Posts Tagged ‘bitcoin rich list’

4
Feb

Tokyo Bitcoin News ep. 10 – Bitcoin ATM’s and Multi-sig

by adminadam in videos

Lazy translation:

— Bitcoin ATM’s: Here’s an ATM next to us. Where are these made?
— Generally in America.
— There are more and more Bitcoin ATM’s around the world. We can see them on the map. There are 555.
— 16 in Japan, huh?
— Yes, there are different brands too: Genesis ATM is the leading manufacturer of Bitcoin ATM’s. Lamassu is #2. One’s that are easy to use are becoming more common. We are adding one Bitcoin ATM per day on average right now around the world.

— Recently the price has been going up and down. But it seems more people are buying bitcoin these days; we can safely ignore the recent Hearn debacle.

— There was a seminar recently that we attended. How was it for you?
— I thought that it was easy to understand, and I thought it was noteworthy that transactions are almost free of fees and the fact that everyone in the network secures bitcoin together I thought was interesting. I also thought, wow, I’ve never thought about the nature of money before either…
— A lot of people were buying bitcoins there, too, huh?
— Yeah, quite a few people.
— Some individuals were buying a large amount too.

— So let’s talk about how people are getting their hands on bitcoin these days… If you buy bitcoin at an ATM you’ll either send it to a wallet on your phone, or you’ll get one of these paper wallets with the private key and the public key showing. Of course if you’ve got a lot of money on your paper wallet, it’s insecure, and you stand to lose it all if anyone scans the private key before you transfer the bitcoin associated with it away to some other wallet (and a new address).

— So how do you secure bitcoin? If you look at the top 100 richest bitcoin addresses on BitcoinRichList, it shows there are some with over $60 million worth of bitcoin in them. And notice the addresses here, there are a few that start with a 3, and most of the rest start with a number 1. The number at the beginning of the addresses tell you something. A 1 tells you that it’s a normal single-signature wallet address. A 3 tells you that it belongs to a multi-signature wallet.

— Multi-signature wallets, such as the Trezor hardware wallet, or any number of multi-sig software wallets, allow you to divide the ownership or control over a bitcoin wallet amongst three or more keys. You can distribute these keys around the world, or have your neighbor or a friend hold a third key for you while you hold two. If you hold two keys, you can use those two keys to spend your bitcoin from the multi-sig wallet that you’ve got. If you lose one, your neighbor can still help you sign off on the transaction so it can be sent.
— It’s kind of like a bank, isn’t it?
— It is like a bank except only the wallet (account) owner can move the bitcoin to a new address.

— Only about 30 out of the top 100 bitcoin addresses now are multi-sig wallet addresses. It seems rather foolish. You’re much more vulnerable keeping all your bitcoin in a single-signature wallet. I think we’ll be seeing the number of multi-sig addresses increase a lot in the near future. We could expect more multi-sig addresses to be taking up the top 100 richest address spots in the next few years.

— There are some trends in top companies around the world (having to do with dematerializaiton). So many of the world’s most innovative companies have little-to-no property or inventory; they generally just coordinate others’ resources:

  • Uber – The world’s largest taxi company owns no vehicles.
  • Facebook – The world’s most popular media owner creates no content.
  • Alibaba – The most valuable retailer has no inventory.
  • Airbnb – The world’s largest accommodation provider owns no real estate.

— I could see bitcoin fitting into such a role in the future: “Bitcoin – The world’s largest bank holds no money”.

— The Trezor is a really cool way to protect your bitcoins. If you don’t plug it into your computer, you can’t spend the bitcoins. If your computer is hacked, you’re protected because the private key for your wallet is on the other device, the Trezor. Not only is the key separated from the network (offline), but you need to enter an pincode with on-screen obfuscated number pad, but also you need to confirm two times by pressing a button on the device before you can send money to someone.

— And now Trezor is selling this multi-sig set of hardware wallets. There’s three in each package. You could take two and trust me to hold the third as a backup. You’d need both of your keys, or one of yours plus mine, in order to withdraw from the account. I can’t ever withdraw from the account because I only have one key.

— You can see this being potentially very useful for companies to secure large accounts. For example, they could distribute 15 keys to members of the board of directors. Maybe they give one to a law firm they hire to arbitrate in the case consensus cannot be reached or if, heaven forbid, more than half of the board members die or lose their keys. You can set the minimum number of keys needed to send a transaction to whatever you want: 5 of 15, 10 of 15, etc.

— There are new physical hardware wallets that work just like credit cards, too, now. They use the same kind of chip technology and everything. As of right now, there is no standard way of securing your bitcoin with hardware wallets. The bitcoin ecosystem is still in its infancy, but it is developing quickly.

— What do you think about all this?
— I feel like I want to know more now, like it would be good to know about bitcoin and how it works.

— What about the economic and technological impacts that this technology can have? What do you think about this?
— It seems like it could be useful for many things. Since you can send money to anyone it would be great for charity, wouldn’t it?
— Yes, indeed. You can donate to any given cause around the world.

— Ultimately, it’s really a young technology and is not very user-friendly yet. But the developers in the space are working at a frantic pace to build it out and make it better and easier to use.