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      "body": "<html>\n<p>&nbsp;Like any financial system, Bitcoin represents an attractive target for thieves and hackers. Any organization that accepts or sends significant volumes of money must, therefore, ensure they can&nbsp;<strong>secure their online service</strong>&nbsp;against these risks. This page details some best practices for merchants and other organizations, along with avenues for future research. It is&nbsp;<em>not</em>&nbsp;about securing your personal wallet.&nbsp;</p>\n<p><img src=\"https://cryptonomad.info/wp-content/uploads/2019/09/security-265130_1280-1024x682.jpg\" width=\"1024\" height=\"682\"/></p>\n<p>&nbsp;</p>\n<h2><strong>Traditional payment risks</strong></h2>\n<p>Any time you accept payments online, you must deal with risk. This is true both of Bitcoin and credit cards, but the risks and responses to those risks are different. Let’s recap the risks involved with traditional payment networks so we can compare them with Bitcoin.</p>\n<h3><strong>Risks involved with accepting credit card payments online</strong></h3>\n<p>To accept credit card payments online, you must perform the following tasks:</p>\n<ol>\n  <li>Obtain a merchant account with a bank</li>\n  <li>Build a database and online ordering system that can store credit card details</li>\n  <li>Ensure it is secured to the level specified by the PCI DSS (Payment Card Industry Data Security Standards)</li>\n  <li>Handle inspections by PCI auditors</li>\n  <li>Be prepared to handle chargebacks, potentially large volumes of them depending on the type of business</li>\n</ol>\n<p>A&nbsp;<em>chargeback</em>&nbsp;occurs when the owner of a credit card disputes a transaction, typically because either they believe you did not deliver satisfactorily, or because the card details were stolen and used by a card fraudster. If a chargeback occurs, the credit card company will take back the money and also fine you. If too many of your transactions result in chargebacks, you will lose the ability to accept credit card transactions and most likely your online business with it.As you may have noticed, whilst happy customers are somewhat under your control in aggregate, you have no control over how many credit card numbers are stolen. For this reason, credit-card accepting merchants typically have large and sophisticated fraud control measures in place, involving dedicated risk operations staff, machine learning, JavaScript browser fingerprinting and so on. The goal being to spot repeat fraudsters and deny their transactions. Too many false positives and legitimate customers who want to pay for your product cannot, limiting your market. Too many false negatives and you can lose significant money to chargebacks, which may arrive weeks or months after the product or service has been delivered.Unsurprisingly, many merchants choose to outsource this arduous process to a third party payment gateway like&nbsp;PayPal, Google Checkout and so on or a third party fraud prevention like FraudLabs Pro, Signifyd and so on. However, all these services add their own policies, fees and often do not provide any guarantees of chargeback protection.</p>\n<h3><strong>Risks involved in online banking</strong></h3>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/09/safe-913452_640.jpg\" width=\"640\" height=\"556\"/></p>\n<p>&nbsp;Storing money in an internet-accessible bank account is convenient, but how safe it depends very heavily on the type and quality of security measures put in place by your bank. A good online banking system looks like this:</p>\n<ol>\n  <li>To log in, it requires you to input a code into a dedicated hardware device and then type back the response.</li>\n  <li>To wire money, it requires you to input a fragment of the destination account number into a dedicated hardware device and then type back the response. Typically this is only required the first time you send money to an account. After that repeat transactions will be considered OK.</li>\n  <li>It uses SSL.</li>\n  <li>The bank will not issue new hardware or other credentials based purely on a phone conversation and a few personal trivia checks.</li>\n  <li>The bank may also perform a manual inspection of unusual transactions and call you to verify them.</li>\n</ol>\n<p>With such a setup the rates of fraudulent bank wires are low and so bank transfers tend to be hard to reverse, so merchants are also protected. This setup describes many banks around the world, especially in the European SEPA zone. Unfortunately some banks, particularly American banks, often look like this:</p>\n<ol>\n  <li>To log in you have to provide a password and something vaguely password-ish like a secret question</li>\n  <li>There are no dedicated hardware devices used</li>\n  <li>Security may be entirely heuristic</li>\n  <li>Though Fedwire bank wires are not reversible, banks can still return funds that were received such as when the transfer was the result of phishing, for instance.</li>\n  <li>Whilst consumer accounts may have some liability protection, business accounts do not</li>\n</ol>\n<p>Because the security mechanisms in place are entirely controlled by your bank, if yours is unacceptable your only choice is to find another bank. If all banks serving your local market are the same, you’re out of luck. Even if your bank has good security, accepting payments from a bank that does not can entail significant risk.</p>\n<h2><strong>Risks involved in handling Bitcoins</strong></h2>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/09/hacker-1944688_640.jpg\" width=\"640\" height=\"426\"/></p>\n<p>&nbsp;In contrast to the above systems, Bitcoin carries a different set of risks which can be managed in different ways.</p>\n<ol>\n  <li>The server containing your wallet may be hacked and the coins stolen</li>\n  <li>Money sent to your wallet may be reversed</li>\n  <li>Your wallet may be accidentally destroyed, along with all the money in it.</li>\n  <li>You may be scammed into sending your money elsewhere (this problem is not unique to Bitcoin)</li>\n</ol>\n<p>However, unlike with traditional payment schemes, the risk of fraudulent payments is low and Bitcoin gives you tremendous flexibility to implement as much or as little security as you like. At no point are you at the mercy of third-party payment processors who may or may not be properly incentivized to be secure? Below we discuss each problem Bitcoin using traders may face, and some common solutions.</p>\n<h3><strong>Server hacking</strong></h3>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/09/cyber-security-1805632_640.png\" width=\"640\" height=\"465\"/></p>\n<p>&nbsp;Server hacks have resulted in the loss of tens of thousands of Bitcoins. Any internet-connected computer that has liquid access to data worth hundreds of thousands of dollars will come under sophisticated and sustained attack, but there are some simple techniques you can use to reduce your risk.</p>\n<ul>\n  <li>For merchants who need to automatically accept payments online but not make them, use an&nbsp;<strong>encrypted wallet</strong>&nbsp;that does not have the password on the server. To receive payment all you need is a public key (for better privacy most merchants use one fresh key per-user or transaction). The public key alone does not allow you to spend the money. By creating a wallet with plenty of keys on your own local computer and then uploading the encrypted version to the server, you ensure that whilst the server can accept payments only your own computer can make them, even though they share the same balance. Thus hacking the server doesn’t allow any financial gain. Of course, you must still ensure your local computer is secured.</li>\n  <li>Some organizations need to be able to automatically send money as well as receive it. Examples include trading platforms and mining pools. These typically use&nbsp;<strong>cold storage</strong>&nbsp;as much as possible, where only the minimum balance necessary to handle withdrawals is on the server. The rest is sent to a separate wallet which is kept away from internet-connected computers. Because a wallet can receive coins without it being online, profit can be moved from the server to cold storage without risking the cold money. If an unusually large withdrawal takes place the transaction can be placed on hold until a human operator has time to reach the cold wallet and send money from it to the live site. This limits your losses to the size of your hot wallet in the case of a server breach.</li>\n  <li>Avoid managed server hosting. During 2012 several high profile breaches were caused not by lax security on the part of the site operators themselves but rather the companies providing the servers. Many data center operators, even large well-known ones, are&nbsp;not&nbsp;equipped to handle sensitive data regardless of what assurances they may provide. They can be vulnerable to hacking and social engineering themselves. Instead, purchase your own server(s) and rent a cage/network connection from a local datacenter that you can visit in person. For added security, either disable remote access entirely or ensure only connections from your home IP ranges are allowed. Make sure the data center operator won’t provide remote access on request without some pre-agreed security protocol being followed, like a callback.