Friday, 12 November 2021

WHAT ARE SATS?

 “Sats,” that is shorthand for “satoshis” is a term used for the smallest feasible denomination of BTC: zero.00000001 BTC, or 1 one-hundred-millionth of a bitcoin. The unit is known as for the pseudonymous creator of Bitcoin, Satoshi Nakamoto.

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In a 2010 Bitcointalk thread supposed to decide the reputable Bitcoin Unicode character, user Ribuck asked, “What’s the plan for subdividing bitcoins? Do we move in lots just like the metric system (millibits, microbits, nanobits)?”

“A hundredth of a bitcoin may be a Satoshi, a thousandth of that is a Molyneau, and a thousandth of that would be an Austrian,” Ribuck wrote.


Fellow Bitcointalk customers didn’t take Ribuck up at the idea, however Ribuck resurfaced the idea in a 2011 thread particularly searching for greater divisibility in BTC, which caused a thread soon after entitled “Bitcent?”, which sought to call these divided gadgets. Within that thread, cryptography and Bitcoin pioneer Hal Finney referenced Ribuck’s original inspiration:

“I like ribuck’s terminology,” Finney wrote. “He indicates bitcents, then millicents and microcents. Microcents occur to be the smallest to be had subdivision of bitcoins, so this works properly.”


A few hours later, consumer marcus_of_augustus counseled a good smaller denomination: “1 satoshi = 1 microbitcent (smallest denomination). One hundred million satoshis = 1 bitcoin. Are we agreed?”


With apparent consent on the thread, the time period became adopted through default. And in current years, it’s use has regarded to develop more generic. That may be because of increased adoption, an basic rise in charge, the beginning of new rewards and earning platforms that use small denominations of BTC or different causes.

WHAT IS A BLOCKCHAIN?

 Bitcoin depends on a disbursed ledger device called the blockchain. The blockchain is probable the maximum effective innovation associated with Bitcoin, as endless industries from financial offerings to healthcare have began taking into account the way to leverage the technology for their very own uses. So it’s well worth asking: What is a blockchain?

The vital power of blockchain technology is its potential to distribute data. Because it's miles disbursed across all the nodes, or person computers, that make up the system, the time period “blockchain generation” is frequently swapped with “dispensed ledger era.” A blockchain’s database isn’t held in a single area, which might be infiltrated or controlled by a single party, however instead it's far hosted by means of numerous (inside the case of Bitcoin, tens of thousands of) computer systems all at once.

The blockchain network mechanically verifies itself at sure periods, growing a self-auditing system that guarantees the accuracy of the information it holds. Groups of this information are called “blocks,” and as those blocks are cryptographically chained collectively, the pieces of statistics get buried and more difficult to control. Altering any piece of facts on the blockchain could require a huge quantity of computing strength.

One large downside of a blockchain, in comparison with different varieties of databases, is that this distributed setup requires steady computing energy from several different resources to maintain up.


Like Bitcoin, the invention of the blockchain as we apprehend it now is usually credited to the character or group that goes by the name of Satoshi Nakamoto. But certainly, the idea of a mutual dispensed ledger can be traced back to a 1976 studies paper known as “New Directions in Cryptography.” For many years the concept was seen as insecure and overly complicated, but while it turned into eventually paired with Bitcoin, the technology’s safety and distribution benefits became clear.


Now, new uses for the blockchain are being evolved by agencies like Microsoft and Deloitte, which agree with that its decentralized and verifiable nature give it large potential beyond virtual currencies.


Only time will tell how a ways blockchain era can cross. If the present is any indication, it will be utilized far and wide.

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BITCOIN WALLETS FOR BEGINNERS: FROM ZERO TO SELF CUSTODY

 Many humans select to shop for bitcoin thru an exchange like Robinhood or Coinbase, then go away the asset on that crypto change platform. Please don’t make this rookie mistake!

The satisfactory manner to keep your bitcoin is in your personal pockets. This way you’ll in no way must worry that you virtually have much less than you’re being informed by a financial institution, change or other provider provider. Don’t ask for permission to spend your very own cash. Hold your own bitcoin.


There are many cellular wallets to select from, along with Samourai Wallet and Sparrow Wallet. In this educational, we’ll show you how to purchase Bitcoin the use of Cash App, an exchange, then switch your digital foreign money to a mobile wallet. To whole this identical manner without getting into understand-your-consumer statistics, use a carrier like CardCoins alternatively, to shop for bitcoin with a pay as you go gift card. If you prefer a web app, the Swan Bitcoin exchange gives similar functions to the ones described under. These alternatives may take a wee bit longer. Otherwise, this newbie educational can be tailor-made to iPhone users beginning from scratch. Here’s what you’ll want:

  • iPhone
  • Internet connection
  • Driver’s license or passport
  • 30 minutes

HOW TO USE AN IPHONE AS A BITCOIN WALLET

1. Install each Cash App and Blue Wallet. Get each Cash App and Blue Wallet through the iPhone app store, much like every other cell app. You also can watch this video for more on putting in and putting in place Blue Wallet on iPhone. 


Input your email address or cellphone number to be despatched a signal-up hyperlink. You can select to link your bank account at this point by means of including your debit card variety (although it’s perfectly pleasant to pass this step). Then, input your name and pick out a $Cashtag. This public user name is how you will receive and ship budget. Type on your zip code and also you’re excellent to move.


2. Set up your Cash App account. Input your electronic mail cope with or cellphone wide variety to be sent a sign-up hyperlink. You can choose to hyperlink your financial institution account at this factor by way of including your debit card variety (even though it’s flawlessly best to bypass this step). Then, enter your call and pick out a $Cashtag. This public consumer name is how you'll acquire and ship finances. Type in your zip code and you’re correct to go.


3. Buy bitcoin. Now it’s time to buy your first satoshis (the smallest unit of bitcoin) the use of the Cash App exchange. Click on the second tab from the right (along the bottom of the display screen). Then pick out “Bitcoin” from the menu at the pinnacle. You’ll see a brand new web page that says “Buy Bitcoin Instantly.” Click “Buy” and pick the amount in USD you’d like to buy. If you linked your bank account, this ought to go through easily. Otherwise, you can ask a pal to send you greenbacks the usage of your $Cashtag. Confirm your pin number after which your purchase. (It may additionally ask you to affirm a code once more, despatched in your electronic mail). Congratulations, you now own your first satoshis! (Note: you’ll also have the option to set up a habitual bitcoin buy of small quantities. This is known as dollar fee averaging, and many human beings use this approach to invest slowly, over the years, for you to reduce their threat of volatility.


4. Set up self-custody. It’s crucial which you don’t leave your satoshis mendacity around for your Cash App account. To ensure that you in reality own your bitcoin, you ought to ship them to a pockets that best you could get right of entry to. To try this, transfer over to the Blue Wallet app. The small plus signal in the center will activate you to create a pockets, like a subfolder. Choose the bitcoin option. 


5. Secure your seed word. This is the most vital step. Write down your seed word in the proper order on a chunk of paper. Secure this piece of paper as if it had been gold or jewelry. Do now not screenshot these words. Do not store these words on a pc or on your telephone. Your bitcoin is simplest as secure as your 12-phrases and passphrase. Double check your paintings, then confirm acknowledgement that you have secured your 12 words. Select “RETURN TO WALLET.” (Note: Once you get greater severe about Bitcoin, recollect securing your seed terms on metallic as opposed to on paper.) Now you are prepared to transact! 


6. Move your bitcoin to self-custody.  From the Blue Wallet home display screen, definitely select the pockets icon for the pockets you just created. This will convey you into the pockets wherein you could then pick the "Receive" button at the lowest of the display to display your first Bitcoin deal with QR code. It have to be an extended string of numbers and letters.


Next, pass back to Cash App and click the arrow icon on the right side of the display below the “Investing” tab, next to the “Sell” button. You’ll need to have a Cash App account set up, which calls for a photograph of your ID, before your trade account will permit you to ship bitcoin. (This is exactly the motive we’re moving your digital currency to a pockets which you manipulate, so that you received’t want approval in the destiny.) 


Once you’re approved to ship bitcoin via Cash App, paste your Blue Wallet bitcoin address into the recipient area beside “To.” Select the amount of bitcoin you need to send, double-test that the bitcoin deal with fits what you copied from Blue Wallet, and confirm the transaction. 


Congratulations! You’re now the proud (and sole) proprietor of your first bitcoin stash! 


Remember to be aware of the privacy implications associated with your bitcoin cope with. All bitcoin transactions at the blockchain are available to the general public, so it is a superb idea to keep this data separate from your identity.

Thursday, 11 November 2021

WHO CREATED BITCOIN?

 Bitcoin become created with the aid of Satoshi Nakamoto, (almost without a doubt) a pseudonym, that nobody has been able to conclusively connect to an actual character or group of human beings to this present day. Nakamoto vanished from the internet in 2011, leaving few clues as to who they might be. Over the years, many people have publicly claimed to be Satoshi, all failing to help the assertion with indisputable statistics.


In an early bitcointalk discussion board, Satoshi stated that they started running on Bitcoin in 2007, two years before the first block changed into mined. The Genesis block, or the primary block in the Bitcoin blockchain, changed into mined on January 3, 2009. Nakamoto turned into the miner of the Genesis block, receiving the first 50 bitcoins ever placed into movement. This reward from the first block, however, became unspendable due to a quirk within the manner the Genesis block is expressed inside the code. BitMEX Research has posted an evaluation at the early mining days of Bitcoin and concluded that “someone” mined 700,000 cash. While many expect this turned into Satoshi, it officially remains unproven.


One can only consider the repute Satoshi Nakamoto might receive if their identity ever had been to return to light, now not to say the substantial riches they stand to gather (even though Satoshi appears no longer to have spent any of the coins they supposedly mined). Over time, there have been many times of people claiming to be Satoshi, and others who’ve had that declare thrust upon them.


FALSE CLAIMS

One of the most famous instances of a person claiming to be Satoshi is by means of Craig S. Wright, an Australian educational. Wright, as early 2015, has attempted a couple of instances to offer a public demonstration with indeniable evidence that he changed into Bitcoin’s inventor, but he has now not been a success to these days. In fact, his “evidence” has confirmed to be fabricated.


Dorian Nakamoto, a person in California, turned into once publicly assigned the name of Bitcoin’s creator by means of a newspaper journalist who noticed numerous similarities among the 2 Nakamotos, most manifestly their surname. Very fast, however, this claim changed into denied by means of Dorian and disproved as properly.


