Bitcoin Wiki - User contributions [en]

Smart Property

2014-02-03T01:58:31Z

Ontarioboy: /* Theory */ grammar

'''Smart property''' is property whose ownership is controlled via the Bitcoin block chain, using [[Contracts|contracts]]. Examples could include physical property such as cars, phones or houses. Smart property also includes non-physical property like shares in a company or access rights to a remote computer. Making property smart allows it to be traded with radically less trust. This reduces fraud, mediation fees and allows trades to take place that otherwise would never have happened. For example, it allows strangers to loan you money over the internet taking your smart property as collateral, which should make lending more competitive and thus credit cheaper.

Smart property was first proposed by Nick Szabo in his 1997 paper, [http://szabo.best.vwh.net/idea.html "The idea of smart contracts"]. There are currently no implementations of this idea. This page was written by [mailto:mike@plan99.net Mike Hearn], contact him with any questions or ask on the forums.

==Background==

Primitive forms of smart property are already common - if you own a car, it probably comes with an immobilizer. Immobilizers augment the physical key with a protocol exchange ensuring only the holders of the correct cryptographic token can activate the engine. They have dramatically reduced car theft, for example, immobilisers are fitted to around 45% of all cars in Australia, but account for only 7% of the cars that are stolen.

Many other forms of modern property are protected against theft using cryptography, for example, some smartphones will refuse to release certain keys if the correct PIN unlock isn't entered, and cryptography not only renders a stolen device fairly useless but makes it impossible to steal someone's phone number as well.

Although these are victories for cryptography, the potential of cryptographically activated property has not been fully explored. The private key is usually itself held in a physical container (like a key or SIM card) and can't be easily transferred or manipulated. Smart property changes this, allowing ownership to be intermediated by Bitcoin miners.

==Theory==

This section assumes you are familiar with the Bitcoin protocol, and have a good understanding of [[contracts]].

Let's start with the example of a car. The cars computer requires authentication using an ''ownership key''. The ownership key is a regular Bitcoin ECDSA-256 key. The car starts its life at the factory gate with the public part of a newly created ownership key. A small token amount of Bitcoins are deposited on that key, call the amount T (it could be 0.0001 BTC for example). Additionally the car has a digital certificate from its manufacturer, and an ''identification key'' which has the public part in the certificate. This allows the car to prove things like its existence, age or mileage to third parties.

When the car is sold, the following protocol is used:

# The buyer generates a nonce (random number) and asks the seller to send them the car data.
# The seller gives the car that nonce, and the car returns a data structure signed with its identification key. The data contains the nonce, the cars public cert, data about the car, the public key of the current owner, and the transaction+merkle branch which transferred ownership last time. This ensures the buyer knows what they are getting and that it came from the real seller (it's not a replay).
# The seller selects a key to receive the payment, k1, and names their price P.
# The buyer generates a new ownership key, k2.
# The buyer creates a transaction with two inputs and two outputs. The first input signs for P coins. The second input is connected to the output holding T coins for the ownership address. The first output sends P coins to k1 and the second output sends T coins to k2. This transaction is not valid because only the first input can be signed. The buyer passes this partially complete transaction to the seller, who then signs the second input with the car's current ownership key and broadcasts the transaction.
# They wait for some confirmations.
# The buyer presents the car with the Bitcoin transaction, a merkle branch linking it to the block header and then enough block headers to fill in the gap from the cars current ownership transaction. The car sees that the new transaction re-assigns ownership and is further along in the chain than its current one, plus it has enough work piled on top to be sure the tx won't be reversed. It then updates its ownership information. The car does not need to keep a full record of the chain nor all headers, but rather just enough data to be able to connect future block headers to the one it was previously presented with.

In practice this process would likely be handled using smartphones with NFC hardware -- the act of touching the phone containing the ownership key to the dashboard would start your wallet app in a special mode that knows how to do smart property trades, after inputting the price the buyer and seller would then touch their phones together to finalize the deal. Although the cryptography is complex they would never need to know anything about it. The phone could double as a way to start the car as well.

==Loans and collateral==

Being able to trade physical property without fraud risk is useful, but we can add an extra layer to allow for secured low-trust loans. Consider a loan with which to start a small business. Rather than deal with a bank, you decide to allow people from around the world bid on your debt so you can get the best rates. For this to work, the strangers need some assurance that if the loan is not repaid, they get to keep the collateral - yet you still need to be able to use the car to set up the business.

We can do this by adding ''access keys'' to the ownership key. By signing a message with the ownership key, access keys can be added or removed. Access keys can be temporary in nature. This means that for the duration of the loan, you can re-assign ownership of the vehicle to the creditor whilst keeping an access key for yourself.

It would be best if the debtor had an assurance that, on repaying his debt, the cars ownership would indeed revert to his control. We can implement this as follows:

# The creditor generates k1, which is used to receive the loan repayments. The loan size is L.
# The creditor signs Tx1 that has an input/output re-assigning ownership of the car back to the debtor which is signed with SIGHASH_ALL | SIGHASH_ANYONECANPAY, and an output for L coins to k1. This transaction is not valid because the loan has not yet been repaid, so the output sums to more value than the inputs. The creditor sends this transaction to the debtor who keeps it.
# As the debtor re-earns the money they spent, they add inputs to Tx1 to increase its value. This doesn't break the signature on the ownership key input/output pair because it was signed with SIGHASH_ANYONECANPAY so is independent of other inputs. They can't adjust the outputs or anything else about the transaction because that would invalidate the ownership input/output (SIGHASH_ALL).
# Once the transaction has enough inputs to sum to L, the debtor broadcasts the transaction, thus repaying their debt and simultaneously retaking ownership of the vehicle.

Because access keys can be given time limits, if the debtor does not repay the loan by its maturity period his access key expires and the car will no longer start for him. The new owner can now either come and pick it up himself, or if he doesn't want to (eg he is in another country), he can sell it using the low-trust sales protocol described above and collect the money that way.

Most loans are repaid in multiple installments. The same protocol as above can work in this case by embedding some control data in the extra input/output pair, the ownership key would not change but the signature would cover a command that extends the lifetime of the access key for another month. The vehicle would know how to parse the data out of the transaction.

==Implementation details==

For expiring access keys, the device must have a trustable source of time. Some devices like cars and phones keep time by themselves. In other cases where that's not practical for some reason, a secure timestamping service can be used. This is a service that signs a message containing the current time and a nonce. The device generates a nonce, and as part of the activation/switch-on protocol, a network connected device like a smartphone sends the nonce to the timestamping service then hands back the signed message. The block chain itself cannot be used as a source of time because there's no challenge/response aspect - the device has no way of knowing if you've handed it the latest blocks or not. Signing the time with a nonce solves this.

Smart phones play a key role in smart property because they have the ability to bridge devices without network access to the network, using Bluetooth or NFC radio. For instance, requiring internet access for a smart lock on a house door is too expensive and impractical. However, a lock with an NFC touchpoint that understands how to check block header progression is quite feasible. The only operations needed to implement Bitcoin-linked smart property is hashing, ECDSA and a small amount of storage. Smartcard chips that implement everything required are common and cheap.

[[Category:Technical]]

Smart Property

2014-02-03T01:53:05Z

Ontarioboy: /* Background */ grammar

'''Smart property''' is property whose ownership is controlled via the Bitcoin block chain, using [[Contracts|contracts]]. Examples could include physical property such as cars, phones or houses. Smart property also includes non-physical property like shares in a company or access rights to a remote computer. Making property smart allows it to be traded with radically less trust. This reduces fraud, mediation fees and allows trades to take place that otherwise would never have happened. For example, it allows strangers to loan you money over the internet taking your smart property as collateral, which should make lending more competitive and thus credit cheaper.

Smart property was first proposed by Nick Szabo in his 1997 paper, [http://szabo.best.vwh.net/idea.html "The idea of smart contracts"]. There are currently no implementations of this idea. This page was written by [mailto:mike@plan99.net Mike Hearn], contact him with any questions or ask on the forums.

==Background==

Primitive forms of smart property are already common - if you own a car, it probably comes with an immobilizer. Immobilizers augment the physical key with a protocol exchange ensuring only the holders of the correct cryptographic token can activate the engine. They have dramatically reduced car theft, for example, immobilisers are fitted to around 45% of all cars in Australia, but account for only 7% of the cars that are stolen.

Many other forms of modern property are protected against theft using cryptography, for example, some smartphones will refuse to release certain keys if the correct PIN unlock isn't entered, and cryptography not only renders a stolen device fairly useless but makes it impossible to steal someone's phone number as well.

Although these are victories for cryptography, the potential of cryptographically activated property has not been fully explored. The private key is usually itself held in a physical container (like a key or SIM card) and can't be easily transferred or manipulated. Smart property changes this, allowing ownership to be intermediated by Bitcoin miners.

==Theory==

This section assumes you are familiar with the Bitcoin protocol, and have a good understanding of [[contracts]].

Let's start with the example of a car. The cars computer requires authentication using an ''ownership key''. The ownership key is a regular Bitcoin ECDSA-256 key. The car starts its life at the factory gate with the public part of a newly created ownership key. A small token amount of Bitcoins are deposited on that key, call the amount T (it could be 0.0001 BTC for example). Additionally the car has a digital certificate from its manufacturer, and an ''identification key'' which has the public part in the certificate. This allows the car to prove things like its existence, age or mileage to third parties.

When the car is sold, the following protocol is used:

# The buyer generates a nonce (random number) and asks the seller to send them the car data.
# The seller gives the car that nonce, and the car returns a data structure signed with its identification key. The data contains the nonce, the cars public cert, data about the car, the public key of the current owner, and the transaction+merkle branch which transferred ownership last time. This ensures the buyer knows what they are getting and that it came from the real seller (it's not a replay).
# The seller selects a key to receive the payment, k1, and names their price P.
# The buyer generates a new ownership key, k2.
# The buyer creates a transaction with two inputs and two outputs. The first input signs for P coins. The second input is connected to the output holding T coins for the ownership address. The first output sends P coins to k1 and the second output sends T coins to k2. This transaction is not valid because only the first input can be signed. The buyer passes this partially complete transaction to the seller, who then signs the second input with the cars current ownership key and broadcasts the transaction.
# They wait for some confirmations.
# The buyer presents the car with the Bitcoin transaction, a merkle branch linking it to the block header and then enough block headers to fill in the gap from the cars current ownership transaction. The car sees that the new transaction re-assigns ownership and is further along in the chain than its current one, plus it has enough work piled on top to be sure the tx won't be reversed. It then updates its ownership information. The car does not need to keep a full record of the chain nor all headers, but rather just enough data to be able to connect future block headers to the one it was previously presented with.

In practice this process would likely be handled using smartphones with NFC hardware - the act of touching the phone containing the ownership key to the dashboard would start your wallet app in a special mode that knows how to do smart property trades, after inputting the price the buyer and seller would then touch their phones together to finalize the deal. Although the cryptography is complex they would never need to know anything about it. The phone could double as a way to start the car as well.

==Loans and collateral==

Being able to trade physical property without fraud risk is useful, but we can add an extra layer to allow for secured low-trust loans. Consider a loan with which to start a small business. Rather than deal with a bank, you decide to allow people from around the world bid on your debt so you can get the best rates. For this to work, the strangers need some assurance that if the loan is not repaid, they get to keep the collateral - yet you still need to be able to use the car to set up the business.

We can do this by adding ''access keys'' to the ownership key. By signing a message with the ownership key, access keys can be added or removed. Access keys can be temporary in nature. This means that for the duration of the loan, you can re-assign ownership of the vehicle to the creditor whilst keeping an access key for yourself.

It would be best if the debtor had an assurance that, on repaying his debt, the cars ownership would indeed revert to his control. We can implement this as follows:

# The creditor generates k1, which is used to receive the loan repayments. The loan size is L.
# The creditor signs Tx1 that has an input/output re-assigning ownership of the car back to the debtor which is signed with SIGHASH_ALL | SIGHASH_ANYONECANPAY, and an output for L coins to k1. This transaction is not valid because the loan has not yet been repaid, so the output sums to more value than the inputs. The creditor sends this transaction to the debtor who keeps it.
# As the debtor re-earns the money they spent, they add inputs to Tx1 to increase its value. This doesn't break the signature on the ownership key input/output pair because it was signed with SIGHASH_ANYONECANPAY so is independent of other inputs. They can't adjust the outputs or anything else about the transaction because that would invalidate the ownership input/output (SIGHASH_ALL).
# Once the transaction has enough inputs to sum to L, the debtor broadcasts the transaction, thus repaying their debt and simultaneously retaking ownership of the vehicle.

Because access keys can be given time limits, if the debtor does not repay the loan by its maturity period his access key expires and the car will no longer start for him. The new owner can now either come and pick it up himself, or if he doesn't want to (eg he is in another country), he can sell it using the low-trust sales protocol described above and collect the money that way.

Most loans are repaid in multiple installments. The same protocol as above can work in this case by embedding some control data in the extra input/output pair, the ownership key would not change but the signature would cover a command that extends the lifetime of the access key for another month. The vehicle would know how to parse the data out of the transaction.

==Implementation details==

For expiring access keys, the device must have a trustable source of time. Some devices like cars and phones keep time by themselves. In other cases where that's not practical for some reason, a secure timestamping service can be used. This is a service that signs a message containing the current time and a nonce. The device generates a nonce, and as part of the activation/switch-on protocol, a network connected device like a smartphone sends the nonce to the timestamping service then hands back the signed message. The block chain itself cannot be used as a source of time because there's no challenge/response aspect - the device has no way of knowing if you've handed it the latest blocks or not. Signing the time with a nonce solves this.

Smart phones play a key role in smart property because they have the ability to bridge devices without network access to the network, using Bluetooth or NFC radio. For instance, requiring internet access for a smart lock on a house door is too expensive and impractical. However, a lock with an NFC touchpoint that understands how to check block header progression is quite feasible. The only operations needed to implement Bitcoin-linked smart property is hashing, ECDSA and a small amount of storage. Smartcard chips that implement everything required are common and cheap.

[[Category:Technical]]

Hashcash

2014-01-31T03:49:07Z

Ontarioboy: /* Hashcash function */ some typos, spaces and apostrophes tidyed up

This page explains hashcash and how bitcoin uses it.

==Hashcash==

Bitcoin uses the [http://en.wikipedia.org/wiki/Hashcash hashcash] [[Proof_of_work]] function as the mining core. All bitcoin miners whether CPU, GPU, FPGA or ASICs are expending their effort creating hashcash proofs-of-work which act as a vote in the blockchain evolution and validate the blockchain transaction log.

Like many cryptographic algorithms hashcash uses a hash function as a building block, in the same way that HMAC, or RSA signatures are defined on a pluggable hash-function (commonly denoted by the naming convention of algorithm-hash: HMAC-SHA1, HMAC-MD5, HMAC-SHA256, RSA-SHA1, etc), hashcash can be instantiated with different functions, hashcash-SHA1 (original), hashcash-SHA256^2 (bitcoin), hashcash-Scrypt(iter=1) (litecoin).

===History===

The hashcash proof-of-work function was invented in 1997 by [http://en.wikipedia.org/wiki/Adam_Back Adam Back], and proposed for anti-DoS uses including preventing: anonymous remailer and mail2news gateway abuse, nym name squatting on nymservers (replyable pseudonymous remailer severs), as well as general email anti-spam and general network abuse throttling. Before bitcoin, hashcash was used by SpamAssasin, and (with an incompatible format) by Microsoft (with the name "email postmark") in hotmail, exchange, outlook etc and by i2p anonymity network, mixmaster anonymous remailer components and other systems. Hashcash was also used by [http://en.wikipedia.org/wiki/Hal_Finney_(cypherpunk) Hal Finney]'s bitcoin precursor RPOW as a way to mine coins. Wei Dai's [[B-money Proposal]], and Nick Szabo's similar [[Bit_Gold_proposal]] bitcoin precursors, also were proposed in the context of hashcash mining.

===Hash function choices===

In the original 1997 algorithm hashcash used SHA1 because at that time, this was the defacto and NIST recommended hash, and the previous defacto hash MD5 had recently started to show signs of weakness. Bitcoin being specified/released in 2008/2009 uses SHA256. There is actually no strong reason SHA1 would not have worked also, hashcash relies only on the hash partial preimage resistance property (security up to hash-size, 160-bit with SHA1) and not birthday collision hardness (security up to 80-bit), so the SHA1 hash is big enough. Bitcoin is anyway built to 128-bit security because 256-bit ECDSA is used, which also offers 128-bit security. Never the less SHA256 is the correct and more conservative choice because even SHA1 has started to show some weakenesses, though only in birthday collision, not in 2nd-preimage.

===Double Hash===

Bitcoin is using two hash iterations (denoted SHA256^2 ie "SHA256 function squared") and the reason for this relates to a partial attack on the smaller but related SHA1 hash. SHA1's resistance to birthday attacks has been partially broken as of 2005 in O(2^64) vs the design O(2^80). While hashcash relies on pre-image resistance and so is not vulnerable to birthday attacks, a generic method of hardening SHA1 against the birthday collision attack is to iterate it twice. A comparable attack on SHA256 does not exist so far, however as the design of SHA256 is similar to SHA1 it is probably defensive for applications to use double SHA256. And this is what bitcoin does, it is not necessary given hashcash reliance on preimage security, but it is a defensive step against future cryptanalytic developments. The attack on SHA1 and in principle other hashes of similar design like SHA256, was also the motivation for the NIST SHA3 design competition which is still ongoing.

