Decentralized multi-signature solutions for Bitcoin

Decentralized multi-signature

solutions for

Bitcoin

www.bitalo.comPhone: +49 6322 9419292 | e-mail: [email protected]

Bitcoin?Bitcoin?

- decentralized, peer to peer....

- no banks or 3rd parties needed

- secure system / everything with encryption

- somehow anonymous...

--> SO WHAT?


Status Quo - IntermediaryStatus Quo - Intermediary










Problem solved? – BitcoinsProblem solved? – Bitcoins

- Centralized Service??

- Give up control over my coins??

- Security issues with hackers?

- Sites close over night???

--> SAME PROBLEM AS BEFORE!


Centralized servicesCentralized services





Money goes via a CENTRAL bank

account

Bitcoins go via central server




What if a service exists where you….Get BitcoinsGet Bitcoins

- DO NOT give up control over your coins

- DO NOT allow even the administrators toaccess your coins

- IS NOT possible that Hackers can stealcoins, even when the server is compromised

-DO NOT need to trust the trading party, as still an escrow is in place? EVEN when the site is closed?


Decentralized servicesDecentralized services






Trick: Multi-Signature walletsTrick: Multi-Signature wallets


“Normal” Transaction“Normal” TransactionHow does it work?


Part 1: Create multi-signature addressMulti-SignatureMulti-Signature

-Get two or more Bitcoin addressees.

-Combine them using addmultisigaddress JSON-RPC command

-As a result, you will get a special Bitcoin address starting with „3”.

-The resulting Bitcoin address is fully functional and can receive coins.

-You can create different combinations of M-of-N addresses. It means that you can specify how many private keys are needed to spend the coins.


Part 2: Spending coins from multi-signature walletsMulti-SignatureMulti-Signature

-Create a transaction draft using createrawtransaction JSON-RPC command

-Sign the resulting transaction data with one of private keys, utilizing signrawtransaction command

-provide it with correct details, which may include: public key and redeem script

-Pass partially signed transaction data to other party, which repeats this process -Finally, you broadcast the transaction to the network (using sendrawtransaction or another means)


Multi signature walletsMulti signature wallets


Multi signature walletsMulti signature wallets


Hackers and admins see encrypted wallets

Hackers and admins see encrypted wallets

Two-Factor authenticationTwo-Factor authentication


And the last resort: Dead Man’s SwitchAnd the last resort: Dead Man’s Switch


Bottom lineBottom line- It IS possible to create REAL NO TRUST Bitcoin services

- Multi-Signature wallets, no one can ever access the bitcoins without your consent

- Thanks to MePIN two factor authentication not even if your PC is compromised

-With timed backup-transaction coins are even safe when service is closed down or server data is deleted

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Decentralized multi-signature solutions for Bitcoin