</li>\n  <li>Consider implementing a supervisor system. In this scheme, the site gives its users multi-signature addresses for sending payments. The money received requires a signature by both the website and an independent supervisor computer. The job of the supervisor is to analyze the stream of payment requests from the other server and try to spot anomalies. If a payment request looks OK then it will be signed. If it looks iffy a human will be called for further attention. The supervisor can be made a lot more secure than the website because it has only a single, well-defined purpose and does not need to run complex user-facing software like a web site or email system. So the job of the attacker now becomes either to hack both systems (hard if they are deliberately set up differently) or to find a way to extract the money that the supervisor won’t notice. What exactly “good” vs “bad” transactions look like are merchant-specific.</li>\n</ul>\n<h3><strong>Transaction reversals</strong></h3>\n<p>Whilst both credit cards and Bitcoins can experience transaction reversals, in Bitcoin the risk is entirely theoretical and has yet to be observed in the wild, whilst chargebacks are extremely common in the credit card world. Nevertheless, you should understand the risks:</p>\n<ul>\n  <li>For merchants that are shipping physical goods, you probably don’t have to worry. Reversing a transaction gets harder and harder with time. After only one hour it becomes computationally infeasible to reverse a Bitcoin transaction. Inserting a small delay before shipping isolates you from this risk entirely.</li>\n  <li>For automated trading platforms that may pay out some other currency in response to Bitcoin deposits, you should also delay payment for a short time until reversal becomes infeasible. Low-risk deposits from trusted customers could be processed faster, as reversing a Bitcoin transaction is a nontrivial problem at this time which is suited only to relatively skilled attackers who are after large sums of money.</li>\n  <li>For merchants shipping things immediately, like digital downloads, measuring the propagation of a transaction across the network and waiting until most nodes have reported it is probably good enough. This allows you to accept the payment within seconds. Whilst there’s a higher risk of transaction reversal here, the attack is still expensive and the attacker cannot choose the timing of the attack. Therefore watching out for users who receive an address and then delay the act of payment significantly is probably enough to insulate you from this attack (the&nbsp;Finney attack).</li>\n</ul>\n<h3><strong>Your wallet may be accidentally destroyed</strong></h3>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/09/security-2168234_640.jpg\" width=\"640\" height=\"405\"/></p>\n<p>&nbsp;Backing up Bitcoin wallets is easy, as they are just files. For high volume sites with the existing software (Bitcoin 0.6), you should pre-generate a large number of keys such that a single old backup is enough to restore all your money. Future versions will derive new keys deterministically, so a single backup should be enough to ensure you can always restore your wallet after an accidental or malicious deletion.</p>\n<h3><strong>You may be scammed into sending the money elsewhere</strong></h3>\n<p>Whilst no financial system can completely solve human gullibility, Bitcoins multi-signature keys allow you to lock up money such that multiple people have to agree in order for it to be spent. For example, the bulk of your balance could be assigned to a multi-signature key that requires you and your business partners to agree …. thus forcing a mental sanity check from multiple people, hopefully making the act of scamming harder.</p>\n<h2><strong>Future research</strong></h2>\n<p>Whilst running your own physical servers with no datacenter operator access is secure, it lacks convenience. In future, it may be possible to the use TPM (trusted platform module) chips to allow managed hosting such that root or even physical access is insufficient to steal the funds, as the wallet keys would be bound to a particular software environment. Well-engineered trusted computing solutions have some degree of physical resistance so rebooting the machine, opening it up or logging in with local/remote root would not allow you to steal the balance of the wallet.Unfortunately engineering such systems is nontrivial and the technical difficulty places this solution out of reach for most traders right now. In future easy to use software libraries, documentation, examples and managed hosting providers that sell TC enabled hardware may increase its attractiveness.</p>\n<p><a href=\"https://cryptonomad.info/securing-online-services/\"><strong>Read the original full article here.&nbsp;</strong></a></p>\n</html>",
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      "author": "steemcleaners",
      "permlink": "re-cryptonomads-armory-20190829t142521470z",
      "title": "",
      "body": "[Source](https://en.bitcoin.it/wiki/Armory)\n[Plagiarism](http://www.plagiarism.org/plagiarism-101/what-is-plagiarism/) is the copying & pasting of others work without giving credit to the original author or artist. Plagiarized posts are considered spam. \r\n\r\nSpam is discouraged by the community, and may result in action from the [cheetah bot](https://steemit.com/faq.html#What_is__cheetah).\r\n\r\n[More information and tips on sharing content.](https://steemcleaners.org/copy-paste-plagiarism/)\r\n\r\nIf you believe this comment is in error, please contact us in [#disputes on Discord](https://discord.gg/YR2Wy5A)",
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      "parent_permlink": "bitcoin",
      "author": "cryptonomads",
      "permlink": "armory",
      "title": "Armory",
      "body": "<html>\n<p>&nbsp;Bitcoin Armory is an open-source, python-based, wallet-management application for the Bitcoin&nbsp;network.&nbsp;</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/Armory.png\" width=\"400\" height=\"90\"/></p>\n<p>&nbsp;Armory is a desktop application for Bitcoin funds management. It is a full-featured&nbsp;Bitcoin wallet&nbsp;management application which aims to combine the two characteristics of wallets previously perceived as mutually exclusive:&nbsp;security&nbsp;and usability. It comes with a set of unique features not available in any other client, although it is possible to use its split interface to choose “standard” mode which is devoid of some information people new to Bitcoin may consider excessive.</p>\n<h2><strong>Concept</strong></h2>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/ArmoryMainScreen.png\" width=\"300\" height=\"225\"/></p>\n<p>&nbsp;Multi-currency wallet Armory allows you to create messages using a private&nbsp;key&nbsp;– the recipient will always know that he received a message from a particular user.Armory wallet, in fact, is an addition to&nbsp;Bitcoin Core, which allows increasing the level of security in the operation of virtual means.The main requirement for the installation of the wallet Armory is the presence of another workstation, which has more than 512 megabytes of RAM and USB-drive for storing information. In this case, the second station – a computer should not be connected to the Internet. This condition ensures the safety of confidential data, even if the attacker hacked your account-access to the tools will be limited due to the lack of an online connection.When using a mobile wallet, it is necessary to ensure high-quality encryption of the client, and the backup copy of the keys of the wallet Armory should be stored in another source of information. This is a guarantee that even if you lose control of the application passwords will provide an adequate level of protection for your funds.</p>\n<h4><strong>History</strong></h4>\n<p>The Armory project was announced on January 3rd, 2012.</p>\n<h4><strong>Crowdfunding</strong></h4>\n<p>The project received $2,661 by 26 funders on crowdfunding site RocketHub. The project completed it’s funding on 2012-March-19.</p>\n<h2><strong>Features</strong></h2>\n<ul>\n  <li><strong>The unlimited</strong> number of wallets&nbsp;– Armory was designed from the start to support multi-wallet operations without limit on the number.</li>\n  <li>The dialogue option&nbsp;to print paper backup when creating the wallet.</li>\n  <li>Watching-only wallets&nbsp;– there is a possibility of forking a “watching-only” wallet that contains no private-key data, but can still be used to generate addresses and confirm payments.</li>\n  <li><strong>Wallet-update logic</strong>&nbsp;guarantees all atomic file operations. The system will automatically recover user’s wallets after any power failures or extremely rare-but-possible RAM/HDD errors.</li>\n</ul>\n<p>The Armory wallet site offers users several user modes:</p>\n<ul>\n  <li>Standard – standard;</li>\n  <li>Advanced-advanced;</li>\n  <li>Developer-expert mode.</li>\n</ul>\n<h2><strong>Advantages</strong></h2>\n<p>Armory bitcoin wallets are a reliable way to store and manipulate&nbsp;cryptocurrency. Why is it necessary to choose an electronic wallet&nbsp;Armory Wallet&nbsp;when creating a wallet – to get an answer to this question will allow an overview of all the advantages that this client provides to the user:</p>\n<ul>\n  <li>secure management of funds even if you are connected to the Internet;</li>\n  <li>storing private keys on the offline media, working in offline mode;</li>\n  <li>address&nbsp;creation and control of funds without risk of hacking by intruders;</li>\n  <li>operation by means of offline mode when using USB-key;</li>\n  <li>the ability to create a&nbsp;paper wallet.</li>\n</ul>\n<h2><strong>Disadvantages</strong></h2>\n<p>Despite the fact that the installation of the Armory wallet on the computer offers bitcoin a lot of positive aspects of the client’s use, among its positive aspects it is also necessary to highlight some disadvantages, which somewhat darken the picture:</p>\n<ul>\n  <li>Armory requires that you have plenty of free disk space to install;</li>\n  <li>operation options the Armory client requires specific skills and experience in the use of such programs;</li>\n  <li>to generate the Armory wallet requires the official Bitcoin Core wallet because of the lack of Armory needed network functions;</li>\n  <li>easy of use in the Armory only for Windows platforms, Linux, Mac, Ubuntu.</li>\n</ul>\n<p><a href=\"https://cryptonomad.info/armory/\"><strong>Read the original full article here.</strong></a></p>\n</html>",