===Future Hash===

Once the NIST SHA3 contest has finalised, bitcoin might in the future consider adopting hashcash-SHA3 as a security upgrade (eg a single invocation of SHA3 vs a double invocation of SHA256). It seems clear from the SHA1 break, and SHA256 is a similar design, that there was previously a misunderstanding about the security of hash functions against birthday collisions, and SHA3 finalists all aim to fix that issue. One aspect of relevance for hashcash-SHA3 is that there is some debate within the NIST comments process on the proposal of weakening SHA3's resistance to pre-image attacks down to 128-bit (vs the full hash size as with previous hashes). The motivation is a small performance gain, with the rationale that some hash-pluggable algorithms do not rely on full-length pre-image resistance. The proposal has met with significant negative feedback due to it creating a non-standard security assumption (compared to all previous hashes), and therefore it creates risk and all hash-pluggable algorithms (like HMAC, RSA, DSA, hashcash etc) would need to be re-examined on a case by case basis to see if SHA3 is safe to use with them; from the balance of the feedback it seems probable that NIST will accept the feedback and SHA3 will retain the full 256-bit pre-image resistance.

===Cryptanalytic Risks===

A practical issue with switching to hashcash-SHA3 is that it would invalidate all existing ASIC mining hardware, and so is a change that would unlikely to be made except in the face of security risk; there is no indication that SHA1 or SHA256, or SHA256^2 are vulnerable to pre-image attack so the motivation is missing absent new cryptanalytic developments. In addition even if SHA256^2 became easier due to cryptanalytic attack, and miners started using whatever the new algorithmic approach was, it does not necessarily matter as difficulty would just adapt to it. One likely side-effect however would be that it would introduce more memory or pre-computation tradeoffs which could make ASICs unprofitable, or give advantages to people with large resources to do the pre-computations. Pre-computation advantages would perhaps be enough motivation to replace the hash with SHA3. Anyway this is all speculation if and until any pre-image affecting cryptanalytic attacks are found on SHA256.

==Hashcash function==

The hashcash algorithm is relatively simple to understand. The idea builds on a security property of cryptographic hashes, that they are designed to be hard to invert (so-called one-way or pre-image resistant property). You can compute y from x cheaply y=H(x) but it's very hard to find x given only y. A full hash inversion has a known computationally infeasible brute-force running time, being O(2^k) where k is the hash size eg SHA256, k=256, and if a pre-image was found anyone could very efficiently verify it by computing one hash, so there is a huge asymmetry in full pre-image mining (computationally infeasible) vs verification (a single hash invocation).

A second hash pre-image means given one-preimage x of hash y where y=H(x), the task is to find another pre-image of hash y: x' so that y=H(x'). This is not to be confused with a birthday collision which is to find two values x, x' so that H(x)=H(x'), this can be done in much lower work O(sqrt(2^k))=O(2^(k/2)) because you can proceed by computing many H(x) values and storing them until you find a matching pair. It takes a lot of memory, but there are memory-time tradeoffs.

Version 0 of hashcash protocol (1997) used a partial 2nd pre-image, however the later version 1 (2002) uses partial pre-images of a fairly chosen string, rather than digits of pi or something arbitrary, 0^k (ie all 0 string) is used for convenience, so the work is to find x such that H(x)=0. This is also equally fair and only requires one hash invocation to verify vs two with 2nd partial-pre-images. (This optimisation was proposed by Hal Finney & independently by Thomas Boschloo). To make the work easier the definition of a partial-pre-image is to find x such that H(x)/2^(n-k) = 0 where / is the integer quotient from division, n is the size of the hash output (n=256-bits for SHA256) and k is the work factor, ie, the first k bits of the hash output are 0 . So for example k=20 requires average 1 million tries. It is actually the output that partially matches, not the pre-image, so could perhaps more accurately called a pre-image with a partial output match, however partial pre-image effectively a short-hand for that.

===Adding purpose===

If the partial-pre-image x from y=H(x) is random it is just a disconnected proof-of-work to no purpose, everyone can see you did do the work, but they don't know why, so users could reuse the same work for different services. To make the proof-of-work be bound to a service, or purpose, the hash must include s, a service string so the work becomes to find H(s,c)/2^(n-k)=0. The miner varies counter c until this is true. The service string could be a web server domain name, a recipients email address, or in bitcoin a block of the bitcoin blockchain ledger.

One additional problem is that if multiple people are mining, using the same service string, they must not start with the same x or they may end up with the same proof, and anyone looking at it will not honor a duplicated copy of the same work as it could have been copied without work, the first to present it will be rewarded, and others will find their work rejected. To avoid risking wasting work in this way, there needs to be a random starting point, and so the work becomes to find H(s,x,c)/2^(n-k) = 0 where x is random (eg 128-bits to make it statistically infeasible for two users to maliciously or accidentally start at the same point), and c is the counter being varied, and s is the service string.

This is what hashcash version 1 and bitcoin does. In fact in bitcoin the service string is the coinbase and the coinbase includes the recipients reward address, as well as the transactions to validate in the block. Bitcoin actually does not include a random start point x, reusing the reward address as the randomization factor to avoid collisions for this random start point purpose, which saves 16-bytes of space in the coinbase. For privacy bitcoin expect the miner to use a different reward address on each successful block.

===More Precise Work===

Hashcash as originally proposed has work 2^k where k is an integer, this means difficulty can only be scaled in powers of 2, this is slightly simpler as you can see and fully measure the difficulty just by counting 0s in hex/binary and was adequate for prior uses. (A lot of hashcash design choices are motivated by simplicity).

But because bitcoin needs more precise and dynamic control of work (to target 10-minute block interval accurately), it changes k to be a fractional (floating-point) so the work becomes to find H(s,x,c) < 2^(n-k) which is equivalent if k is an integer. Bitcoin defines target = 2^(n-k), so the work can be more simply written to find H(s,x,c) < target. Of course because of luck the block time actually has quite high variance, but the average is still more accurately targeted by the introduction of fractional k.

===Work, difficulty & cryptographic security===

Hashcash expresses security margin in the standard cryptographic security terms O(2^k) where for comparison DES offers k=56-bits of security, ECDSA-256 offers k=128-bits of security, and because its widely used this log2 way of expressing work and security can also be useful for making security comparisons.

Bitcoin rate of work is called the [https://blockchain.info/q/hashrate network hashrate] in GH/sec. As the target block interval is 10 minutes that can be converted to cryptographic security as log2(hashrate*600), so that of Nov 2013 hashrate is 4 petahash/sec and bitcoin's hashcash-256^2 proofs-of-works are 62-bits (including +1 for double hash).

Bitcoin also defines a new notion of (relative) difficulty which is the work required so that at current network hashrate a block is expected to be found every 10 minutes. It is expressed relative to a minimum work unit of 2^32 iterations (approximately, technically minimum work is 0xFFFF000 due to bitcoin implementation level details). Bitcoin difficulty is simple to approximately convert to log2 cryptographic security: k=log2(difficulty)+32 (or for high accuracy log2(difficulty*0xFFFF0000)). Difficulty is related to the target simply as difficulty = target / 0xFFFF000.

It is perhaps easier to deal with high difficulties in log2 scale (a petahash/second is a 16 decimal digit number of hashes per second), and makes them comparable to other cryptographic security statements. For example the EFF "deepcrack" [https://en.wikipedia.org/wiki/EFF_DES_cracker DES cracker] project built a hardware brute force machine capable of breaking a DES key in 56 hours to make a political point that 56-bit DES was too weak in 1998 at a cost of $250,000 (plus volunteer design time). By comparison bitcoin network does 62-bits (including +1 for double hash) every 10-minutes and is 537,000 times more powerful than deepcrack, or could if it were focused on DES rather than SHA256 crack a DES key in 9 seconds to deepcracks 56 hours.

===Miner privacy===

In principle a miner should therefore for privacy use a different reward-address for each block (and reset the counter to 0). Why Satoshi's early mined bitcoins were potentially linked, was because while he changed the reward-addresss, he forgot to reset the counter after each successful mine, which is a bitcoin mining privacy bug. In fact with bitcoin the counter also should be obscured otherwise you would reveal your effort level, and if you have a lot of mining power that may imply who the coin belongs to. Bitcoin does this via the nonce and extra-nonce. Nonce starts at 0, but extra nonce is random. Together these form a randomized counter hiding the amount of effort that went into the proof, so no one can tell if it was a powerful but unlucky miner who worked hard, or a weak miner who was very lucky.

Additionally with the introduction of mining pools, if the miner uses the same reward address for all users, which is what the current mining protocols do, then there is risk that users may redo work. To avoid users redoing work, miners hand out defined work for the users to do. However this creates an unnecessary communication round trip and in early protocol versions perhaps was a factor in the decision to have the pool send the actual block to mine, which means the miners are not validating their own blocks, which delegates validation authority, though not work, to the pool operator, reducing the security of the bitcoin network. The more recent mining protocol version allows the user to add their own block definition, but still unnecessarily incur round trips for handing out work allocation. Because the new pooled-mining protocol has a miner chosen extraNonce this acts as a random start factor so there is actually no need to talk to the pool for work allocation, a pool could have a static published address, and miners could just do work of whatever size they chose, and submit it to the pool as a UDP packet. (If privacy is required by the miner, it could use the public derivation method from BIP 32 to allow the node to tell the miner via an encrypted message with the mining work, which factor to multiply the static public key by.)

===Litecoin proof-of-work===

It is a misunderstanding to say litecoin uses the Scrypt proof-of-work. Scrypt is not a proof-of-work function, but a stretched key-derivation function, and while it is by design expensive to compute with high iterations, it can not be used to make an efficiently publicly auditable proof-of-work, as verifying costs the same as creating.

Litecoin uses hashcash with the internal hash function of Scrypt denoted hashcash-Scrypt(1). Scrypt, by Colin Percival, is a key-derivation function for converting user chosen passphrases into keys. It is salted (to prevent pre-computation/rainbow table attacks), and the hash is iterated many times to slow down passphrase grinding. Scrypt is similar in purpose to the defacto standard passphrase key-derivation function PBKDF2 (which uses HMAC-SHA1 internally). The differentiator and why people might choose Scrypt rather than PBDF2 is that Scrypt's inner hash uses more memory so the GPU (or theoretical Scrypt ASIC/FPGA) advantage in password grinding is reduced compared to CPUs.

Litecoin does not use the key-stretching feature of Scrypt so litecoin mining is not actually using Scrypt directly, but only the inner Scrypt hash (accessed by setting the iteration parameter to one iteration). So Scrypt's key-stretching function is not being used at all to contribute to the hardness, unlike its normal use for key protection eg in deriving the encryption key from user passphrase to encrypt bitcoin wallets. The reason Scrypt's key-stretching can not be used for mining is because that simultaneously makes it more expensive to verify by the same factor. The litecoin hashcash variant can be denoted hashcash-Scrypt(iter=1,mem=128KB) or shortened to hashcash-Scrypt(1). The other major scrypt parameter denotes the amount of memory used (128kB for litecoin).

===Decentralization: hashcash-Scrypt vs hashcash-SHA256===

The 128kB Scrypt memory footprint makes litecoin arguably less vulnerable to centralization of mining power arising from limited access to or ownership of ASIC equipment by users. It's arguable and unclear, because there are counter arguments: that hashcash-SHA256^2 is very simple, so a skilled individual with his personal savings or a small Kickstarter project could design and put in an order with a chip-fabricator. This simplicity ensures that many people will do it and ASICs should become available. Conversely it is somewhat more difficult in comparison to make an hashcash-Scrypt(1) ASIC so perhaps litecoin will prove in the mid-term actually worse for centralization, if a well funded commercial entity corners the market by having faster, but proprietary, not available on the market, hashcash-Scrypt(1) ASICs that render litecoin GPU mining unprofitable.

Note also a mitigating factor is that it is considered that hashcash-Scrypt(1) should offer less speed up from ASIC implementation vs GPUs than hashcash-SHA256^2. This is claimed because of the argument that the die area taken up by 128kB of RAM, which it might be thought must be dedicated to each Scrypt(1) core, would reduce the number of Scrypt(1) cores that fit per chip. Note however that Scrypt(1) is not actually securely memory-hard in that it makes no attempt to prevent time-memory tradeoffs, so it is actually possible to repeat the computation of internal rounds to reduce the memory requirement. In theory therefore it would be possible though more computation expensive to implement Scrypt(iter=1, mem=128kB) with minimal memory, just with more work. In hardware the time-memory tradeoff would be optimized to find the optimal amount of memory to use, and it is quite possible the optimal amount would be less than 128kB.

Hashcash-Scrypt(1) also has a disadvantage relative to hashcash-SHA256^2 in that it is significantly slower to verify, as the verification cost of one iteration of Scrypt(mem=128kB) is far higher than a two SHA256 hashes. This makes validating the litecoin blockchain more CPU and memory intensive for all full nodes. Note however that the dominating CPU work of validation is the verification of the per transaction ECDSA signatures of the multiple transactions in a block. Even one ECDSA signature is slower than one Scrypt(1) verification which is done once per block, and there are many transactions (and so ECDSA signature verifications) to verify within a block.

Hashcash

2014-01-31T03:34:45Z

Ontarioboy: /* History */ capitalize Microsoft

This page explains hashcash and how bitcoin uses it.

==Hashcash==

Bitcoin uses the [http://en.wikipedia.org/wiki/Hashcash hashcash] [[Proof_of_work]] function as the mining core. All bitcoin miners whether CPU, GPU, FPGA or ASICs are expending their effort creating hashcash proofs-of-work which act as a vote in the blockchain evolution and validate the blockchain transaction log.

Like many cryptographic algorithms hashcash uses a hash function as a building block, in the same way that HMAC, or RSA signatures are defined on a pluggable hash-function (commonly denoted by the naming convention of algorithm-hash: HMAC-SHA1, HMAC-MD5, HMAC-SHA256, RSA-SHA1, etc), hashcash can be instantiated with different functions, hashcash-SHA1 (original), hashcash-SHA256^2 (bitcoin), hashcash-Scrypt(iter=1) (litecoin).

===History===

The hashcash proof-of-work function was invented in 1997 by [http://en.wikipedia.org/wiki/Adam_Back Adam Back], and proposed for anti-DoS uses including preventing: anonymous remailer and mail2news gateway abuse, nym name squatting on nymservers (replyable pseudonymous remailer severs), as well as general email anti-spam and general network abuse throttling. Before bitcoin, hashcash was used by SpamAssasin, and (with an incompatible format) by Microsoft (with the name "email postmark") in hotmail, exchange, outlook etc and by i2p anonymity network, mixmaster anonymous remailer components and other systems. Hashcash was also used by [http://en.wikipedia.org/wiki/Hal_Finney_(cypherpunk) Hal Finney]'s bitcoin precursor RPOW as a way to mine coins. Wei Dai's [[B-money Proposal]], and Nick Szabo's similar [[Bit_Gold_proposal]] bitcoin precursors, also were proposed in the context of hashcash mining.

===Hash function choices===

In the original 1997 algorithm hashcash used SHA1 because at that time, this was the defacto and NIST recommended hash, and the previous defacto hash MD5 had recently started to show signs of weakness. Bitcoin being specified/released in 2008/2009 uses SHA256. There is actually no strong reason SHA1 would not have worked also, hashcash relies only on the hash partial preimage resistance property (security up to hash-size, 160-bit with SHA1) and not birthday collision hardness (security up to 80-bit), so the SHA1 hash is big enough. Bitcoin is anyway built to 128-bit security because 256-bit ECDSA is used, which also offers 128-bit security. Never the less SHA256 is the correct and more conservative choice because even SHA1 has started to show some weakenesses, though only in birthday collision, not in 2nd-preimage.

===Double Hash===

Bitcoin is using two hash iterations (denoted SHA256^2 ie "SHA256 function squared") and the reason for this relates to a partial attack on the smaller but related SHA1 hash. SHA1's resistance to birthday attacks has been partially broken as of 2005 in O(2^64) vs the design O(2^80). While hashcash relies on pre-image resistance and so is not vulnerable to birthday attacks, a generic method of hardening SHA1 against the birthday collision attack is to iterate it twice. A comparable attack on SHA256 does not exist so far, however as the design of SHA256 is similar to SHA1 it is probably defensive for applications to use double SHA256. And this is what bitcoin does, it is not necessary given hashcash reliance on preimage security, but it is a defensive step against future cryptanalytic developments. The attack on SHA1 and in principle other hashes of similar design like SHA256, was also the motivation for the NIST SHA3 design competition which is still ongoing.