Another class of humans who've garnered attention around Satoshi’s unknown identification are cryptographers and computer scientists. Hal Finney, a renowned cryptographer who turned into the primary man or woman to get hold of bitcoins from Satoshi Nakamoto, is one of the maximum famous suspects due to his early involvement inside the space. For much less than a yr after Bitcoin turned into created, Satoshi and Hal Finney exchanged numerous posts on Bitcoin dialogue boards, discussing matters just like the era and its destiny implications. Finney passed faraway from ALS in 2014, main some to invest at the volume of his involvement with the world’s first decentralized currency. Nick Szabo is some other famend cryptographer who created Bit Gold, a digital forex invented numerous years before Bitcoin. The fact that he does now not seem to were at once worried with Bitcoin’s advent, although his mission is so remarkably much like it, has led some to invest he might be Bitcoin’s author as well


WHY SATOSHI MUST BE ANONYMOUS

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FIND THE BEST BOOKS ABOUT BITCOIN

 For young children offer boks like “Bitcoin Money: A Tale Of Bitville Discovering Good Money,” while for teenage and adult beginners offer “The Little Bitcoin Book: Why Bitcoin Matters For Your Freedom, Finances, And Future,” among many other offerings.


These titles include the 20 best books about bitcoin


Are you a developer who wants to learn more about software and the Bitcoin network? Look no further than “Programming Bitcoin: Learn How To Program Bitcoin From Scratch.” An experienced Bitcoin user who is passionate about the history of decentralized money? For you, we offer “The Blocksize War: The Battle Over Who Controls Bitcoin’s Protocol Rules” and “Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies.” 


What about if you are looking for a gift for a friend, wife or daughter who just doesn’t understand what is so cool about Bitcoin? We even have a book for that, “Cypherpunk Women,” which covers both Bitcoin and broader social movements. It’s the perfect book for nocoiners who aren’t attracted to the hard money narrative. There will be a limited supply of this anthology available for pickup this June at the conference in Miami, so be sure to reserve your copy in advance. All the rest of our books are available for purchase either online or in person in Miami, so everyone can enjoy our collection of books about Bitcoin. 

Even a complete beginner who is not tech-savvy can use this curriculum to go from understanding bitcoin basics, with beginner books like “Bitcoin Clarity: The Complete Beginners Guide to Understanding” and “Inventing Bitcoin: The Technology Behind the First Truly Scarce and Decentralized Money Explained,” to experienced bitcoin users with a comprehensive understanding of how inflation, supply and demand all impact the economy.


You can basically give yourself a PhD in Bitcoin just by reading our whole curriculum with the best 20 books about bitcoin. In terms of economics text books, we recommend “The Sovereign Individual: Mastering The Transition To The Information Age” and “Economics In One Lesson: The Shortest And Surest Way To Understand Basic Economics.” And, of course, no Bitcoin curriculum would be complete without “The Bitcoin Standard: The Decentralized Alternative To Central Banking.” Prioritize your own self-sovereignty by getting the educational resources you need to learn all about Bitcoin.

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Wednesday, 10 November 2021

HOW TO SET UP A WATCHTOWER FOR AN UMBREL BITCOIN LIGHTNING NODE

 This guide will show you how to quickly and easily protect your funds in your Bitcoin Lightning channel.

The Lightning Network is a trustless* Layer 2 network for Bitcoin and brings forth many improvements in speed and cost of final settlement. I use an asterisk on trustless because although it is, there are a few caveats to take into consideration so that your funds are safe, aside from normal hot wallet risks. Watchtowers, which we’ll cover today, ensure that your funds are safe from malicious channel closures, which is one of the main risks of running a well-capitalized Lightning node.


Lightning channels are currently constructed through setting up a two-of-two multisig address, in which your funds are locked up with another party. Either party has the secret to revoke the multisig contract and settle up at any time, but only if both nodes are online can it be closed immediately. If your node did go offline, the other party has to either wait for you to come back online or force close the channel. Now, force closing is not always a huge concern, especially if you're using the Lightning Network with peers that you trust already, but as the Lightning Network grows and its use cases expand, you’ll inevitably start interacting with peers whom you may not know, and so it's important to learn to defend your node against malicious closures.


If a malicious peer were to close a channel with a false balance state, and you don't come online to rebroadcast and claim the actual balance within enough time, they can get all of your funds in the channel. Watchtowers protect against this by keeping a running tab of your channel balances and defending against malicious closures. If a bad actor were to close a channel while you have a watchtower active on your Lightning node, they will instantly be penalized through what’s called a justice transaction instead of you, and you will get all of their funds instead of them getting yours.


In this writeup, we explain how watchtowers work to protect your funds inside Bitcoin Lightning channels and show you how to connect to Voltage.Cloud's free, LND Tor-based watchtower service.

This significantly reduces the operational risk of running a capitalized Lightning node in my opinion. While it does not necessarily reduce the risk of force closures on a crashed node with static backups and could still be an expensive incident to recover, at least this will protect your funds against malicious channel partners who may try to steal your funds if a hardware failure event were to occur.


Currently Voltage.Cloud runs this service altruistically, too. Pretty sweet, huh?

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HOW TO PROTECT YOUR BITCOIN FROM EMERGENCY WITH THE BITPLATES DOMINO

 Preserving your Bitcoin wallet recovery seed is critical to self sovereignty. Here’s how to do so with the BitPlates Domino steel backup plate.


Congratulations on taking the leap into bitcoin self custody. By doing so, you no longer need to rely on third-party permission to access and use your bitcoin however or whenever you see fit. An added benefit of self custody is mitigating third-party risk — you no longer need to worry about an exchange hack depleting all of your bitcoin from your trusted custodian's control. Self custody puts you in control of your bitcoin, ensuring that you maintain access to your bitcoin in case of a catastrophe.


By stamping your BIP39 Bitcoin wallet recovery words into a stainless steel medium like the Domino®, you can rest assured that you have the necessary information secured to restore your Bitcoin wallet and regain access to your funds whether you lose your mobile, desktop or hardware wallet and/or you are the victim of an environmental hazard such as fire or flood. If you secured your Bitcoin wallet with an added passphrase during initial setup, it is possible for you to purchase multiple Domino plates to secure that information as well.

 The industrial grade is made of 304 stainless steel and the marine grade is made of 316L stainless steel. There are three sizes available in each grade: pocket, original and grande.


The larger the plate, the more space there is in each square for stamping the appropriate dots.

Each plate is 3 millimeters (mm) thick and 100 mm tall, but the widths vary depending on model:

  • Pocket: 3 mm x 100 mm x 75 mm
  • Original: 3 mm x 100 mm x 100 mm
  • Grande: 3 mm x 100 mm x 125 mm

The generation two line of plates feature an etched alphabet on the left side, as compared to the generation one plates which did not include the alphabet. Every Domino also includes a 3 mm hole which can be used for a range of storage techniques, like hanging the plate behind a picture on your wall or attaching the plate to a lanyard.


For this guide, I will be demonstrating the industrial grade, original Domino. I used a 24-word seed phrase generated by a ColdCard, which is the hardware wallet I recommend for reasons I outline here, but you can use any BIP39-compatible Bitcoin wallet. If you are looking for guidance on the available choices, here are recommendations I make for getting started with Android, iPhone and desktop. The Domino can be used for any BIP39-compatible seed phrase such as those with 12, 18 or 24 words.

Only the first four letters of each word are necessary, as no two words on the BIP39 word list share the same sequence of the initial four letters. Start with a permanent marker just in case you make a mistake and then double check your work before proceeding with the spring-loaded punch. The alphabet template can assist in keeping the letters properly aligned while moving across the grid.


On the first side of the plate, use a single dot for words one through six and a double dot for words seven through 12. If any words share a common character, stamp three dots in that square. Some words from the BIP39 list are only three letters in length so the fourth square in those instances will be left blank if not needed. Use the reverse side of the plate and repeat the process for words 13 through 18 and 19 through 24. Ensure that the words are kept in order of one through 24.

Once finished, you can clean the permanent marker off of the plate with rubbing alcohol or acetone and the results are a clean, legible and organized backup.


Now that the Bitcoin wallet recovery seed words are secure, let's test the durability of the Domino against white-hot temperatures of about 1,500°C, just below melting point. Then we can verify that this backup method is guaranteed to withstand a house fire. After you have checked and double checked your backup by restoring your wallet, consider safely burning the paper copy.


The Domino survived the test and all 24-words are 100% recoverable!


In conclusion, the Domino is a robust Bitcoin wallet backup method. One of my favorite features is that it is thicker than most steel backups at 3 mm. I also like that it is available in multiple sizes to fit a wide range of needs or hiding places. Multiple plates can be used for backing up more advanced security methods, such as an additional passphrase, a SeedXOR or multisig. For example, a secondary Domino could be used to stamp a second set of words from the BIP39 list and this could even generate a decoy wallet with some duress funds stored in case of emergency. Then the first six words, for example, could actually be the passphrase for the primary wallet secured by the first Domino. This video demonstrates the technique.


There are many clever solutions you could implement to secure your Bitcoin wallet using a high degree of entropy.

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HOW TO OPERATE A BLOCKSTREAM SATELLITE AS A BITCOIN NODE

 Everything you need to know to install and operate a Bitcoin node connected to the blockchain via satellite, and enjoy full sovereignty.


This guide has the following sections:

  • Recommended Materials
  • Satellite Selection And Rough Pointing Angles
  • Antenna Installation
  • Raspberry Pi OS Image
  • Configuring The SSD
  • Installing And Configuring BlockSat-CLI And Bitcoin Satellite
  • Dialing In The Antenna Pointing Angles
  • Running Bitcoin Satellite
  • Conclusion

RECOMMENDED MATERIALS:

Raspberry Pi kit: includes Raspberry Pi 4 byte (B) to 8 gigabyte (GB) RAM, case, cooling fan, power adaptor and microSD card.

  • 1 terabyte (TB) Solid State Drive (SSD), such as the Samsung T5 or T7
  • Satellite Antenna Kit: All-in-one base station sold by Block stream
  • Ethernet cable: Outdoor-rated CAT5e will suffice
  • Ethernet cable crimp tool for terminating the cable ends
  • RJ45 connectors for the Ethernet cable ends
  • GitHub Repo: Be sure to bookmark this repo as well

All together, a setup like this will cost less than $800 for all the required materials. You will also benefit from having a laptop with WiFi capabilities.

Everything needed for the Raspberry Pi comes in the CanaKit listed above, except for the SSD.

Make sure to first install the supplied heat sinks.

Then, start with the lower portion of the case and place the Raspberry Pi circuit board on it. Then, place the middle of the case on the circuit board.

Then, connect the red lead from the fan to pin #2, which is the five-volt direct current power supply pin. Connect the black lead from the fan to pin #6, which is the ground pin. The fan itself snaps into place on the underside of the top of the case.