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      "body": "Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:\nhttps://en.bitcoin.it/wiki/Address_reuse",
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      "author": "cryptonomads",
      "permlink": "address-reuse",
      "title": "Address reuse",
      "body": "<html>\n<p>&nbsp;<strong>Address reuse</strong>&nbsp;refers to the use of the same&nbsp;address&nbsp;for multiple&nbsp;transactions. It is an unintended practice, abusing the&nbsp;privacy&nbsp;and&nbsp;security&nbsp;of the participants of the transactions as well as future holders of their value. It also only functions by accident, not by design, so cannot be depended on to work reliably.&nbsp;</p>\n<p><img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/business-3194671_1280-1024x576.jpg\" width=\"1024\" height=\"576\"/></p>\n<p>&nbsp;</p>\n<h2><strong>Problems</strong></h2>\n<h3><strong>Privacy</strong></h3>\n<p>Address reuse harms the privacy of not only yourself but also others – including many not related to the&nbsp;transaction. In some cases, these risks are serious enough that they are likely in violation of reasonable consumer protection laws.</p>\n<p>When addresses are re-used, they allow others too much more easily and reliably determine that the address being reused is&nbsp;yours. Every time the re-used address’s&nbsp;private key signs a fresh transaction, whoever receives it can use the histories of that address to discover information about you, and everyone who is interested in discovering the identity of the address’s owner has one more&nbsp;target&nbsp;they can try to contact to discover who you are.</p>\n<p>The relationship graph in a re-used address is powerfully-linked in that&nbsp;<strong>all</strong>&nbsp;of the inputs to that address are necessarily joined (via the spending authority of your private key) to all of its outputs.</p>\n<p>There has been significant&nbsp;research&nbsp;into the area of what researchers are calling ‘identity collapse’, which is what happens when more than one&nbsp;Bitcoin&nbsp;address is strongly-linked via the&nbsp;Bitcoin transaction&nbsp;graph to another. Re-using addresses makes their job trivial. There are publically-known databases that exist, right now, that have not only collapsed millions of Bitcoin addresses but used publically-available information to&nbsp;<strong>link</strong>&nbsp;those collapsed identities to individuals, and these databases are being actively maintained.</p>\n<p>While you may be okay with some random European researcher bound by his ethics board to conceal your identity from the public-at-large, it is very possible that&nbsp;people&nbsp;who accept money from you may not be aware of your decision: thus, via your privacy-decreasing action, people further on the address signing&nbsp;chain&nbsp;could thus be putting&nbsp;<strong>you</strong>&nbsp;at risk if they spend their bitcoin on something that catches the attention of law enforcement.</p>\n<p>Additionally, in the event that you knowingly make this choice (which you are doing, now that you’ve read this,) the transaction histories that you are responsible for linking in the event you are a retailer of some sort could put the privacy of your customers at risk because now your well-known singular address(es) which can be strongly linked to your corporate identity can be assumed to be economic activity interacting with your corporate identity.</p>\n<p>See also:&nbsp;<a href=\"http://www.bitcoinnotbombs.com/innovations-that-enhance-bitcoin-anonymity/\">Innovations that Enhance Bitcoin Anonymity</a></p>\n<h4><strong>Worked Example 1</strong></h4>\n<ul>\n  <li>You save in bitcoin, using a single-address paper <a href=\"https://cryptonomad.info/cryptocurrency-wallet/\">wallet</a>.</li>\n  <li>All your <a href=\"https://cryptonomad.info/bitcoin/\">bitcoin</a> savings to this same address, let’s say it contains $1 million worth.</li>\n  <li>You buy a small amount of&nbsp;bitcoins&nbsp;to add to your savings, depositing in the paper&nbsp;<a href=\"https://cryptonomad.info/cryptocurrency-wallet/\">wallet</a>.</li>\n  <li>The person who sold you the bitcoins follows their trail on the&nbsp;<a href=\"https://cryptonomad.info/blockchain/\">blockchain</a>&nbsp;and finds your paper wallet containing $1 million.</li>\n  <li>He mentions it to someone in a&nbsp;cafe&nbsp;or bar.</li>\n  <li>Word gets around. A burglar raids your home. Kidnappers capture your children and know exactly how much to demand in ransom.</li>\n</ul>\n<h4><strong>Worked Example 2</strong></h4>\n<ul>\n  <li>You use a single&nbsp;<a href=\"https://cryptonomad.info/bitcoin-address/\">Bitcoin address</a>&nbsp;for all your earning and spending. Anyone you&nbsp;trade&nbsp;with can see a complete&nbsp;history&nbsp;of your finances.</li>\n  <li>Your landlord can see your salary when he raises the rent he&nbsp;knows&nbsp;exactly how much to ask for.</li>\n  <li>Your shopkeeper can see your spending. Gossip gets around of how much you spend on pornography and how little on church donations.</li>\n  <li>Your employer can see your spending. When you pay labor union dues or donate to&nbsp;WikiLeaks&nbsp;or another non-profit, your boss knows who not to trust.</li>\n</ul>\n<h3><strong>Security</strong></h3>\n<p><a href=\"https://cryptonomad.info/bitcoin/\">Bitcoin </a>does not, at a low level, have any concept of addresses, only individual&nbsp;coins. Address reuse, at this layer, requires producing multiple digital signatures when you&nbsp;spend bitcoins. Multiple situations have been found where more than one digital signature can be used to calculate the private key needed to spend bitcoins. Even if you spend all the bitcoins claimed by this private key at once, it is still possible to double-spend them in theft before they confirm. While the known situations for finding the private key from signatures have been fixed, it is not prudent to assume there aren’t more such situations yet unknown.</p>\n<p>In the&nbsp;case&nbsp;of spending all the TXOs in a single transaction, there is an additional risk if someone is actively monitoring the&nbsp;network&nbsp;for vulnerable transactions. Upon receiving such a transaction, they can split up their double spends such that there is only one&nbsp;ECDSA&nbsp;verification per transaction (making a single transaction for each TXO). This will cause the attacker’s transactions to relay across the rest of the nodes&nbsp;<em>faster</em>&nbsp;than the legitimate one, increasing success of a double spend.</p>\n<h4><strong>Known attacks</strong></h4>\n<ul>\n  <li>Same K in multiple signatures, see;&nbsp;<a href=\"http://www.nilsschneider.net/2013/01/28/recovering-bitcoin-private-keys.html\">Recovering Bitcoin private keys using weak signatures from the blockchain</a>.</li>\n  <li><a href=\"https://eprint.iacr.org/2014/140.pdf\">Timing side-channel</a></li>\n</ul>\n<h3><strong>Accidental loss</strong></h3>\n<p>In <a href=\"https://cryptonomad.info/bitcoin/\">Bitcoin</a> abstraction, an address is an invoice for a specific payment. Once that payment is made, the receiving party has no reason to retain the data for the address (technical details simplified) and may discard it. Even if someone does not choose to discard that data, it may have since been lost in an accident or compromised. In any of these situations, any future payments to the same address would go into a “black hole”, and be forever lost through no fault of the recipient.</p>\n<h3><strong>Confusion</strong></h3>\n<p>Users who see addresses reused may incorrectly be led to believe they function similarly to&nbsp;wallets&nbsp;or bank accounts. Often this is manifested in people talking about nonsense like “address balance”, “wallet address”, “from address”, and similar&nbsp;misconceptions&nbsp;that don’t actually exist in Bitcoin.</p>\n<h3><strong>High Fees</strong></h3>\n<p>A single invoice payment using&nbsp;P2PKH&nbsp;can be redeemed and spent with a predictable fee because the transaction should have a predictable size.&nbsp;Software&nbsp;that determines payment and available funds based on “address balance” can cause loss through high fees. If you are paid to an address in many small increments, you will pay a much higher&nbsp;transaction fee when redeeming those payments. It is much more useful for a&nbsp;client&nbsp;to display transaction outputs spendable than address balances for this reason.</p>\n<h2><strong>Notable offenders</strong></h2>\n<p>Some notable Bitcoin software and services encourage or require address reuse:</p>\n<ul>\n  <li>Many bitcoin&nbsp;mining pools&nbsp;(especially&nbsp;Eligius)</li>\n  <li>Paper wallet&nbsp;which use a single bitcoin private key/address pair</li>\n</ul>\n<p><br></p>\n<p>&nbsp;<a href=\"https://cryptonomad.info/address-reuse/\"><strong>Read the original full article here&nbsp;</strong></a></p>\n</html>",