===Future Hash===

Once the NIST SHA3 contest has finalised, bitcoin might in the future consider adopting hashcash-SHA3 as a security upgrade (eg a single invocation of SHA3 vs a double invocation of SHA256). It seems clear from the SHA1 break, and SHA256 is a similar design, that there was previously a misunderstanding about the security of hash functions against birthday collisions, and SHA3 finalists all aim to fix that issue. One aspect of relevance for hashcash-SHA3 is that there is some debate within the NIST comments process on the proposal of weakening SHA3's resistance to pre-image attacks down to 128-bit (vs the full hash size as with previous hashes). The motivation is a small performance gain, with the rationale that some hash-pluggable algorithms do not rely on full-length pre-image resistance. The proposal has met with significant negative feedback due to it creating a non-standard security assumption (compared to all previous hashes), and therefore it creates risk and all hash-pluggable algorithms (like HMAC, RSA, DSA, hashcash etc) would need to be re-examined on a case by case basis to see if SHA3 is safe to use with them; from the balance of the feedback it seems probable that NIST will accept the feedback and SHA3 will retain the full 256-bit pre-image resistance.

===Cryptanalytic Risks===

A practical issue with switching to hashcash-SHA3 is that it would invalidate all existing ASIC mining hardware, and so is a change that would unlikely to be made except in the face of security risk; there is no indication that SHA1 or SHA256, or SHA256^2 are vulnerable to pre-image attack so the motivation is missing absent new cryptanalytic developments. In addition even if SHA256^2 became easier due to cryptanalytic attack, and miners started using whatever the new algorithmic approach was, it does not necessarily matter as difficulty would just adapt to it. One likely side-effect however would be that it would introduce more memory or pre-computation tradeoffs which could make ASICs unprofitable, or give advantages to people with large resources to do the pre-computations. Pre-computation advantages would perhaps be enough motivation to replace the hash with SHA3. Anyway this is all speculation if and until any pre-image affecting cryptanalytic attacks are found on SHA256.

==Hashcash function==

The hashcash algorithm is relatively simple to understand. The idea builds on a security property of cryptographic hashes, that they are designed to be hard to invert (so-called one-way or pre-image resistant property). You can compute y from x cheaply y=H(x) but its very hard to find x given only y. A full hash inversion has a known computationally infeasible brute-force running time, being O(2^k) where k is the hash size eg SHA256, k=256, and if a pre-image was found anyone could very efficiently verify it by computing one hash, so there is a huge asymmetry in full pre-image mining (computationally infeasible) vs verification (a single hash invocation).

A second hash pre-image means given one-preimage x of hash y where y=H(x), the task is to find another pre-image of hash y: x' so that y=H(x'). This is not to be confused with a birthday collision which is to find two values x, x' so that H(x)=H(x'), this can be done in much lower work O(sqrt(2^k))=O(2^(k/2)) because you can proceed by computing many H(x) values and storing them until you find a matching pair. It takes a lot of memory, but there are memory-time tradeoffs.

Version 0 of hashcash protocol (1997) used a partial 2nd pre-image, however the later version 1 (2002) uses partial pre-images of a fairly chosen string, rather than digits of pi or something arbitrary, 0^k (ie all 0 string) is used for convenience, so the work is to find x such that H(x)=0. This is also equally fair and only requires one hash invocation to verify vs two with 2nd partial-pre-images. (This optimisation was proposed by Hal Finney & independently by Thomas Boschloo). To make the work easier the definition of a partial-pre-image is to find x such that H(x)/2^(n-k) = 0 where / is the integer quotient from division, n is the size of the hash output (n=256-bits for SHA256) and k is the work factor ie the first k bits of the hash output are 0 . So for example k=20 requires average 1 million tries. It is actually the output that partially matches, not the pre-image, so could perhaps more accurately called a pre-image with a partial output match, however partial pre-image effectively a short-hand for that.

===Adding purpose===

If the partial-pre-image x from y=H(x) is random it is just a disconnected proof-of-work to no purpose, everyone can see you did do the work, but they dont know why, so users could reuse the same work for different services. To make the proof-of-work be bound to a service, or purpose, the hash must include s, a service string so the work becomes to find H(s,c)/2^(n-k)=0. The miner varies counter c until this is true. The service string could be a web server domain name, a recipients email address, or in bitcoin a block of the bitcoin blockchain ledger.

One additional problem is that if multiple people are mining, using the same service string, they must not start with the same x or they may end up with the same proof, and anyone looking at it will not honor a duplicated copy of the same work as it could have been copied without work, the first to present it will be rewarded, and others will find their work rejected. To avoid risking wasting work in this way, there needs to be a random starting point, and so the work becomes to find H(s,x,c)/2^(n-k) = 0 where x is random (eg 128-bits to make it statistically infeasible for two users to maliciously or accidentally start at the same point), and c is the counter being varied, and s is the service string.

This is what hashcash version 1 and bitcoin does. In fact in bitcoin the service string is the coinbase and the coinbase includes the recipients reward address, as well as the transactions to validate in the block. Bitcoin actually does not include a random start point x, reusing the reward address as the randomization factor to avoid collisions for this random start point purpose, which saves 16-bytes of space in the coinbase. For privacy bitcoin expect the miner to use a different reward address on each successful block.

===More Precise Work===

Hashcash as originally proposed has work 2^k where k is an integer, this means difficulty can only be scaled in powers of 2, this is slightly simpler as you can see and fully measure the difficulty just by counting 0s in hex/binary and was adequate for prior uses. (A lot of hashcash design choices are motivated by simplicity).

But because bitcoin needs more precise and dynamic control of work (to target 10-minute block interval accurately), it changes k to be a fractional (floating-point) so the work becomes to find H(s,x,c) < 2^(n-k) which is equivalent if k is an integer. Bitcoin defines target = 2^(n-k), so the work can be more simply written to find H(s,x,c) < target. Of course because of luck the block time actually has quite high variance, but the average is still more accurately targetted by the introduction of fractional k.

===Work, difficulty & cryptographic security===

Hashcash expresses security margin in the standard cryptographic security terms O(2^k) where for comparison DES offers k=56-bits of security, ECDSA-256 offers k=128-bits of security, and because its widely used this log2 way of expressing work and security can also be useful for making security comparisons.

Bitcoin rate of work is called the [https://blockchain.info/q/hashrate network hashrate] in GH/sec. As the target block interval is 10 minutes that can be converted to cryptographic security as log2(hashrate*600), so that of Nov 2013 hashrate is 4 petahash/sec and bitcoin's hashcash-256^2 proofs-of-works are 62-bits (including +1 for double hash).

Bitcoin also defines a new notion of (relative) difficulty which is the work required so that at current network hashrate a block is expected to be found every 10minutes. It is expressed relative to a minimum work unit of 2^32 iterations (approximately, technically minimum work is 0xFFFF000 due to bitcoin implementation level details). Bitcoin difficulty is simple to approximately convert to log2 cryptographic security: k=log2(difficulty)+32 (or for high accuracy log2(difficulty*0xFFFF0000)). Difficulty is related to the target simply as difficulty = target / 0xFFFF000.

It is perhaps easier to deal with high difficulties in log2 scale (a petahash/second is a 16 decimal digit number of hashes per second), and makes them comparable to other cryptographic security statements. For example the EFF "deepcrack" [https://en.wikipedia.org/wiki/EFF_DES_cracker DES cracker] project built a hardware brute force machine capable of breaking a DES key in 56 hours to make a political point that 56-bit DES was too weak in 1998 at a cost of $250,000 (plus volunteer design time). By comparison bitcoin network does 62-bits (including +1 for double hash) every 10-minutes and is 537,000 times more powerful than deepcrack, or could if it were focused on DES rather than SHA256 crack a DES key in 9 seconds to deepcracks 56 hours.

===Miner privacy===

In principle a miner should therefore for privacy use a different reward-address for each block (and reset the counter to 0). Why Satoshi's early mined bitcoins were potentially linked, was because while he changed the reward-addresss, he forgot to reset the counter after each successful mine, which is a bitcoin mining privacy bug. In fact with bitcoin the counter also should be obscured otherwise you would reveal your effort level, and if you have a lot of mining power that may imply who the coin belongs to. Bitcoin does this via the nonce and extra-nonce. Nonce starts at 0, but extra nonce is random. Together these form a randomized counter hiding the amount of effort that went into the proof, so no one can tell if it was a powerful but unlucky miner who worked hard, or a weak miner who was very lucky.

Additionally with the introduction of mining pools, if the miner uses the same reward address for all users, which is what the current mining protocols do, then there is risk that users may redo work. To avoid users redoing work, miners hand out defined work for the users to do. However this creates an unnecessary communication round trip and in early protocol versions perhaps was a factor in the decision to have the pool send the actual block to mine, which means the miners are not validating their own blocks, which delegates validation authority, though not work, to the pool operator, reducing the security of the bitcoin network. The more recent mining protocol version allows the user to add their own block definition, but still unnecessarily incur round trips for handing out work allocation. Because the new pooled-mining protocol has a miner chosen extraNonce this acts as a random start factor so there is actually no need to talk to the pool for work allocation, a pool could have a static published address, and miners could just do work of whatever size they chose, and submit it to the pool as a UDP packet. (If privacy is required by the miner, it could use the public derivation method from BIP 32 to allow the node to tell the miner via an encrypted message with the mining work, which factor to multiply the static public key by.)

===Litecoin proof-of-work===

It is a misunderstanding to say litecoin uses the Scrypt proof-of-work. Scrypt is not a proof-of-work function, but a stretched key-derivation function, and while it is by design expensive to compute with high iterations, it can not be used to make an efficiently publicly auditable proof-of-work, as verifying costs the same as creating.

Litecoin uses hashcash with the internal hash function of Scrypt denoted hashcash-Scrypt(1). Scrypt, by Colin Percival, is a key-derivation function for converting user chosen passphrases into keys. It is salted (to prevent pre-computation/rainbow table attacks), and the hash is iterated many times to slow down passphrase grinding. Scrypt is similar in purpose to the defacto standard passphrase key-derivation function PBKDF2 (which uses HMAC-SHA1 internally). The differentiator and why people might choose Scrypt rather than PBDF2 is that Scrypt's inner hash uses more memory so the GPU (or theoretical Scrypt ASIC/FPGA) advantage in password grinding is reduced compared to CPUs.

Litecoin does not use the key-stretching feature of Scrypt so litecoin mining is not actually using Scrypt directly, but only the inner Scrypt hash (accessed by setting the iteration parameter to one iteration). So Scrypt's key-stretching function is not being used at all to contribute to the hardness, unlike its normal use for key protection eg in deriving the encryption key from user passphrase to encrypt bitcoin wallets. The reason Scrypt's key-stretching can not be used for mining is because that simultaneously makes it more expensive to verify by the same factor. The litecoin hashcash variant can be denoted hashcash-Scrypt(iter=1,mem=128KB) or shortened to hashcash-Scrypt(1). The other major scrypt parameter denotes the amount of memory used (128kB for litecoin).

===Decentralization: hashcash-Scrypt vs hashcash-SHA256===

The 128kB Scrypt memory footprint makes litecoin arguably less vulnerable to centralization of mining power arising from limited access to or ownership of ASIC equipment by users. Its arguable and unclear, because there are counter arguments: that hashcash-SHA256^2 is very simple, so a skilled individual with his personal savings or a small kick-stater project could design and put in an order with a chip-fabricator. This simplicity ensures that many people will do it and ASICs should become available. Conversely it is somewhat more difficult in comparison to make an hashcash-Scrypt(1) ASIC so perhaps litecoin will prove in the mid-term actually worse for centralization, if a well funded commercial entity corners the market by having faster, but proprietary, not available on the market, hashcash-Scrypt(1) ASICs that render litecoin GPU mining unprofitable.

Note also a mitigating factor is that it is considered that hashcash-Scrypt(1) should offer less speed up from ASIC implementation vs GPUs than hashcash-SHA256^2. This is claimed because of the argument that the die area taken up by 128kB of RAM, which it might be thought must be dedicated to each Scrypt(1) core, would reduce the number of Scrypt(1) cores that fit per chip. Note however that Scrypt(1) is not actually securely memory-hard in that it makes no attempt to prevent time-memory tradeoffs, so it is actually possible to repeat the computation of internal rounds to reduce the memory requirement. In theory therefore it would be possible though more computation expensive to implement Scrypt(iter=1, mem=128kB) with minimal memory, just with more work. In hardware the time-memory tradeoff would be optimized to find the optimal amount of memory to use, and it is quite possible the optimal amount would be less than 128kB.

Hashcash-Scrypt(1) also has a disadvantage relative to hashcash-SHA256^2 in that it is significantly slower to verify, as the verification cost of one iteration of Scrypt(mem=128kB) is far higher than a two SHA256 hashes. This makes validating the litecoin blockchain more CPU and memory intensive for all full nodes. Note however that the dominating CPU work of validation is the verification of the per transaction ECDSA signatures of the multiple transactions in a block. Even one ECDSA signature is slower than one Scrypt(1) verification which is done once per block, and there are many transactions (and so ECDSA signature verifications) to verify within a block.

Help:FAQ

2013-11-12T21:45:29Z

Ontarioboy: /* Do you have to wait until my transactions are confirmed in order to buy or sell things with Bitcoin? */ spell buried

Here you will find answers to the most commonly asked questions.

== General ==
=== What is Bitcoin? ===
Bitcoin is a distributed peer-to-peer digital currency that can be transferred instantly and securely between any two people in the world. It's like electronic cash that you can use to pay friends or merchants.

=== What are bitcoins? ===
Bitcoins are the unit of currency of the Bitcoin system. A commonly used shorthand for this is “BTC” to refer to a price or amount (e.g. “100 BTC”).
There are such things as [[physical bitcoins]], but ultimately, a bitcoin is just a number associated with a [[Address|Bitcoin Address]]. A physical bitcoin is simply an object, such as a coin, with the number carefully embedded inside. See also an [[Introduction|easy intro]] to Bitcoin.

=== How can I get bitcoins? ===

There are a variety of ways to acquire bitcoins:

* Accept bitcoins as payment for goods or services.
* The most common way to buy bitcoins are the [[Buying bitcoins|Bitcoin Exchanges]]
* There are several services where you can [[Buying_Bitcoins_(the_noob_version)|trade them]] for traditional currency.
* Find someone to trade cash for bitcoins in-person through a [https://en.bitcoin.it/wiki/Category:Directories local directory].
* Participate in a [[Pooled mining|mining pool]].
* If you have a lot of mining hardware, you can solo mine and attempt to create a new [[block]] (currently yields 25 bitcoins plus transaction fees).
* Visit sites that provide [[Trade#Free_Samples_and_Offers|free samples and offers]].

===Does Bitcoin guarantee an influx of free money?===

Since Bitcoin is a new technology, what it is and how it works may be initially unclear. Bitcoin is sometimes presented as being one of three things:
<ol style="list-style-type: upper-alpha;">
<li>Some sort of online 'get-rich-quick' scam.</li>
<li>A loophole in the market economy, the installation of which guarantees a steady influx of cash.</li>
<li>A sure investment that will almost certainly yield a profit.</li>
</ol>
In fact, none of the above are true. Let's look at them independently.

;Is Bitcoin a 'get-rich-quick' scheme?
:If you've spent much time on the Internet, you've probably seen ads for many 'get-rich-quick' schemes. These ads usually promise huge profits for a small amounts of easy work. Such schemes are usually pyramid/matrix-style schemes that make money from their own employees and offer nothing of any real value. Most convince one to buy packages that will make them earn hundreds a day, which in fact have the buyer distribute more such ads, and make minute profits.

:Bitcoin is in no way similar to these schemes. Bitcoin doesn't promise windfall profits. There is no way for the developers to make money from your involvement or to take money from you. That bitcoins are nearly impossible to acquire without the owner's consent represents one of its greatest strengths. Bitcoin is an experimental, virtual currency that may succeed or may fail. None of its developers expect to get rich off of it.

:A more detailed answer to this question can be found [http://bitcointalk.org/?topic=7815.0 here].

;Will I make money by installing the client?
:Most people who use Bitcoin don't earn anything by doing so, and the default client has no built-in way to earn Bitcoins. A small minority of people with dedicated, high-performance hardware do earn some Bitcoins by "''mining''" (generating new bitcoins, see [[#What is mining?|What is mining?]]) with special software, but joining Bitcoin shouldn't be construed as being the road to riches. Most Bitcoin users get involved because they find the project conceptually interesting and don't earn anything by doing so. This is also why you won't find much speculation about the political or economic repercussions of Bitcoin anywhere on this site: Bitcoin developers owe their dedication to the project's intellectual yieldings more than to those of a monetary nature. Bitcoin is still taking its first baby steps; it may go on to do great things but right now it only has something to offer those chasing conceptually interesting projects or bleeding edge technology.

;As an investment, is Bitcoin a sure thing?
:Bitcoin is a new and interesting electronic currency, the value of which is not backed by any single government or organization. Like other currencies, it is worth something partly because people are willing to trade it for goods and services. Its exchange rate fluctuates continuously, and sometimes wildly. It lacks wide acceptance and is vulnerable to manipulation by parties with modest funding. Security incidents such as website and account compromise may trigger major sell-offs. Other fluctuations can build into positive feedback loops and cause much larger exchange rate fluctuations. Anyone who puts money into Bitcoin should understand the risk they are taking and consider it a high-risk currency. Later, as Bitcoin becomes better known and more widely accepted, it may stabilize, but for the time being it is unpredictable. Any investment in Bitcoin should be done carefully and with a clear plan to manage the risk.

=== Can I buy bitcoins with Paypal? ===

It is possible to buy [[physical bitcoins]] with PayPal but it is otherwise difficult and/or expensive to do so for non-physical bitcoins, because of significant risk to the seller.

