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    Bitcoin Bitcoin – needle in the haystack technology

    November 05, 2021

    Bitcoin Bitcoin – needle in the haystack technology

    Bitcoin – needle in the haystack technology

    Posted: 02 Nov 2021 11:52 PM PDT

    Bitcoin – needle in the haystack technology

    "Entropy is what makes a bitcoin your bitcoin"

    ​

    https://preview.redd.it/ha0j1vudubx71.png?width=2356&format=png&auto=webp&s=39ab3fcd2fb81447001e6f95e60c9b9fdff420f8

    Your private key is a needle in the haystack. Well actually that's not true, your private key is a really big and random number.

    So 1st of all why is it a number? Well because everything that's on a computer is a number.

    Ok, but why does it have to be big?

    Well, let's say my private key is a number between 1 and 10. If you want to guess it, you have a 1 in 10 chance of guessing it. Which is pretty bad for me. And if you're a bit zealous it would only take you 10 tries to go through all the possibilities to guess my private key.

    Now let's say my private key is a number between 1 and 115 quattuorvigintillion, things are a bit different.What is 115 quattuorvigintillion? That is 2256, and this is the upper limit of the number I was talking about and to put it more into perspective this is how many atoms there are in the visible universe.

    So if you would want to go through all the possibilities of all the private keys to guess my private key that would take you about 500 years. And that is great because this process is very time-consuming, like finding a needle in the haystack.

    So your private key is like the needle in the haystack, more precisely the position of the needle in the haystack.

    If you put your needle at the top of the haystack, anyone can find it. If you put it in the corner of the haystack, someone might look there and also find it. So if you put in a position that is pretty obvious, someone will guess it with ease.

    But if you would put it in a random position, the only way someone could guess the position of your needle(aka your private key) is by going through all the hey in the haystack, which could take a long time.

    Luckily you don't have to worry about this and your wallet takes care of all these things.

    RNGs – Random Number Generators

    Your Bitcoin wallet is the instrument you use to interact with the Bitcoin network. It has 3 main functions:

    1. It generates the private keys
    2. It stores the private keys
    3. It signs transactions

    And depending on what specific wallet you may be using it may include other functionalities.

    I'm sure you learned by now from your past relationships that it does not matter how hard you try in the present or even if she'll do anal once a week if the whole thing had a bad beginning.

    The same holds true for cryptography, and more precisely for the security of your Bitcoin keys. If your private key was not generated randomly and privately, there is a decent chance you may lose all your coins, and even more, it can nullify future efforts you put into securing your Bitcoin.

    The private part is up to you, but the random depends on the software and hardware you trust. So what's so hard?

    Well, computers are deterministic machines, meaning they will do the same thing if you give them the same input.Example.When I type in xhamster.com in my browser, it takes me to xhamster.com every time[2]. This is great because this is why we use computers in the first place because they are reliable, but this means they are NOT capable of producing random outputs.

    Yeah, but cryptography is not only used to secure Bitcoin, in fact but it's also used all over the place, so clearly we must have solutions that provide use random numbers.

    Indeed. We have, and they are called Random Number Generators.

    Of which there are of 2 types:

    1. Pseudo RNGs
    2. True RNGs

    PRNGs – Pseudo-Random Number Generators

    https://preview.redd.it/pstv36fnubx71.png?width=672&format=png&auto=webp&s=0ad02da0cbc40a3b1a373b4040f600dfaa20c8de

    The Pseudo ones are like fake boobs. They may look real for a distance, but on close inspection, it's obvious they are fake.

    These are pretty much an algorithm, a piece of software that spits out multiple numbers. These numbers are uniformly distributed, and if you have a few of them you can NOT guess future ones. Uniformly distributed means that if you chart them they are all over the place, and dont concentrate in one area.

    Remember the needle in the haystack. We dont want possible private keys to show any specific patterns or predictability.

    ​

    Numbers from a Pseudo-Random Number Generator plotted.