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      "parent_author": "cryptonomads",
      "parent_permlink": "zerocoin",
      "author": "brainceo",
      "permlink": "pwykh5",
      "title": "",
      "body": "has a great future ahead for sure",
      "json_metadata": "{\"tags\":[\"bitcoin\",\"steemleo\"],\"app\":\"steemleo/0.1\"}"
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      "title": "",
      "body": "Thanks for explaining that in details",
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      "title": "51% attack",
      "body": "<html>\n<p>&nbsp;<strong>51% attack</strong>&nbsp;is a term which signifies that an attacker has accumulated more computing power in his hands than all the other members of the&nbsp;network&nbsp;combined: a sort of controlling interest of generating power.</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/51.jpg\" width=\"300\" height=\"169\"/></p>\n<h2><strong>Consequences of 51% attack</strong></h2>\n<p><strong>51% attack</strong>&nbsp;vulnerability is a kind of cryptocurrency’s sickness and a terminal one at that. When a new&nbsp;cryptocurrency&nbsp;isn’t trusted it’s network’s power is poor so enough power for an attack can be accumulated easily. Of course, there’s no economic gain to be yielded at this stage but an attacker could, for example, “kill off” a rising competitor.&nbsp;</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/51percentattack.png\" width=\"300\" height=\"177\"/></p>\n<p>&nbsp;Another possible way of application is an attack on already commercially successful currency for profit. However, this case implies that the coin is commercially mined by network members who use their computing power for the generation of cherished coins. In the case of a successful currency, this means that the total network power is enormous as there’s a massive number of people who are engaged in&nbsp;the mining&nbsp;process. Thus a 51% attack becomes hard to conduct.</p>\n<p>Therefore 51% attack is a tool of a natural selection of sorts that separates the&nbsp;coins&nbsp;with high potential from all others at early stages of their existence. At the same time, it may present a problem in the future when commercial mining will come to an end. Once in every four years, the reward for a block is halved. Now, this reward equals 25 BTC per block and at the end of 2016 will drop to 12.5. Sooner or later this number will become lower than efforts spent on block generation. Lower people engaged in mining means lower combined network power means higher applicability of 51% attack.</p>\n<p>Vulnerability to attack 51% is a kind of children’s disease of cryptocurrency, and the disease is deadly. When confidence in the new currency is small, generating capacity is still negligible, you can easily collect the necessary forces for the attack. Of course, no commercial benefits at this stage can not be obtained, but you can, for example, “kill a competitor.” Another scenario is an attack on a commercially successful currency for profit. However, in this case, the currency provides for commercial mining — its users use their power to generate the coveted coins. In a successful currency, this phenomenon is massive, the total generation capacity is huge. And, therefore, attack 51% becomes intractable. Thus, 51% attack carries out a kind of natural selection of cryptocurrencies in the early stages of development — only the strong survive.</p>\n<p>However, it can also be a problem in the future when commercial mining will come to an end. Every 4 years in the network is halving the rewards for the block. So, closer to the end of 2012, the award will be 25 PTS, and approximately by the end of 2016 already 12.5 PTS. Sooner or later, this figure will be less than the effort spent on block generation. Less people are involved in the generation, the less the capacity of the network, the more likely the attack 51%. It turns out that everyone is interested in the continuation of the network, but no one wants to generate blocks for free. The classic scenario of “tragedy of the Commons”.</p>\n<h2><strong>51% attack and Bitcoin</strong></h2>\n<p>&nbsp;So, put yourself in the place of an attacker who intended to gain control of the blockchain. Let him manage to split the chain in the above way. One of the formed branches he controls, how to make it so that the network discarded the other? This requires that the aggregate complexity of the blocks in that branch be greater than the true complexity. In practice, this means that the attacker must have more power than the rest of the network, a kind of “controlling packet” of generating capacity. Hence the name “attack of 51%”. What does a burglar get in case of luck? Control of the entire network, no more or less. The ability to carry out any transaction at its discretion. It is clear that it means the death of the currency.</p>\n<p>This type of attack can also take place in the Bitcoin network if for example someone will buy an entire batch of BFL ASICs and commit them all to an attack. Although there will be no profit in it. Entire Bitcoin&nbsp;capitalization&nbsp;is around $5.5 billion at the moment. If someone starts withdrawing them at once their price will drop in an order of magnitude or two. Now one just has to compare this to the price of buying the equipment needed for such an attack. Most probably the attacker will be a manufacturer of&nbsp;mining&nbsp;equipment and not a buyer. What is more profitable in the end: to blow up a goldmine and get 10% of all gold in the process or continuously sell shovels to the prospectors for several years? Almost certainly it’s the second.</p>\n<p>There’s also a dreamlike possibility of the appearance of fundamentally new kinds of computing equipment, for example, quantum computers. Although in this case&nbsp;the Bitcoin&nbsp;price drop will be the least of our problems. In this scenario, cryptographic resistance will be lost by most of the current encryption systems including those used by governments and banks.</p>\n<p>All this doesn’t mean however that a 51% attack on Bitcoin or even Litecoin is theoretically impossible.</p>\n<h2><strong>Solutions</strong></h2>\n<p>The vulnerability is fundamental, stemming from the architecture of bitcoin-like cryptocurrencies. This means that by making some changes to the process of generating blocks and confirming transactions, it can be eliminated. One example of how this can be done demonstrates the recently introduced currency of PPCoin. It implements the Proof-of-Stake principle instead of the standard Proof-of-Work principle. Its meaning is that the probability of generating a block is not affected by the generation power, but by the number of coins that the miner already has. That is, to generate 51% or more of the units must have 51% of coins, which makes the attacker the most injured member of the network. Thus, commercial hacking is excluded completely, and destructive becomes difficult and expensive, Nevertheless, the technology is very controversial and carries other dangers, such as the possibility of monopolization of the transaction process by one major holder of funds. In other words, it turns out the same Issuer-the Central Bank, voluntarily distributing the currency in the economy. Strictly speaking, ppcoin uses hybrid technology — and Proof-of-Work and Proof-of-Stake at the same time. Such a system needs to be time-tested, since removing one problem can give rise to a dozen others.</p>\n<p>This vulnerability is part of the lives of all involved in various cryptocurrencies. Also, this is a very likely cause of death of the young currency “standard design”, which does not have additional protection mechanisms. Moreover, this problem is fundamental and will not disappear. The night is a nightmare or a Ghost threat — everyone decides for himself.</p>\n<p><a href=\"https://en.bitcoinwiki.org/wiki/51%25_attack\">Read the original full article here.</a>&nbsp;</p>\n</html>",