While it is possible to find an individual who wishes to sell Bitcoin to you via Paypal, (perhaps via [http://www.bitcoin-otc.com/ #bitcoin-otc] ) most exchanges do not allow funding through PayPal. This is due to repeated cases where someone pays for bitcoins with Paypal, receives their bitcoins, and then fraudulently complains to Paypal that they never received their purchase. PayPal often sides with the fraudulent buyer in this case, which means any seller needs to cover that risk with higher fees or refuse to accept PayPal altogether.

Buying Bitcoins from individuals this way is still possible, but requires the seller to have some trust that the buyer will not file a claim with PayPal to reverse the payment.

=== Where can I find a forum to discuss Bitcoin? ===

Please visit the [[Bitcoin:Community_portal#Bitcoin_Community_Forums_on_various_platforms|Community Portal]] for links to Bitcoin-related forums.

=== How are new bitcoins created? ===

[[File:total_bitcoins_over_time_graph.png|thumb|Number of bitcoins over time, assuming a perfect 10-minute interval.]]
New bitcoins are generated by the network through the process of "[[#What is mining?|''mining'']]". In a process that is similar to a continuous raffle draw, mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new [[block]]). Creating a block is a [[proof of work]] with a difficulty that varies with the overall strength of the network. The reward for solving a block is [[Controlled Currency Supply|automatically adjusted]] so that roughly every four years of operation of the Bitcoin network, half the amount of bitcoins created in the prior 4 years are created. {{formatnum:10500000}} bitcoins were created in the first 4 (approx.) years from January 2009 to November 2012. Every four years thereafter this amount halves, so it will be {{formatnum:5250000}} over years 4-8, {{formatnum:2625000}} over years 8-12, and so on. Thus the total number of bitcoins in existence will never exceed {{formatnum:21000000}}. See [[Controlled Currency Supply]].

Blocks are [[Mining|mined]] every 10 minutes, on average and for the first four years ({{formatnum:210000}} blocks) each block included 50 new bitcoins. As the amount of processing power directed at mining changes, the difficulty of creating new bitcoins changes. This difficulty factor is calculated every 2016 blocks and is based upon the time taken to generate the previous 2016 blocks. See [[Mining]].

=== What's the current total number of bitcoins in existence? ===

[http://blockexplorer.com/q/totalbc Current count]. Also see [https://blockchain.info/charts/total-bitcoins Total bitcoins in circulation chart]

The number of blocks times the coin value of a block is the number of coins in existence. The coin value of a block is 50 BTC for each of the first {{formatnum:210000}} blocks, 25 BTC for the next {{formatnum:210000}} blocks, then 12.5 BTC, 6.25 BTC and so on.

=== How divisible are bitcoins? ===

A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts.

=== What do I call the various denominations of bitcoin? ===

There is a lot of discussion about the naming of these fractions of bitcoins. The leading candidates are:

* 1 BTC = 1 bitcoin
* 0.01 BTC = 1 cBTC = 1 centibitcoin (also referred to as bitcent)
* 0.001 BTC = 1 mBTC = 1 millibitcoin (also referred to as mbit (pronounced em-bit) or millibit or even bitmill)
* 0.000 001 BTC = 1 μBTC = 1 microbitcoin (also referred to as ubit (pronounced yu-bit) or microbit)

The above follows the accepted international SI prefixes for hundredths, thousandths, and millionths. There are many arguments against the special case of 0.01 BTC since it is unlikely to represent anything meaningful as the Bitcoin economy grows (it certainly won't be the equivalent of 0.01 USD, GBP or EUR). Equally, the inclusion of existing national currency denominations such as "cent", "nickel", "dime", "pence", "pound", "kopek" and so on are to be discouraged; this is a worldwide currency.

One exception is the "satoshi" which is smallest denomination currently possible

* 0.000 000 01 BTC = 1 satoshi (pronounced sa-toh-shee)
which is so named in honour of Satoshi Nakamoto, the pseudonym of the inventor of Bitcoin.

For an overview of all defined units of Bitcoin (including less common and niche units), see [[Units]].

Further discussion on this topic can be found on the forums here:

* [https://bitcointalk.org/index.php?topic=14438.msg195287#msg195287 We need names]
* [https://bitcointalk.org/index.php?topic=8282.0 What to call 0.001 BTC]

=== How does the halving work when the number gets really small? ===

Eventually the reward will go from 0.00000001 BTC to zero and no more bitcoins will be created.

The block reward calculation is done as a right bitwise shift of a 64-bit signed integer, which means it is divided by two and rounded down. The integer is equal to the value in BTC * 100,000,000 since internally in the reference client software, all Bitcoin balances and values are stored as unsigned integers.

With an initial block reward of 50 BTC, it will take many 4-year periods for the block reward to reach zero.

=== How long will it take to generate all the coins? ===

The last block that will generate coins will be block #6,929,999 which should be generated at or near the year 2140. The total number of coins in circulation will then remain static at 20,999,999.9769 BTC.

Even if the allowed precision is expanded from the current 8 decimals, the total BTC in circulation will always be slightly below 21 million (assuming everything else stays the same). For example, with 16 decimals of precision, the end total would be 20,999,999.999999999496 BTC.

=== If no more coins are going to be generated, will more blocks be created? ===

Absolutely! Even before the creation of coins ends, the use of [[transaction fee|transaction fees]] will likely make creating new blocks more valuable from the fees than the new coins being created. When coin generation ends, these fees will sustain the ability to use bitcoins and the Bitcoin network. There is no practical limit on the number of blocks that will be mined in the future.

=== But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem? ===

Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item '''de'''creases. This is a [[Deflationary spiral|deflationary economic model]]. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

=== If every transaction is broadcast via the network, does Bitcoin scale? ===
The Bitcoin protocol allows lightweight clients that can use Bitcoin without downloading the entire transaction history. As traffic grows and this becomes more critical, implementations of the concept will be developed. Full network nodes will at some point become a more specialized service.

With some modifications to the software, full Bitcoin nodes could easily keep up with both VISA and MasterCard combined, using only fairly modest hardware (a single high end server by todays standards). It is worth noting that the MasterCard network is structured somewhat like Bitcoin itself - as a peer to peer broadcast network.

Learn more about [[Scalability]].

==Economy==
=== Where does the value of Bitcoin stem from? What backs up Bitcoin? ===
Bitcoins have value because they are useful and because they are [[Controlled Currency Supply|scarce]]. As they are accepted by more merchants, their value will [http://en.wikipedia.org/wiki/Sticky_%28economics%29 stabilize]. See the [[Trade|list of Bitcoin-accepting sites]].

When we say that a currency is backed up by gold, we mean that there's a promise in place that you can exchange the currency for gold. Bitcoins, like dollars and euros, are not backed up by anything except the variety of merchants that accept them.

It's a common misconception that Bitcoins gain their value from the cost of electricity required to generate them. Cost doesn't equal value – hiring 1,000 men to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a useful currency, it alone doesn't make anything valuable. For example, your fingerprints are scarce, but that doesn't mean they have any exchange value.

Alternatively it needs to be added that while the law of supply and demand applies it does not guarantee value of Bitcoins in the future. If confidence in Bitcoins is lost then it will not matter that the supply can no longer be increased, the demand will fall off with all holders trying to get rid of their coins. An example of this can be seen in cases of state currencies, in cases when the state in question dissolves and so no new supply of the currency is available (the central authority managing the supply is gone), however the demand for the currency falls sharply because confidence in its purchasing power disappears. Of-course Bitcoins do not have such central authority managing the supply of the coins, but it does not prevent confidence from eroding due to other situations that are not necessarily predictable.

=== Is Bitcoin a bubble? ===
Yes, in the same way as the euro and dollar are. They only have value in exchange and have no inherent value. If everyone suddenly stopped accepting your dollars, euros or bitcoins, the "bubble" would burst and their value would drop to zero. But that is unlikely to happen: even in Somalia, where the government collapsed 20 years ago, [http://en.wikipedia.org/wiki/Somali_shilling Somali shillings] are still accepted as payment.

=== Is Bitcoin a Ponzi scheme? ===
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.

The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

=== Doesn't Bitcoin unfairly benefit early adopters? ===
Early adopters have a large number of bitcoins now because they took a risk and invested resources in an unproven technology. By so doing, they have helped Bitcoin become what it is now and what it will be in the future (hopefully, a ubiquitous decentralized digital currency). It is only fair they will reap the benefits of their successful investment.

In any case, any bitcoin generated will probably change hands dozens of time as a medium of exchange, so the profit made from the initial distribution will be insignificant compared to the total commerce enabled by Bitcoin.

Since the pricing of Bitcoins has fallen greatly from its June 2011 peak, prices today are much more similar to those enjoyed by many early adopters. Those who are buying Bitcoins today likely believe that Bitcoin will grow significantly in the future. Setting aside the brief opportunity to have sold Bitcoins at the June 2011 peak enjoyed by few, the early-adopter window is arguably still open.

===Won't loss of wallets and the finite amount of Bitcoins create excessive deflation, destroying Bitcoin? ===
Worries about Bitcoin being destroyed by deflation are not entirely unfounded. Unlike most currencies, which experience inflation as their founding institutions create more and more units, Bitcoin will likely experience gradual deflation with the passage of time. Bitcoin is unique in that only a small amount of units will ever be produced (twenty-one million to be exact), this number has been known since the project's inception, and the units are created at a predictable rate.

Also, Bitcoin users are faced with a danger that doesn't threaten users of any other currency: if a Bitcoin user loses his wallet, his money is gone forever, unless he finds it again. And not just to him; it's gone completely out of circulation, rendered utterly inaccessible to anyone. As people will lose their wallets, the total number of Bitcoins will slowly decrease.

Therefore, Bitcoin seems to be faced with a unique problem. Whereas most currencies inflate over time, Bitcoin will mostly likely do just the opposite. Time will see the irretrievable loss of an ever-increasing number of Bitcoins. An already small number will be permanently whittled down further and further. And as there become fewer and fewer Bitcoins, the laws of supply and demand suggest that their value will probably continually rise.

Thus Bitcoin is bound to once again stray into mysterious territory, because no one exactly knows what happens to a currency that grows continually more valuable. Many economists claim that a low level of inflation is a good thing for a currency, but nobody is quite sure about what might happens to one that continually deflates. Although deflation could hardly be called a rare phenomenon, steady, constant deflation is unheard of. There may be a lot of speculation, no one has any hard data to back up their claims.

That being said, there is a mechanism in place to combat the obvious consequences. Extreme deflation would render most currencies highly impractical: if a single Canadian dollar could suddenly buy the holder a car, how would one go about buying bread or candy? Even pennies would fetch more than a person could carry. Bitcoin, however, offers a simple and stylish solution: infinite divisibility. Bitcoins can be divided up and trade into as small of pieces as one wants, so no matter how valuable Bitcoins become, one can trade them in practical quantities.

In fact, infinite divisibility should allow Bitcoins to function in cases of extreme wallet loss. Even if, in the far future, so many people have lost their wallets that only a single Bitcoin, or a fraction of one, remains, Bitcoin should continue to function just fine. No one can claim to be sure what is going to happen, but deflation may prove to present a smaller threat than many expect.

For more information, see the [[Deflationary spiral]] page.

=== What if someone bought up all the existing Bitcoins? ===
Bitcoin markets are competitive -- meaning the price of a bitcoin will rise or fall depending on supply and demand at certain price levels. Only a fraction of bitcoins issued to date are found on the exchange markets for sale. So even though technically a buyer with lots of money could buy all the bitcoins offered for sale, unless those holding the rest of the bitcoins offer them for sale as well, even the wealthiest, most determined buyer can't get at them.

Additionally, new currency continues to be issued daily and will continue to do so for decades though over time the rate at which they are issued declines to insignificant levels. Those who are mining aren't obligated to sell their bitcoins so not all bitcoins will make it to the markets even.

This situation doesn't suggest, however, that the markets aren't vulnerable to price manipulation. It doesn't take significant amounts of money to move the market price up or down and thus Bitcoin remains a volatile asset.

===What if someone creates a new block chain, or a new digital currency that renders Bitcoin obsolete?===

That the block chain cannot be easily forked represents one of the central security mechanisms of Bitcoin. Given the choice between two block chains, a Bitcoin miner always chooses the longer one - that is to say, the one with the more complex hash. Thusly, it ensures that each user can only spend their bitcoins once, and that no user gets ripped off.

As a consequence of the block chain structure, there may at any time be many different sub-branches, and the possibility always exists of a transaction being over-written by the longest branch, if it has been recorded in a shorter one. The older a transaction is though, the lower its chances of being over-written, and the higher of becoming permanent. Although the block chain prevents one from spending more Bitcoins than one has, it means that transactions can be accidentally nullified.

A new block chain would leave the network vulnerable to [[double-spending|double-spend]] attacks. However, the creation of a viable new chain presents considerable difficulty, and the possibility does not present much of a risk.

Bitcoin will always choose the longer Block Chain and determines the relative length of two branches by the complexities of their hashes. Since the hash of each new block is made from that of the block preceding it, to create a block with a more complex hash, one must be prepared to do more computation than has been done by the entire Bitcoin network from the fork point up to the newest of the blocks one is trying to supersede. Needless to say, such an undertaking would require a very large amount of processing power and since Bitcoin is continually growing and expanding, it will likely only require more with the passage of time.

A much more distinct and real threat to the Bitcoin use is the development of other, superior virtual currencies, which could supplant Bitcoin and render it obsolete and valueless.

A great deal of careful thought and ingenuity has gone into the development of Bitcoin, but it is the first of its breed, a prototype, and vulnerable to more highly-evolved competitors. At present, any threatening rivals have yet to rear their heads; Bitcoin remains the first and foremost private virtual currency, but we can offer no guarantees that it will retain that position. It would certainly be in keeping with internet history for a similar system built from the same principles to supersede and cast Bitcoin into obsolescence, after time had revealed its major shortcomings. Friendster and Myspace suffered similar fates at the hand of Facebook, Napster was ousted by Limeware, Bearshare and torrent applications, and Skype has all but crushed the last few disciples of the Microsoft Messenger army.

This may sound rather foreboding, so bear in mind that the introduction of new and possibly better virtual currencies will not necessarily herald Bitcoin's demise. If Bitcoin establishes itself sufficiently firmly before the inception of the next generation of private, online currencies so as to gain widespread acceptance and general stability, future currencies may pose little threat even if they can claim superior design. This is known as the network effect.

=== Is Bitcoin open to value manipulation? ===

The current low market cap of Bitcoin means that any investor with deep enough pockets can significantly change/manipulate the rate. Is this a problem?

This is only a problem if you are investing in Bitcoin for short period of time. A manipulator can't change the fundamentals, and over a period of 5-10 years they will win over any short term manipulations.

==Sending and Receiving Payments==

=== Why do I have to wait 10 minutes before I can spend money I received? ===

10 minutes is the average time taken to find a block. It can be significantly more or less time than that depending on luck; 10 minutes is simply the average case.

[[Blocks]] (shown as "confirmations" in the GUI) are how the Bitcoin achieves consensus on who owns what. Once a block is found everyone agrees that you now own those coins, so you can spend them again. Until then it's possible that some network nodes believe otherwise, if somebody is attempting to defraud the system by reversing a transaction. The more confirmations a transaction has, the less risk there is of a reversal. Only 6 blocks or 1 hour is enough to make reversal computationally impractical. This is dramatically better than credit cards which can see chargebacks occur up to three months after the original transaction!

Ten minutes was specifically chosen by [[Satoshi]] as a tradeoff between first confirmation time and the amount of work wasted due to chain splits. After a block is mined, it takes time for other miners to find out about it, and until then they are actually competing against the new block instead of adding to it. If someone mines another new block based on the old block chain, the network can only accept one of the two, and all the work that went into the other block gets wasted. For example, if it takes miners 1 minute on average to learn about new blocks, and new blocks come every 10 minutes, then the overall network is wasting about 10% of its work. Lengthening the time between blocks reduces this waste.

As a thought experiment, what if the Bitcoin network grew to include Mars? From the farthest points in their orbits, it takes about 20 minutes for a signal to travel from Earth to Mars. With only 10 minutes between new blocks, miners on Mars would always be 2 blocks behind the miners on Earth. It would be almost impossible for them to contribute to the block chain. If we wanted collaborate with those kinds of delays, we would need at least a few hours between new blocks.

[[File:TransactionConfirmationTimesExample.PNG]]

=== Do you have to wait until my transactions are confirmed in order to buy or sell things with Bitcoin? ===

YES, you do, IF the transaction is non-recourse. The Bitcoin reference software does not display transactions as confirmed until six blocks have passed (confirmations). As transactions are buried in the chain they become increasingly non-reversible but are very reversible before the first confirmation. Two to six confirmations are recommended for non-recourse situations depending on the value of the transactions involved.

When people ask this question they are usually thinking about applications like supermarkets. This generally is a recourse situation: if somebody tries to double-spend on a face-to-face transaction it might work a few times, but probabalistically speaking eventually one of the double-spends will get noticed, and the penalty for shoplifting charges in most localities is calibrated to be several times worse than the proceeds of a single shoplifting event.

