Sophisticated multi-signature

solutions

Bitcoin

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

backgroundabout me

•Martin Albert, 33 years old

•Diploma in Chemistry, Diploma in Business Economics

•Business Consultant in the field of chemicals legislation

•EU bureaucrat

•2011 Discovered Bitcoin, early adopter

•2012 Full time Bitcoin enthusiast

•2013 Investor, CEO at Bitalo AG

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

lets see…Now more about bitcoin

A system to transfer “value” from person to person

Inventor: 2009 – “Satoshi Nakamoto” As White Paper

Open Source project

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

a story about an apple

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

But now a virtual apple

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Now you require a ledger

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Basis is the P2P Network

Like Skype or Bit-torrent

Download client, install, start

When connected you can tell yourcomputer to confirm transactions

Computer will confirm Bitcoin transactions

Reward for confirmations in Bitcoins

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Bitcoin?

- decentralized, peer to peer....

- no banks or 3rd parties needed

- secure system / everything with encryption

- somehow anonymous...

--> SO WHAT?

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Transaction in DetailGeneral principle:

I take a certain amount of bitcoins

I take my public key as senderI take public key of recipient

Transaction is signed with my private key to prove that I am sender

Transactions are public and sent to the bitcoin network.

Network checks if transaction is valid and “confirms”

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Normal Bank TransactionNormal Bank account:Person and Account are connected

Only Sender, Receiver (and Bank)Know about the transaction

Bitcoin:Transaction is PUBLIC,But it is NOT known who is behind the account (unless known)

One person can have unlimited bank accounts

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Status Quo - Intermediary

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Status Quo - Intermediary

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Status Quo - Intermediary

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Status Quo - Intermediary

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Status Quo - Intermediary

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Problem solved? – Bitcoins

- Centralized Service??

- Give up control over my coins??

- Security issues with hackers?

- Sites close over night???

--> SAME PROBLEM AS BEFORE!

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

so…where should I store my Bitcoins

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

What if a service exists where you….Get 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?

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Trick: Multi-Signature wallets

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

“Normal” TransactionHow does it work?

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Part 1: Create multi-signature addressMulti-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.

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Part 2: Spending coins from multi-signature walletsMulti-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)

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Multi signature wallets

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Multi signature wallets

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Hackers and admins see encrypted wallets

Two-Factor authentication

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

And the last resort: Dead Man’s Switch

www.bitalo.comPhone: +49 6322 9419292 | e-mail: martin@bitalo.com

Bottom 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

YOUFOR watching

THANK