Then, snap the top of the case onto the middle part and the Raspberry Pi assembly is finished. You can set this aside for now and we'll come back to it later.

SATELLITE SELECTION AND ROUGH POINTING ANGLES

Navigate to the Blockstream Satellite network coverage website and make note of the satellite with the strongest signal for your geographic location. You will want to either drop a pin on the map, enter the address where the satellite will be installed, or use a satellite pointer mobile app to get the most accurate elevation, azimuth and polarity numbers that you will need to set up your mounting bracket and antenna.

For example, using the Denver Federal Reserve bank address:

1020 16th Street Mall, Denver, Colorado, 80202, United States

Enter this address into the satellite map website, it will reveal the best numbers for the elevation, azimuth and polarity. Then, use those numbers to set up the correct angles on the mounting bracket and antenna. If you are using the flat panel antenna like the one in this guide, then you will want to make sure your selected satellite has the green check mark, like the Galaxy 18 for example.

You can also download the Satellite Pointer app for iOS or Android to utilize an augmented reality tool to help get all of your angles right. With this app, you can find the satellite you want to point your antenna at by scanning the sky around you. Then, you will be given the best azimuth and elevation to use when you align the cross-hair pointer on screen with the satellite you want to connect with. You can also find the best polarity to use by selecting the appropriate satellite from the list option and scrolling down through the details. It helps too if you allow the app access to your location, or you can also enter the location manually.

Make sure to notate the ideal pointer angles. You will need to carefully set up your mounting bracket based on these angles as described in the next section; otherwise you may not receive good reception from the satellite.

ANTENNA INSTALLATION

The antenna is shipped in an inconspicuous box that has no mention of Blockstream or Bitcoin on it. The label on the outside of the box merely indicates that there is a flat panel antenna inside, which is commonly used for internet reception and televisions, among other things.

Upon opening the box, you will find that it contains the antenna, the Ethernet power supply, literature, mounting brackets for multiple applications, a compass, hardware and a flat wrench. 

Be careful while handling the antenna; try not to scratch the surface or drop it. Also do not apply any paint, stickers or anything else to the face of the unit. The back of the unit has the legacy-style coax cable connections and the Ethernet connection.

In this guide, I will be demonstrating the Ethernet connection. The advantage here is that the satellite signal is being converted into a digital signal internally and I do not need additional outboard hardware with this antenna.

There are a few different mounting options, such as window mounting, railing mounting and surface mounting. The right choice for you will depend on your unique situation. For me, I had an old DirecTV satellite dish installed on my house, so I decided to use the existing stand for it and I went with the railing mounting hardware in the kit.

After removing the old satellite dish, I mocked up the mounting bracket with the hardware to make sure I had everything I needed before going back up onto the roof.

Next, I installed the bare mounting bracket onto the existing mounting pole on the roof, leaving the satellite safe on the ground.

After I had the new mounting bracket installed and only fastened hand-tight, then I mounted the satellite antenna onto the mounting bracket.

Now that everything is in place and still only hand-tight, the pointing angles all need to be roughly set, these angles will be fine-tuned once it's powered up. Based on the geographic location example using the Denver Federal Reserve bank, the best pointing angles for the antenna are going to be:

Elevation: 40.37°

Azimuth: 206.94°

Polarity: 20.39°

Geometry is not my strong suit, but here is my best explanation: This graphic helps illustrate the three-dimensional planes. The vertical XZ plane defines elevation, the flat XY plane defines azimuth and the horizontal YZ plane defines polarity.

Elevation is the vertical degrees of X from Z, with Z being 0.

Azimuth is degrees on the XY plane of Y from X, with X being equal to north. With my antenna, I set the main mounting bracket roughly correct and then used the smaller adjustment to fine tune the setting:

Polarity is the horizontal degrees of Z from Y, with Y being equal to 0.

The notches on the mounting hardware will only get you so far. To get as accurate as I could, I used the Satellite Pointer app to provide the angles while my mobile phone was physically placed on the antenna. Since the Satellite Pointer app doesn't display real-time polarity, I used the Level Tool app on my mobile device for this. Also, to assist with the azimuth reading, I used the Compass app on my mobile device. As each angle was as accurate as I could get it, I would tighten down the hardware with the included flat wrench.


With the antenna installed and the pointer angles roughly set, all that is left for the installation piece is to run the Ethernet cable. About a year ago I ran a new coax cable from this satellite dish to my office in the basement on the other side of the house. Due to stocking levels at Blockstream, Lightning Network payment routing issues on my end and getting busy with other projects, I never did end up ordering the Satellite Kit despite running the cabling for it. I'm glad that I waited though, because the flat panel antenna has a built in LNB and internal satellite signal converter. Running a new Ethernet cable from the new antenna to my office was a worthwhile chore, since I did not want to use the legacy signal and buy an additional piece of hardware to convert it.

If you are not comfortable installing your own cable, then call a licensed professional. Depending on your installation, you may need to terminate your own cables, drill holes in your walls, and crawl inside your attic.

I went to a hardware store and bought 100 feet of outdoor-rated CAT5e Ethernet cable, a box of RJ45 connectors and the crimping tool.


Then, you need to decide which standard you want to use for your Ethernet cable. I couldn't find the standard used for the SelfSat>IP22 antenna but considering it is new, I made a safe assumption that it was the T568B configuration. So long as you terminate both ends of the cable with the same configuration, I don't think it really matters how the device's internal configuration is set up. All of the wires are the same color on the inside, after all.

 I won't go into the full details here on how to terminate your Ethernet cables, since there are so many good videos and guides online. But just a few things I do want to point out: Make sure your wire color order is the same on both ends. Make sure the wires go all the way to the end of the RJ45 connector. And make sure there is some of the insulated outer jacket where the pinch point clamps down on the cable in the RJ45 connector.

Before terminating the end of your Ethernet cable that gets plugged into the antenna, make sure you slip the cord-grip connector over the cable so that once you do have the end terminated, you can still plug it in and tighten down the cord-grip to keep and weather out of the connection.

Next, I used some zip ties to run the cable down along the side of my house and then drilled an inconspicuous hole to pass the cable through to the attic. Then, I crawled inside the attic and ran the cable along the length of the house to the opposite side and then down through the interior wall and then through the floor into the basement where I terminated the other end of the cable in my office. If you are uncomfortable with crawling into confined spaces to do this type of work, then I would recommend contacting a professional installer.

With the cable installed, simply plug it into the Power over Ethernet (PoE) adaptor, making sure that the cable connected to the antenna is in the correct port and that the other port is connected to your Raspberry Pi.

RASPBERRY PI OS IMAGE

There are three main steps covered in this section:

  1. Installing a Raspberry Pi Image
  2. Installing the Blockstream Satellite command-line interface (CLI)
  3. Installing the Bitcoin Satellite application, which is a fork of Bitcoin Core with the added capabilities to receive Bitcoin network data from satellites

First, the Raspberry Pi needs an Operating System (OS). To achieve this, the OS image will be downloaded and then flashed to the 32 GB microSD card that came in the CanaKit. Navigate to this website and select the image you want, I recommend downloading the latest available ARM 64 image; you may need to navigate back up the parent directory to get to the latest images. I chose the "2021-05-07-raspios-buster-arm64.zip." Then, you also want to download the SHA-256 file, as well as the signature file as shown here:

You will also need the Raspberry Pi imager executable file to flash the OS image onto the microSD card. 


Save all of the files in the same folder. It is important to verify the software that you can. This is why the SHA-256 file and the signature file were also downloaded in addition to the OS image. I'll show you how to use a PGP signature and a hash value to cryptographically verify the integrity of the OS image you just downloaded before installing it on your Raspberry Pi. For this, I will be using the Kleopatra key manager.

First, import the Raspberry Pi public PGP key into your key manager and then certify it. The PGP key can be downloaded here:

https://www.raspberrypi.org/raspberrypi_downloads.gpg.key

Then, simply right click on the signature file, select "More GpgEX options" and then select "Verify.”

The software will run for a moment and it should return a green verified dialog. Now, you know the downloaded .ZIP file is verified with the Raspberry Pi signature.

Now, you can run a SHA-256 hashing algorithm on the .ZIP file and compare that to the hash value in the downloaded hash file. I like to use a hex editing program called HxD for calculating hash values. Always be sure to get the latest hash files from the same archive you downloaded the image file.


Now that everything is verified, you can delete the SHA-256 hash file and the signature file from that folder, so the only items left are the imager executable file and the .ZIP file. Leave the .ZIP file compressed, the imager executable will take care of decompressing it. Load the microSD card in the USB adaptor and make sure that is available for your computer to communicate with it. Then double click on the imager executable file and the flashing process should start.


The microSD card that comes with the CanaKit already has an image loaded on it. But there is a preference to use the downloaded image in this case. Simply formatting the microSD card is only going to clear out the data in the available disk volume, just to be sure there are no hidden partitions, I'll do this with the Disk Manager instead. Open the Computer Manager by right clicking on "This PC" from a file explorer. Then navigate to the Disk Manager and then right click on the disk volume in question and select "delete volume." A warning will pop up indicating that this will delete all the data, select "yes."


Next, right click on the unallocated volume and select "start new volume." Then, follow the prompts in the wizard, leaving all of the default settings as they are. Formatting for FAT32 is fine.

Navigate back to the folder containing only the .ZIP file and the imager executable, and double click on the executable. Then, follow the prompts to install it and then run it. If everything went according to plan, you should be looking at this screen:

Select "Choose OS" then scroll down to "Use Custom" and then navigate to your .ZIP file:

Select "Choose Storage" and then select your microSD card. Then click on "Write" and select "Yes" to the warning that all data will be erased.

Then the writing and verification processes will start. This should take approximately ten minutes. When it is finished, you should receive the success notification.

Once you hit "Continue," it will eject the microSD card from the computer. However, a blank Secure Shell (SSH) file needs to be written to the root directory of the microSD card so that it can be connected to remotely. Upon reinserting the microSD card, your computer may tell you that the microSD card needs to be reformatted. Do not reformat it, just select "cancel."

Using the file explorer, navigate to the root folder on the microSd card, it is probably called "boot." Then, simply right click in that folder and select "new," then "text document." Then, just name it "ssh" without any file extension. You should receive a dialog warning you about changing file extensions, just select "yes."

That's it, you're done flashing the Raspberry Pi image, you can eject the microSd card. Insert the microSD card into the Raspberry Pi microSD card port, not into the USB port using the adaptor, but on the opposite side of the circuit board from the USB ports, there is a microSD card port. Then, connect an Ethernet cable to your router or switch, and the power cable.