Double-spends might be a concern for something like a snack machine in a low-traffic area with no nearby security cameras. Such a machine shouldn't honor zero-confirmation payments, and should instead use some other mechanism of clearing Bitcoin or validating transactions against reversal, see the wiki article [[Myths#Point_of_sale_with_bitcoins_isn.27t_possible_because_of_the_10_minute_wait_for_confirmation|here]] for alternatives.

Applications that require immediate payment processing, like supermarkets or snack machines, need to manage the risks. Here is one way to reverse an unconfirmed payment:

A [[Double-spending#Finney_attack|Finney attack]], in which an attacker mines a block containing a movement of some coins back to themselves. Once they find a block solution, they quickly go to a merchant and make a purchase, then broadcast the block, thus taking back the coins. This attack is a risk primarily for goods that are dispatched immediately, like song downloads or currency trades. Because the attacker can't choose the time of the attack, it isn't a risk for merchants such as supermarkets where you can't choose exactly when to pay (due to queues, etc). The attack can fail if somebody else finds a block containing the purchasing transaction before you release your own block, therefore, merchants can reduce but not eliminate the risk by making purchasers wait some length of time that's less than a confirm.

Because pulling off this attack is not trivial, merchants who need to sell things automatically and instantly are most likely to adjust the price to include the cost of reversal fraud, or elect to use special insurance.

=== I was sent some bitcoins and they haven't arrived yet! Where are they? ===

Don't panic! There are a number of reasons why your bitcoins might not show up yet, and a number of ways to diagnose them.

The latest version of the Bitcoin-Qt client tells you how far it has yet to go in downloading the blockchain. Hover over the icon in the bottom right corner of the client to learn your client's status.

If it has not caught up then it's possible that your transaction hasn't been included in a block yet.

You can check pending transactions in the network by going [http://blockchain.info here] and then searching for your address. If the transaction is listed here then it's a matter of waiting until it gets included in a block before it will show in your client.

If the transaction is based on a coin that was in a recent transaction then it could be considered a low priority transaction. Transfers can take longer if the transaction fee paid was not high enough. If there is no fee at all the transfer can get a very low priority and take hours or even days to be included in a block.

=== Why does my Bitcoin address keep changing? ===

Whenever the address listed in "Your address" receives a transaction, Bitcoin replaces it with a new address. This is meant to encourage you to use a new address for every transaction, which enhances [[anonymity]]. All of your old addresses are still usable: you can see them in ''Settings -> Your Receiving Addresses''.

===How much will the transaction fee be?===

Some transactions might require a [[transaction fee]] for them to get confirmed in a timely manner. The transaction fee is processed by and received by the bitcoin miner. The most recent version of the Bitcoin client will estimate an appropriate fee when a fee might be required.

The fee is added to the payment amount. For example, if you are sending a 1.234 BTC payment and the client requires a 0.0005 BTC fee, then 1.2345 BTC will be subtracted from the wallet balance for the entire transaction and the address for where the payment was sent will receive a payment of 1.234 BTC.

A fee might be imposed because your transaction looks like a denial of service attack to the Bitcoin system. For example, it might be burdensome to transmit or it might recycle Bitcoins you recently received. The wallet software attempts to avoid generating burdensome transactions, but it isn't always able to do so: The funds in your wallet might be new or composed of many tiny payments.

Because the fee is related to the amount of data that makes up the transaction and not to the amount of Bitcoins being sent, the fee may seem extremely low (0.0005 BTC for a 1,000 BTC transfer) or unfairly high (0.004 BTC for a 0.02 BTC payment, or about 20%). If you are receiving tiny amounts (''e.g.'' as small payments from a mining pool) then fees when sending will be higher than if your activity follows the pattern of conventional consumer or business transactions.

As of Bitcoin 0.5.3 the required fee will not be higher than 0.05 BTC. For most users there is usually no required fee at all. If a fee is required it will most commonly be 0.0005 BTC.

=== What happens when someone sends me a bitcoin but my computer is powered off? ===

Bitcoins are not actually "sent" to your wallet; the software only uses that term so that we can use the currency without having to learn new concepts. Your wallet is only needed when you wish to spend coins that you've received.

If you are sent coins when your wallet client program is not running, and you later launch the wallet client program, the coins will eventually appear as if they were just received in the wallet. That is to say, when the client program is started it must download blocks and catch up with any transactions it did not already know about.

=== How long does "synchronizing" take when the Bitcoin client is first installed? What's it doing? ===

The popular Bitcoin client software from bitcoin.org implements a "full" Bitcoin node: It can carry out all the duties of the Bitcoin P2P system, it isn't simply a "client". One of the principles behind the operation of full Bitcoin nodes is that they don't assume that the other participants have followed the rules of the Bitcoin system. During synchronization, the software is processing historical Bitcoin transactions and making sure for itself that all of the rules of the system have been correctly followed.

In normal operation, after synchronizing, the software should use a hardly noticeable amount of your computer's resources.

When the wallet client program is first installed, its initial validation requires a lot of work from your computer's hard disk, so the amount of time to synchronize depends on your disk speed and, to a lesser extent, your CPU speed. It can take anywhere from a few hours to a day or so. On a slow computer it could take more than 40 hours of continuous synchronization, so check your computer's power-saving settings to ensure that it does not turn its hard disk off when unattended for a few hours. You can use the Bitcoin software during synchronization, but you may not see recent payments to you until the client program has caught up to the point where those transactions happened.

If you feel that this process takes too long, you can download a pre-synchronized blockchain from [http://eu2.bitcoincharts.com/blockchain/ http://eu2.bitcoincharts.com/blockchain/]. Alternatively, you can try an alternative "lite" client such as Multibit or a super-light client like electrum, though these clients have somewhat weaker security, are less mature, and don't contribute to the health of the P2P network.

==Networking==
=== Do I need to configure my firewall to run Bitcoin? ===

Bitcoin will connect to other nodes, usually on TCP port 8333. You will need to allow outgoing TCP connections to port 8333 if you want to allow your Bitcoin client to connect to many nodes. [[Testnet]] uses TCP port 18333 instead of 8333.

If you want to restrict your firewall rules to a few IPs, you can find stable nodes in the [[Fallback Nodes|fallback nodes list]].

=== How does the peer finding mechanism work? ===

Bitcoin finds peers primarily by forwarding peer announcements within its own network and each node saves a database of peers that it's aware of, for future use. In order to bootstrap this process Bitcoin needs a list of initial peers, these can be provided manually but normally it obtains them by querying a set of DNS domain names which have automatically updated lists, if that doesn't work it falls back to a built-in list which is updated from time to time in new versions of the software. There is also an IRC based mechanism but it is disabled by default.

==Mining==
===What is mining?===
[[Mining]] is the process of spending computation power to secure Bitcoin transactions against reversal and introducing new Bitcoins to the system.

Technically speaking, mining is the calculation of a [[hash]] of the a block header, which includes among other things a reference to the previous block, a hash of a set of transactions and a [[nonce]]. If the hash value is found to be less than the current [[target]] (which is inversely proportional to the [[difficulty]]), a new block is formed and the miner gets the newly generated Bitcoins (25 per block at current levels). If the hash is not less than the current target, a new nonce is tried, and a new hash is calculated. This is done millions of times per second by each miner.

===Is mining used for some useful computation?===
The computations done when mining are internal to Bitcoin and not related to any other distributed computing projects. They serve the purpose of securing the Bitcoin network, which is useful.

===Is it not a waste of energy?===
Spending energy on creating and securing a free monetary system is hardly a waste. Also, services necessary for the operation of currently widespread monetary systems, such as banks and credit card companies, also spend energy, arguably more than Bitcoin would.

===Why don't we use calculations that are also useful for some other purpose?===
To provide security for the Bitcoin network, the calculations involved need to have some [http://bitcoin.stackexchange.com/questions/5617/why-are-bitcoin-calculation-useless/5618#5618 very specific features]. These features are incompatible with leveraging the computation for other purposes.

===How can we stop miners from creating zero transaction blocks?===
The incentive for miners to include transactions is in the fees that come along with them. If we were to implement some minimum number of transactions per block it would be trivial for a miner to create and include transactions merely to surpass that threshold. As the network matures, the block reward drops, and miners become more dependent on transactions fees to pay their costs, the problem of zero transaction blocks should diminish over time.

===How does the proof-of-work system help secure Bitcoin?===
Bitcoin uses the [[Hashcash]] proof of work with a minor adaption. To give a general idea of the mining process, imagine this setup:

payload = <some data related to things happening on the Bitcoin network>
nonce = 1
hash = [http://en.wikipedia.org/wiki/SHA2 SHA2]( [http://en.wikipedia.org/wiki/SHA2 SHA2]( payload + nonce ) )

The work performed by a miner consists of repeatedly increasing "nonce" until
the hash function yields a value, that has the rare property of being below a certain
target threshold. (In other words: The hash "starts with a certain number of zeroes",
if you display it in the fixed-length representation, that is typically used.)

As can be seen, the mining process doesn't compute anything special. It merely
tries to find a number (also referred to as nonce) which - in combination with the payload -
results in a hash with special properties.

The advantage of using such a mechanism consists of the fact, that it is very easy to check a result: Given the payload and a specific nonce, only a single call of the hashing function is needed to verify that the hash has the required properties. Since there is no known way to find these hashes other than brute force, this can be used as a "proof of work" that someone invested a lot of computing power to find the correct nonce for this payload.

This feature is then used in the Bitcoin network to secure various aspects. An attacker
that wants to introduce malicious payload data into the network, will need to do the
required proof of work before it will be accepted. And as long as honest miners have more
computing power, they can always outpace an attacker.

Also see [http://en.wikipedia.org/wiki/Hashcash Hashcash] and [http://en.wikipedia.org/wiki/Proof-of-work_system Proof-of-work system] and [http://en.wikipedia.org/wiki/SHA2 SHA2] and on Wikipedia.

===Why was the "Generate coin" option of the client software removed?===

In the early days of Bitcoin, it was easy for anyone to find new blocks using standard CPUs. As more and more people started mining, the [[difficulty]] of finding new blocks has greatly increased to the point where the average time for a CPU to find a single block can be many years. The only cost-effective method of [[Mining|mining]] is using a high-end graphics card with special software (see also [[Why a GPU mines faster than a CPU]]) and/or joining a [[Bitcoin Pool|mining pool]]. Since solo CPU mining is essentially useless, it was removed from the GUI of the Bitcoin software.

==Security==

===Could miners collude to give themselves money or to fundamentally change the nature of Bitcoin?===

There are two questions in here. Let's look at them separately.

;Could miners gang up and give themselves money?

Mining itself is the process of creating new blocks in the block chain. Each block contains a list of all the transactions that have taken place across the entire Bitcoin network since the last block was created, as well as a hash of the previous block. New blocks are 'mined', or rather, generated, by Bitcoin clients correctly guessing sequences of characters in codes called 'hashes,' which are created using information from previous blocks. Bitcoin users may download specialized 'mining' software, which allows them to dedicate some amount of their processing power – however large or small – to guessing at strings within the hash of the previous block. Whoever makes the right guess first, thus creating a new block, receives a reward in Bitcoins.

The block chain is one of the two structures that makes Bitcoin secure, the other being the public-key encryption system on which Bitcoin trade is based. The block chain assures that not only is every single transaction that ever takes place recorded, but that every single transaction is recorded on the computer of anyone who chooses to store the relevant information. Many, many users have complete records of every transaction in Bitcoins history readily available to them at any point, and anyone who wants in the information can obtain it with ease. These things make Bitcoin very hard to fool.

The Bitcoin network takes considerable processing power to run, and since those with the most processing power can make the most guesses, those who put the most power toward to sustaining the network earn the most currency. Each correct guess yields, at present, twenty-five Bitcoins, and as Bitcoins are presently worth something (although the value still fluctuates) every miner who earns any number of Bitcoins makes money. Some miners pull in Bitcoins on their own; and some also join or form pools wherein all who contribute earn a share of the profits.

Therefore, first answer is a vehement “yes” – not only can miners collude to get more money, Bitcoin is designed to encourage them to do so. Bitcoin pools are communal affairs, and there is nothing dishonest or underhanded about them.

Of course, the real question is:

;Can they do so in ways not sanctioned by Bitcoin developers? Is there any way to rip off the network and make loads of money dishonestly?

Bitcoin isn't infallible. It can be cheated, but doing so is extremely difficult. Bitcoin was designed to evade some of the central problems with modern currencies – namely, that their trustworthiness hinges upon that of people who might not have users' best interests in mind. Every currency in the world (other than Bitcoin) is controlled by large institutions who keep track of what's done with it, and who can manipulate its value. And every other currency has value because people trust the institutions that control them.

Bitcoin doesn't ask that its users trust any institution. Its security is based on the cryptography that is an integral part of its structure, and that is readily available for any and all to see. Instead of one entity keeping track of transactions, the entire network does, so Bitcoins are astoundingly difficult to steal, or double-spend. Bitcoins are created in a regular and predictable fashion, and by many different users, so no one can decide to make a whole lot more and lessen their value. In short, Bitcoin is designed to be inflation-proof, double-spend-proof and completely distributed.

Nonetheless, there are a few ways that one can acquire Bitcoins dishonestly. Firstly, one can steal private keys. Key theft isn't something that Bitcoin security has been designed to prevent: it's up to users to keep theirs safe. But the cryptography is designed so that it is completely impossible to deduce someone's private key from their public one. As long as you keep your private key to yourself, you don't have much to worry about. Furthermore, one could theoretically create a new block chain, but due to the way in which the block chain is constructed, this would be extremely difficult and require massive amounts of processing power. A full explanation of the difficulties involved can be found in the [[block chain]] article.

Bitcoin can be ripped off – but doing so would be extremely hard and require considerable expertise and a staggering amount of processing power. And it's only going to get harder with time. Bitcoin isn't impenetrable, but it's close enough to put any real worries in the peripherals.

;Could miners fundamentally change the nature of Bitcoin?

Once again, almost certainly not.

Bitcoin is a distributed network, so any changes implemented to the system must be accepted by all users. Someone trying to change the way Bitcoins are generated would have to convince every user to download and use their software – so the only changes that would go through are those that would be equally benefit all users.

And thus, it is more or less impossible for anyone to change the function of Bitcoin to their advantage. If users don't like the changes, they won't adopt them, whereas if users do like them, then these will help everyone equally. Of course, one can conceive of a situation where someone manages to get a change pushed through that provides them with an advantage that no one notices, but given that Bitcoin is structurally relatively simple, it is unlikely that any major changes will go through without someone noticing first.

The fact that such changes are so difficult to make testifies to the fully distributed nature of Bitcoin. Any centrally controlled currency can be modified by its central agency without the consent of its adherents. Bitcoin has no central authority, so it changes only at the behest of the whole community. Bitcoins development represents a kind of collective evolution; the first of its kind among currencies.

==Help==
===I'd like to learn more. Where can I get help?===

* Read the [[Introduction|introduction to bitcoin]]
* See the videos, podcasts, and blog posts from the [[Press]]
* Read and post on the [[:Bitcoin:Community_portal#Bitcoin_Community_Forums|forums]]
* Chat on one of the [[:Bitcoin:Community_portal#IRC_Chat|Bitcoin IRC]] channels
* Listen to [http://omegataupodcast.net/2011/03/59-bitcoin-a-digital-decentralized-currency/ this podcast], which goes into the details of how bitcoin works
* Ask questions on the [http://bitcoin.stackexchange.com Bitcoin Stack Exchange]

==See Also==

* [[Man page]]
* [[Introduction]]

[[de:FAQ]]
[[zh-cn:FAQ]]
[[fr:FAQ]]
[[ru:FAQ]]

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

Selling bitcoins

2013-06-01T04:39:42Z

Ontarioboy: /* Fixed Rate Exchanges & Others */ Liberty Reserve was shut down May 2013

There are various methods for selling bitcoins.

Warning: Please be careful with your money. When sending bitcoins to an exchange or other counterparty you are trusting that the counterparty will not abscond with your bitcoins and that the operator maintains secure systems that protect against theft -- internal or external. It is recommended that you obtain the real-world identity of the counterparty and ensure that sufficient recourse is available. Exchanging or storing significant funds with exchanges is not recommended.

==Market Exchanges==
The best rates for selling medium to large amounts of bitcoins generally when withdrawing from an exchange using a cash method such as a bank transfer (ACH, EUR/SEPA).