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      "body": "<html>\n<p>&nbsp;<strong>Silk Road</strong>&nbsp;was an anonymous online trading platform located in the zone&nbsp;.onion&nbsp;of the anonymous tor&nbsp;network&nbsp;and worked from 2011 to 2013. Most of the products was to prove to delegate, however, recently site banned pair-the sale of raw details of bank cards, about money, children’s section, personal data, services of a killer and a weapon. The site was best known as a platform for the trade of illicit psychoactive, which are costly 70% of the goods, in addition they prove other commodities, including legal, for example, a paragraph or an electronic copy of forbidden books.</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/Silk-road-logo.jpg\" width=\"300\" height=\"173\"/></p>\n<h2><strong>Description</strong></h2>\n<p>&nbsp;Buyers and sellers conduct all monetary transactions through&nbsp;Bitcoin&nbsp;cryptocurrency, which in combination with&nbsp;Tor&nbsp;can ensure the anonymity of participants in the transaction and the inability to block payment. Buyers register on silk road for free, and sellers are required to purchase an account via an auction to reduce the risk of fraud</p>\n<h3><strong>History</strong></h3>\n<p>The website launched in February 2011; development had begun six months prior. It is held to be part of the&nbsp;Deep Web. Silk Road was operated by “Dread Pirate Roberts” (named after the fictional character from The Princess Bride), who was known for espousing libertarian ideals and criticizing regulation.</p>\n<p>Initially, buyers could register for free, but there were a limited number of new seller accounts available; new sellers had to purchase an account via an auction. Later, a fixed fee for each new seller account was chosen to mitigate the possibility of malicious individuals distributing tainted goods.</p>\n<p>On October 2, 2013, the FBI shut down Silk Road. They arrested&nbsp;Ross William Ulbricht&nbsp;on charges of alleged murder-for-hire and narcotics trafficking violation and identified him as the founder and chief operator “Dread Pirate Roberts.” On 6 November 2013 Forbes and Vice reported that Silk Road 2.0 was online and being run by former administrators of Silk Road and that a different user was now using the name, Dread Pirate Roberts.&nbsp;</p>\n<p><img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/businessman-3205454_1280-1024x442.jpg\" width=\"1024\" height=\"442\"/></p>\n<p>&nbsp;</p>\n<h3><strong>Products</strong></h3>\n<p>As of March 2013, the site had 10,000 products for sale by vendors, 70% were drugs that are considered contraband in most jurisdictions. 340 varieties of drugs were being sold, including heroin, LSD, and cannabis. There were also legal goods and services for sale, such as apparel, art, books, cigarettes, erotica, jewelry, and writing services. A sister site, called “The&nbsp;Armory”, sold weapons (primarily guns) during 2012 but was shut down due to a lack of demand.</p>\n<h3><strong>Sales</strong></h3>\n<p>The criminal complaint published when Ulbricht was arrested included information the FBI gained from a system image of the Silk Road server collected on 23 July 2013. It noted that, “From February 6, 2011 to July 23, 2013 there were approximately 1,229,465&nbsp;transactions&nbsp;completed on the site. The total revenue generated from these sales was 9,519,664 Bitcoins, and the total commissions collected by Silk Road from the sales amounted to 614,305 Bitcoins. These figures are equivalent to roughly $1.2 billion in revenue and $79.8 million in commissions, at current&nbsp;Bitcoin&nbsp;exchange rates…”, according to the September 2013 complaint, and involved 146,946 buyers and 3,877 vendors. According to information users provided upon registering, 30 percent were from the United States, 27 percent chose to be “undeclared,” and beyond that, in descending order of prevalence: the United Kingdom, Australia, Germany, Canada, Sweden, France, Russia, Italy, and the Netherlands.</p>\n<h2><strong>Interesting facts</strong></h2>\n<p>&nbsp;</p>\n<ul>\n  <li>The total volume of transactions on the site for 2.5 years amounted to 9.5 million bitcoins, which is comparable to the total number of bitcoins at the time of closure of the site, that is, 11.75 million with about 78% of bitcoins from their total never used in any turnover. According to the FBI, this ratio between the volume of transactions on the site and the number of bitcoins may indicate that the main use of&nbsp;cryptocurrency, with the exception of speculative investments, was the purchase of illegal goods.</li>\n  <li>The largest investors in bitcoins Winkelvoss brothers planning to launch Winkelvoss Bitcoin Trust in the United States after obtaining permission, associate the growth of the bitcoin rate (as of January 22, 2014 8 times) after the closure of Silk Road with the fact that bitcoin has ceased to be associated with the shadow market. Cameron Winkelvoss in his online interview with Reddit users gave an assessment of Silk Road’s turnover in the bitcoin economy. In his opinion, it amounted to 4&nbsp;%.</li>\n  <li>In 2013, Forbes magazine wrote about similar small shops Atlantis and Black Market Reloaded. Currently they are both closed by their owners. Another similar shop Sheep Marketplace shut down after break-in and steal 5400 bitcoins from him.</li>\n  <li>This website was cited at the 2011 SOPA amendment hearings as an example of the evolution of some websites into distributed networks and computer systems that cannot be blocked in a constructive way by the domain filtering method proposed in SOPA.</li>\n</ul>\n<p><a href=\"https://cryptonomad.info/silk-road/\"><strong>Read the original full article here.</strong></a></p>\n</html>",
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      "body": "<html>\n<p>&nbsp;<a href=\"https://www.torproject.org/\"><strong>Tor</strong></a>&nbsp;is a distributed ‘onion’ network, that makes it more difficult for an adversary to track any one peer on the&nbsp;network. Tor also is very useful to access the ‘uncensored’ internet in countries such as China and Iran. Preserving&nbsp;privacy&nbsp;means not only hiding the content of messages, but also hiding who is talking to whom (traffic analysis). Tor provides anonymous connections that are strongly resistant to both eavesdropping and traffic analysis.</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/370px-Tor-logo-2011-flat.svg_.png\" width=\"370\" height=\"224\"/></p>\n<p>Bitcoin&nbsp;can run easily on the Tor network.</p>\n<h2><strong>Description</strong></h2>\n<p>&nbsp;</p>\n<h3><strong>Tor installation &amp; use</strong></h3>\n<p><em>todo explain: onion routing (how tor network helps to anonymize), encryption used, exit nodes, routers</em>.Please follow the instructions provided with installation files and read the&nbsp;<a href=\"http://www.torproject.org/download/download.html.en#warning\">list of warnings</a>.&nbsp;<em>Tor doesn’t magically anonymize all your traffic just because you install it.</em>&nbsp;Down the page you can find examples how to configure applications to use Tor to anonymize the origin of your traffic. This is a detailed installation guide for Windows. Before you setup Bitcoin or mIRC to use Tor, please install Tor and start in. On the taskbar of your compute you’ll see a small green onion when Tor is running.</p>\n<h3><strong>GUI</strong></h3>\n<p>Once you have your Tor client up &amp; running, you can configure your Bitcoin client to use it. Select in menu Settings -&gt; OptionsCheck “Connect through socks 4 proxy” with the address 127.0.0.1 and port 9050 (the Tor default port number). Configuring an application to use Tor is also called to torify it.&nbsp;<em>the note about bitcoin-otc promote on a more appropriate place in this page? reference to trading and IRC</em>.Conducting business using&nbsp;Bitcoin-OTC&nbsp;can be done more anonymously when directly connected to a Freenode IRC hidden service.</p>\n<h3><strong>bitcoind</strong></h3>\n<p>Run&nbsp;Bitcoind&nbsp;with -proxy=127.0.0.1:9050 (or whatever your SocksPort is).bitcoind will detect that you are using a proxy on 9050 and will force the “nolisten” flag. If you are not running tor on 9050, you need to set “nolisten” manually otherwise you will listen on your public IP and possibly reveal that you are running a node.</p>\n<h3><strong>Hidden services</strong></h3>\n<p>These services are running within the tor network. You can connect to them, for example, using the -connect= parameter to bitcoind. Note that you do not need to use them – tor can also anonymize your normal internet traffic, including bitcoin connections. There are some technical reasons why hidden services may be beneficial, see the tor documentation if you’re really interested.Services are listed at Tor network along with instructions for using them.</p>\n<h3><strong>Pooled Mining</strong></h3>\n<p>Some&nbsp;mining&nbsp;pools are available as a hidden service on the tor network. Any pool can be reached over tor. The general methodology here is to tell your mining client to use your local Tor proxy. This is client-specific but there are some helpful hints.</p>\n<h3><strong>Linux / BSD</strong></h3>\n<p>Any client can have its traffic routed via Tor by using the torify command and invoking the miner with that. Another method is to set the http_proxy environment variable as some miners use libraries which support that.</p>\n<h3><strong>Windows / OS X</strong></h3>\n<p>It is possible to set the http_proxy environment variable as some miners use libraries which support that.