    They are useful as they are fast and reliable, and they are used all over the place. The operating system on your phone and computer uses them all the time.

    So the way these pseudo RNGs work is that they are a function(recursive most of the time) that needs an initial term T0. The same way the Fibonacci sequence needs the 1st term. Depending on this term you will get different sets of uniformly distributed numbers.

    But remember this is a deterministic process that runs on a deterministic machine, so if someone gets this initial term, they will all be able to generate the same numbers as you, and possibly guess your current and any future private keys you may generate.

    Ok, so where do we get this very important 1st term from?

    TRNGs True Random Number Generators

    The answer is True RNGs.

    ​

    https://preview.redd.it/ehljcxb0vbx71.png?width=522&format=png&auto=webp&s=26af5bf0549c51dcadbcb3eae00556575a1cc20a

    What makes these ones "true" as opposed to "pseudo", is the same thing that makes boobs real as opposed to fake. The fact that they are natural.

    Tru-RNGs are hardware-based and digitize chaotic events from nature in order to produce random numbers. They often focus on physical phenomena like atmospheric noise, magnetic noise, or electromagnetic or quantum phenomena like thermal noise or avalanche noise.

    The numbers outputted by a TRNG will also be uniformly distributed, lack patterns, and are totally unpredictable, but there are 2 differences. There is no T0 and there is no algorithm behind them.

    If we take 2 data sets one from a PseudoRNG and one from a TrueRNG you can't distinguish between the two. The only difference is that one is random and one is not.

    As John von Neumann famously put it.

    https://preview.redd.it/6ottvag3vbx71.png?width=501&format=png&auto=webp&s=e68a966a2d38d2528065f98a1c878e23d9188434

    As with anything in life, there are tradeoffs, and even though the true ones are truly random, they are usually slower, and if not slower very expensive. And as with any physical device living in the physical world, it can break down and/or become unreliable.

    So are the true random number generators better than the pseudo-random number generators?

    Well is a wife better than a table? Even though one is more useful than the other, the question does not make sense.

    ​

    https://preview.redd.it/0ecrsk36vbx71.png?width=1002&format=png&auto=webp&s=09bcb6b1d4bc1ebb852c19d68e9e7b0426cd05d6

    Entropy

    You can't measure randomness. You can observe a process and understand how it works and draw the conclusion that it is random or not.

    But considering we are talking about numbers, after all, can't we measure the numbers?Of course, we can say 8008 > 1234 but saying that 8008 is more random than 1234, would not make any sense.

    Whenever the topic of randomness is mentioned, entropy comes up very often, and depending on the context it can mean different things.

    The physics context

    The term comes from Thermodynamics and it has to do with measuring molecular randomness, or in how many ways you can arrange the tiny things that make up something. And is used to express the 2nd Law of Thermodynamics.

    "The entropy of isolated systems left to spontaneous evolution cannot decrease, as they always arrive at a state of thermodynamic equilibrium, where the entropy is highest."

    The information theory context.

    In 1948 Claude Shanon((Who was a crazy motherfucker! )) wanted to measure information and published a paper called "A Mathematical Theory of Communication", which pretty much give birth to this field. He popularised((But not come up with as he "stole" it from John Tukey)) the bit as the most minimal unit of information.

    A bit can either be a 0 or a 1, something or nothing.

    He started thinking about how many questions does he need to ask in order to guess all the digits of a string. Let's say we have an 8 digit long binary number. Binary means that each digit can either be a 0 or a 1.

    So how many questions do you need to ask me in order to guess my number?
    Well for the 1st character one question.
    You ask me is it a 0, and if I say no, you know it's a 1.
    What about the 2nd character, the same.
    So in order to guess all the 8 characters, you need to ask me 8 questions.
    So the entropy of the string is 1 bit per character times 8 characters = 8 bits.

    This is true only if you dont have any information about my string, let's say you somehow found out that 4 of the digits are 1s, then you would require fewer questions. And of course, this gets more interesting and complicated when we have more options for each character, but for Bitcoin private keys, we keep everything in binary form.

