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Archive for the ‘Cryptocurrency’ Category

A few months ago I had purchased 2 Casascius coins – physical coins that hold the keypairs for a Bitcoin address credited with their face value. They look like this:

Tons of Casascius coins

I bought one 1 BTC coin and another 5 BTC coin from Casascius.com. The amount I paid for both (6 BTC) was around $50 (R$ 100,00) back then. I intended to keep the coins, but Bitcoin / Dollar exchange, God knows why, recently inflated a lot, so I just had to sell them… I was also curious to see the honeycomb pattern from the coins’ tamper-evident hologram, so I just went ahead and “peeled” the 5 BTC coin, selling each BTC for around $45 (R$ 90,00), $225 total. So, basically, I “profitted” $200, four times the money I’d put in. Coincidentally, I was struggling with the fact that I purchased an air conditioner this month and wouldn’t be able to save money like I do every month. It cost around $200, so I guess Bitcoin took care of that problem for me. Nice : )

I couldn’t find photos of a tampered Casascius coin on the web before, so I decided to take some and post here. This is the short “peeling” process. If you’re curious, I just used a screwdriver to lift the hologram sticker starting from the corner of the coin:

Coin heads

“Vires In Numeris” means “Strength In Numbers” – that’s due to the fact that, in order for the Bitcoin network to operate and be secure, there must be lots of mining machines from common people like you and me. This is something a person couldn’t do solo.

This is the hologram before I had messed it up.

This is the hologram before I’d messed it up. The small code in the middle of the coin is the public key’s “First Bits” code. It can be used to check if the coin is credited with the appropriate face value (5 BTC in this case) by checking it on the public blockchain.

Tampered hologram – 1

It came out rather easily. Maybe I could have done it just using my nails instead of a screwdriver…

Honeycomb pattern starts to show up. I think it's hard to see on this photo, but it's there.

Honeycomb pattern starts to show up. I think it’s hard to see on this photo, but it’s there.

Tampered hologram – 3

Tampered hologram – 4

Finally, the private key appears in mini private key format (https://en.bitcoin.it/wiki/Mini_private_key_format).

Finally, the private key appears, in mini private key format. Neat, huh?? Showing it is no problem because I already took the BTC in it. You can see the transactions here on Blockchain.info. If the money was still there, you could just copy the private key and steal my money; then you’d be a true cyberbrazuca huehue ❤

Trying to put the hologram back in place doesn't work; the honeycomb pattern appears all over the hologram.

Trying to put the hologram back in place doesn’t work; the honeycomb pattern appears all over the hologram. If you tilt it a little, it becomes even more evident.

In order to exchange the value from the private key into Brazilian Real (BRL), I had to convert the mini private key into a SHA256 hex key. It could then be added to your wallet in most Bitcoin clients. I’ve used blockchain.info/wallet because of its simple usage and because I just wanted to make a quick transaction; if you’re serious about storing your Bitcoins, you better download a desktop client, preferrably one that supports offline wallet backup and operation, like Armory.

Then I sent the Bitcoins to an address on my MercadoBitcoin.com.br account, where I easily exchanged this little amount of coins for a fair price in Brazilian Reais.

I’ll keep the 1 BTC one intact as a souvenir from the start of the cryptocurrency era ; ) All this process, and even Bitcoins themselves, have many flaws or otherwise tricky security issues you must be careful about, but I have hope it will get better as Bitcoins mature. I hope you enjoy the pics.

This public key / private key thing… I don’t get it!

Commenter Ian asks:

I was very confused as to how these work, my questions are:
Do you need to pull the sticker off? and
What is the point of the outside digits if the address is on the inside?

Hi, Ian. I’ll answer your questions in reverse order because they nicely chain together like this:

  1. The outside/inside digits are called, in public-key cryptography, a keypair.The inside digits (called the private key) are used to control the money charged into the coin using the Bitcoin network. With those secret digits, you can take money out of the coin and transfer them to another address. This address is secured by the tamper-evident hologram you see in the images.

    The outside digits (called the public key), on the other hand, cannot be used to control the money. They can only be used to prompt the network how much money is charged into that coin. This gives them a little more substance and is one of the things you should check before accepting the coin to make sure they’re charged with the proper value.

    In order to be sure that the coin really has its face value, you must also look at the hologram, check if it shows signs of tampering, and make sure you trust the manufacturer (in this case, Mike “Casascius” Caldwell). Needless to say, this is a really important aspect of accepting these coins as money, just as much as it’s important to be sure dollar bills are real before accepting them (also by checking their authenticity holograms).

    The public key in front of coins can also be useful when the manufacturer mails you these coins before charging them. The receiver can then poll the network to figure when he has completed the transfer.

  2. Given the observations above, you can make and accept payments using Casascius coins without pulling the sticker off.In order to use the use the coin online, however, you must have access to the private key inside, which allows you to transfer money from the coin. Since the private key is protected by the hologram, you can’t (affordably?) impersonate the coin manufacturer by sealing it again without the charged value, or with a copy of the private key which you could use to steal the money from it after the recipient validates the public key.

I hope that better explains how these coins work.


Cute bouncing pixels

un.ma.i!

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