{| class="wikitable"
|-
| Exchange || Adding Funds || Withdrawing Funds || [[eWallet]] || Notes
|-
| [[File:BIPS.gif|20px|link=https://bips.me]] [https://bips.me BIPS] ([[BIPS|info]]) || BTC CAD (Cash deposits in Canada) Any Currency (Wire Transfer - Any Country) USD (Liberty Reserve) || Danish Domestic Transfer Any Currency (ACH / Direct Deposit) Any Currency (Wire Transfer - Any Country) USD (Mt.Gox) || {{ Table Value Yes }} || <ul><li>DK-based</li><li>[https://github.com/BitcoinInternetPaymentSystem BIPS GitHub]</li><li>[https://bips.me/connect/BitcoinInternetPaymentSystemAPI.pdf REST API]</li></ul>
|-
| [[BitBox]] || BTC USD (Wire Transfer - US) || BTC USD (Wire Transfer - US) || {{Table Value Yes}} || <ul><li>US-based</li><li>Two-factor Authentication</li><li>[http://inbitbox.github.io/rest/ BitBox REST API]</li><li>[https://github.com/inbitbox BitBox GitHub]</li></ul>
|-
| [[MtGox]] ||BTC BTC ([[Redeemable code]]) USD ([[Dwolla]]) USD (International bank wire) USD (Wire to [[AurumXChange Company|AurumXChange]]) AUD (Bank wire) GBP (Bank wire) GBP (Cash deposit, Barclays) USD (Redeemable code) Liberty Reserve USD (via AurumXChange) || BTC BTC (Redeemable code) USD ([[Dwolla]]) USD (Wire via [[AurumXChange Company|AurumXChange]]) AUD (Bank wire) USD (Redeemable code) Liberty Reserve USD (via AurumXChange) || {{Table Value Yes}} || Restrictions and limits on withdrawals.
|-
| [[VirWoX]] || BTC SLL (Second Life) ACD (Avination) OMC (OpenSim) USD,EUR,GBP,CHF ([[PayPal]]) USD,EUR,GBP (Credit & Debit cards via [[Skrill]]/Moneybookers) USD,EUR,GBP ([[NETELLER]]) EUR (DIRECTebanking / Sofortüberweisung) USD,EUR,GBP,CHF ([[paysafecard]]) EUR (SEPA bank transfer) || BTC SLL (Second Life) ACD (Avination) OMC (OpenSim) USD,EUR,GBP,CHF ([[PayPal]]) USD,EUR,GBP ([[Skrill]]/Moneybookers) USD,EUR,GBP ([[NETELLER]]) EUR (SEPA bank transfer) || {{Table Value Yes}} || Trading through Second Life Linden Dollars (highly liquid). Variable limits on PayPal and Credit Card deposits.
|-
| [[Intersango]]([[Britcoin]]) || BTC GBP (bank deposit) EUR (SEPA bank deposit) PLN (bank transfer) || BTC GBP (bank deposit) EUR (SEPA bank transfer) PLN (bank transfer) || {{Table Value Yes}} ||
|-
| [[BTC-E]] || BTC BTC (BTC-e redeemable code) USD (Cash deposit at Post of Russia) USD (Cash deposit at banks including Privatbank, Savings Bank of Russia (Sberbank), RU/UA Terminals, & more) USD ([[Liberty Reserve]]) USD (Interkassa) USD (WebMoney - WMZ) USD (Yandex) USD (LiqPay) USD (Perfect Money) USD (QIWI) USD (OKPay) USD (RBK Money) USD (Ditial currencies including НСМЭП (NSMEP), Единый Кошелек (Unified Purse), TeleMoney, & more) USD (BTC-e Redeemable Code, available via BitInstant and AurumXChange) USD (International bank wire) EUR (SEPA bank transfer) RUB (QIWI) RUB (LiqPay) RUB (WebMoney-WMR) RUB (BTC-e Redeemable code) RUB (Bank transfer) || BTC BTC (BTC-e redeemble code) USD (Liberty Reserve) USD (Webmoney - WMZ) USD (Perfect Money) USD (LiqPay) USD (QIWI) USD (PayPal) USD (OKPay) USD (Payza/AlertPay) USD (Privat, Privat UAH) USD (Cash deposit into Savings Bank/Sberbank, Telebank, Alfa Bank) USD (BTC-e Redeemable Code) USD (International Wire Transfer) EUR (SEPA bank transfer) RUB (Cash delivery, possible in Moscow) RUB (QIWI) RUB (LiqPay) RUB (WebMoney WMR) RUB (Яндекс.Деньги Yandex) RUB (RBK Money) Cash deposit (into account at Сбербанка России!/Savings Bank/Sberbank, Телебанк (Telebank), and АльфаБанк (Alfa Bank) RUB (Transfer to credit card VISA & MasterCard) RUB (BTC-e Redeemable code) RUB (Bank transfer) || {{Table Value Yes}} || Language: English, Russian.
|-
| [[VirtEx]] || BTC CAD (cash deposit at BMO Bank of Montreal) CAD (Online bill payment) CAD (Wire transfer) || BTC CAD (direct deposit) CAD (Canada Xpress Post Bank Draft send by mail) CAD Payza (formerly AlertPay) || {{Table Value Yes}} ||
|-
| [[Camp BX]] (CBX) || BTC USD ([[Dwolla]]) USD (P2P bank transfer at Chase, B of A, Wells Fargo and ING. Credited after three business days). USD (Personal Check) USD (USPS Postal money order, Canada Post money order) || BTC USD ([[Dwolla]]) USD (ACH Direct Deposit) USD (USPS Postal Money Order) USD (Domestic bank wire) USD (International bank wire) || {{Table Value Yes}} || <ul> <li> Security certification from McAfee</li><li> Advanced trading options with AON/FOK/Market</li> <li>STOPLOSS and Short-Selling in Pipeline</li><li> Trading API available</li><li> Wallet API available </li><li> CBX Instant Bitcoin Transfers Feature </li><li> Stoploss / Custom Order Expiry Date/Time </li><li> SMS (Text Message) Notifications </li> <li> Two-Factor Authentication </li> <li> Based in USA - Atlanta </li> </ul>
|-
| [[Bitstamp]] || BTC BTC (Redeemable code) EUR (SEPA transfer) USD (Intl wire) USD (Redeemable code) CHF || BTC BTC (Redeemable code) EUR (SEPA transfer) USD (Intl wire) USD (Redeemable code) CHF || {{Table Value Yes}} || EUR and CHF deposits converted to/from USD for trading
|-
| [[Bitcoin-Central]] || BTC GBP (Bank transfer) EUR (SEPA) Liberty Reserve USD Liberty Reserve EUR International wire (any currency) || BTC GBP (Bank transfer) EUR (SEPA) Liberty Reserve USD Liberty Reserve EUR || {{Table Value Yes}} || [https://github.com/davout/bitcoin-central Open-source], community reviewed platform Available in French and English languages
|-
| [[FYB-SG]] || BTC SGD(Internet Bank Transfer) SGD (Annonymous Cash Deposit at any UOB Cash Deposit Machine in Singapore). || BTC SGD(Internet Bank Transfer) || {{Table Value Yes}} || <ul><li> Based in Singapore </li> </ul>
|-
| [[Rock Currency Exchange]] || BTC SLL (Second Life) USD ([[Dwolla]]) EUR (SEPA bank transfer) || BTC SLL (Second Life) USD ([[Dwolla]]) EUR (SEPA bank transfer) || {{Table Value Yes}} ||
|-
| [[bitNZ]] || BTC NZD (Cash deposit at Westpac) || BTC NZD (Domestic bank transfer) || {{Table Value Yes}} ||
|-
| [[Bitcoin-24]] || BTC USD ([[MtGox]] redeemable code) USD (VouchX redeemable code) USD (Credit card through LiqPay) USD (International bank wire) EUR ([[MtGox]] redeemable code) EUR (VouchX redeemable code) EUR (SEPA wire) EUR (Sofort banking/Sofortuberweisung) EUR (GIROPay) GBP (International bank wire, converted to EUR) PLN (International bank wire, converted to EUR) || BTC USD (Bank wire transfer) USD ([[Skrill]]/Moneybookers) USD (VouchX redeemable code) EUR (SEPA wire) EUR (VouchX redeemable code) EUR (Cash, via DHL) || {{Table Value Yes}} || <ul><li>Biggest Exchange in Europe</li><li>Instant registration and trading</li><li>Instant credit card deposits</li><li>Instant bank transfers from the EU</li><li>No trading fees for bitcoins</li><li>No restrictions and limits on withdrawals and deposits</li><li>Support chat</li><li>SMS notifications</li></ul>
|-
| [[Kapiton.se]] || BTC SEK (Bankgiro Bank Transfer) || BTC SEK (Bankgiro Bank Transfer) || {{Table Value Yes}} ||
|-
| [[Vircurex]] || BTC EUR (VouchX/AurumXchange redeemable code) USD (VouchX/AurumXchange redeemable code)|| BTC EUR (VouchX/AurumXchange redeemable code) USD (VouchX/AurumXchange redeemable code)|| {{Table Value Yes}} || Trading in many other P2P/Crypto currencies possible
|-
| [[Real Bitcoin]] || BTC INR (Transfer directly to your account) USD|| BTC INR USD || {{Table Value Yes}} || Trading, printing, exchange, interest on investment, transfer to local bank
|}

==Fixed Rate Exchanges & Others==

The following exchanges are either exchanges using a fixed rate based on other markets or are exchanges that enable you to redeem smaller amounts of bitcoins at reasonable rates:

* [[AurumXchange Company]] Exchange Bitcoins '''instantly''' to Perfect Money, Pecunix, C-Gold, VouchX, CosmicPay and more. Sell your Bitcoins and receive a USD Wire, or SEPA EUR transfer.
* [[AutoMtGox]] Convert your bitcoins to US Dollars automatically.
* [[Bahtcoin]] Trade BTC for Thai Baht, cash, LR, Webmoney, or Thai mobile and gaming prepaid cards.
* [[BTC China]] Market for exchanging bitcoins to and from CNY, withdraw CNY (Tencent, Alipay) and USD.
* [[BitBargain]] Market in the UK for buying bitcoins with GBP instantly from trusted OTC sellers through escrow.
* [[Bitcoil]] Exchange BTC for ILS with bank transfers in Israel
* [[Bitcoin Argentina]] Trades BTC for ARS. Cash and bank transfer. No exchange fees.
* [[Bitcoin Brasil]] Cash exchange that redeems bitcoins for BRL, USD.
* [[Bitcoin Nordic]] Sell bitcoins with withdrawal to PayPal or bank transfer.
* [http://BitcoinIsrael.co.il BitcoinIsrael.co.il] Get cash (ILS) for your Bitcoins within hours from any where in Israel.
* [[Bitcoiny.cz]] Trade your BTCs for CZK. No-escrow, direct person-to-person trading.
* [[bitcoin-otc]] IRC trading marketplace will usually have people willing to deal for small and larger amounts using various payment methods, including [[PayPal]], [[Dwolla]], [[Linden Dollars]], etc.
* [[Bitcoin.com.es]] Trade your BTCs for EUR (Bank transfer).
* [[bitcoin.de]] Trade your BTCs for EUR (bank wire, SEPA bank transfer, Money Bookers), person to person, eWallet
* [http://bitcoin.in.th/ Bitcoin in Thailand] Buy and Sell BTC in Thailand for cash via local bank deposits and transfers.
* [[bitcoin.local]] arranges for exchanging currencies in person with someone nearby
* [[Bitcoins In Berlin]] Trade your BTC for cash-in-the-mail (EUR), in-person trande, Western Union, Moneygram, bank transfer or SEPA.
* [[Bitcopia.com]] Bitcopia is currently restructuring itself to serve the community in an exciting new way. Stay tuned for updates.
* [[BitMarket.co]] Trade your BTCs for Colombian Peso (COP) as OTC with BTC Escrow.
* [[BitPiggy]] Trade your BTCs for AUD (Bank transfer).
* [http://bitquick.net BitQuick] Sell your Bitcoins for MoneyPaks (Cash USD). Use it to fund your PayPal account!
* [http://BTCInstant.com BTCinstant.com] Trade bitcoins for Virtual Credit Card (VCC, and specifically Virtual Mastercard brand) sent through e-mail.
* [[BlockChain.info]] Convert bitcoins to [[MoneyPak]] straight from your Blockchain wallet (serviced from [[BTCPak]]).
* [[btcbuy|BTC Buy]] Simple interface to trade your BTCs for Amazon, Barnes & Noble, NewEgg, ThinkGeek and Sears gift cards
* [http://www.BTCJoe.com BTCJoe.com] Trade bitcoins for Amazon gift codes and iTunes (USD).
* [[BTCPak]] EXCHANGE YOUR BITCOINS FOR MONEYPAK: SECURE, ANONYMOUS AND EASY!
* [[btcx.se]] / Btcx Sweden || 0% above 80 btc || SEK || Bank transfers to most Swedish banks within 4-12 hours.
* [[Canadian Bitcoins]] Buy/Sell Bitcoins in CAD and receive Cash, Cheque, Bank Transfer (TD Person Pay) or Interac.
* [[Cartão BitCoin]] Convert your bitcoins to reload your debit card (offered to Brazilians, accepted at 10,000 locations in Brazil)
* [[Coin2Pal]] Sell your Bitcoins and receive PayPal funds immediately.
* [[Coinabul]] Trade your BTCs for Gold/Silver
* [[Coinbase]] Sell bitcoins with proceeds delivered as a bank transfer (U.S., as ACH/direct deposit). Instant verification available for new accounts.
* [[ECurrencyZone]] Cash out bitcoins to INR, BDT, MYR, SGD via bank transfer or cash deposited to your bank account. Also to Western Union, Moneygram, Citibank global funds transfer, Paypal, Skrill/Moneybookers, Payza/AlertPay, OKPay. Convert to digital currencies C-Gold, Perfect Money, WebMoney and EGOPay.
* [[FastCash4Bitcoins]] Sell your BTC and receive cash today. Over 100,000 BTC bought. Payments issued using your choice of PayPal, Dwolla, ACH (Direct Deposit), Bank Wire, Company Check, Cashier's Check or Silver Bullion even.
* [http://www.happycoins.nl HappyCoins] Buy and sell Bitcoins in Euro using the Dutch iDEAL or European SEPA payment system. Fast and simple transactions with transparent fee and prices based on near real-time MtGox exchange price.
* [[Mang Sweeney]] Use bitcoins to send remittance payments to the Philippines, in-person cash out in metro Manilla or from various remittance centers. Languages: English, Filipino.
* [[Lilion Transfer]] Exchanges bitcoins for [[Pecunix]], [[AlertPay]], [[Skrill]]/Moneybookers, [[PayPal]], and more.
* [[Nanaimo Gold]] Redeem bitcoins for money transfer, money order or direct deposit within Canada.
* [[Spend Bitcoins]] Sell bitcoins for AUD (Australia). Redeem for bank transfer, AustPost reloadable VISA, bill payment and other various methods.
* [[Real Bitcoin]] Buy, Sell, trade, print, vanity address, interest on investment, transfer directly to your bank.
* [[WM-Center]] Buy/Sell BTCs with withdrawal to International bank wire (USD, GBP, EUR/IBAN, RUB, AUD), Western Union, Moneygram, Perfect Money USD/EUR, Pecunix, Paxum, c-gold, Hoopay, Anelik, Xoom, cash, etc. 24/7/365 support in English, Spanish and Russian.
* [http://jzn5w5pac26sqef4.onion.sh/ WeBuyBitcoins] Sell Bitcoins for ACH, PayPal, Cash In Mail, WU/MG.
* [http://localbitcoins.com LocalBitcoins.com] ([[LocalBitcoins|Info]]) Location-based bitcoin to cash exchange.
* [[OKPAY]] || Convert bitcoins from USD, EUR, GBP, RUB, CHF etc via bank wire transfer, USD, EUR via additional direct methods, USD, EUR via Migom, USD, EUR via Money Polo, USD, EUR via Intel Express, USD, EUR via Liqpay, USD, EUR, UAH via Wallet1, RUB via (Yandex Money) and USD via OKPAY Debit Card. Completely non-reversible payments. Support of 19 world currencies, 15 languages.
* [[Prime]] Licensed bitcoin exchange software with ETA in the late 2013. Claims to be developed in software craftsmanship spirit.
* [[Ecardone]] '''Fully licensed EU company''' exchanging Bitcoins to Payza, Bank Wire, SEPA EUR, Debit Cards. USD, EUR, GBP, CAD, CHF, SEK, AUD, CZK

==Goods and Services==

One way of selling bitcoins is to use them as the payment method when making purchases.

See the [[Trade]] page for a fairly comprehensive list of goods and service that bitcoins will purchase.

==See Also==

* [[:Category:Digital currencies|Digital currencies]]
* [[Buying bitcoins]]
* [[Secure Trading]]
* [[:Category:Local|Local]] exchanges

[[Category:Exchanges]]
[[Category:Introduction]]

Selling bitcoins

2013-06-01T04:32:10Z

Ontarioboy: /* Fixed Rate Exchanges & Others */ Liberty Reserve was shut down May 2013

There are various methods for selling bitcoins.

Warning: Please be careful with your money. When sending bitcoins to an exchange or other counterparty you are trusting that the counterparty will not abscond with your bitcoins and that the operator maintains secure systems that protect against theft -- internal or external. It is recommended that you obtain the real-world identity of the counterparty and ensure that sufficient recourse is available. Exchanging or storing significant funds with exchanges is not recommended.

==Market Exchanges==
The best rates for selling medium to large amounts of bitcoins generally when withdrawing from an exchange using a cash method such as a bank transfer (ACH, EUR/SEPA).