    Also in the paper, he estimated that the entropy of written English is between 0.6 and 1.3 bits per character, which is very low, and this is why it compresses so well((The higher the entropy is in a bitstring the less it can compress. Kinda makes sense as there are no patterns.)).

    So higher entropy would mean more secure, no? Well, not necessary. This does bring us closer to what we are interested in but not quite there.

    The cryptographic context.

    You see Cryptography is just adversarial math. Meaning that we always frame stuff by how hard it's for an adversary to guess the secret or alter data.

    The way modern((Modern meaning after 1883 after Kerckhoffs formulated his 6 principles)) cryptography works is that everyone knows the algorithms we use, but none one knows the entropy. Like in Bitcoin everything is open-source, we know how every little thing works, and that's great because that's why we also trust the code because is auditable, but everyone's, private keys are private and entropic(hopefully).

    So good entropy would mean it's hard(it will cost a LOT of resources) for an adversary to guess your secret, or in our case the Bitcoin private keys.

    Good entropy has 3 characteristics:

    1. Unpredictability, which is a measure of how strong the non-computability of the bits in the sequence is;
    2. Uniform distribution of the bits in the sequence;
    3. Lack of patterns in the sequence.

    It is worth pointing out that 3 implies both 1 and 2. However, 1 does not imply 2. And similarly, 2 does not guarantee 1.

    But not all entropy is equally important.

    Some people use entropy to make simulations of the universe(or for video games) and they don't need cryptographically secure entropy, because they dont have any adversaries to worry about.

    So what is the actual difference between Shanon's entropy and cryptographic entropy, seem to be the same?

    Well, it is not.

    For example, we can take the very well-known constant Pi.

    Pi is a number that goes on forever, and to date, we calculated about 62.8 trillion((To put it into perspective this is 3 times more than there are blood cells in the human body*.*)) digits of it. The sequence of digits of Pi has all the proprieties listed above, but if we use that as entropy for our private keys, it's trivial for anyone to guess.

    The key difference is that generating the digits of Pi is not a random process, and it can be replicated by anyone with a computer, so from the adversarial POV, even though the entropy checks all the boxes, it would not serve as cryptographically secure entropy.

    Ok, ok, but we are talking about Bitcoin here. This can((will*)) be worth millions in the future, and I might even want to pass it on to other generations, so as entropy is so important what is the best entropy for my Bitcoin private keys?

    Well, that sounds like a great subject for a future post.

    Edit: replaced 2256

    Spaces at beginning of the sentences after "."

    submitted by /u/olivietti
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    Daily Discussion, November 05, 2021

    Posted: 04 Nov 2021 10:05 PM PDT

    Please utilize this sticky thread for all general Bitcoin discussions! If you see posts on the front page or /r/Bitcoin/new which are better suited for this daily discussion thread, please help out by directing the OP to this thread instead. Thank you!

    If you don't get an answer to your question, you can try phrasing it differently or commenting again tomorrow.

    Join us in the r/Bitcoin Chatroom!

    Please check the previous discussion thread for unanswered questions.

    submitted by /u/rBitcoinMod
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    New mayor of New York City will take his first three paychecks not in US Dollar but in Bitcoin.

    Posted: 04 Nov 2021 10:59 AM PDT

    New mayor of New York City will take his first three paychecks not in US Dollar but in Bitcoin.

    Eric Adams, the mayor-elect of NYC just said he is going to take his first three paychecks in Bitcoin. After his promise to make NYC a crypto hub, this is a pretty strong follow-up action. Mayor of NYC taking his first paychecks not in US Dollar but in open, decentralized Bitcoin.