Now you are ready to turn on the Raspberry Pi and next I'll show you how to remote in via SSH connection and install the Blockstream Satellite command-line interface (CLI) tool.

Do not connect your SSD yet.

SOFTWARE COMPILING

In this step, you will see how to make the SSH connection from your desktop computer to your Raspberry Pi computer. Once this connection is established, you will then build the OS Image, install the Blockstream Satellite CLI, and compile the Bitcoin Satellite application.

Once you run Putty, you will need to enter the IP address of your Raspberry Pi. To find this, log into your home router from a web browser, usually by simply entering 192.168.0.1 in the URL dialog box. Most routers have basic log in credentials like Admin/1234, check online for your brand of router and login instructions.


Once logged into your router, you should be able to locate a list of connected devices on your home network. For example, the connected devices on my home network and their IP address can be viewed from navigating to: “Basic Router” to “DHCP.”

Then in Putty, in the Host Name dialog box, enter your user, which will be "pi" the "@" symbol followed by your RaspberryPi IP local address. For example, all together, mine was: "pi@192.168.0.33" and then select "Open" at the bottom.

A terminal window will automatically open on your desktop, then you may get a warning about the host key not being registered. Select "Yes" to add this key to your registry.

Then, you will be asked for the password: "raspberry."

Then, you should be ready to continue.

CONFIGURING THE SSD

Here is how I configured my SSD. There might be better and/or more efficient ways to do this, but here are the steps I took:

$sudo apt update;

$sudo apt upgrade -y;

A script will run for a few moments and then run the following commands:

$sudo apt install git -y;

$sudo apt install htop -y;

$sudo apt install curl -y;

$sudo apt install bash-completion -y;

$sudo apt install jq -y;

$sudo apt install qrencode -y;

$sudo apt install dphys-swapfile -y;

$sudo apt install hdparm -y;


Now, there are a few things that need to done in order to set up the SSD such as formatting it, mounting it, and setting the permissions:

$sudo dmesg -C;

$sudo dmesg -w;


Now, connect your external drive. Make note of “idVendor” and “idProduct.” For example, “idVendor = 1058” and “idProduct = 0748”

$ctl+c;

$lsblk -o NAME,MOUNTPOINT,UUID,FSTYPE,SIZE,LABEL,MODEL;


Make note of the partition name. For example: “sda” or “sda1.”

Test your external drive's performance with:

$sudo hdparm -t --direct /dev/XXX;

(Where “XXX” is your partition name).

You should get a result that reads something like: “Timing O_DIRECT disk reads: 902 MB in 3.0 seconds = 300.13 MB/s.”


If your results are less than 50 MB per second (MB/s), then follow the next step with your idvendor and idproduct from above. Otherwise, skip ahead to "$sudo mkfs.ext4..."

First, edit the cmdline text file:

$sudo nano /boot/cmdline.txt;

At the very beginning of the text in the file, insert:

usb-storage.quirks=XXXX:YYYY:u

Where “XXXX” is idVendor and “YYYY” is idProduct. Make sure you leave a single space after the "u" and before the original text.

Save the text file by hitting “control” and “x,” “y” for yes, and then “enter” on your keyboard.

$sudo reboot;


Once you're all logged back in and back in the shell, re-run the performance test.

$sudo hdparm -t --direct /dev/sda1;

You should have increased performance. If not, get a new external drive and start again.


Format the partition on the external drive.

$sudo mkfs.ext4 /dev/XXX;

Where “XXX” is your partition name, such as "sda."


In case your external drive was previously mounted, you can use "$ sudo umount /dev/sda" to unmount.

Next, you need the UUID, so run:

$lsblk -o NAME,MOUNTPOINT,UUID,FSTYPE,SIZE,LABEL,MODEL;


Make note of your external drive's UUID, this should be on the same line as the partition name (sda).

$sudo nano /etc/fstab;


Create a new line below the others that reads the following: where "{tab}" is you hitting the “tab” key on your keyboard.

UUID=XXXXXXXX-XXXX-XXXX-XXXX-XXXXXXXX {tab} /mnt/ext {tab} ext4 {tab} defaults,noatime {tab} 0 {tab} 2


Where the “UUID” is what you copied from above. Hit “control” and “x,” “y” for yes, and then “enter” on your keyboard to save.

$sudo mkdir -p /mnt/ext;

$sudo mount -a;

$df -h /mnt/ext;


It should return something like:

Filesystem Size Used Avail Use% Mounted On

#/dev/sda 916G 77M 870G 1% /mnt/ext


Set the owner:

$sudo chown -R pi:pi /mnt/ext/;

$cd /mnt/ext;

$sudo mkdir -p .bitcoin;

$ls -la;


If “owner” and “group” for the new bitcoin folder are “root” and “root,” then run:

$sudo chown -R pi:pi /mnt/ext/.bitcoin;

$ls -la;


The bitcoin folder should now be owned by pi.

Edit swap file:

$sudo nano /etc/dphys-swapfile;


Scroll down to "CONF_SWAPSIZE=100" and put a (#) hashtag in front of it. Hit “control” and “x,” “y” for yes, and then “enter” on your keyboard to save.

$sudo dphys-swapfile install;

$cd ../..;

INSTALL BLOCKSAT CLI

$sudo apt update;

$sudo pip3 install blocksat-cli;

INSTALL BITCOINSATELLITE

$blocksat-cli deps install --btc;

$blocksat-cli btc -d /mnt/ext/.bitcoin;

Enter “y” for yes to save the bitcoin.conf file to your bitcoin directory on your SSD.

CONFIGURE BLOCKSAT CLI

After that runs for a moment, run the following command and launch the configuration dialog. The terminal will ask you if you want to run the configuration file now, select “y” for yes.

$blocksat-cli sat-ip;


First, you will select the appropriate satellite for your location and then the model of receiver you have. For example, option "0" for Galaxy 18, followed by option "3" for the Base Station receiver.

Next run this command:

blocksat-cli instructions


Following the instructions, now you can connect the Ethernet cable coming from the satellite to the PoE adapter. Then, plug the other Ethernet port into your router or switch. And then plug the PoE adapter into power. Ensure you have the Ethernet cables connected to the right ports, otherwise you can cause damage to your hardware.

When that is connected and powered on, hit "enter" on the terminal window and then you will receive instructions giving you a couple commands you can run once you get back to the main terminal window to complete the configuration.


Now you should be able to run this command:

blocksat-cli sat-ip


And get a return like this:

2021-08-05 04:16:53 Lock = False; Level = -71.67dBm; Signal Quality = 0.0%;


This means that you are ready to run this terminal on your laptop and monitor the values to make the fine tuning alignment adjustments on the satellite receiver.

DIALING IN THE ANTENNA POINTING ANGLES

With your laptop in hand and a connection to your antenna, you can start dialing in the exact angles on your receiver. This is the most time-consuming part of this entire project. Make sure you attempt this when you have plenty of time and are not in a rush. Ensure that you do this on a day when you have a clear, unobstructed view of the sky, preferably with no clouds, smoke or smog in the air.

My basic approach was to loosen the bolts for the azimuth adjustments and then slowly move the antenna side to side ever so slightly, like half a degree at a time. Then, I would wait a few seconds to see if the readings in the terminal window changed to “Lock = True.” If not, then I would move the antenna half of a degree and wait again.


I repeated this process again and again and again. Sweeping from center to one side, then starting back at center and sweeping the other side. When I couldn't get a locked signal, then I would loosen the elevation adjusting bolts, adjust the elevation angle by half a degree, and lock the elevation adjusting bolts back down. Then, I would start sweeping the azimuth again.

I repeated this process several times over the course of several days. The windows of opportunity to try this were few and far between because of all the wildfire smoke in the air where I lived during this time. My attempts were spread out over several weeks. But finally, during a clear evening around sunset, I got my terminal to print “Lock = True.”

Once you achieve “Lock = True,” make sure to tighten down all the hardware. The connection should remain locked. Also, keep an eye on the signal quality. If you are not getting 100% quality in clear sky conditions, try adjusting the polarity to dial this in. Be careful not to lose your locked signal.


RUNNING BITCOIN SATELLITE

With your signal locked, you are now ready to start downloading the Bitcoin blockchain data. You can either use your internet connection to facilitate a quicker Initial Blockchain Download (IBD). Or, if you want to strictly download Bitcoin blocks from the satellite connection and not use any internet connection, you can run bitcoind with the "connect=0" flag. Be aware that if you are doing this for your IBD, this will take approximately 40 days.


You're going to have three terminal windows open during this part.

1. In the first terminal window you need to have the blocksat-cli running:

$blocksat-cli sat-ip;

“Lock” should “= True” and “Quality” should be as close to 100% as possible.


2. In the second window, you can run Bitcoin Satellite. You want to run this from the directory where you created the /.bitcoin folder on your SSD:

$sudo bitcoind -datadir=/mnt/ext/.bitcoin -connect=0;


In this step you may have encountered an error regarding the maximum receive buffer size. To fix this first check what the buffer size is set to by running:

$sysctl net.core.rmem_max;

If the size is set smaller than 24660008, you can increase it by running:

$ sudo sysctl -w net.core.rmem_max=24660008;


3. Now, try running this command again:

$sudo bitcoind -datadir=/mnt/ext/.bitcoin -connect=0;


You should see the application start and then it should hesitate on the line ending with "udpread thread start," 

Now you can open the third terminal window and run a couple of commands to check if everything is working as expected.

$sudo bitcoin-cli -datadir=/mnt/ext/.bitcoin getudpmulticastinfo;

And then this command…

$sudo bitcoin-cli -datadir=/mnt/ext/.bitcoin getchunkstats;

...should return something like this:

Now you can just let the IBD run. Remember that this will take roughly a month or longer, so check on it often and make sure to address any issues if they happen.


CONCLUSION

After I get the blockchain synchronized, I plan on setting this up so that my other Bitcoin nodes will continue receiving blockchain data from my satellite node over my local network during an internet outage. But because I'm strictly downloading from satellite signal, this will take roughly a month or longer to get a full sync. That is why I think this is a good stopping point for this guide and I will follow up with shorter guides on useful things you can do with a satellite-connected receiving node.


Having a Bitcoin node configured to receive blockchain data over satellite connection is a censorship-resistant tool that can help mitigate government-enforced internet shutdown like we have been seen in Myanmar recently. Even though the current satellite node configuration only allows for receiving blockchain data and not broadcasting transactions back to the network yet, this can still be a valuable tool to facilitate keeping other internet-connected nodes up to date during times of internet outages, so that when internet communications are back online, valuable time is not wasted syncing.

