Bitcoin Wiki - User contributions [en]

Block

2014-03-02T21:08:45Z

Krellis: /* Description */ Transaction record isn't in the block header

Data is permanently recorded in the Bitcoin network through files called '''blocks'''. A block is a record of some or all of the most recent Bitcoin transactions that have not yet been recorded in any prior blocks. They could be thought of like the individual pages of a city recorder's recordbook (where changes to title to real estate are recorded) or a stock transaction ledger. In all but a few exceptional cases, new blocks are added to the end of the record (known in Bitcoin as the [[block chain]]), and once written, are never changed or removed. Each block memorializes what took place immediately before it was created.
===Block structure===
{| class="wikitable"
|-
! Field
! Description
! Size
|-
|Magic no
|value always 0xD9B4BEF9
|4 bytes
|-
|Blocksize
|number of bytes following up to end of block
|4 bytes
|-
|Blockheader
|[[Block hashing algorithm| consists of 6 items]]
|80 bytes
|-
|Transaction counter
| positive integer [[ Protocol_specification#Variable_length_integer|VI = VarInt]]
| 1 - 9 bytes
|-
|[[transactions]]
|the (non empty) list of transactions
|<Transaction counter>-many transactions
|}
==Description==
Each block contains, among other things, a record of some or all recent [[transactions]], and a reference to the block that came immediately before it. It also contains an answer to a difficult-to-solve mathematical puzzle - the answer to which is unique to each block. New blocks can't be submitted to the network without the correct answer - the process of "[[Mining]]" is essentially the process of competing to be the next to find the answer that "solves" the current block. The mathematical problem in each block is difficult to solve, but once a valid solution is found, it is very easy for the rest of the network to confirm that the solution is correct. There are multiple valid solutions for any given block - only one of the solutions needs to be found for the block to be solved.

Because there is a reward of brand new Bitcoins for solving each block, every block also contains a record of which [[Bitcoin address]] is entitled to receive the reward. This record is known as a generation transaction, or a [[coinbase]] transaction, and is always the first transaction appearing in every block. The number of [[Bitcoins]] generated per block starts at 50 and is halved every 210,000 blocks (about four years).

Bitcoin transactions are [[transaction broadcasting|broadcast]] to the [[network]] by the sender, and all peers trying to solve blocks collect the transaction records and add them to the block they're working to solve.

The difficulty of the mathematical problem is automatically adjusted by the network, such that it targets a goal of solving an average of 6 blocks per hour. Every 2016 blocks (about two weeks), all Bitcoin clients compare the actual number created with this goal and modify the target by the percentage that it varied. This increases (or decreases) the difficulty of generating blocks.

Because each block contains a reference to the prior block, the collection of all blocks in existence can be said to form a chain. However, it's possible for the chain to have temporary splits - for example, if two miners arrive at two different valid solutions for the same block at the same time, unbeknownst to one another. The peer-to-peer network is designed to resolve these splits within a short period of time, so that only one branch of the chain survives.

The client accepts the 'longest' chain of blocks as valid. The 'length' of the entire [[block chain]] refers to the chain with the most combined difficulty, not the one with the most blocks. This prevents someone from forking the chain and creating a large number of low-difficulty blocks, and having it accepted by the network as 'longest'.

== Common Questions about Blocks ==

=== How many blocks are there? ===
[http://blockexplorer.com/q/getblockcount Current block count]

=== What is the maximum number of blocks? ===
There is no maximum number, blocks just keep getting added to the end of the chain at an average rate of one every 10 minutes.

==== Even when all 21 million coins have been generated? ====
Yes. The blocks are for proving that transactions existed at a particular time. Transactions will still occur once all the coins have been generated, so blocks will still be created as long as people are trading Bitcoins.

=== How long will it take me to generate a block? ===
No-one can say exactly. There is a [[Generation Calculator|generation calculator]] that will tell you how long it '''might''' take.

=== What if I'm 1% towards calculating a block and...? ===
There's no such thing as being 1% towards solving a block. You don't make progress towards solving it. After working on it for 24 hours, your chances of solving it are equal to what your chances were at the start or at any moment. Believing otherwise is what's known as the Gambler's fallacy [http://en.wikipedia.org/wiki/Gambler's_fallacy].

It's like trying to flip 53 coins at once and have them all come up heads. Each time you try, your chances of success are the same.

=== Where can I find more technical detail? ===
There is more technical detail on the [[block hashing algorithm]] page.

==See Also==

* [https://bitcointalk.org/index.php?topic=101514.0 Format of the BDB-style block files]
* [[:File:Total_bitcoins_over_time_graph.png|Total Bitcoins Over Time]]

[[Category:Technical]]
[[Category:Vocabulary]]

[[fr:Blocs]][[pl:Bloki]][[zh-cn:Block]]
[[de:Block]]

How to set up a secure offline savings wallet

2014-01-19T23:05:02Z

Krellis:

== Why set up an offline savings wallet? ==

Modern operating systems are getting more and more complex. The flip side of all this complexity is that they generally have a large [http://en.wikipedia.org/wiki/Attack_surface attack surface] and constantly leak information without the user’s knowledge or consent. No matter how many precautions you take, your [[wallet]]s will never be 100% safe on a computer that is connected to the internet.

Because bitcoins are stored directly on your computer and because they are real money, the motivation for sophisticated and targeted attacks against your system is higher than in the pre-bitcoin era, when only large organizations normally had to worry about such attacks.