    Also, as you guys know, he is part of the Democratic party. This is interesting too, as until now, Bitcoin (I think) has been at risk of becoming a partisan topic as it was mostly Republicans that endorsed Bitcoin.

    edit: thanks for the upvotes and awards fellow Bitcoiners! I guess my contribution was pretty small (copy a tweet hehe) but nevertheless I feel thankful and I think I've never got awards before, makes me feel more part of the community! Hugs&sats to all!

    https://twitter.com/ericadamsfornyc/status/1456311827550384129

    https://preview.redd.it/9zsyjf8qamx71.png?width=662&format=png&auto=webp&s=e1fbf0f3fa8ef3838b14af6cbe65e390f3a4aa7f

    submitted by /u/la_roscinante
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    The penny dropped!

    Posted: 05 Nov 2021 01:57 AM PDT

    It's so simple, yet it took me a while to pin it down. It is NEVER too late to buy bitcoin, even if it's at $1,000,000, because it's not so much about making money as it is about protecting the value of your existing money.

    submitted by /u/RecordedWave
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    just bought my first btc

    Posted: 04 Nov 2021 07:20 PM PDT

    remind me! 10 years

    submitted by /u/filipifolopi
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    Zillow should have bought Bitcoin instead of homes.

    Posted: 04 Nov 2021 09:04 PM PDT

    The problem with homes is they keep building more, the supply is not limited to 21,000,000 homes. Micheal Saylor should really reach out the Zillow ceo and teach him a thing or two. Secondly, hoarding bitcoin doesn't screw over the people who are trying to homes or the unhomed. 7,000 homes are sitting empty right now, when homeless americans sleep on the streets in tents. Hoarding bitcoin doesn't hurt people, except the bankers.

    submitted by /u/hyperinflationUSA
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    The Buy Bitcoin sign was shown during Yellen's testimony to Congress in 2017 with a price of $2,329.

    Posted: 05 Nov 2021 03:39 AM PDT

    Hello Bitcoin community is Viyoda from El Salvador! I met a lot of people asking what places to visit or what to do and what not to do, and how and where to pay with Bitcoin, so I build a local Salvadorean Bitcoin guide with all the answers.

    Posted: 04 Nov 2021 04:27 PM PDT

    Hope this can be useful here, when you visit this beautiful Bitcoin Nation!

    https://elsalvadorbitcoin.notion.site/El-Salvador-Bitcoin-Guide-68d831f555ae4f559936d47f78c83d73

    submitted by /u/Viyoda
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    Bitcoin Street Art (Phneep, Brighton UK)

    Posted: 04 Nov 2021 05:53 AM PDT

    The First Bitcoiner. Circa: 1985

    Posted: 04 Nov 2021 06:08 PM PDT

    Tom Brady And Aaron Rodgers Both Announce Support For Bitcoin, While Mayors Across The United States Race To Convert Their Paychecks Into Bitcoin!

    Posted: 04 Nov 2021 09:33 PM PDT

    If you bought $100 worth of #Bitcoin when this "expert" called it a stupid currency in 2011, you would have about 12.5 BTC. That's $780,000 today.

    Posted: 04 Nov 2021 11:48 PM PDT

    Ted Cruz proposes Senate resolution to require DC merchants, vending machines and gift shops to accept Bitcoin

    Posted: 04 Nov 2021 08:10 AM PDT

    Google Invests $1B in Bitcoin Futures Provider CME Group

    Posted: 04 Nov 2021 11:56 AM PDT

    MIAMI MAYOR TO TAKE HIS ENTIRE SALARY IN BITCOIN - Response to NYC Mayor-Elect Eric Adams

    Posted: 04 Nov 2021 03:07 PM PDT

    What Can You Expect for the Bitcoin Price in November? The Road to $80K Is Clear. Things will accelerate in the coming days.

    Posted: 05 Nov 2021 12:40 AM PDT

    Millennials bullish on crypto even during crashes

    Posted: 05 Nov 2021 12:38 AM PDT

    The Iconic Bitcoin Logo Was Created for Free on This Day 11 Years Ago

    Posted: 04 Nov 2021 03:13 PM PDT

    “When to sell” posts are increasing, but here is my warning to newbies

    Posted: 05 Nov 2021 01:41 AM PDT

    Seeing lots of posts with questions of "when to sell" recently, and I'm expecting these posts to increase as more media attention comes in. So I am writing this so that I can link it as a warning to the newbies coming in.

