Bitcoin transaction forwarding

Submitted by jbrown on Tue, 02/10/2015 - 07:54

Forwarding of individual Bitcoin transactions to one or more addresses is a new feature in Coin Tools.

Because it spends the outputs from the transaction that is being forwarded instead of making a regular payment from the wallet pool of unspent outputs it is not necessary to wait for confirmations before sending the new transaction. If the original transaction did not ultimately make it onto the blockchain then the forwarding transaction would also not make it onto the blockchain.

Using Bitcoin dust transactions to prevent website spam

Submitted by jbrown on Fri, 01/30/2015 - 10:49

I quite often use Mollom to prevent spam submissions on contact and comment forms. It works pretty well, but some spam still gets through.

An alternative anti-spam technique is to require a Bitcoin dust transaction before an unprivileged user can POST a form. The value of such a transaction would only be about $0.001 USD. For a non-spammer this cost is fine, but for a spammer this is enough to make it totally uneconomical as they need to send out millions of posts.

Ensuring security of funds and preserving anonymity when using Bitcoin for e-commerce

Submitted by jbrown on Wed, 01/21/2015 - 08:01

When configuring an e-commerce website to accept Bitcoin, it is important to be aware of the extra security considerations relating to private keys. Each payment needs its own Bitcoin address so these need to be readily available on the system providing the e-commerce functionality. This is not true of the private keys. Unless payments need to be made in an automated manner in response to user actions on the website, the wallet that holds them can be stored in a much more secure environment. This can make it significantly harder for a hacker to steal the funds.

Using HD Bitcoin wallets with Drupal Coin Tools

Submitted by jbrown on Wed, 01/07/2015 - 13:10

Each Coin Tools payment needs its own Bitcoin address. This is necessary so that it is clear whether or not the payment has been completed. It is also important for preserving anonymity.

In order to participate in the Bitcoin network, a Drupal website must talk to a Bitcoin node. Currently Coin Tools utilises the reference implementation, bitcoind.

bitcoind has wallet functionality built in. In fact, it was originally released as a desktop wallet for Microsoft Windows. By default, bitcoind will pre-generate a pool of 100 pairs of addresses and corresponding private keys. This pool will be increased as necessary.

This presents a number of problems. If data-loss were to occur on the server, the private keys could be unrecoverable and therefore the funds stored on the addresses would be unspendable. If a hacker gains access to the server they could copy the keys and steal the funds. The private keys can be encrypted, but the password is exposed on the server when generating new keys and spending funds.

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