This guide will instruct you on how to create an offline wallet, a wallet that never even touches the internet in its plaintext form. Another term for this is [[cold storage]]. This security measure is also referred to as being an air gap. For all practical purposes, this wallet is safe from all online threats, such as viruses and hackers. It is however still exposed to offline threats, such as [http://en.wikipedia.org/wiki/Hardware_keylogger hardware keyloggers], extortion, or people looking over your shoulder. A best practice is to keep the majority of your bitcoins in the offline wallet and only to use the online wallet for everyday expenses/earnings.

The below procedure may seem tedious, but remember that security almost always comes at the cost of convenience. When you deposit money at a bank, you let them worry about security. Bitcoins, however, are stored on '''your''' computer and that means '''you''' are fully responsible for securing them. The bitcoin ecosystem is still very young and unfortunately no user friendly tools for creating highly secure wallets have been developed yet (though some members of the Bitcoin community are [http://forum.bitcoin.org/?topic=7357.0 working hard at this]).

== How to deposit funds ==

# Set up a [http://www.wuala.com/en/bitcoin Wuala] account, or other cloud backup service of your choice.
# Create a strong and unique password offline (manually). This password should be at least 20 characters long; it should contain numbers, upper and lower case letters, and symbols. It should be as random as possible, ie it should look something like this: Zr%8qL03&cvwS9@05AatdP71. Never use this password elsewhere.
# '''Do not forget this password'''. Recite it several times a day. It is easy to overestimate your ability to remember a password several months in the future. To be on the safe side, write it down and store the piece of paper in a safety deposit box.
# Download [http://www.bitcoin.org/ Bitcoin Linux binary] and save it on a USB drive.
# Shut down your computer, and boot [http://www.ubuntu.com/ Ubuntu] (or Linux distribution of you choice) from a [http://www.ubuntu.com/download/ubuntu/download liveCD]. This will not affect your current operating system.
# '''Disconnect machine from the internet'''. Unplug any network cables and disable wireless. Verify that wireless is disabled in the icon on the upper right corner (Ubuntu). Double check that machine is disconnected by opening the web browser.
# Run bitcoin while disconnected to the internet. The client will show 0 connections and 0 blocks, but it will still generate a wallet.dat file and a bitcoin address.
# Encrypt your wallet using the strong and unique password from step 2 above. (Bitcoin Client > Settings > Encrypt wallet)
# Copy wallet.dat (found in hidden folder .bitcoin in your home directory) to USB drive.
# Save bitcoin address to a text file and copy it to USB drive.
# Shut down system and turn off computer. Before switching your computer on again, remove all power sources for about 1 minute. Physically remove battery from laptop.
# Backup encrypted wallet.dat file in several places:
#*Send it to your 5 best friends by email attachment and ask them to save it for you.
#*Save it on your Wuala account created in step 1.
#*Save it on several USB drives and CDs and store them in different geographic locations.
#Send bitcoins to the address saved on the USB drive. Double check in the [[Bitcoin Block Explorer|block explorer]] that they have been sent.

==How to retrieve funds ==

#Boot from Ubuntu liveCD, as in step 5 above.
#Insert USB drive.
#Run bitcoin client and close it again.
#Replace wallet.dat in ~/.bitcoin directory with wallet.dat from USB drive.
#Connect to the internet.
#Restart bitcoin client.
#Wait for blocks to download (optional).
#Send bitcoins.

==Notes==

*This procedure is only secure if you perform steps 1-13 in this '''exact order'''.

*If you're a non-technical user that can't perform the steps above, try using services like [[BitAddress]] or [[OfflineAddress]] to generate paper wallets (read below for more caveats and info).

*Perform one or two trial runs of the above procedure with a few bitcents, and make sure that you know how to successfully retrieve them, before making a bulk transfer.

*Every time you retrieve bitcoins from your savings wallet, create a fresh savings wallet by repeating the above procedure, and send all your remaining savings balance there.

*There is more than one way to do it. Similar procedures have been suggested on the forums [http://forum.bitcoin.org/index.php?topic=17240.0 here] and [http://forum.bitcoin.org/?topic=5194.0 here].

*Beware that even savings wallets have limited lifetimes. New, backwards incompatible versions of bitcoin might come out in future, [http://en.wikipedia.org/wiki/Advanced_Encryption_Standard AES] might be broken, [http://en.wikipedia.org/wiki/Bit_rot bit rot] might destroy your wallets, etc. Pay attention to updates in the Bitcoin world and update to fresh savings wallets every couple of years, or as needed.

* See [[How to import private keys]] for an alternative way of retrieve your coins.

==Alternatives ==

[[Paper wallet|'''Paper wallets''']] can also be used to create offline bitcoin savings accounts. While paper wallets are much easier to generate, they are not generally encrypted which means you cannot guard against accidental loss by distributing copies to online services and friends. Instead, paper wallets must be kept safe like jewels or cash. Looking forward, support for [[BIP 0038|BIP-38]] encryption is growing fast and it is expected that paper wallet generators will soon include options for generating ''encrypted paper wallets'' that can be duplicated and widely distributed for safekeeping.

==See Also==

* [[Cold storage]]
* [http://codinginmysleep.com/bitcoin-cold-storage-in-plain-english Bitcoin Cold Storage In Plain English] by David Perry

[[Category:Instructional]]
[[Category:Security]]