</p>\n<h3><strong>mIRC</strong></h3>\n<p>mIRC is a popular&nbsp;IRC&nbsp;client. This is a guide how to connect to Freenode IRC using Tor + SASL + mIRC.</p>\n<h3><strong>Register your nick with freenode nickserv</strong></h3>\n<p>Freenode only allows SASL authenticated users to connect to the onion IRC server. SASL authentication works only with a registered nickname. Connect to Freenode IRC without using tor &amp; execute /msg nickserv register &lt;password&gt; &lt;email&gt;You will see something like this -NickServ- An email containing nickname activation instructions has been sent to &lt;email&gt; -NickServ- If you do not complete registration within one day, your nickname will expire.To finish your nick registration go the provided email and copy/paste the command from e-mail to irc.</p>\n<h3><strong>Add SASL support to your mIRC installation</strong></h3>\n<p>Download the SASL.dll and sasl.mrc files and copy them to your mIRC installation directory Load sasl.mrc script (Alt + R to open script editor, Ctrl + L to load file, browse to sasl.mrc, press OK or “save &amp; exit”).Type /dialog -m SASL.main SASL.main to open the SASL connection manager.Add Freenode entry.Network is Freenode. Username and NS Password must match your nickserv reservation. Auth Type can be PLAIN&nbsp;</p>\n<p><img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/darknet-3588402_1280-1024x576.jpg\" width=\"1024\" height=\"576\"/></p>\n<p>&nbsp;</p>\n<h2><strong>setup mIRC to use Tor</strong></h2>\n<p>Add the entry for Freenode onion IRC serverConfigure mIRC to use a Proxy (your local Tor proxy)Now you should be able to connect.&nbsp;<a href=\"https://www.bitcointalk.org/index.php?topic=2602\">Bitcoin forum where this topic is discussed</a></p>\n<h2><strong>How Tor works</strong></h2>\n<p>Unlike Freenet, I2P, etc., Tor’s&nbsp;security&nbsp;is very well-defined. While weaknesses do exist (described below), they have been known since Tor was created, and new weaknesses of significance are not expected.Tor sends TCP packets over 3 (normal) or 7 (hidden services) Tor relays. This is why it is so slow: your packet might have to go through 100 computers (counting Internet routers) before it reaches its destination. Tor uses multiple&nbsp;<em>layers</em>&nbsp;of encryption that are&nbsp;<em>pulled away</em>&nbsp;for each&nbsp;node. Hence the name&nbsp;<strong>T</strong>he&nbsp;<strong>O</strong>nion&nbsp;<strong>R</strong>outer, which is always capitalized as&nbsp;<strong>Tor</strong>, and never TOR or t.o.r.Say that I want to connect to&nbsp;Bitcoin.org&nbsp;through Tor. I first select three Tor relays that I know about. Then, I send a message to my ISP that looks like this:</p>\n<pre><code>Send to this IP: &lt;IP of Relay1&gt;<br>\n&lt;Encrypted data for Relay1&gt;<br>\n</code></pre>\n<p>When Relay1 receives this, he decrypts the payload using his private key. The payload contains this:</p>\n<pre><code>Send to this Tor node: &lt;Relay2&gt;<br>\n&lt;Encrypted data for Relay2&gt;<br>\n</code></pre>\n<p>Relay2 decrypts his payload:</p>\n<pre><code>Send to this Tor node: &lt;Relay3&gt;<br>\n&lt;Encrypted data for Relay3&gt;<br>\n</code></pre>\n<p>Relay3 receives the&nbsp;real&nbsp;TCP payload, which he sends to the destination:</p>\n<pre><code>Send to this IP: &lt;IP of destination&gt;<br>\n&lt;Unencrypted payload&gt;</code></pre>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/protest-2265287_640.jpg\" width=\"640\" height=\"400\"/></p>\n<p>&nbsp;The payload is not and can not be further encrypted by Tor. However, if the protocol itself uses encryption (HTTPS, SSH, etc.), the data will be encrypted. This means that the last node (the&nbsp;<em>exit node</em>) can see everything you do on HTTP sites, and can steal your passwords if they are transmitted unencrypted. Many people become exit nodes just so they can view this information — Tor is much more dangerous than open WiFi for snooping!The encryption arrangement described above ensures that no single Tor node&nbsp;<a href=\"https://en.bitcoinwiki.org/wiki/KNOWS\">knows</a>&nbsp;both the sender and the destination. Relay1 and your ISP know that you are using Tor and sending a packet at a certain time, but they don’t know what you’re sending or who you’re sending to. Relay3 knows exactly what you’re sending, but he can’t determine who is sending it because Relay2 and Relay1 are blocking him. All three relays need to work together in order to conclusively connect the sender and the destination.However, Tor is weak to a&nbsp;<em>timing attack</em>&nbsp;that allows only two participants in certain positions to determine the sender with high accuracy. Consider this Tor connection:</p>\n<pre><code>Sender &lt;-&gt; S-ISP &lt;-&gt; Relay1 &lt;-&gt; Relay2 &lt;-&gt; Relay3 &lt;-&gt; D-ISP &lt;-&gt; Destination<br>\n</code></pre>\n<p>If the sender’s ISP (S-ISP) and the destination are working together, they can record the size and times of packets sent and received. Over a large number of packets, they can determine with very high accuracy that the sender is, in fact, the person sending packets to the destination. This requires active surveillance or detailed logging by both sides. Relay1 can also perform the same role as S-ISP.Additionally, more configurations are possible if the underlying connection is not encrypted (normal HTTP, for example):</p>\n<ul>\n  <li>S-ISP &amp; Relay3</li>\n  <li>Relay1 &amp; Relay3</li>\n  <li>S-ISP &amp; D-ISP</li>\n  <li>Relay1 &amp; D-ISP</li>\n</ul>\n<p>This second set can always see that the sender is connected to the destination, but they can only see what the sender is doing on the site if the connection is not encrypted. (Pathnames are encrypted in HTTPS.)&nbsp;</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/v-for-vendetta-2855606_640.jpg\" width=\"427\" height=\"640\"/></p>\n<p>&nbsp;Because the first relay (the&nbsp;<em>entry node</em>) is a weak point in the connection, Tor takes certain defensive measures. When you first start Tor, it chooses three&nbsp;<em>entry guards</em>&nbsp;that don’t change for the entire time that you run Tor. You will always use one of those three unless one goes down. If all of those nodes are safe and your ISP is safe, then you are OK.These timing attacks are of special importance to Bitcoin because anyone can be the “destination” in a connection. Packets are broadcast to every peer in the Bitcoin network. This might allow your ISP alone to associate your transactions to you without much&nbsp;difficulty. However, a timing attack relies on receiving at least several dozen packets from the sender, so the “destination” might actually have to be one of your direct Bitcoin peers. It’s not too difficult to flood the Bitcoin network with peers, though. Because of this attack, it is wise to use an&nbsp;EWallet&nbsp;instead of the Bitcoin client when using Tor.To discover Tor relays, Tor uses a centralized directory server model. There are nine authoritative directory servers. To become a relay, you register with one of these. The directory servers share their data and produce a&nbsp;<em>network&nbsp;status&nbsp;consensus</em>&nbsp;document every so often containing all Tor nodes. Tor clients don’t connect directly to the authoritative directory servers — they connect to one of many&nbsp;<em>directory mirrors</em>, which have a copy of the network status consensus. Since there is no peer-to-peer bootstrap mechanism in Tor, the entire network can be destroyed if half of the authoritative directory servers are destroyed, and the entire network can be subverted if half of the authoritative directory servers become evil.Hidden services allow both the sender and destination to remain anonymous. A&nbsp;hidden service&nbsp;connection is made like this:</p>\n<ul>\n  <li>The destination tells several Tor relays to act as&nbsp;<em>introduction points</em>&nbsp;for the hidden service. The destination stays connected to all of these introduction points through a regular three-node Tor circuit.</li>\n  <li>The destination registers these introduction points on a Tor DHT. The introduction points are associated with the first 16 characters of an encoded SHA-1&nbsp;hash&nbsp;of the destination’s key. This is the information in&nbsp;.onion&nbsp;addresses. The use of&nbsp;SHA-1&nbsp;is a possible weakness.</li>\n  <li>The sender creates a four-node Tor circuit. The fourth node is called the&nbsp;<em>rendezvous point</em>.</li>\n  <li>The sender searches the DHT for the introduction points of the desired hidden service. The sender connects to one through a regular three-node Tor circuit and, through the introduction point, tells the destination about the rendezvous point he has chosen.</li>\n  <li>The destination connects to the rendezvous point over a three-node Tor circuit. The sender and destination are now in contact over a seven-node connection.</li>\n</ul>\n<p>For clients, hidden services are more secure than encrypted Tor HTTPS connections because:</p>\n<ul>\n  <li>If the destination remains anonymous, they are less likely to become controlled by an evil party.</li>\n  <li>The destination’s ISP isn’t involved as they are in the HTTPS case. Only these configurations are possible for a timing attack:\n    <ul>\n      <li>S-ISP &amp; Destination</li>\n      <li>Relay1 &amp; Destination</li>\n    </ul>\n  </li>\n</ul>\n<p>Running a hidden service is more dangerous, however. A simple intersection attack can be performed by the hidden service’s ISP alone:</p>\n<ul>\n  <li>Your Internet service is cut off.</li>\n  <li>If the hidden service went down at that exact moment, you are unmasked.</li>\n</ul>\n<p>The same sort of timing attacks as above are also possible.See the&nbsp;<a href=\"http://www.usenix.org/events/sec04/tech/full_papers/dingledine/dingledine_html/index.html\">Tor design paper</a>&nbsp;for more info.</p>\n<h2><strong>Exchange Restrictions</strong></h2>\n<p>Some&nbsp;exchanges&nbsp;will treat activity occurring through Tor with greater precautions. For instance, the now-defunct Mt. Gox signup sheet read:Please be advised that accessing your account via the Tor network and/or public proxies may result in a temporary suspension of your account, and having to submit AML documents.&nbsp;</p>\n<p><a href=\"https://cryptonomad.info/tor/\"><strong>&nbsp;Read the original full article here.</strong></a><br>\n&nbsp;</p>\n</html>",