{| class="wikitable"
|-
| Exchange || Adding Funds || Withdrawing Funds || [[eWallet]] || Notes
|-
| [[File:BIPS.gif|20px|link=https://bips.me]] [https://bips.me BIPS] ([[BIPS|info]]) || BTC CAD (Cash deposits in Canada) Any Currency (Wire Transfer - Any Country) USD (Liberty Reserve) || Danish Domestic Transfer Any Currency (ACH / Direct Deposit) Any Currency (Wire Transfer - Any Country) USD (Mt.Gox) || {{ Table Value Yes }} || <ul><li>DK-based</li><li>[https://github.com/BitcoinInternetPaymentSystem BIPS GitHub]</li><li>[https://bips.me/connect/BitcoinInternetPaymentSystemAPI.pdf REST API]</li></ul>
|-
| [[BitBox]] || BTC USD (Wire Transfer - US) || BTC USD (Wire Transfer - US) || {{Table Value Yes}} || <ul><li>US-based</li><li>Two-factor Authentication</li><li>[http://inbitbox.github.io/rest/ BitBox REST API]</li><li>[https://github.com/inbitbox BitBox GitHub]</li></ul>
|-
| [[MtGox]] ||BTC BTC ([[Redeemable code]]) USD ([[Dwolla]]) USD (International bank wire) USD (Wire to [[AurumXChange Company|AurumXChange]]) AUD (Bank wire) GBP (Bank wire) GBP (Cash deposit, Barclays) USD (Redeemable code) Liberty Reserve USD (via AurumXChange) || BTC BTC (Redeemable code) USD ([[Dwolla]]) USD (Wire via [[AurumXChange Company|AurumXChange]]) AUD (Bank wire) USD (Redeemable code) Liberty Reserve USD (via AurumXChange) || {{Table Value Yes}} || Restrictions and limits on withdrawals.
|-
| [[VirWoX]] || BTC SLL (Second Life) ACD (Avination) OMC (OpenSim) USD,EUR,GBP,CHF ([[PayPal]]) USD,EUR,GBP (Credit & Debit cards via [[Skrill]]/Moneybookers) USD,EUR,GBP ([[NETELLER]]) EUR (DIRECTebanking / Sofortüberweisung) USD,EUR,GBP,CHF ([[paysafecard]]) EUR (SEPA bank transfer) || BTC SLL (Second Life) ACD (Avination) OMC (OpenSim) USD,EUR,GBP,CHF ([[PayPal]]) USD,EUR,GBP ([[Skrill]]/Moneybookers) USD,EUR,GBP ([[NETELLER]]) EUR (SEPA bank transfer) || {{Table Value Yes}} || Trading through Second Life Linden Dollars (highly liquid). Variable limits on PayPal and Credit Card deposits.
|-
| [[Intersango]]([[Britcoin]]) || BTC GBP (bank deposit) EUR (SEPA bank deposit) PLN (bank transfer) || BTC GBP (bank deposit) EUR (SEPA bank transfer) PLN (bank transfer) || {{Table Value Yes}} ||
|-
| [[BTC-E]] || BTC BTC (BTC-e redeemable code) USD (Cash deposit at Post of Russia) USD (Cash deposit at banks including Privatbank, Savings Bank of Russia (Sberbank), RU/UA Terminals, & more) USD ([[Liberty Reserve]]) USD (Interkassa) USD (WebMoney - WMZ) USD (Yandex) USD (LiqPay) USD (Perfect Money) USD (QIWI) USD (OKPay) USD (RBK Money) USD (Ditial currencies including НСМЭП (NSMEP), Единый Кошелек (Unified Purse), TeleMoney, & more) USD (BTC-e Redeemable Code, available via BitInstant and AurumXChange) USD (International bank wire) EUR (SEPA bank transfer) RUB (QIWI) RUB (LiqPay) RUB (WebMoney-WMR) RUB (BTC-e Redeemable code) RUB (Bank transfer) || BTC BTC (BTC-e redeemble code) USD (Liberty Reserve) USD (Webmoney - WMZ) USD (Perfect Money) USD (LiqPay) USD (QIWI) USD (PayPal) USD (OKPay) USD (Payza/AlertPay) USD (Privat, Privat UAH) USD (Cash deposit into Savings Bank/Sberbank, Telebank, Alfa Bank) USD (BTC-e Redeemable Code) USD (International Wire Transfer) EUR (SEPA bank transfer) RUB (Cash delivery, possible in Moscow) RUB (QIWI) RUB (LiqPay) RUB (WebMoney WMR) RUB (Яндекс.Деньги Yandex) RUB (RBK Money) Cash deposit (into account at Сбербанка России!/Savings Bank/Sberbank, Телебанк (Telebank), and АльфаБанк (Alfa Bank) RUB (Transfer to credit card VISA & MasterCard) RUB (BTC-e Redeemable code) RUB (Bank transfer) || {{Table Value Yes}} || Language: English, Russian.
|-
| [[VirtEx]] || BTC CAD (cash deposit at BMO Bank of Montreal) CAD (Online bill payment) CAD (Wire transfer) || BTC CAD (direct deposit) CAD (Canada Xpress Post Bank Draft send by mail) CAD Payza (formerly AlertPay) || {{Table Value Yes}} ||
|-
| [[Camp BX]] (CBX) || BTC USD ([[Dwolla]]) USD (P2P bank transfer at Chase, B of A, Wells Fargo and ING. Credited after three business days). USD (Personal Check) USD (USPS Postal money order, Canada Post money order) || BTC USD ([[Dwolla]]) USD (ACH Direct Deposit) USD (USPS Postal Money Order) USD (Domestic bank wire) USD (International bank wire) || {{Table Value Yes}} || <ul> <li> Security certification from McAfee</li><li> Advanced trading options with AON/FOK/Market</li> <li>STOPLOSS and Short-Selling in Pipeline</li><li> Trading API available</li><li> Wallet API available </li><li> CBX Instant Bitcoin Transfers Feature </li><li> Stoploss / Custom Order Expiry Date/Time </li><li> SMS (Text Message) Notifications </li> <li> Two-Factor Authentication </li> <li> Based in USA - Atlanta </li> </ul>
|-
| [[Bitstamp]] || BTC BTC (Redeemable code) EUR (SEPA transfer) USD (Intl wire) USD (Redeemable code) CHF || BTC BTC (Redeemable code) EUR (SEPA transfer) USD (Intl wire) USD (Redeemable code) CHF || {{Table Value Yes}} || EUR and CHF deposits converted to/from USD for trading
|-
| [[Bitcoin-Central]] || BTC GBP (Bank transfer) EUR (SEPA) Liberty Reserve USD Liberty Reserve EUR International wire (any currency) || BTC GBP (Bank transfer) EUR (SEPA) Liberty Reserve USD Liberty Reserve EUR || {{Table Value Yes}} || [https://github.com/davout/bitcoin-central Open-source], community reviewed platform Available in French and English languages
|-
| [[FYB-SG]] || BTC SGD(Internet Bank Transfer) SGD (Annonymous Cash Deposit at any UOB Cash Deposit Machine in Singapore). || BTC SGD(Internet Bank Transfer) || {{Table Value Yes}} || <ul><li> Based in Singapore </li> </ul>
|-
| [[Rock Currency Exchange]] || BTC SLL (Second Life) USD ([[Dwolla]]) EUR (SEPA bank transfer) || BTC SLL (Second Life) USD ([[Dwolla]]) EUR (SEPA bank transfer) || {{Table Value Yes}} ||
|-
| [[bitNZ]] || BTC NZD (Cash deposit at Westpac) || BTC NZD (Domestic bank transfer) || {{Table Value Yes}} ||
|-
| [[Bitcoin-24]] || BTC USD ([[MtGox]] redeemable code) USD (VouchX redeemable code) USD (Credit card through LiqPay) USD (International bank wire) EUR ([[MtGox]] redeemable code) EUR (VouchX redeemable code) EUR (SEPA wire) EUR (Sofort banking/Sofortuberweisung) EUR (GIROPay) GBP (International bank wire, converted to EUR) PLN (International bank wire, converted to EUR) || BTC USD (Bank wire transfer) USD ([[Skrill]]/Moneybookers) USD (VouchX redeemable code) EUR (SEPA wire) EUR (VouchX redeemable code) EUR (Cash, via DHL) || {{Table Value Yes}} || <ul><li>Biggest Exchange in Europe</li><li>Instant registration and trading</li><li>Instant credit card deposits</li><li>Instant bank transfers from the EU</li><li>No trading fees for bitcoins</li><li>No restrictions and limits on withdrawals and deposits</li><li>Support chat</li><li>SMS notifications</li></ul>
|-
| [[Kapiton.se]] || BTC SEK (Bankgiro Bank Transfer) || BTC SEK (Bankgiro Bank Transfer) || {{Table Value Yes}} ||
|-
| [[Vircurex]] || BTC EUR (VouchX/AurumXchange redeemable code) USD (VouchX/AurumXchange redeemable code)|| BTC EUR (VouchX/AurumXchange redeemable code) USD (VouchX/AurumXchange redeemable code)|| {{Table Value Yes}} || Trading in many other P2P/Crypto currencies possible
|-
| [[Real Bitcoin]] || BTC INR (Transfer directly to your account) USD|| BTC INR USD || {{Table Value Yes}} || Trading, printing, exchange, interest on investment, transfer to local bank
|}

==Fixed Rate Exchanges & Others==

The following exchanges are either exchanges using a fixed rate based on other markets or are exchanges that enable you to redeem smaller amounts of bitcoins at reasonable rates:

* [[AurumXchange Company]] Exchange Bitcoins '''instantly''' to Perfect Money, Pecunix, C-Gold, VouchX, CosmicPay and more. Sell your Bitcoins and receive a USD Wire, or SEPA EUR transfer.
* [[AutoMtGox]] Convert your bitcoins to US Dollars automatically.
* [[Bahtcoin]] Trade BTC for Thai Baht, cash, LR, Webmoney, or Thai mobile and gaming prepaid cards.
* [[BTC China]] - Market for exchanging bitcoins to and from CNY, withdraw CNY (Tencent, Alipay) and USD (Liberty Reserve).
* [[BitBargain]] - Market in the UK for buying bitcoins with GBP instantly from trusted OTC sellers through escrow.
* [[Bitcoil]] Exchange BTC for ILS with bank transfers in Israel
* [[Bitcoin Argentina]] Trades BTC for ARS. Cash and bank transfer. No exchange fees.
* [[Bitcoin Brasil]] Cash exchange that redeems bitcoins for BRL, USD.
* [[Bitcoin Nordic]] Sell bitcoins with withdrawal to PayPal or bank transfer.
* [http://BitcoinIsrael.co.il BitcoinIsrael.co.il] Get cash (ILS) for your Bitcoins within hours from any where in Israel.
* [[Bitcoiny.cz]] Trade your BTCs for CZK. No-escrow, direct person-to-person trading.
* [[bitcoin-otc]] IRC trading marketplace will usually have people willing to deal for small and larger amounts using various payment methods, including [[PayPal]], [[Dwolla]], [[Linden Dollars]], etc.
* [[Bitcoin.com.es]] Trade your BTCs for EUR (Bank transfer).
* [[bitcoin.de]] Trade your BTCs for EUR (bank wire, SEPA bank transfer, Liberty Reserve, Money Bookers), person to person, eWallet
* [http://bitcoin.in.th/ Bitcoin in Thailand] Buy and Sell BTC in Thailand for cash via local bank deposits and transfers.
* [[bitcoin.local]] arranges for exchanging currencies in person with someone nearby
* [[Bitcoins In Berlin]] Trade your BTC for cash-in-the-mail (EUR), in-person trande, Western Union, Moneygram, bank transfer or SEPA.
* [[Bitcopia.com]] Bitcopia is currently restructuring itself to serve the community in an exciting new way. Stay tuned for updates.
* [[BitMarket.co]] Trade your BTCs for Colombian Peso (COP) as OTC with BTC Escrow.
* [[BitPiggy]] Trade your BTCs for AUD (Bank transfer).
* [http://bitquick.net BitQuick] Sell your Bitcoins for MoneyPaks (Cash USD). Use it to fund your paypal account!
* [http://BTCInstant.com BTCinstant.com] Trade bitcoins for Virtual Credit Card (VCC, and specifically Virtual Mastercard brand) sent through e-mail.
* [[BlockChain.info]] Convert bitcoins to [[MoneyPak]] straight from your Blockchain wallet (serviced from [[BTCPak]]).
* [[btcbuy|BTC Buy]] Simple interface to trade your BTCs for Amazon, Barnes & Noble, NewEgg, ThinkGeek and Sears gift cards
* [http://www.BTCJoe.com BTCJoe.com] Trade bitcoins for Amazon gift codes and iTunes (USD).
* [[BTCPak]] EXCHANGE YOUR BITCOINS FOR MONEYPAK: SECURE, ANONYMOUS AND EASY!
* [[btcx.se]] / Btcx Sweden || 0% above 80 btc || SEK || Bank transfers to most Swedish banks within 4-12 hours.
* [[Canadian Bitcoins]] Buy/Sell Bitcoins in CAD and receive Cash, Cheque, Bank Transfer (TD Person Pay) or Interac.
* [[Cartão BitCoin]] Convert your bitcoins to reload your debit card (offered to Brazilians, accepted at 10,000 locations in Brazil)
* [[Coin2Pal]] Sell your Bitcoins and receive PayPal funds immediately.
* [[Coinabul]] Trade your BTCs for Gold/Silver
* [[Coinbase]] Sell bitcoins with proceeds delivered as a bank transfer (U.S., as ACH/direct deposit). Instant verification available for new accounts.
* [[ECurrencyZone]] Cash out bitcoins to INR, BDT, MYR, SGD via bank transfer or cash deposited to your bank account. Also to Western Union, Moneygram, Citibank global funds transfer, Paypal, Skrill/Moneybookers, Payza/AlertPay, OKPay. Convert to digital currencies Liberty Reserve, C-Gold, Perfect Money, WebMoney and EGOPay.
* [[FastCash4Bitcoins]] Sell your BTC and receive cash today. Over 100,000 BTC bought. Payments issued using your choice of PayPal, Dwolla, ACH (Direct Deposit), Bank Wire, Company Check, Cashier's Check or Silver Bullion even.
* [http://www.happycoins.nl HappyCoins] Buy and sell Bitcoins in Euro using the Dutch iDEAL or European SEPA payment system. Fast and simple transactions with transparent fee and prices based on near real-time MtGox exchange price.
* [[Mang Sweeney]] Use bitcoins to send remittance payments to the Philippines, in-person cash out in metro Manilla or from various remittance centers. Languages: English, Filipino.
* [[Lilion Transfer]] Exchanges bitcoins for Liberty Reserve, [[Pecunix]], [[AlertPay]], [[Skrill]]/Moneybookers, [[PayPal]], and more.
* [[Nanaimo Gold]] Redeem bitcoins for Liberty Reserve (automated) or for money transfer, money order or direct deposit within Canada.
* [[Spend Bitcoins]] Sell bitcoins for AUD (Australia). Redeem for bank transfer, AustPost reloadable VISA, bill payment and other various methods.
* [[Real Bitcoin]] Buy, Sell, trade, print, vanity address, interest on investment, transfer directly to your bank.
* [[WM-Center]] Buy/Sell BTCs with withdrawal to International bank wire (USD, GBP, EUR/IBAN, RUB, AUD), Western Union, Moneygram, Liberty Reserve USD/EUR, Perfect Money USD/EUR, Pecunix, Paxum, c-gold, Hoopay, Anelik, Xoom, cash, etc. 24/7/365 support in english, spanish and russian.
* [http://jzn5w5pac26sqef4.onion.sh/ WeBuyBitcoins] Sell Bitcoins for ACH, PayPal, Cash In Mail, WU/MG and Liberty Reserve.
* [http://localbitcoins.com LocalBitcoins.com] ([[LocalBitcoins|Info]]) Location-based bitcoin to cash exchange.
* [[OKPAY]] || Convert bitcoins from USD, EUR, GBP, RUB, CHF etc via Bank Wire Transfer, USD, EUR via additional direct methods, USD, EUR via Migom, USD, EUR via Money Polo, USD, EUR via Intel Express, USD, EUR via Liqpay, USD, EUR, UAH via Wallet1, RUB via (Yandex Money), and USD via OKPAY Debit Card. Completely non-reversible payments. Support of 19 world currencies, 15 languages.
* [[Prime]] Licensed bitcoin exchange software with ETA in the late 2013. Claims to be developed in software craftsmanship spirit.
* [[Ecardone]] '''Fully licensed EU company''' exchanging Bitcoins to Liberty Reserve, Payza, Bank Wire, SEPA EUR, Debit Cards. USD, EUR, GBP, CAD, CHF, SEK, AUD, CZK

==Goods and Services==

One way of selling bitcoins is to use them as the payment method when making purchases.

See the [[Trade]] page for a fairly comprehensive list of goods and service that bitcoins will purchase.

==See Also==

* [[:Category:Digital currencies|Digital currencies]]
* [[Buying bitcoins]]
* [[Secure Trading]]
* [[:Category:Local|Local]] exchanges

[[Category:Exchanges]]
[[Category:Introduction]]

Selling bitcoins

2013-06-01T04:30:14Z

Ontarioboy: Virtex no longer has a Bank of Nova Scotia account since May 2013

There are various methods for selling bitcoins.

Warning: Please be careful with your money. When sending bitcoins to an exchange or other counterparty you are trusting that the counterparty will not abscond with your bitcoins and that the operator maintains secure systems that protect against theft -- internal or external. It is recommended that you obtain the real-world identity of the counterparty and ensure that sufficient recourse is available. Exchanging or storing significant funds with exchanges is not recommended.

==Market Exchanges==
The best rates for selling medium to large amounts of bitcoins generally when withdrawing from an exchange using a cash method such as a bank transfer (ACH, EUR/SEPA).