As this technology continues to develop and get into the hands of those who need it, development of application use cases will grow.


Thanks for reading! I hope that this article helped you get your own Bitcoin Satellite node up and running. Whether you are using a Blockstream satellite kit or sourcing the materials from other places, this is a powerful censorship-resistant tool that helps strengthen the Bitcoin network and helps transfer power from the hands of the few to the hands of the many.

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Monday, 8 November 2021

THE WORLD REQUIRES THE RELENTLESS OPTIMISM OF BITCOINERS

 First off, I recently read Aleksander Svetski’s article “Bitcoiners Are the Remnant, The Masses Don’t Matter.” It hit a chord at my deepest core and what he was elegantly articulating in that piece inspired me to write this.

Bitcoiners, here is my ode to all of you:

“Bitcoin fixes this!”

The phrase has become like a mantra in the Bitcoin space, being spoken on podcasts and used to create memes on social media. For those of us who are already orange pilled, we understand the significance of Bitcoin — the purest form of hard money that has ever been invented in human history.


Bitcoin can starve the beast of central banks that have perpetuated rapacious war, exploitation and oppression. The fiat dark ages are now finally coming to an end. Bitcoin has helped us see a glimpse of a new world in which humanity can become free from misery and suffering created by the few.

This new vision of the future gives us hope. It is the source of bitcoiners’ relentless optimism. The creation of Bitcoin brought excitement in the world. For some people, this enthusiasm over time got transformed into a kind of peacefulness inside them. Personally, I found a sense of relief, as if all of a sudden, a heavy weight on my shoulder got lifted, I became permeated with the sensation that everything is going to be alright.

I am sure that I am not the only one to have experienced this. Many of us have gone through our lives being haunted by the feeling that we can’t quite explain. In the film “The Matrix,” Morpheus told Neo:

“What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad.”


We have been looking for answers to the problems that we can’t quite articulate. This civilization run by the fiat regime operates like the matrix control system. Through the global financial Ponzi scheme that enriches those who are close to money printers, it creates a paradigm of materialism, confining us within a perception of mere physical existence.

In the consumer capitalism harnessed inside “The Matrix,” we are being pushed down to stay in survival fear and become dependent on the system. We are made to seek our sensory pleasure and only to satisfy fleeting desires.

Like me, you might have felt that life is more than just eating, sleeping and being entertained. We have been searching for meaning. Somewhere at a deep level, perhaps we knew that this system does not nurture and nourishes us. In fact, many of us have probably felt that by adjusting to this society, parts of ourselves are dying.

Our culture denies the intrinsic value of our personhood and destroys our dignity. The banking model of education teaches us to be passive students who simply store the information that self-appointed authorities handed down to us. Instead of creating critical thinkers, this mind control program has produced a population that is obedient, being easily manipulated and corralled like a herd by mass media.

In the fiat system’s centrally-planned economy, we all are treated like rats in a Skinner Box. Being conditioned with low expectations of life, people get on a hamster wheel of meaningless nine-to-five jobs to keep a debt cycle going. The incentives that are misaligned with our self interests punish our will to self determination, creativity and the pursuit of happiness. Through stimulus and response, we are made to give up our dreams and are being rewarded for the sacrifices we make for the good of a society.

The world has become full of grown ups who are cynical, pessimistic and can easily become fearful. The fast pace of life made us unable to enjoy the smiles of our children, to cultivate our friendship and appreciate our connection with our loved one. In the environment that has now turned into the corporate wasteland, we became disconnected from beauty that surrounds us every day.

As, one by one, people have been domesticated, we Bitcoiners couldn’t be tamed. While a majority of people seem to not question society’s prescribed way of life and are able to go along with it, we Bitcoiners couldn’t easily accept society’s expectations.


Here, I speak for myself: Growing up, I always felt like an outsider, not being able to fit in. At times, I could not shake off the feeling that I didn’t belong to a culture that I was born into. Being surrounded by people who speak the same language and look like me, somehow I felt like a foreigner. My peers didn’t quite get me and I often felt misunderstood by my colleagues and associates at work.

If you are reading this, you might be able to resonate with this strange feeling that I carried through my life. Let’s face it, you might agree with me saying this. We were called geeks, lunatics, fringe, and radicals, long before Bitcoin came into our lives! We were often ridiculed and called crazy. People around us saw us being eccentric and overly idealistic.

Let’s admit it: We’ve been “toxic” maximalists, freedom lovers and revolutionaries even before we made our first bitcoin transactions. We are remnants who are compelled to reject the status quo. We were willing to remain as a minority, accept all stigma and labels by refusing to trade our authenticity for acceptance. Some interpreted our rebelliousness as us being too stubborn or unreasonable, when in truth we were simply not willing to compromise our values.

Bitcoiners are deviant from the norm — an anomaly that creates a glitch in the matrix. We could not accept the fiat’s standard of living that constantly steals our energy through inflation and keeps us in perpetual state of poverty and sickness. We couldn’t even if we wanted to. Why?

Somehow, we are equipped with an internal guide system that others don’t seem to have. It is like a compass that helped our ancestors navigate in a jungle as they paved the way toward a civilization. We had this laser-eyed vision to see the bright North Star in the dark night sky that shines the light on paths to our destination.

Psychologist and founder of archetypal psychology James Hillman wrote in “The Soul’s Code: In Search of Character And Calling”:

"Sooner or later something seems to call us onto a particular path. You may remember this ‘something’ as a signal calling in childhood when an urge out of nowhere, a fascination, a peculiar turn of events struck like an annunciation: This is what I must do, this is what I've got to have. This is who I am." 


We heard a call, a tiny voice inside us that asks us to remember who we are. It is the heart that communicates with us through calm sensation of love, joy and excitement. While others around us seem to have forgotten this “something” that gives us life, we could not. When a majority of people in our society learned to suppress this subtle signal coming from within through medications and indulging in entertainment, we could not, but choose to follow this internal voice that gently nudges us to do what makes us come alive.


Whether we know it or not, we’ve been searching for our connection to our soul. Our desire to exit from the destructive fiat matrix was driven by our deep yearning to claim our own individuality. Then came the 2008 financial meltdown. As trust in institutions weakened, our reality began to collapse. This has created an existential crisis for humanity. As layers of our identities wrapped up in the modern nation state were slowly being peeled off, a new foundation of our society began to emerge.


Satoshi Nakamoto, the mysterious creator of Bitcoin, cracked open the matrix, beginning to transform it into a womb in which new humanity can be developed. Bitcoin began to activate a soul’s code. Emitting high frequencies, it sent out a signal. We heard the voice that comes to us from the future. We slowly began to remember ourselves in childhood whose boundless imagination could reach the stars!

The signal that now got amplified through the network effect began to transform lives of those who have received it.

Our universe has been taken under the control of power hungry parasites. A global syndicate of central banks warps space and time through money made out of thin air. Through gravity, they create a black hole destroying stars and absorbing all light into their emptiness. In their artificial world maintained through infinite money printing, the land becomes barren and people are made to be sterile and can’t produce anything. As a debt spiral increasingly captures all that moves, now Bitcoin has come to our rescue.

Recognizing an escape route that Bitcoin opens up, the head of the European Central Bank, Christine Lagarde, called for global regulation.

Now, through the darkness inside Bitcoin mining, stars begin to reappear to form a new galaxy. Every 10 minutes, as new bitcoin enter into the world economy, the network gives birth to new humanity that can resuscitate this dying world.


In the novel, “The Neverending Story” (“Die Unendliche Geschicht”) written by Michael Ende, “the childlike empress,” the supreme ruler of a mythical land called Fantasia, has fallen into illness. Her beautiful magical country begins to be destroyed by an evil force. In order for her to regain her strength, she needs a child in the human world who can dream and give her a new name. She calls a young boy, Bastian, to make wishes and keep her alive.

“Bastian: How many wishes do I get?

The Childlike Empress: As many as you want. And the more wishes you make, the more magnificent Fantasia will become.

Bastian: Really?

The Childlike Empress: Try it… The emptiness cannot be destroyed; it has to be filled with love.” 


The world needs human beings who can envision a future with enthusiasm. Without our ability to imagine, the earth will become a hollow desert which nothing can inhabit. It is through our dreams and wishes that the world would come alive. The land becomes fertile and flourishing. Its people become healthy, prosperous and abundant.

The age of Bitcoin has begun. We, Bitcoiners are bringers of hope. For those of us who embraced sats in the heart, we are visionaries, artists, prophets and pioneers of this new world. We are the way shower. We are here to facilitate user activation of the soul’s code across a network.

“Imagine there's no countries

It isn't hard to do

Nothing to kill or die for

And no religion, too

Imagine all the people

Living life in peace...

You may say I'm a dreamer

But I'm not the only one

I hope someday you'll join us

And the world will be as one.”


–John Lennon, “Imagine”


Bitcoiners, it’s time for us to wake up to our existence as infinite creative beings. With money backed by our source energies, now we can create a new operating system of reality and upgrade our civilization.

As we reconfigure ourselves by integrating new codes in our field of consciousness, we can now transcend the false matrix, its limiting beliefs and mentality that keep us powerless. Stack harder and HODL to keep our vibrations high. Laser beam focus toward hyperbitcoinization to create a heaven on the earth.

The sky's our limit. With sparkles in our eyes, let’s make magic and show the rest of humanity what is possible.

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Saturday, 6 November 2021

THE VOLUME OF BITCOIN TRANSFERS HAS REACHED ALL-TIME HIGHS

Bitcoin network transfer volume is sustained $15 billion transferred on the network per day throughout October.

The transfer volume on the Bitcoin network can help gauge the current level of network activity and provide a better understanding of how much value the network is moving in BTC and USD denominations. To measure total transfer volume, we use Glassnode’s entity-adjusted metrics which uses advanced heuristics to determine and exclude volume transferred within addresses of the same entity.

Using a 30-day average of transfer volume in BTC, the network reached a three-year high, moving 318,830 bitcoin at its peak in early October. Since then it’s slowed down to around 275,000 bitcoin per day. Yet with the price increase, total transfer volume in USD is sustaining $15 billion transferred on the network per day throughout October. 

We can break down the total transfer volume in USD categorizing smaller and larger transfer volumes. The lion’s share of total transfer volume on the network comes from transactions moving $1 million-plus in value which now makes up 81.56% of all transfer volume. This trend of increasing share of $1 million-plus volume to total volume has been rising since late 2020 with a recent surge in September. In layman's terms, more of the big money is moving around the network than ever before, especially over the last two months.

Although $1 million plus volume makes up 81.56% of total volume, $10 million plus volume is the majority share of total volume at 61.7%. We can see a spike in the $10 million plus volume activity reaching over 75% share of total volume slightly before September’s monthly low. That activity is largely sustained right before bitcoin’s rally from $40,633 into a new all-time high. 