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      "body": "Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:\nhttps://en.bitcoinwiki.org/wiki/Zerocoin",
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      "parent_permlink": "bitcoin",
      "author": "cryptonomads",
      "permlink": "zerocoin",
      "title": "Zerocoin",
      "body": "<html>\n<p>&nbsp;<a href=\"http://zerocoin.org/\"><strong>Zerocoin</strong></a>&nbsp;is a cryptocurrency proposed by Johns Hopkins University professor Matthew D. Green and graduate students Ian Miers and Christina Garman as an extension to the&nbsp;bitcoin protocol&nbsp;that would add true <a href=\"https://cryptonomad.info/cryptography/\">cryptographic&nbsp;</a>anonymity&nbsp;to <a href=\"https://cryptonomad.info/bitcoin/\">bitcoin</a>transactions. Zerocoin was first implemented into a fully functional <a href=\"https://cryptonomad.info/\">cryptocurrency</a> released to the public by Poramin Insom, as the Zcoin. Zerocoin provides anonymity by the introduction of a separate&nbsp;<a href=\"https://cryptonomad.info/mixing-service/\">mixing service</a>&nbsp;known as&nbsp;<em>zerocoin</em>&nbsp;that is stored in the bitcoin <a href=\"https://cryptonomad.info/blockchain/\">blockchain</a>. Though originally proposed for use with the bitcoin network, zerocoin could be integrated into any&nbsp;<a href=\"https://cryptonomad.info/\">cryptocurrency</a>.</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/Zerocoin.png\" width=\"500\" height=\"167\"/></p>\n<h2><strong>Description</strong></h2>\n<p><a href=\"https://cryptonomad.info/bitcoin-transaction/\">Bitcoin transactions</a> are all stored, by design, in a public ledger (the blockchain) that is accessible to everyone. These transactions provide privacy through&nbsp;pseudonymity, in that while each transaction is associated with the public address of the sender and receiver, the names of the owners of these addresses are at no time made known to the bitcoin network. To increase privacy, each person could create as many public addresses as they like, making it difficult to link transactions to the same person. If additional privacy were required, it is possible to&nbsp;launder&nbsp;bitcoin through a trusted third party, where the input coins are mixed in a large pool and output to a new address.</p>\n<p>Regardless of the best precautions, by data <a href=\"https://cryptonomad.info/crypto-mining/\">mining</a> of the&nbsp;blockchain, it becomes possible in certain cases to link a set of public addresses to a specific (unnamed) individual. For example, this could be done by the analysis of spending habits, or by having the change of a transaction from one public address being sent to another. Furthermore, by utilizing information external to the blockchain, such as public bitcoin addresses posted on a web site, or the postal address used with a bitcoin purchase, the possibility exists that every single bitcoin transaction of a given person could be determined.</p>\n<p>Zerocoins are purchased with bitcoin in fixed denominations by a zerocoin mint transaction. Later, these zerocoins can be redeemed for bitcoin to a different bitcoin address by a zerocoin spend transaction. Through the use of cryptographic accumulators and digital commitments with zero-knowledge proofs, it is not possible to link the&nbsp;<a href=\"https://cryptonomad.info/bitcoin-address/\">bitcoin address</a>&nbsp;that was used to mint the original zerocoin to the <a href=\"https://cryptonomad.info/bitcoin-address/\">bitcoin address</a> used to redeem the zerocoin.</p>\n<h2><strong>Zerocoin protocol</strong></h2>\n<p><img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/ace-1869825_1280-1024x682.jpg\" width=\"1024\" height=\"682\"/></p>\n<p>&nbsp;The zerocoin&nbsp;extension to bitcoin would have functioned like a money laundering pool, temporarily pooling bitcoins together in exchange for a temporary currency called zerocoins. While the laundering pool is an established concept already utilized by several currency laundering services, zerocoin would have implemented this at the protocol level, eliminating any reliance on trusted third parties. It anonymizes the&nbsp;<a href=\"https://cryptonomad.info/cryptocurrency-exchange/\">exchanges</a>&nbsp;to and from the pool using <a href=\"https://cryptonomad.info/cryptography/\">cryptographic</a> principles, and as a proposed extension to the bitcoin protocol, it would have recorded the transactions within bitcoin’s existing blockchain.The anonymity afforded by zerocoin is the result of cryptographic operations involved with separate zerocoin mint and spend transactions.&nbsp;To mint a zerocoin, a person generates a random serial number&nbsp;<em>S</em>, and encrypts (that is commits) this into a coin&nbsp;<em>C</em>&nbsp;by use of second random number&nbsp;<em>r</em>. In practice,&nbsp;<em>C</em>&nbsp;is a Pedersen Commitment. The&nbsp;coin&nbsp;<em>C</em>&nbsp;is added to a <a href=\"https://cryptonomad.info/cryptography/\">cryptographic</a> accumulator by <a href=\"https://cryptonomad.info/crypto-mining/\">miners</a>, and at the same time, the amount of bitcoin equal in value to the denomination of the zerocoin is added to a zerocoin escrow pool.To redeem the zerocoin into bitcoin (preferably to a new public address) the owner of the coin needs to prove two things by way of a zero-knowledge proof. (A zero-knowledge proof is a method by which one party can prove to another that a given statement is true, without conveying any additional information apart from the fact that the statement is indeed true.) The first is that they know a coin&nbsp;<em>C</em>&nbsp;that belongs to the set of all other minted zerocoins (<em>C1</em>,&nbsp;<em>C2</em>,…&nbsp;<em>Cn</em>), without revealing which coin it is. In practice, this is done quickly by use of a one-way accumulator that does not reveal the members of the set. The second is that the person knows a number&nbsp;<em>r</em>, that along with the serial number&nbsp;<em>S</em>&nbsp;corresponds to a zerocoin. The proof and serial number&nbsp;<em>S</em>&nbsp;are posted as a zerocoin spend&nbsp;transaction, where miners verify the proof and that the serial number&nbsp;<em>S</em>&nbsp;has not been spent previously. After verification, the transaction is posted to the blockchain, and the amount of bitcoin equal to the zerocoin denomination is transferred from the zerocoin escrow pool. <a href=\"https://cryptonomad.info/knowledge-base/anonymity%E2%80%8F%E2%80%8E/\">Anonymity</a> in the transaction is assured because the minted coin&nbsp;<em>C</em>&nbsp;is not linked to the serial number&nbsp;<em>S</em>&nbsp;used to redeem the coin.The accumulator used for the zero-knowledge proof would have to be re-computed every time a spend transaction is verified, and although this can be done incrementally if the accumulator checkpoint is carried on from earlier blocks to the new block, it would still add some overhead to the verification-process. Additionally, both the accumulator checkpoint and all the zerocoin serial numbers would have to be added to every <a href=\"https://cryptonomad.info/bitcoin/\">bitcoin</a>block, thus increasing the size (although not substantially).Since the verification process for zerocoins is much more computationally heavy than for bitcoins, the verification time for a&nbsp;block&nbsp;would increase up to 6 times depending on the ratio between bitcoins and zerocoins. Preliminary tests done by the developers show that even with the increased verification time and blocks twice the size of current bitcoin blocks, the verification time for an entire block would not exceed five minutes, and since a new bitcoin block is currently created every ten minutes on average, the increased verification time should not be a problem.</p>\n<h3><strong>Zcoin (XZC)</strong></h3>\n<p>Zerocoin was first implemented into a fully functional <a href=\"https://cryptonomad.info/\">cryptocurrency</a> called Zcoin (XZC), a project that went live on September 28, 2016, 12AM UTC.&nbsp;The project’s testnet software was first released to the public on December 18, 2015 under the name Moneta (not Moneta Verde (MCN)) before it was dubbed to Zcoin.&nbsp;Roger Ver&nbsp;was one of Zcoin’s initial investors same as&nbsp;<a href=\"https://cryptonomad.info/zcash/\">Zcash</a>.