    There are 2 main options for bitcoin First option; use bitcoin as a savings account. Dollar cost average in or buy the dips, never sell for depreciating fiat but spend when needed. This is what I and many others do, and it is a winning long term formula.

    Second option, trading aka timing the market. Many people can trade up their position doing this; but please do your research - so many think they can beat the market by watching YouTube videos and Twitter (or asking Reddit). Most amateurs spend hours doing this just to lose a huge chunk of their portfolio. You're not only up against expert traders and whales, but also tax. For example, let's say you read every trading book and want to outsmart the market and plan to sell top and rebuy on a dip. Say you sell one bitcoin for 200k that you bought for 10k, with the plan to rebuy at 100k. In the unlikely event you outsmarted the market; you sold one bitcoin for 200, set aside 60k for tax, rebuy 1.4 bitcoin in 6 months. But what if you aren't smarter than the market (or a spot etf is approved, or another large company announcement, or another country adopts bitcoin as legal tender) and you end up rebuying at 280k, your one bitcoin is now 0.5 bitcoin (or 140k of stocks with a current cape ratio of 40) https://www.multpl.com/shiller-pe)

    Nothing wrong with day trading, just my warning to people who don't understand how difficult it is.

    submitted by /u/steffanovici
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    No other money is really YOUR money

    Posted: 04 Nov 2021 02:07 PM PDT

    (Stating the obvious, preaching to the choir, BUT with a personal story)

    ​

    It is a sunny day, my non-crypto investments (I know, "boomer") went up and got a call from family member who needed help. So I pulled part of profits out, nothing crazy, quite modest.

    Next day call from the bank "hello sir we noticed some extra money in your account do you want to talk with us what to do with them" - it took them less time than me to notice that transfer was completed, and wtf is that question. Told them off.

    Fast forward one week and I am getting few letters and phone calls, serious looking, to "explain myself" - "where did I got the money from? what is my relationship with this brokerage (I thought it is quite self explanatory), who has access to this account, how long that relationship lasted, to whom I sent the money, HOW THEY WILL SPEND IT, what is my relationship with them..." and more.

    Guys, normal transaction, regular person, simple life... and those pricks without any real reason, will violate your privacy, and will block your money. Actually it is not your money, it is now THEIR money, with your name next to it, and if you do what they say and you pay them a fee, they MIGHT give it back to you.

    I read a lot about crypto, but nothing turned me more bullish than dealing with those pretentious pricks in the last days.

    ​

    (I just hope that once banks will get the right to custody crypto people will not fall for this)

    submitted by /u/WakingUpSamurai
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    Bitcoin Doesn't Need a Reason To Go Higher, Tick Tock, Next Block | Caitlin Long and Nic Carter on What Could Drive Bitcoin Higher - Nov 4th 2021

    Posted: 04 Nov 2021 01:09 PM PDT

    Bank of America COO: Crypto Could Add Value to Banks

    Posted: 04 Nov 2021 08:57 PM PDT

    What do you think will happen to BTC price if the infrastructure bill is passed?

    Posted: 05 Nov 2021 02:36 AM PDT

    What are your thoughts about how the vote on the infrastructure bill will affect Bitcoin's price? I watched this video and I'm really against it.

    submitted by /u/UpvoteBeast
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    Voyager is Garbage

    Posted: 04 Nov 2021 05:15 PM PDT

    So not only does Voyager have a large spread price they literally charged $31 to transfer $40 in BTC off their network. I will be closing my account ASAP. Total Trash.

    submitted by /u/Rambalamda
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    Financial Cryptography: Is Bitcoin a triple entry system?

    Posted: 05 Nov 2021 02:55 AM PDT

    NYC Mayor-Elect Eric Adams Vows to Take First 3 Paychecks in Bitcoin

    Posted: 04 Nov 2021 12:30 PM PDT
    Read more
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