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DON'T USE AN ETF TO GAIN BITCOIN EXPOSURE. BITCOIN IS AVAILABLE FOR PURCHASE

 The recent launch of bitcoin futures ETFs may have made history, but this exposure is not the same as holding BTC yourself.

“What happens if the government makes bitcoin illegal?” is a question you will frequently hear. The underlying assumption — the same one that Prohibitionists made in the early part of the last century — is that usage will decrease, or even stop altogether, if you make something illegal.

But this is not necessarily so.

On September 24, Chinese regulators issued two documents: One outlawed cryptocurrency mining, the other reiterated a ban on all cryptocurrency transactions and noted that all companies providing cryptocurrency trading services to Chinese citizens are engaged in illicit financial activity.

And here we are, just over a month later, and the price of bitcoin is up over 50%...

MEET THE NEW BOSS, SAME AS THE OLD BOSS

Bitcoin has broken out to new highs against almost every currency there is, even the U.S. dollar. Bitcoin’s market cap has never been bigger. The network is stronger than ever. Mining simply relocated following China’s regulatory notice.

This is now the 18th — something like that, anyway — time China has attempted to ban bitcoin. Its bans don’t seem to have the desired effect.

The reason for bitcoin’s recent rally, certainly the latter part of it anyway, was the announcement last week that there will, finally, be a listed bitcoin exchange-traded fund (ETF).


Said ET, the ProShares Bitcoin Strategy ETF (NYSE:BITO), began trading on October 19. It turned over almost $1 billion (we don’t know the precise number as of this writing), with more than 24 million shares changing hands.

This makes it the second-most-heavily-traded fund on record, beaten only by a BlackRock carbon fund, which ranked higher due to pre-seed investments.

We have been waiting a long time. The Winkelvoss twins tried to get a bitcoin ETF off the ground in 2013, when bitcoin was $65. Many others have tried, and here we are finally, eight years on, with the price a thousand times higher. I guess bitcoin ETFs are like buses. You wait all that time and then two come along at once. Valkyrie’s bitcoin futures ETF launched soon after.


I used to be CEO of Canadian-listed privacy tech company Cypherpunk Holdings (CSE:HODL) and I was extremely proud of myself and the team for securing what I thought was the best ticker in the world in “HODL.” But, credit where credit’s due, Valkyrie have gone one better. They have secured the ticker “BTFD.” “LOL,” as they say.

It’s being hailed as a watershed moment for the crypto industry, enabling it to enter the financial mainstream, easily accessible to investors of all shapes and sizes through traditional brokers.

I am less convinced, myself. Call me a grouch.

The publicity is good, sure. But bitcoin has done perfectly well without an ETF. Does it even need one?

Crypto is supposed to be an entirely new financial system, where individuals take control of their own keys, their own custody, their own money, freeing themselves of the need for intermediaries and trusted third parties. In that sense, an ETF is like a step back.

It feels a bit like French revolutionaries celebrating that Marie Antoinette and the aristocracy have joined them in overthrowing the regime.

IF YOU WANT TO GET BETTER EXPOSURE TO BITCOIN, THERE’S AN EASY ANSWER


What’s more, these futures ETFs are based on futures contracts, not the “spot” price of bitcoin. I confess I am out of my depth discussing the intricacies of short- and long-dated futures contracts, but if my understanding is correct, the fund, which charges a 1% fee, will have to constantly sell expiring contracts and buy longer-dated ones, which tend to be more expensive. This constant rolling of contracts is going to cost money — in the 5% to 10% range — and that means the ETF might not end up accurately replicating the price of bitcoin itself, which is the very purpose of the thing.

United States Oil Fund (NYSE:USO) used to be a popular ETF for investors hoping to track the oil price. But with all of the complications of rolling futures contracts, contango and backwardation, it always seemed to underperform the price. It might reflect short-term swings, but in the longer term, it was useless, even more so than Shell or BP as oil price trackers. It is immensely frustrating for an investor to correctly call a market, only for the chosen vehicle not to deliver.

USO is by no means alone in its failure as an ETF to actually track the underlying asset. One hopes that BITO, BTFD and their investors will not fall into the same trap. I am sure this is something they have prepared for, but it is a concern.

The Grayscale Bitcoin Trust (NYSE: GBTC), with a market cap of $32 billion, had been the previous way by which traditional investors could buy exposure to bitcoin through their brokers. It is a closed-end fund that owns bitcoin directly — not futures — charging 2%. As a closed-end fund, new shares are not created as new money buys in. The trust price is therefore determined by supply and demand for the trust, rather than the price of the asset it is designed to replicate. It has traded at a consistent 20% discount to the price of its bitcoin.

Trusts often trade at a discount to their net asset values (NAVs), many perpetually so, which means there is a value proposition there. But that is not why people buy GBTC — they buy it to replicate bitcoin’s price, and it hasn’t.

What I’m saying is this: if you want to get exposure to bitcoin’s price, then buy bitcoin!

It involves some self-education that many can’t or are not prepared to take on, but that is the sacrifice to be made. I can’t see how synthetic vehicles for mainstream investors will ever be anything but second best.

Grayscale is now, I hear, applying for ETF status. The danger here is that, if it achieves it, it will then sell the bitcoin it currently holds, which could actually mean greater selling than would otherwise have happened.

We are at new highs. New highs, way more often than not, lead to more new highs. This ETF should mean a lot more money flowing into bitcoin. That has to be bullish.

BEWARE THE CURSE OF THE ETF LAUNCH

And one final word of warning: I remember the launch of the gold and silver ETFs back in the noughties. Until then, it was difficult for mainstream investors to get easy exposure to the gold and silver prices. Buying physical metal was cumbersome — it was hard to make quick entries and exits with all of the delivery and quality complications. Futures contracts presented their own problems.

The gold and silver ETFs were brilliant innovations to make gold and silver quickly and easily tradable. There was a lot of hype about both in the lead up to their launch.

The SPDR Gold Shares ETF (NYSE:GLD) launched in late November 2004 and the iShares Silver Trust (NYSE:SLV) did so in April 2006. We take them for granted now, but they were considerable breakthroughs at the time and there was a lot of excitement.

Gold was trading around $440 an ounce at the time of the launch of GLD. It rallied over the next ten days or so to $450 — and then went into a two-and-a-half-month bear market that saw it go below $415.

When SLV was launched in April 2006, it rallied for a fortnight to $15 an ounce, then crashed 40% to $9.

Bitcoin is a different beast of course. And the mistake with bitcoin has always been to underestimate it.
I am a bitcoin bull — don’t get me wrong on that. But let’s just say it wouldn’t surprise me to see this market rally for a fortnight on all the excitement, then turn around and sell off, just as the gold and silver ETFs did.

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ESTIMATING THE TOP OF THIS CYCLE'S BITCOIN PRICE

 As this bitcoin price bull cycle carries on, everyone wants predictions of when the price may top out. We will add one framework to the mix.


As the bull cycle carries on, everyone wants price predictions and a better understanding of when the price may top out and reverse course. Although we expect bitcoin to reach a six-figure price this cycle, it’s difficult to estimate how far the cycle will extend beyond that. There’s a lot of different models, thoughts and projections on this already. We will add one framework to the mix using long-term holder cost basis and long-term holder historic spent output profit ratio (SOPR) trends. This shouldn’t be taken as a price prediction for the cycle but rather a logical thought exercise based on simple historical assumptions.

SOPR tells us price sold over price paid, indicating what profit levels long-term holders realized in the past. At the peak price over previous all-time highs in 2018 and 2021, long-term holder SOPR peaked at 20.74 and 9.04, respectively. Said otherwise, that’s 1,974% and 804% realized profit. A big market question is at what price level will a portion of long-term holders be incentivized to sell some of their bitcoin? That will likely mark the cycle top.

Using the long-term holder cost basis, an estimate for the market price paid, and the profit ratios of the past two cycles, estimates for price sold, we can multiply the two to get implied cycle top prices for this cycle.

For example, the long-term holder cost basis is now $17,751. If long-term holders look to take the same level of profits like they did at the previous all-time high (804%), the cycle price would need to be $160,469. If they expected to take profit levels at the peak in January 2018 (1,974%), the cycle price would need to be $368,157. A midpoint between the two would be 1,389% with a price around $264,000.


It’s also a fair assumption that long-term holders may expect lower profit percentage returns as larger returns diminish over time. So the long-term holder SOPR peak may exist below the January 2018 peak but above the previous all-time high, assuming that we haven’t reached the cycle top yet.


All that said, we don’t really know how this cycle will behave compared to previous cycles or how long-term holders will respond to profit taking this time around. Maybe they realize a lower level of profit this time around or hold out for higher prices, expecting a new type of adoption cycle unfolding.

After all, we’re not stacking sats to just get rid of them at cycle tops. This is a multi-decade adoption thesis where timing the local cycle tops won’t matter in the long-run.

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LESS BTC IS BEING SOLD BY BITCOIN MINERS

 Bitcoin miners are the most profitable they have been in more than two years, and they're holding more of their produced bitcoin.



One of the most stable trends over the last few years has been the constant sell pressure on the market from bitcoin miners as they are forced to sell new bitcoin to fund their operations. That sell pressure still exists today, but it has been diminishing over the last few months as miners start holding more of their produced bitcoin.

Right now miners are the most profitable they have been in the last 2.5 years and have more access to legacy equity and debt markets than ever before. The cycle is also primed for another bullish leg up which incentivizes miners to hold as much bitcoin as they can in anticipation of higher prices.


The below chart shows miner transfer volume sent to exchanges as a 30-day moving average. Prior to the previous all-time high run up, miners were sending bitcoin to exchanges at their highest levels over the last two years. Now miners are sending 65% less in transfer volume to exchanges than they were at that previous peak. The 90-day average tells the same story emphasizing the decline over the last six months.


Another way to look at this trend is to normalize miner transfer volume to exchanges by the number of newly-issued bitcoin. This matters more when comparing the transfer volume across halving cycles when the block reward has changed. Using a ratio of the 90-day average of miner transfer volume to the 90-day average of new bitcoin supply, the top of the previous all-time high coincided when miners were selling the most bitcoin as a percentage of newly-issued supply. That percentage has been declining since falling to two-year lows with declining miner transfer volume to exchanges.

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Friday, 5 November 2021

LESS BTC IS BEING SOLD BY BITCOIN MINERS

 Using a Coldcard hardware wallet with Seed XOR, you can split your backup seed phrase and better protect your bitcoin from accidents and bad actors.