{| class="wikitable"
|-
| Exchange || Adding Funds || Withdrawing Funds || [[eWallet]] || Notes
|-
| [[File:BIPS.gif|20px|link=https://bips.me]] [https://bips.me BIPS] ([[BIPS|info]]) || BTC CAD (Cash deposits in Canada) Any Currency (Wire Transfer - Any Country) USD (Liberty Reserve) || Danish Domestic Transfer Any Currency (ACH / Direct Deposit) Any Currency (Wire Transfer - Any Country) USD (Mt.Gox) || {{ Table Value Yes }} || <ul><li>DK-based</li><li>[https://github.com/BitcoinInternetPaymentSystem BIPS GitHub]</li><li>[https://bips.me/connect/BitcoinInternetPaymentSystemAPI.pdf REST API]</li></ul>
|-
| [[BitBox]] || BTC USD (Wire Transfer - US) || BTC USD (Wire Transfer - US) || {{Table Value Yes}} || <ul><li>US-based</li><li>Two-factor Authentication</li><li>[http://inbitbox.github.io/rest/ BitBox REST API]</li><li>[https://github.com/inbitbox BitBox GitHub]</li></ul>
|-
| [[MtGox]] ||BTC BTC ([[Redeemable code]]) USD ([[Dwolla]]) USD (International bank wire) USD (Wire to [[AurumXChange Company|AurumXChange]]) AUD (Bank wire) GBP (Bank wire) GBP (Cash deposit, Barclays) USD (Redeemable code) Liberty Reserve USD (via AurumXChange) || BTC BTC (Redeemable code) USD ([[Dwolla]]) USD (Wire via [[AurumXChange Company|AurumXChange]]) AUD (Bank wire) USD (Redeemable code) Liberty Reserve USD (via AurumXChange) || {{Table Value Yes}} || Restrictions and limits on withdrawals.
|-
| [[VirWoX]] || BTC SLL (Second Life) ACD (Avination) OMC (OpenSim) USD,EUR,GBP,CHF ([[PayPal]]) USD,EUR,GBP (Credit & Debit cards via [[Skrill]]/Moneybookers) USD,EUR,GBP ([[NETELLER]]) EUR (DIRECTebanking / Sofortüberweisung) USD,EUR,GBP,CHF ([[paysafecard]]) EUR (SEPA bank transfer) || BTC SLL (Second Life) ACD (Avination) OMC (OpenSim) USD,EUR,GBP,CHF ([[PayPal]]) USD,EUR,GBP ([[Skrill]]/Moneybookers) USD,EUR,GBP ([[NETELLER]]) EUR (SEPA bank transfer) || {{Table Value Yes}} || Trading through Second Life Linden Dollars (highly liquid). Variable limits on PayPal and Credit Card deposits.
|-
| [[Intersango]]([[Britcoin]]) || BTC GBP (bank deposit) EUR (SEPA bank deposit) PLN (bank transfer) || BTC GBP (bank deposit) EUR (SEPA bank transfer) PLN (bank transfer) || {{Table Value Yes}} ||
|-
| [[BTC-E]] || BTC BTC (BTC-e redeemable code) USD (Cash deposit at Post of Russia) USD (Cash deposit at banks including Privatbank, Savings Bank of Russia (Sberbank), RU/UA Terminals, & more) USD ([[Liberty Reserve]]) USD (Interkassa) USD (WebMoney - WMZ) USD (Yandex) USD (LiqPay) USD (Perfect Money) USD (QIWI) USD (OKPay) USD (RBK Money) USD (Ditial currencies including НСМЭП (NSMEP), Единый Кошелек (Unified Purse), TeleMoney, & more) USD (BTC-e Redeemable Code, available via BitInstant and AurumXChange) USD (International bank wire) EUR (SEPA bank transfer) RUB (QIWI) RUB (LiqPay) RUB (WebMoney-WMR) RUB (BTC-e Redeemable code) RUB (Bank transfer) || BTC BTC (BTC-e redeemble code) USD (Liberty Reserve) USD (Webmoney - WMZ) USD (Perfect Money) USD (LiqPay) USD (QIWI) USD (PayPal) USD (OKPay) USD (Payza/AlertPay) USD (Privat, Privat UAH) USD (Cash deposit into Savings Bank/Sberbank, Telebank, Alfa Bank) USD (BTC-e Redeemable Code) USD (International Wire Transfer) EUR (SEPA bank transfer) RUB (Cash delivery, possible in Moscow) RUB (QIWI) RUB (LiqPay) RUB (WebMoney WMR) RUB (Яндекс.Деньги Yandex) RUB (RBK Money) Cash deposit (into account at Сбербанка России!/Savings Bank/Sberbank, Телебанк (Telebank), and АльфаБанк (Alfa Bank) RUB (Transfer to credit card VISA & MasterCard) RUB (BTC-e Redeemable code) RUB (Bank transfer) || {{Table Value Yes}} || Language: English, Russian.
|-
| [[VirtEx]] || BTC CAD (cash deposit at BMO Bank of Montreal) CAD (Online bill payment) CAD (Wire transfer) || BTC CAD (direct deposit) CAD (Canada Xpress Post Bank Draft send by mail) CAD Payza (formerly AlertPay) || {{Table Value Yes}} ||
|-
| [[Camp BX]] (CBX) || BTC USD ([[Dwolla]]) USD (P2P bank transfer at Chase, B of A, Wells Fargo and ING. Credited after three business days). USD (Personal Check) USD (USPS Postal money order, Canada Post money order) || BTC USD ([[Dwolla]]) USD (ACH Direct Deposit) USD (USPS Postal Money Order) USD (Domestic bank wire) USD (International bank wire) || {{Table Value Yes}} || <ul> <li> Security certification from McAfee</li><li> Advanced trading options with AON/FOK/Market</li> <li>STOPLOSS and Short-Selling in Pipeline</li><li> Trading API available</li><li> Wallet API available </li><li> CBX Instant Bitcoin Transfers Feature </li><li> Stoploss / Custom Order Expiry Date/Time </li><li> SMS (Text Message) Notifications </li> <li> Two-Factor Authentication </li> <li> Based in USA - Atlanta </li> </ul>
|-
| [[Bitstamp]] || BTC BTC (Redeemable code) EUR (SEPA transfer) USD (Intl wire) USD (Redeemable code) CHF || BTC BTC (Redeemable code) EUR (SEPA transfer) USD (Intl wire) USD (Redeemable code) CHF || {{Table Value Yes}} || EUR and CHF deposits converted to/from USD for trading
|-
| [[Bitcoin-Central]] || BTC GBP (Bank transfer) EUR (SEPA) Liberty Reserve USD Liberty Reserve EUR International wire (any currency) || BTC GBP (Bank transfer) EUR (SEPA) Liberty Reserve USD Liberty Reserve EUR || {{Table Value Yes}} || [https://github.com/davout/bitcoin-central Open-source], community reviewed platform Available in French and English languages
|-
| [[FYB-SG]] || BTC SGD(Internet Bank Transfer) SGD (Annonymous Cash Deposit at any UOB Cash Deposit Machine in Singapore). || BTC SGD(Internet Bank Transfer) || {{Table Value Yes}} || <ul><li> Based in Singapore </li> </ul>
|-
| [[Rock Currency Exchange]] || BTC SLL (Second Life) USD ([[Dwolla]]) EUR (SEPA bank transfer) || BTC SLL (Second Life) USD ([[Dwolla]]) EUR (SEPA bank transfer) || {{Table Value Yes}} ||
|-
| [[bitNZ]] || BTC NZD (Cash deposit at Westpac) || BTC NZD (Domestic bank transfer) || {{Table Value Yes}} ||
|-
| [[Bitcoin-24]] || BTC USD ([[MtGox]] redeemable code) USD (VouchX redeemable code) USD (Credit card through LiqPay) USD (International bank wire) EUR ([[MtGox]] redeemable code) EUR (VouchX redeemable code) EUR (SEPA wire) EUR (Sofort banking/Sofortuberweisung) EUR (GIROPay) GBP (International bank wire, converted to EUR) PLN (International bank wire, converted to EUR) || BTC USD (Bank wire transfer) USD ([[Skrill]]/Moneybookers) USD (VouchX redeemable code) EUR (SEPA wire) EUR (VouchX redeemable code) EUR (Cash, via DHL) || {{Table Value Yes}} || <ul><li>Biggest Exchange in Europe</li><li>Instant registration and trading</li><li>Instant credit card deposits</li><li>Instant bank transfers from the EU</li><li>No trading fees for bitcoins</li><li>No restrictions and limits on withdrawals and deposits</li><li>Support chat</li><li>SMS notifications</li></ul>
|-
| [[Kapiton.se]] || BTC SEK (Bankgiro Bank Transfer) || BTC SEK (Bankgiro Bank Transfer) || {{Table Value Yes}} ||
|-
| [[Vircurex]] || BTC EUR (VouchX/AurumXchange redeemable code) USD (VouchX/AurumXchange redeemable code)|| BTC EUR (VouchX/AurumXchange redeemable code) USD (VouchX/AurumXchange redeemable code)|| {{Table Value Yes}} || Trading in many other P2P/Crypto currencies possible
|-
| [[Real Bitcoin]] || BTC INR (Transfer directly to your account) USD|| BTC INR USD || {{Table Value Yes}} || Trading, printing, exchange, interest on investment, transfer to local bank
|}

==Fixed Rate Exchanges & Others==

The following exchanges are either exchanges using a fixed rate based on other markets or are exchanges that enable you to redeem smaller amounts of bitcoins at reasonable rates:

* [[AurumXchange Company]] Exchange Bitcoins '''instantly''' to Liberty Reserve, Perfect Money, Pecunix, C-Gold, VouchX, CosmicPay and more. Sell your Bitcoins and receive a USD Wire, or SEPA EUR transfer.
* [[AutoMtGox]] Convert your bitcoins to US Dollars automatically.
* [[Bahtcoin]] Trade BTC for Thai Baht, cash, LR, Webmoney, or Thai mobile and gaming prepaid cards.
* [[BTC China]] - Market for exchanging bitcoins to and from CNY, withdraw CNY (Tencent, Alipay) and USD (Liberty Reserve).
* [[BitBargain]] - Market in the UK for buying bitcoins with GBP instantly from trusted OTC sellers through escrow.
* [[Bitcoil]] Exchange BTC for ILS with bank transfers in Israel
* [[Bitcoin Argentina]] Trades BTC for ARS. Cash and bank transfer. No exchange fees.
* [[Bitcoin Brasil]] Cash exchange that redeems bitcoins for BRL, USD.
* [[Bitcoin Nordic]] Sell bitcoins with withdrawal to PayPal or bank transfer.
* [http://BitcoinIsrael.co.il BitcoinIsrael.co.il] Get cash (ILS) for your Bitcoins within hours from any where in Israel.
* [[Bitcoiny.cz]] Trade your BTCs for CZK. No-escrow, direct person-to-person trading.
* [[bitcoin-otc]] IRC trading marketplace will usually have people willing to deal for small and larger amounts using various payment methods, including [[PayPal]], [[Dwolla]], [[Linden Dollars]], etc.
* [[Bitcoin.com.es]] Trade your BTCs for EUR (Bank transfer).
* [[bitcoin.de]] Trade your BTCs for EUR (bank wire, SEPA bank transfer, Liberty Reserve, Money Bookers), person to person, eWallet
* [http://bitcoin.in.th/ Bitcoin in Thailand] Buy and Sell BTC in Thailand for cash via local bank deposits and transfers.
* [[bitcoin.local]] arranges for exchanging currencies in person with someone nearby
* [[Bitcoins In Berlin]] Trade your BTC for cash-in-the-mail (EUR), in-person trande, Western Union, Moneygram, bank transfer or SEPA.
* [[Bitcopia.com]] Bitcopia is currently restructuring itself to serve the community in an exciting new way. Stay tuned for updates.
* [[BitMarket.co]] Trade your BTCs for Colombian Peso (COP) as OTC with BTC Escrow.
* [[BitPiggy]] Trade your BTCs for AUD (Bank transfer).
* [http://bitquick.net BitQuick] Sell your Bitcoins for MoneyPaks (Cash USD). Use it to fund your paypal account!
* [http://BTCInstant.com BTCinstant.com] Trade bitcoins for Virtual Credit Card (VCC, and specifically Virtual Mastercard brand) sent through e-mail.
* [[BlockChain.info]] Convert bitcoins to [[MoneyPak]] straight from your Blockchain wallet (serviced from [[BTCPak]]).
* [[btcbuy|BTC Buy]] Simple interface to trade your BTCs for Amazon, Barnes & Noble, NewEgg, ThinkGeek and Sears gift cards
* [http://www.BTCJoe.com BTCJoe.com] Trade bitcoins for Amazon gift codes and iTunes (USD).
* [[BTCPak]] EXCHANGE YOUR BITCOINS FOR MONEYPAK: SECURE, ANONYMOUS AND EASY!
* [[btcx.se]] / Btcx Sweden || 0% above 80 btc || SEK || Bank transfers to most Swedish banks within 4-12 hours.
* [[Canadian Bitcoins]] Buy/Sell Bitcoins in CAD and receive Cash, Cheque, Bank Transfer (TD Person Pay) or Interac.
* [[Cartão BitCoin]] Convert your bitcoins to reload your debit card (offered to Brazilians, accepted at 10,000 locations in Brazil)
* [[Coin2Pal]] Sell your Bitcoins and receive PayPal funds immediately.
* [[Coinabul]] Trade your BTCs for Gold/Silver
* [[Coinbase]] Sell bitcoins with proceeds delivered as a bank transfer (U.S., as ACH/direct deposit). Instant verification available for new accounts.
* [[ECurrencyZone]] Cash out bitcoins to INR, BDT, MYR, SGD via bank transfer or cash deposited to your bank account. Also to Western Union, Moneygram, Citibank global funds transfer, Paypal, Skrill/Moneybookers, Payza/AlertPay, OKPay. Convert to digital currencies Liberty Reserve, C-Gold, Perfect Money, WebMoney and EGOPay.
* [[FastCash4Bitcoins]] Sell your BTC and receive cash today. Over 100,000 BTC bought. Payments issued using your choice of PayPal, Dwolla, ACH (Direct Deposit), Bank Wire, Company Check, Cashier's Check or Silver Bullion even.
* [http://www.happycoins.nl HappyCoins] Buy and sell Bitcoins in Euro using the Dutch iDEAL or European SEPA payment system. Fast and simple transactions with transparent fee and prices based on near real-time MtGox exchange price.
* [[Mang Sweeney]] Use bitcoins to send remittance payments to the Philippines, in-person cash out in metro Manilla or from various remittance centers. Languages: English, Filipino.
* [[Lilion Transfer]] Exchanges bitcoins for Liberty Reserve, [[Pecunix]], [[AlertPay]], [[Skrill]]/Moneybookers, [[PayPal]], and more.
* [[Nanaimo Gold]] Redeem bitcoins for Liberty Reserve (automated) or for money transfer, money order or direct deposit within Canada.
* [[Spend Bitcoins]] Sell bitcoins for AUD (Australia). Redeem for bank transfer, AustPost reloadable VISA, bill payment and other various methods.
* [[Real Bitcoin]] Buy, Sell, trade, print, vanity address, interest on investment, transfer directly to your bank.
* [[WM-Center]] Buy/Sell BTCs with withdrawal to International bank wire (USD, GBP, EUR/IBAN, RUB, AUD), Western Union, Moneygram, Liberty Reserve USD/EUR, Perfect Money USD/EUR, Pecunix, Paxum, c-gold, Hoopay, Anelik, Xoom, cash, etc. 24/7/365 support in english, spanish and russian.
* [http://jzn5w5pac26sqef4.onion.sh/ WeBuyBitcoins] Sell Bitcoins for ACH, PayPal, Cash In Mail, WU/MG and Liberty Reserve.
* [http://localbitcoins.com LocalBitcoins.com] ([[LocalBitcoins|Info]]) Location-based bitcoin to cash exchange.
* [[OKPAY]] || Convert bitcoins from USD, EUR, GBP, RUB, CHF etc via Bank Wire Transfer, USD, EUR via additional direct methods, USD, EUR via Migom, USD, EUR via Money Polo, USD, EUR via Intel Express, USD, EUR via Liqpay, USD, EUR, UAH via Wallet1, RUB via (Yandex Money), and USD via OKPAY Debit Card. Completely non-reversible payments. Support of 19 world currencies, 15 languages.
* [[Prime]] Licensed bitcoin exchange software with ETA in the late 2013. Claims to be developed in software craftsmanship spirit.
* [[Ecardone]] '''Fully licensed EU company''' exchanging Bitcoins to Liberty Reserve, Payza, Bank Wire, SEPA EUR, Debit Cards. USD, EUR, GBP, CAD, CHF, SEK, AUD, CZK

==Goods and Services==

One way of selling bitcoins is to use them as the payment method when making purchases.

See the [[Trade]] page for a fairly comprehensive list of goods and service that bitcoins will purchase.

==See Also==

* [[:Category:Digital currencies|Digital currencies]]
* [[Buying bitcoins]]
* [[Secure Trading]]
* [[:Category:Local|Local]] exchanges

[[Category:Exchanges]]
[[Category:Introduction]]