline address allows you to create a key while offline. https://www.offlineaddress.com/

3. Ok, I went to this site, you have to be offline and then it will give you a private key, I note it down on paper and that´s it? No one will ever be able to figure it out, except from reading my physical note on paper?

Hopefully.

Just being offline doesn't guarantee that the algorithm used by that site isn't designed to select a small subset of private keys which the site creators know.  Using well-established code written by reputable people will help here; I personally can't vouch for this site.

If after writing down the private key you ever reconnect to the internet you're leaving a window for a trojan of some kind to note down the private key and upload it once you reconnect.  This can be mitigated a bit by power-cycling before reconnecting, or mitigated a huge amount by formatting all drives and reinstalling the OS before reconnecting.  You can also gain some small advantage in this area by creating a separate user just for handling Bitcoin.

If you print it you have another device to worry about.  You gain a little something by writing the private key down by hand.

None of these attack vectors is especially likely here so you should be fine to try it out with small amounts.

But, when I want to send money from my address to another one, I will have to write my private key on computer, at those few seconds, when I do that, how can I be sure a malware will not save it and then send to hacker? And having an offline computer is not an option for me.

If you have no offline computer (and are incapable of performing all of Bitcoin's various cryptographic functions manually on paper) then you'll have to settle for "almost sure".  This then becomes a question of how secure your computer is.

What if I buy a new HD and use it just for bitcoins, without my original HD, and then I turn off computer, unplug HD, plug the other one, so on so forth? Will that prevent trojans or can they be in other devices than HD, e.g. boards, cards, etc?

In other words, instead of an offline "whole computer", is it enough to have just an offline HD, or is there some weakness to using 2 HDs with one computer? And by 2 HDs I mean they are connected just one at a time, never together, each one has its own OS, etc. Just the same Mobo and cards.