@ -117,7 +117,7 @@ Third-party API client:: ((("third-party API clients")))A third-party API client
Combining these categorizations, many bitcoin wallets fall into a few groups, with the three most common being desktop full client, mobile lightweight wallet, and web third-party wallet. The lines between different categories are often blurry, as many wallets run on multiple platforms and can interact with the network in different ways.
For the purposes of this book, we will be demonstrating the use of a variety of downloadable bitcoin clients, from the reference implementation (Bitcoin Core) to mobile and web wallets. Some of the examples will require the use of Bitcoin Core, which, in addition to being a full client, also exposes APIs to the wallet, network, and transaction services. If you are planning to explore the programmatic interfaces into the bitcoin system, you will need to run Bitcoin Core, or one of the alternative clients (see <<alt_libraries>>).((("", startref="GSwallet01")))((("", startref="Wselect01")))
For the purposes of this book, we will be demonstrating the use of a variety of downloadable bitcoin clients, from the reference implementation (Bitcoin Core) to mobile and web wallets. Some of the examples will require the use of Bitcoin Core, which, in addition to being a full client, also exposes APIs to the wallet, network, and transaction services. If you are planning to explore the programmatic interfaces into the bitcoin system, you will need to run Bitcoin Core, or one of the alternative clients.((("", startref="GSwallet01")))((("", startref="Wselect01")))
==== Quick Start
@ -145,10 +145,12 @@ Once Alice has recorded the mnemonic phrase, she should plan to store each copy
====
Never attempt a "DIY" security scheme that deviates in any way from the best practice recommendation in <<mnemonic-storage>>. Do not cut your mnemonic in half, make screenshots, store on USB drives or cloud drives, encrypt it, or try any other non-standard method. You will tip the balance in such a way as to risk permanent loss or theft. Many people have lost funds, not from theft but because they tried a non-standard solution without having the expertise to balance the risks involved. The best practice recommendation is carefully balanced by experts and suitable for the vast majority of users.
====
****
[[bluewallet-welcome]]
.The Bluewallet Mobile Wallet
image::images/bw_0101.png["BluewalletWelcome"]
****
((("addresses", "bitcoin wallet quick start example")))((("QR codes", "bitcoin wallet quick start example")))((("addresses", see="also keys and addresses"))) The main wallet view displays the bitcoin amount, transaction history, and _Receive_ and _Send_ buttons. In addition, many wallets feature the ability to purchase Bitcoin directly through an exchange or similar service where you can offer fiat money in return for cryptocurrency, which is done by <<bitcoin_price>> and selling to the wallet user at or above this price. The _Buy Bitcoin_ button would allow Alice to purchase Bitcoin in this fashion.
Alice is now ready to start using her new bitcoin wallet. ((("", startref="GSquick01")))((("", startref="Wquick01"))) Her wallet application randomly generated a private key (described in more detail in <<private_keys>>) which will be used to derive bitcoin addresses that direct to her wallet. At this point, her bitcoin addresses are not known to the bitcoin network or "registered" with any part of the bitcoin system. Her bitcoin addresses are simply random numbers that correspond to her private key that she can use to control access to the funds. The addresses are generated independently by her wallet without reference or registration with any service. In fact, in most wallets, there is no association between a bitcoin address and any externally identifiable information including the user's identity. Until the moment an address is referenced as the recipient of value in a transaction posted on the bitcoin ledger, the bitcoin address is simply part of the vast number of possible addresses that are valid in bitcoin. Only once an address has been associated with a transaction does it become part of the known addresses in the network.
@ -215,7 +217,7 @@ Joe now has Alice's bitcoin address set as the recipient. Joe enters the amount
[TIP]
====
The price of bitcoin has changed a lot over time, and an incredible amount since the first edition of this book was written. As of March 2021, a person would need approximately $54,000 USD to purchase one whole bitcoin. Many examples in this book reference real-life past transactions, when the price of bitcoin was much lower. Think about how generous of a friend Joe would have been if he had made the same agreement with Alice today!