This guide demonstrates everything you need to know in order to secure your Bitcoin private keys using a Coldcard hardware wallet and its integrated Seed XOR method. With this method, you are able to split your backup seed phrase into multiple parts that look and function like complete 24-word seed phrases of their own. This opens up a range of possibilities and safeguards to protect your bitcoin.



BACKGROUND ON SELF

CUSTODY AND KEEPING BITCOIN SAFE

Welcome to the wonderful world of self custody, this is where the laws of man and the laws of math collide in a battle over your cryptographically-secured wealth.

There are a number of different reasons that people find themselves here; some realize the risks associated with trusted third-party custodians; others know that authorities have what it takes to take what you have; and a few understand that inflation is taxation without representation and confiscation of wealth without due process of law, propped up by an elaborate scheme between the U.S. Treasury and the Federal Reserve in an attempt to keep the rich in power and everyone else enslaved to debt and perpetual consumption.

For whatever reason you found yourself here, let's dive into securing your bitcoin in a way that offers protection from environmental hazards, confiscation and seizure, that mitigates trust and introduces plausible deniability.


STEP ONE: MATERIALS

Although there are several hardware wallets to choose from, you can see my top-10 reasons for using Coldcard here. At a bare minimum to follow along with this guide, you will need:
  • One Coldcard
  • Three stainless-steel SeedPlates
  • One spring-loaded punch
  • One ColdPower Adaptor
  • One microSD Card
  • One USB-to-micro-USB cable
  • One permanent marker
  • One pen
  • One balanced dice
  • One nine volt battery
  • One wallet backup card (included with Coldcard)
  • One computer with internet connection
If you haven't done so already, you can order a SeedXOR kit from Coinkite that comes with a Coldcard, an industrial microSD card, three stainless-steel backup plates, and the security bags.

STEP TWO: CHECKING YOUR NEW COLDCARD

Upon receiving your Coldcard, ensure that the tamper-evident bag has not been compromised.
You will see the tamper-evident words "void" appear when the seal is opened.

Inside, you will find your new Coldcard, the wallet recovery backup card, sticker(s), and an additional copy of the bag number which should match the bag number printed on the outside of the bag.

Here is a graphic to help you figure out the navigation of your Coldcard. You can always hold down the “up” or “down” arrows when scrolling.

STEP THREE: UPGRADE FIRMWARE

One of the best features of the Coldcard in my opinion is that it can be used in a completely air-gapped fashion, meaning that you never have to connect it to a computer, although that option is there if you choose to use it. I prefer to use a nine volt battery with the ColdPower adaptor.

First, read and accept the terms of sale and use. Then you will be asked to confirm the bag number.
Next, select "Advanced" and then scroll down to "Upgrade Firmware" and finally "Show Version." 

Even the firmware can be upgraded in an air-gapped way by utilizing the microSD card. These steps will show you how to do that and verify the integrity of the firmware file on a Windows desktop using Kleopatra OpenPGP from the GPG4win bundle.

If you don't want to get into the PGP verification piece of this process, then you can skip ahead to the part about just saving the firmware file to the microSD card and loading on the Coldcard.

These next steps will show you how to save the PGP-signed hash value of the .dfu file and verify it with Doc Hex's PGP public key and then calculate your own hash value on the firmware to confirm.

From the CoinKite website, click on the link for the latest firmware version at the top of the page. 

From this same page, scroll down toward the bottom to the advanced section and then click on the "this clear-signed text file" link. That link will open a PGP-signed message containing the SHA-256 hash values of various firmware versions.

You want to save this PGP signed message as a .asc file. You can just hit “ctrl” and “s” from your web browser and you should be presented with a pop-up window like the one below. Make sure you have the "All Files (*.*)" option selected from the "Save as type:" drop-down menu. And then save the file with the ".asc" extension. You can leave it named "signatures."

Next, you need to get Doc Hex's public PGP key and import it to your Kleopatra keychain so you can certify it. Doc Hex's public key can be copied from this keyserver here.

Once you copy his public key to your clipboard, then in Kleopatra navigate to "Tools," then "Clipboard," then "Certificate Import." You will then be asked for your PGP password to certify Doc Hex's public key. Once certified, this public key will be added to your keychain.

You can confirm that the fingerprint of the public key you just imported for Doc Hex matches the fingerprint of the Doc Hex account from KeyBase

Now that you have Doc Hex's key imported and certified, you can verify that the signed message with the firmware hash values was actually signed by Doc Hex. Open the folder containing the signed message .asc file and right click on it, then select "More GpgEX options," then "Verify."

Kleopatra will start calculating the veracity of the signature and after a moment, you should receive a dialog box confirming that the signature matches the public key you certified.

At this point, you have verified that the PGP-signed message containing the hash values for the firmware files was in fact signed by Doc Hex. But you now need to verify that the .dfu firmware file does in fact return the same hash value as the one in the signed message.

To do this, I prefer using a freeware hex editing program called HxD. Simply navigate to "File" then select "Open" and navigate to the file path where you have the firmware .dfu file saved. Once opened, then navigate to "Analysis" then "Checksums" then scroll down to "SHA-256" and hit "OK." Then the software will return the calculated SHA-256 hash value on the firmware file you downloaded. Visually compare this returned hash value with the hash value that you can look at in the signed message by opening it with a text editor.

Now you know that the firmware file you downloaded is an exact match to the file that Coinkite intended that you receive and that it is safe to install on your new Coldcard.

Grab your microSD card and the USB adapter and insert them into your desktop. Once recognized, just drag and drop the firmware .dfu file onto the microSD card. Then safely eject the microSD card.

Turn the Coldcard over and insert the microSD card into the slot until it clicks in place.

You should still be in the "Advanced" menu, then scroll down to "Upgrade Firmware" then "From MicroSD" then select the firmware file. This will take a moment to automatically load, verify and upgrade.

With the firmware now upgraded, you're ready to move on and set your PIN number.

STEP FOUR: SETTING A PIN

Make careful considerations with your PIN number. You don't want to use one that is easy to guess. It is convenient when you can memorize it so that you don't have to find your notecard or other storage medium every time you want to access your Coldcard. Or perhaps you want a PIN that you don't have memorized, specifically so that you must have access to your notecard or other storage medium to open the Coldcard.

Either way, your PIN will have two parts: a prefix and suffix. The idea is that once you enter the prefix, you will be presented with two anti-phishing words. If the words are the same as the words that were originally presented to you at initial startup, then you know that your Coldcard has not been tampered with since the last time you accessed it.

First, select "Choose PIN Code," then you will see a brief description of how the PIN code works. Each part of your PIN code can be between two and six digits. There is absolutely no way to access a forgotten or lost PIN. And if you enter a PIN incorrectly too many times, it will brick your Coldcard as a security feature.

After hitting "OK" you will get one more warning about the risk of losing or forgetting your PIN. After reading that, you can enter your PIN prefix. Use the included notecard to write down your PIN prefix, then hit "OK.

Next, you will be presented with your two anti-phishing words. Write these down on your notecard.

Next, enter your PIN suffix, then write it down on the notecard and hit "OK."

Then, you will be asked to re-enter your PIN prefix, confirm the two anti-phishing words, and enter your PIN suffix. The Coldcard will save that information and then open up the wallet where you can generate your seed phrase.

STEP FIVE: CREATING A SEED PHRASE

There are a couple considerations you may want to make when creating a seed phrase.

For example, Coldcard will generate a seed phrase for you by default, but maybe you don't trust the true random number generator (TRNG) used for some reason. Well, you don't have to trust it because you can generate your own entropy with dice or by other means. Then you can leave the seed phrase like it is, with 24 words, or you can add a 25th word, also known as a passphrase.

The passphrase can be any combination of upper case letters, lower case letters, numbers, or special characters. There is no way for the wallet to know if your passphrase is correct or not though once you set it. So if you do decide to use a passphrase and then you misenter it when accessing the wallet in the future, the Coldcard will display a perfectly valid wallet, but it won't be the wallet that contains your funds. Even with the same 24 words, entering two different passphrases will generate two completely different wallets.

So, think about what your threat model is, how you will secure your recovery information and how your loved ones would recover your bitcoin if you were gone.

Typically, I like to use dice to generate my seed phrases and then I like to add a high-entropy passphrase to it, so I will show you how I do it and you can pick and choose what works for you.

Like I said, the Coldcard will use a TRNG to make a random seed phrase for you by default. Select "New Wallet" and after a moment you will be presented with 24 words. You can use that seed phrase if you want, there is nothing wrong with doing so.

But I like to scroll down to the bottom of the word list and select "4" to add some dice rolls.

It is recommended to use at least 50 dice rolls for 126 bits of entropy or 99 dice rolls for 256 bits of entropy. Entropy is calculated by using: log2(6) = 2.58. For reference, it would take the world's most powerful supercomputer trillions of years to brute force a 256-bit key.

So, roll the dice and enter the corresponding number for each roll. Repeat this process as much as you want. If you roll fewer than 50 times, then the Coldcard will add the remaining necessary entropy with the TRNG. Then hit "OK."

You can always verify that the dice roll math is actually doing what it purports to be doing by following the instructions in the Coldcard documentation here, or by checking out another guide of mine here.

Now you will be presented with a new list of 24 words. Write these words down on your notecard. Then, double check your work.

Next, you will be asked to take a test to prove you wrote the words down correctly.

STEP SIX: CREATING A PASSPHRASE

From the main menu, select "Passphrase," then you will see a short explanation that warns you about how passphrases are not recoverable, so if you lose your passphrase then you will lose access to your funds. It also warns you that any passphrase you enter will generate a completely separate wallet.

After reading through the warning, select "OK" to continue, then you have a few options of passphrases you can enter:

  • Choose any assortment of characters, for example: h&v03kNUU6768%6J
  • Choose from lowercase words, for example: comic hazard glazed madagascar
  • Choose from uppercase words, for example: DIFFER MEDIA MORE GRASS
  • Choose any assortment of numbers, for example: 1948568742364521
  • Choose any combination of any of the above, for example: h&v03comicDIFFER194856
You can make your passphrase whatever you want. Just keep in mind that if you lose it, you lose your bitcoin. Keep in mind too that it may not be you recovering your funds, it might be your spouse or child or someone else, so think about how complex your security model is and if they will be able to use it if you were gone.

Once you have entered the passphrase you want, select "APPLY," then you will be presented with the new wallet fingerprint. It is important to write this fingerprint down so that you can always verify that your passphrase was entered correctly. Then hit "OK" to enter this new wallet.

At this point, I recommend double checking your work by trying to regenerate this fingerprint in another wallet by importing your 24 words and then applying the passphrase. If you have properly documented everything, then you should be able to get the same fingerprint from the other wallet.