</p>\n<h3><strong>Private Instant Verified Transaction (PIVX)</strong></h3>\n<p>PIVX is the first&nbsp;<a href=\"https://cryptonomad.info/proof-of-stake/\">Proof-of-stake</a> <a href=\"https://cryptonomad.info/\">cryptocurrency</a> that has implemented the Zerocoin protocol. Zerocoin went live on PIVX on October 16th, 2017. The Zerocoin PIVX tokens are known as zPiv.</p>\n<h3><strong>SmartCash (SMART)</strong></h3>\n<p>SmartCash (SMART) is a Keccak SHA-3 algorithm, mineable coin that uses Zero-knowledge proofs from the zerocoin extension.</p>\n<h3><strong>ZeroVert (ZER)</strong></h3>\n<p>ZeroVert (ZER)&nbsp;is a Scrypt-N algorithm coin, merge-mineable on the VTC chain with a total circulation of 8.4 million ZER.</p>\n<h3><strong>CredaCash</strong></h3>\n<p>A faster implementation of zero-knowledge proofs using zk-SNARKs was created for a new cryptocurrency called CredaCash. CredaCash requires only about 3 seconds and 85 KB of memory to create a transaction proof. Similar to Zerocash, CredaCash is an alt-coin with its own blockchain and transaction protocol. The CredaCash developer hope they can offer CredaCash to the market in 2016.</p>\n<h2><strong>Reception</strong></h2>\n<p>One criticism of zerocoin is the added computation time required by the process, which would need to have been performed primarily by bitcoin miners. If the proofs were posted to the <a href=\"https://cryptonomad.info/blockchain/\">blockchain</a>, this would also dramatically increase the size of the blockchain. Nevertheless, as stated by the original author, the proofs could be stored outside of the blockchain. To counter criticisms that the anonymity offered by zerocoin would facilitate illegal activity, it has been suggested that a backdoor, or other features, could be added to the zerocoin protocol to allow police to track money laundering, but this was not advocated in the original paper.Since a zerocoin will have the same denomination as the bitcoin used to mint the zerocoin, anonymity would be compromised if no other zerocoins (or few zerocoins) with the same denomination are currently minted but unspent. A potential solution to this problem would be to only allow zerocoins of specific set denominations, however this would increase the needed computation time since multiple zerocoins could be needed for one transaction.Depending on the specific implementation, the zerocoin protocol would rely on one or more trusted parties to generate two large prime numbers,&nbsp;<em>p</em>&nbsp;and&nbsp;<em>q</em>, so&nbsp;<em>n</em>&nbsp;=&nbsp;<em>p</em> <em>q</em>. Since&nbsp;<em>n</em>&nbsp;has to be hard to factor,&nbsp;<em>p</em>&nbsp;and&nbsp;<em>q</em>&nbsp;must be unknown to normal users for zerocoin to be secure. The protocol could rely on RSA unfactorable objects to avoid having to have a trusted party for the setup process. Such a setup, however, is not possible with the new Zerocash protocol.</p>\n<h2><strong>Extensions of Zerocoin</strong></h2>\n<p>Recognizing that <a href=\"https://cryptonomad.info/bitcoin/\">Bitcoin</a> was unlikely to be implement Zerocoin, the authors of Zerocoin expressed hope that other <a href=\"https://cryptonomad.info/\">cryptocurrencies</a> would incorporate Zerocoin anonymity features. Currently, Zerocoin is being implemented in the alternative cryptocurrency Anoncoin.&nbsp;</p>\n<p><a href=\"https://cryptonomad.info/zerocoin/\"><strong>Read the original full article here.</strong></a></p>\n<p><br></p>\n</html>",
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      "title": "Setting up a Tor hidden service",
      "body": "<html>\n<p>&nbsp;If you use a Bitcoin&nbsp;full node&nbsp;over Tor, then usually it will only be able to make outgoing connections. Therefore, you will only get a maximum of 8 total connections. This is fine, and is not something you usually need to worry about, but if your computer is often online and you want to be a big help to the network, you can run a Tor hidden service in order to accept incoming connections over Tor.&nbsp;</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/mask-1249922_640.jpg\" width=\"640\" height=\"426\"/></p>\n<p>&nbsp;Note that there is no need to forward port 8333 when using a Tor hidden service. The hidden service will cause most firewalls and NAT setups to be bypassed. For this reason, running a Tor hidden service is also a good idea if you want incoming connections but are for some reason unable to forward port 8333.</p>\n<h3><strong>Prerequisites</strong></h3>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/invisible-man-154567_640.png\" width=\"320\" height=\"640\"/></p>\n<p>&nbsp;These instructions are for &nbsp;&nbsp;Linux. It is possible to do on Windows, but the instructions would be rather different. (If you’ve done it on Windows, consider adding the instructions to this page.)You need Tor (at least version 0.2.7.1). Figure out where your&nbsp;torrc&nbsp;file is (/etc/tor/torrc&nbsp;is one possibility). This guide assumes default Tor settings. This guide assumes that Tor is running under the user and group&nbsp;tor, which will usually be the case if you install Tor using your distro’s package manager.You need Bitcoin Core (or similar). For method 1, you need at least version 0.12.0. Find&nbsp;bitcoin.conf&nbsp;in your&nbsp;data directory.</p>\n<h3><strong>Method 1 (recommended)</strong></h3>\n<p>This sets up an ephemeral hidden service. The hidden service address (xxxx.onion) will change every time Bitcoin Core is restarted.Add these lines to your&nbsp;torrc:</p>\n<pre><code>ControlPort 9051<br>\nCookieAuthentication 1<br>\nCookieAuthFileGroupReadable 1</code></pre>\n<p>You need to figure out what user bitcoind or bitcoin-qt is running as. Run the following command while Bitcoin is running:</p>\n<pre><code>ps -eo user,group,comm |egrep 'bitcoind|bitcoin-qt' |awk '{print \"Bitcoin user: \" $1}'</code></pre>\n<p>Write down the reported user.Run the following command as root, which adds your Bitcoin user to the tor group. Replace BITCOIN_USER with the actual user name found above:</p>\n<pre><code>usermod -a -G tor BITCOIN_USER</code></pre>\n<p>If you don’t modify any other settings, Bitcoin Core will usually connect over the regular Internet, but will also allow connections to and from the hidden service. If you want Bitcoin Core to only connect via Tor (for anonymity), add these lines to bitcoin.conf:</p>\n<pre><code>proxy=127.0.0.1:9050<br>\nlisten=1<br>\nbind=127.0.0.1</code></pre>\n<p>If you additionally want Bitcoin Core to only connect out to Tor&nbsp;<em>hidden services</em>, also add this line (not particularly recommended):</p>\n<pre><code>onlynet=onion</code></pre>\n<p>If you’re only interested in running a hidden service in order to help the network, then there’s no need to modify any bitcoin.conf settings at all. Bitcoin Core will automatically detect Tor and create the hidden service.Now restart Tor, and then Bitcoin Core. You should eventually get incoming connections via the hidden service.&nbsp;</p>\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src=\"https://cryptonomad.info/wp-content/uploads/2019/08/mask-3579320_640.jpg\" width=\"640\" height=\"426\"/></p>\n<p>&nbsp;</p>\n<h3><strong>Method 2</strong></h3>\n<p>This sets up a static hidden service. The hidden service address (xxxx.onion) will never change. This is probably even more helpful for the network, and you will probably get more incoming connections than method 1, but&nbsp;<em>maybe</em>&nbsp;it would be helpful to someone trying to track your transactions.<strong>Add these lines to your&nbsp;torrc:</strong></p>\n<pre><code>HiddenServiceDir /var/lib/tor/bitcoin-service/<br>\nHiddenServicePort 8333 127.0.0.1:8333</code></pre>\n<p>Restart Tor. As root, run&nbsp;cat /var/lib/tor/bitcoin-service/hostname. Your onion address will be reported. If it didn’t work, then probably your distro’s version of Tor doesn’t actually use&nbsp;/var/lib/tor&nbsp;for this purpose. You should try to figure out the correct HiddenServiceDir location.In the following steps, replace ONION_ADDR with the onion address reported above.If you don’t care about anonymity and are only looking to help the network, add the following lines to bitcoin.conf:</p>\n<pre><code>onion=127.0.0.1:9050<br>\nlisten=1<br>\nexternalip=ONION_ADDR<br>\ndiscover=1</code></pre>\n<p>This will allow you to accept connections both via your onion address and your IP address (if you have port 8333 forwarded), and Tor will only be used for connections to and from Tor hidden services.If you care about anonymity,&nbsp;<strong>instead</strong>&nbsp;of the above, add the following lines to bitcoin.conf to use Tor for everything:</p>\n<pre><code>proxy=127.0.0.1:9050<br>\nlisten=1<br>\nbind=127.0.0.1<br>\nexternalip=ONION_ADDR</code></pre>\n<p>If you additionally want Bitcoin Core to only connect out to Tor&nbsp;<em>hidden services</em>, also add this line (not particularly recommended):</p>\n<pre><code>onlynet=onion</code></pre>\n<p>Now restart Bitcoin Core. You should eventually get incoming connections via your hidden service.</p>\n<p><a href=\"https://cryptonomad.info/setting-up-a-tor-hidden-service/\"><strong>Read the original full article here.&nbsp;</strong></a></p>\n</html>",
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