The price of bitcoin has changed a lot over time, and an incredible amount since the first edition of this book was written. As of March 2021, a person would need approximately $60,000 USD to purchase one whole bitcoin. Many examples in this book reference real-life past transactions, when the price of bitcoin was much lower. Think about how generous of a friend Joe would have been if he had made the same agreement with Alice today!
====
[[electrum-mobile-send]]
@ -223,7 +225,7 @@ The price of bitcoin has changed a lot over time, and an incredible amount since
.Electrum mobile bitcoin wallet send screen
image::images/ew_0101.png["electrum mobile send screen"]
Using Electrum Wallet (available on Android), Joe then carefully checks to make sure he has entered the correct amount, because he is about to transmit money and mistakes are irreversible. After double-checking the address and amount, he presses Send to transmit the transaction. Joe's mobile bitcoin wallet constructs a transaction that assigns 0.10 BTC to the address provided by Alice, sourcing the funds from Joe's wallet and signing the transaction with Joe's private keys. This tells the bitcoin network that Joe has authorized a transfer of value to Alice's new address. As the transaction is transmitted via the peer-to-peer protocol, it quickly propagates across the bitcoin network. In less than a second, most of the well-connected nodes in the network receive the transaction and see Alice's address for the first time.
Using Electrum Wallet (available on Android), Joe carefully checks to make sure he has entered the correct amount, because he is about to transmit money and mistakes are irreversible. For simplicity sake, we will assume that Joe does not pay any transaction fees. The purpose and setting of transaction fees are covered in subsequent chapters. After double-checking the address and amount, he presses _Send_ to transmit the transaction. Joe's mobile bitcoin wallet constructs a transaction that assigns 0.10 BTC to the address provided by Alice, sourcing the funds from Joe's wallet and signing the transaction with Joe's private keys. This tells the bitcoin network that Joe has authorized a transfer of value to Alice's new address. As the transaction is transmitted via the peer-to-peer protocol, it quickly propagates across the bitcoin network. In less than a second, most of the well-connected nodes in the network receive the transaction and see Alice's address for the first time.
Meanwhile, Alice's wallet is constantly "listening" to published transactions on the bitcoin network, looking for any that match the addresses it contains. A few seconds after Joe's wallet transmits the transaction, Alice's wallet will indicate that it is receiving 0.10 BTC.
@ -232,9 +234,8 @@ Meanwhile, Alice's wallet is constantly "listening" to published transactions on
Each bitcoin can be subdivided into 100 million units, each called a "satoshi" (singular) or "satoshis" (plural). Named for bitcoin's creator, the Satoshi is the smallest unit of bitcoin, equivalent to 0.00000001 BTC.
====
[[confirmations]]
.Confirmations
****
((("getting started", "confirmations")))((("confirmations", "bitcoin wallet quick start example")))((("confirmations", see="also mining and consensus; transactions")))((("clearing", seealso="confirmations")))At first, Alice's wallet will show the transaction from Joe as "Unconfirmed." This means that the transaction has been propagated to the network but has not yet been recorded in the bitcoin transaction ledger, known as the blockchain. To be confirmed, a transaction must be included in a block and added to the blockchain, which happens every 10 minutes, on average. In traditional financial terms this is known as _clearing_. For more details on propagation, validation, and clearing (confirmation) of bitcoin transactions, see <<mining>>.
****
((("getting started", "confirmations")))((("confirmations", "bitcoin wallet quick start example")))((("confirmations", see="also mining and consensus; transactions")))((("clearing", seealso="confirmations")))At first, Alice's wallet will show the transaction from Joe as "Unconfirmed." This means that the transaction has been propagated to the network but has not yet been recorded in the bitcoin transaction ledger, known as the blockchain. To be confirmed, a transaction must be included in a block and added to the blockchain, which happens every 10 minutes, on average. Setting a higher transaction fee allow a transaction to be confirmed faster. In traditional financial terms this is known as _clearing_. This book will cover in detail the propagation, validation, and clearing (or confirmation) of bitcoin transactions.
Alice is now the proud owner of 0.10 BTC that she can spend. In the next chapter we will look at her first purchase with bitcoin, and examine the underlying transaction and propagation technologies in more detail.((("", startref="BCbasic01")))((("use cases", "buying coffee", startref="aliceone")))
krupawan5618
3 years ago
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