For example — and please take into consideration the implications this may have on keeping your wallet fully air gapped — use Sparrow Wallet in offline mode and preferably with WiFi turned off and your network cable disconnected from the desktop.

Don't save the wallet unless you want a second instance of your Coldcard wallet on your desktop. Or, if you do create and save a wallet file, then you can always navigate to C:\Users\YourUserName\AppData\Roaming\Sparrow\wallets and delete the wallet file from there. You just want to be careful about having any second instance of your wallet.

Alternatively, you could also perform this check with your Coldcard by navigating to "Advanced," then "Danger Zone," then "Seed Functions," then "Destroy Seed." Once you have deleted your seed, then you can import it using your backup notecard and the passphrase you wrote down.

If everything went well, then you should get the same wallet fingerprint as the one you originally wrote down. The advantage to this approach is that you do not enter your seed words and passphrase on a computer, even though it was in an offline wallet and the computer was disconnected from the network, you just never know.

Once you have your recovery information written down and you are confident that it is correct by whatever means you choose, then you are ready to split the seed.

STEP SEVEN: SPLITTING THE SEED PHRASE WITH SEED XOR

In my own words and as a high level explanation, with Seed XOR you can apply some math to your seed phrase that results in multiple functional, standalone seed phrases. These seed phrases can be combined later to recreate the original seed. So, imagine that you have your seed phrase and you use Seed XOR to split it into three parts — all three parts will now be needed to recreate your wallet and recover your bitcoin. If you added a passphrase to your original seed phrase, then you would need all three parts plus your passphrase in order to recover your bitcoin.

The problem this is solving for is that if you just have a 24-word seed phrase and you stamp it on a steel SeedPlate, then anyone who gains access to that plate could recover your wallet and swipe your funds. Obviously, a passphrase would also prevent this from occurring, assuming that you used a high entropy passphrase. But if you used a weak passphrase, then it could be guessed or brute forced and combined with your 24-words to steal your bitcoin.

So, with Seed XOR, you can split your seed into multiple parts, and then rest assured that if anyone gains access to any of them, then they would need all of the parts and they would need to know how Seed XOR works in order to steal your funds. And, if you used a passphrase on the original 24-words, then they would also need that. If a single plate is found then you could even have some duress bitcoin stashed on it to hopefully satisfy your attacker and live to see another day. This is an advanced level of complexity that should ensure the safety of your bitcoin in the most adversarial environment.

Some tradeoffs with this approach are that if your loved ones need to recover your bitcoin after you are gone, then they will need to be able to complete these steps. This probably means that you will need to leave them very clear instructions, but the instructions themselves then become another piece of information you need to secure because if an adversary found your instructions, then they could follow them to steal your bitcoin assuming they are able to locate all of the steel plates.

Which brings up another trade off: depending on how many pieces you split the seed into and whether you used a passphrase or not, you can wind up with several pieces of critical information that you need to secure in order to recover your bitcoin.

Imagine that you have three plates and a passphrase and instructions for your family — that is five pieces of information that you must ensure are secure. Securing them all in the same geographic location could be problematic if you are ever threatened with your life during a robbery and the attacker is incessant on there being more bitcoin, or if there is an environmental catastrophe like a flood that sweeps everything away. Four of those five pieces would be absolutely necessary to recover the bitcoin and that is with the assumption that it is you recovering the bitcoin. If it is your family, then they would need all five pieces, otherwise all could be lost.

There is a lot to think about with threat models and recovery schemes. I recommend you weigh your options carefully and think about your setup for multiple days before deciding on one. Try to consider all of the tradeoffs you can think of, talk to your loved ones and maybe even try stepping through some processes with them to get a gauge for how well these concepts click with them. If Seed XOR solves a problem for you and the tradeoffs are acceptable then here is how it works.

Navigate to "Advanced," then "Danger Zone," then "Seed Functions," then "Seed XOR," then "Split existing." Then you will see a short description of what you are about to do with the option to split your seed into two, three or four parts.

You have the option to use a deterministic split or a random split. The deterministic split will produce the same sub parts every time you split your seed, the resulting 24-word lists will be the same words each time. With the random split option, you will get different 24-word lists each time you split your seed.

The consideration to make here is that if you combine your deterministic sub parts into the original seed and then split it again, it will produce the same sub parts, which means that an informed adversary could conclude that there are missing sub parts if the results are different than the parts they have available or conclude that the original split was done randomly.

In this example, I split the original seed into two parts. Once the seed is split, the Coldcard will present two lists of 24 words each. Record both lists and double check you work. The Coldcard will display the 24th word of your original seed, which is recommended to keep documented as a checksum to verify proper reconstruction later. Then, the Coldcard will test you on the 48, 72 or 96 words.

To verify your work, you can navigate to "Advanced," then "Danger Zone," then "Seed Functions," then "Seed XOR," and finally "Restore Seed XOR."

There will be a short dialog presented that explains you already have a seed stored on your Coldcard and that if you reconstruct a seed from Seed XOR parts, the resulting seed will not be saved to the secure element. So, if this was an actual reconstruction and not a verification exercise, then you would probably be working with a blank Coldcard, but this would be something to consider in the situation where you already have another seed existing on the Coldcard.

In this exercise, you will have the option to include the Coldcard's stored seed with the Seed XOR reconstruction. I would recommend choosing not to include it because it is the seed being reconstructed, so including it as a part of the reconstruction will produce a different wallet than the original one.

I had chosen to destroy the original seed on the Coldcard for this example to simulate a Seed XOR reconstruction on a new and blank Coldcard. I would only recommend destroying your seed if you know what you are doing and are 100% confident in your chosen backup method.

For example, if you look closely at the photo above, I made a mistake on deterministic split, part two, word 16. I wrote down "archieve," which isn't a word at all. This caused me a massive headache trying to figure it out and it was only because I had the original seed written down on the notecard that I was able to import that seed, split it again, and then double check the words I had written down.

So, make sure you are double checking all of your work and then verifying that the backup information actually works before you deposit any bitcoin or destroy any records of the original.

To restore from Seed XOR on a new or blank Coldcard, navigate to "Import Existing" then "Seed XOR." You will see a short description that informs you all parts are needed and that the Coldcard has no way of knowing if the reconstructed seed is correct or not.

For reconstructing either the deterministic or random split, select the first 23 words from part a in order, then the Coldcard will present a short list to choose the 24th word from as it is a checksum with limited possibilities. Repeat the process for part b. Then, the Coldcard will show you what the 24th word of the resulting seed phrase would be if you stopped at this point with the two pieces.

If you have more pieces, you can continue entering them until completion. Once you have entered all pieces and the resulting 24th word is what you expect, then hit "OK" and the Coldcard will load that seed. Remember, if you already had a seed loaded on your Coldcard prior to reconstruction, then the seed resulting from the reconstruction will not be saved to your Coldcard. Only if you were importing a seed on a Coldcard that didn't have one stored will the resulting reconstruction be loaded and saved on the secure element.

That is how you can use Seed XOR with your ColdCard, and here is what Seed XOR is doing cryptographically:

When combining two seeds together to restore your original seed, every word from your 24-word seed phrases gets converted into a three-digit hex sequence, for example:


Then the hex values get combined using a table that makes it so that it doesn't matter which order they are combined in. For example, using the table below, let's say the first two hex sequences we are combining start with "7" and "9."

Looking at the red squares, if you follow the columns to "7" then go down to row "9," then you arrive at "E." Likewise, looking at the blue squares, if you start with row "7" and go across to column "9," then you again arrive at "E."


Using this method, we can see that the first words on my deterministic split resulting seed phrases are “BRASS” and “LEAR,” which equate to “0D9” and “3F6” in hex. By combining these two hex values on the Seed XOR table, we arrive at “32F,” which equates to “GRASS,” the first word from my original seed phrase.

Taking the values from the A⊕B row and using the seed-word-to-hex conversion table, you can see that the original seed has been reconstructed:
 


Now, you may have noticed that this is only 23 words, not 24.

In all BIP39 seed phrases, the last word acts as a checksum and it can be calculated with the first 23 words. The Seed XOR math does not use these last 8 bits that make up the checksum. This is why it is advisable to save the 24th word from your original seed phrase so you can ensure you have recreated the correct one upon reconstruction.

Alternatively, you can type the 23 words into a Coldcard through the import seed phrase option and the Coldcard will generate a short list of possible 24th words. This would narrow down your choices, but if you don't recall which one it was then this approach could cost you a considerable amount of time in recovering your bitcoin as you would have to try one, enter that wallet, export the xpub, import it to another wallet, and scan it for your transactions.

If it is empty, then you will have to do the process over again and try the next word on the list. Not impossible, but not ideal either. Keep record of your original seed's 24th word to avoid this last resort.

Now that you are sure your backup information works and you understand how the math works, you can secure this information on a robust medium like stainless steel.

STEP EIGHT: STEEL RECOVERY PLATES

Steel plates offer a simple solution for securing your recovery information in a medium that can withstand environmental hazards such as fire and flooding. The basic idea here is that we will take the two BIP39 seed phrases split from the original seed phrase and imprint those on their own steel plates. Then these two steel plates will be needed to reconstruct the original seed phrase.

Another benefit is that both of the steel plates can be funded with an amount of duress bitcoin and this can be used in a plausible-deniability scheme, so long as your attacker doesn't know how Seed XOR works and doesn't know that multiple BIP39 seed phrases can be combined and that they should pressure you for more information or other backup seed phrases.

The steel plates can be stored as a secret in the open since alone, none of the split pieces can access your original funds. There is still benefit in storing the plates in separate geographic locations and also concealing them securely.

You will notice that the plates have the alphabet running vertically on the first column and that there are twelve numbered sections, one through 12, that each contain four columns. If you flip the plate over, the sections are numbered 13 to 24. Each section will get stamped with the first four letters of each seed word. Only the first four letters are necessary to recover the word since no two words on the BIP39 word list have the same sequence of initial four letters.

Start with a permanent marker so you can double check your work before making the markings with the spring-loaded punch. If you make a mistake with the marker, you can use acetone to clean it off.

Use the spring-loaded punch to stamp the marks on both sides of the plate.

These plates provide a robust medium of secure storage against the elements, fire and flooding.

Once you have your seed phrases stamped on the steel plates and you know that your backups can reconstruct your original seed, then you can destroy the handwritten seed phrases you made while setting up your wallet by safely burning them.

Thanks for reading! I hope this guide has helped you get a Coldcard setup and has given you some food for thought on ways in which you can secure your backup information that provides you with plausible deniability and a robust, stainless-steel storage medium.




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