Bitcoin Wallets

   “A wallet is software that holds all your addresses. Use it to send bitcoins and manage your keys.” (from Antonopoulos, Mastering Bitcoin)

Bitcoin ownership is established through digital keys and digital signatures.

These keys are generated locally on Bitcoin end-users’ computers using special software called a Bitcoin client. They can be stored in a file, in a database, or just printed on a piece of paper, but most commonly they are stored in a Bitcoin wallet

The keys within each user’s wallet allow the user to sign transactions, thereby providing cryptographic proof of the ownership of the bitcoins sourced by the transaction.

A wallet is simply a collection of addresses and the keys that unlock the funds withinThere is practically no limit to the number of addresses a user can create.”

A wallet is a collection of data (e.g. the Bitcoin user’s private/public key-pair and his address) enabling a user to receive and send bitcoins, in the form of spendable outputs.

A client is the software that connects a user to the Bitcoin network. It handles all the communication, updates the wallet with incoming funds and uses information from the wallet to sign outgoing transactions.

Having your keys stored locally or remotely (i.e. on a third-party’s server) is a question that depends   on your Bitcoin wallet and client choice. Bear in mind that, the security of your funds also heavily depends on this choice, thus your decision must be made carefully. Below we examine some of the pros and cons of storing your wallet locally or remotely.

  • Locally: If your computer is compromised by a hacker, if it crashes (and you have no backups), or if you forget your passwords, your private keys (and bitcoins) will most probably be lost forever! However, if you take reasonable steps to avoid intrusion or exposure, your keys will be reasonably safe and protected from third-party failure or intent.  In this case, you exchange convenience for increased security.
  • Remotely: If the third-party exchange’s security is compromised, or if they act maliciously, your bitcoins will most probably be lost forever! Bitcoin exchanges are not Banks. Most will provide a method of changing your passwords if you forget them, and employ security experts and suitable infrastructure, so you will not have to worry about taking extensive security measures. However, third-party exchanges are more likely targets for intruders, and if compromised, they could steal your bitcoins. In this case you exchange security for increased convenience.

When first created, a Bitcoin wallet is empty.In order to receive some bitcoins we have to inform the sender about your wallet’s Bitcoin address, just like we would provide our email address to someone who wants to send us an email. To send bitcoins e.g. when using a desktop client, a sender can just copy and paste the receiver’s address:

16NxtXiwsqxDM9T9Pho8dtwNR1c6frcL23

After every transaction is confirmed, it becomes a part of Bitcoin history, and is included in the public ledger, i.e. the blockchain.

Each transaction corresponds to a chain of ownership transfer and is maintained in a distributed, peer to peer  network of Bitcoin nodes.

Mining AltCoins, How to Start

These are instructions to start mining certain AltCoins (ethereum, monero and others) which limit their mining to only using graphics cards. These instructions are based on the Ubuntu 16.04 operating system.

First, gather all the required hardware. Note that this is just a guide which refers to the above video, you can modify your mining rig to your liking:

Instructions

Step 1 – Connect all the hardware together as shown in the video:

Step 2 – Download and install the Ubuntu 16.04 desktop iso on the rig.

Then, run in the terminal:

sudo apt update && sudo apt -y dist-upgrade

Step 3 – Download and install the AMD video driver.

Step 4 – Install a miner.

For ethereum, run in the terminal:

sudo apt clean

sudo add-apt-repository -y ppa:ethereum/ethereum-qt

sudo add-apt-repository -y ppa:ethereum/ethereum

sudo apt update

sudo apt -y install cpp-ethereum
Step 5 – Consider a pool to mine to i.e. dwarfpool.com
Step 6 – Run the miner
ethminer -G -F http://eth-eu.dwarfpool.com/0x2a65aca4...35398226/rig1/mail@example.com
Enter your own wallet address, rig name and email address (that is used here as a sort of “password.”)
Step 7 – Enter your wallet address in the dwarfpool ETH page to see your mining stats which start becoming visible ~10mins after you start mining.

 

How to Invest in Bitcoin from Lebanon

Investing in Bitcoin (or other crytpto) is similar to the way it’s done in any other country, you spend your dollars in a crypto exchange for coins. The only issue is that in Lebanon, not all exchanges accept transfers to and from Lebanon except most notably the London-based exchange, CEX.io.

Just read their instructions on their pages to get started.

If your are privacy conscious or don’t want to deal with any exchanges you can go to localbitcoins.com and buy them from someone face-to-face.

Cryptocoins.cc has a list of cryptocurrencies with the exchanges that they can be traded on, so be sure to look at that website.

Another notable exchange is Kraken.com but they will not deal in cash with Lebanon, so for that exchange, and all other exchanges like it, transfer your coins to them through CEX.io or Localbitcoins.com.

Most coins have their own default wallet app which can be installed in your computer or phone, so storing them on you personally in this way is also an option. Just send your crypto back to an exchange (CEX) and sell them for dollars once you want to withdraw your investment.

Edit: 9/Jan/2018 – CEX.io has stopped accepting Lebanese cards some months ago. Contact us for available options in Lebanon.

Edit: 27/1/2018 – See BDL Governor Riad Salemeh say that the Lebanese are “free to buy these types of currencies.”