Bitcoin instant verification of work

If you have found a bug or wish to request a feature in our software, you can also report it as an issue against the appropriate GitHub repository. You can also post questions on our subreddit. In some cases fellow GreenAddress users may be able to respond to your query before we are able to. Support is offered on a best-effort basis. We prioritize addressing security problems and bugs in the software providing the service. If your question is answered in this FAQ, and in particular, if it pertains to lost credentials, it may be some time before we respond to you.

Unfortunately we receive a large volume of spurious email and we cannot always respond instantly. We are working to improve our email response time and will update this FAQ whenever the support policy or support solution is changed. If you have specific support requirements please contact us to discuss your needs.

Your main GreenAddress account is a 2of2 account. This means that two signatures are required to validate any transaction: We sign your transaction only if it complies with the limits you have enabled, and only when you provide two-factor authentication. This means that a potential coin thief has to first access your wallet and then also hack into your two-factor authentication in order to try to steal your coins.

A 2of3 account requires two out of three signatures, where the third signature is from a backup key known only to you. This gives you the security benefits of a 2of2 account, while still allowing you to move your coins in the event that the GreenAddress service is unavailable.

You can read more about 2of3 recovery here. Please see below for details of recovery transactions which allow you to move coins from 2of2 accounts. When you send an ordinary Bitcoin transaction, the recipient of the coins must take care that the transaction is confirmed mined into a block on the blockchain so that they cannot be defrauded.

An attempt to defraud is usually made by "double spending" coins - after sending a transaction to someone, the inputs are then re-spent in a new transaction that pays someone else.

To avoid this risk, it is usually recommended to wait for at least six blocks after the transaction is mined. This introduces undesirable delays when sending. Because GreenAddress 2of2 accounts only allow sending coins when they are signed by both you and us, the service can act as a kind of guarantee that your coins cannot be double spent, since the service will not sign another transaction for the same coins when one is already in-flight.

Services that choose to rely on this can therefore trust that a transaction they receive from GreenAddress cannot be double spent, eliminating the need to wait for the transaction to confirm. These are known as instant transactions and they can be sent by ticking the "instant" checkbox when sending coins from our wallet software.

Funds in your main GreenAddress account or a multisignature 2of2 subaccount require 2 signatures to be spent: In order to protect you from loss of access to your funds should GreenAddress become unavailable GreenAddress automatically creates pre-signed transactions which you can subsequently countersign to recover the funds to an address controlled solely by you.

These transactions are called nLockTime transactions because they can only be spent and confirmed by the network after a specific period of time. If the service becomes unavailable, you simply wait until the specified period 90 days by default , then sign and send the transaction using our open source recovery tool garecovery. Once the nLockTime period expires these nLockTime transactions would allow you to recover the funds in the 2of2 account without requiring GreenAddress's signature.

This also means that any limits placed on your spending in GreenAddress, such as 2FA requirements, cease to be enforceable by GreenAddress, and that these funds are no longer available for use in instant transactions because GreenAddress cannot guarantee that you have not tried to double spend them. At this point GreenAddress will prompt you to redeposit the coins by sending them to yourself. This creates a new nLocktime transaction for you, while re-protecting the coins by once again requiring a GreenAddress signature to spend them.

In this way you can take advantage of instant transactions from 2of2 accounts, while always being sure you can retrieve your funds if the service is off-line. The redeposit operation is a standard bitcoin transaction and as such is subject to the usual network transaction fees. You can place your funds in a GreenAddress 2of3 account, in which case GreenAddress does not generate nLockTime transactions and therefore no redeposits are necessary.

You can increase the nLockTime period on your account which will reduce the frequency of the redeposits. The downside of this is that should you need to recover your funds for example, because you lose your two factor authentication you will have to wait for longer. We recommend that you redeposit your funds when reminded, however redepositing is optional and failure to redeposit will not necessarily lead to the loss of any funds.

The main consequences of not redepositing are:. The funds in the account will no longer be eligible for instant confirmations because GreenAddress can no longer guarantee that you have not tried to double spend them. It becomes possible that anyone with access to both your mnemonic and the nLockTime.

No, GreenAddress does not support this. GreenAddress will only sign standard bitcoin transactions. Yes, our https site supports Tor users. Our mainnet production site is at http: Unfortunately, many banks and payment services such as PayPal don't yet support Bitcoin directly. For the time being, you can exchange your money using bank transfers and sometimes debit or credit cards via an intermediary like a Bitcoin exchange or a broker.

There are also online services and communities where you can arrange to exchange cash for Bitcoin. This is an area of rapid change and innovation and so we do not list or specifically recommend any services in this space.

The best service for you depends on many factors. We suggest you locate local services using your favorite search engine and carefully review any potential options. You should see new transactions in your wallet within seconds of it being sent by the payer. If you can not see your transaction in a block explorer, it probably means it is still propagating or failed to do so for example, setting the fee too low can cause transactions to be dropped. We have sensible rate limits to prevent the service from denial of service attacks.

It is extremely unlikely that a user will encounter these limits under normal use. If you find that you are hitting a rate limit, please contact support with the details. If you have a requirement that exceeds the current limits, please feel free to contact us to discuss your needs further.

Addresses change constantly for privacy and security reasons. Re-using old addresses makes it easier for others to group transactions together and can be less secure. While GreenAddress does correctly process multiple payments to the same address, we recommend not re-using them. Addresses should be thought of as one-time receipt IDs rather than as unchanging identifiers such as traditional bank wire details. Please see the API documentation for more details. All previously generated addresses are available in the Receive tab under Advanced Options when using the Chrome or Cordova wallet clients.

Your private keys are not stored. They are derived on demand from your mnemonics as a seed to a BIP32 hierarchical wallet.

Your mnemonics and private keys are never sent to the server. The server receives the public key and chaincode for generated addresses only. When you create a PIN, a random bit AES password is created and used to encrypt your mnemonics and store them on your device in encrypted form. This password is sent to the server and destroyed on the client.

If the server is given the correct PIN when logging in, it will return the password to the device in order to decrypt the mnemonics.

If the server is given the wrong PIN three times, it will destroy the password at which point the user must use their mnemonics to log in. Note that the server never sees your mnemonics at any point. If you can't remember the PIN you use to login to your wallet, you will need to use your mnemonics to log in instead. After entering the wrong PIN three times, the back end service will delete its copy of your wallet's random decryption key, at which point the PIN can no longer be used. Your wallet client will then ask you to login using your mnemonics and you can resume using the service as normal.

The service never knows your mnemonics or passphrase; We cannot help you recover them if they are lost. If you have a wallet with PIN entry enabled, you can use your PIN to log in to the wallet and then view the mnemonics from the settings menu. You should then write them down and store them safely.

In all other cases you will only be able to retrieve your mnemonics by brute force trying various combinations of valid words. This is similar to how a hacker might try to break into your wallet, and is not generally feasible.

You should research third party services for wallet recovery, as GreenAddress does not offer assistance or support for wallet cracking for obvious reasons. You should always have at least two different two-factor options enabled.

As long as you keep these backups you can maintain access to your coins even if you lose access to one method for any reason. In cases where you have lost access to all of your two-factor methods, we have no way to return control of your coins to you. We take our users' security very seriously; we have never disabled two-factor authentication for any user once enabled, unless explicitly authorized to do so via another two-factor authentication method.

We follow the restrictions that you placed on your account without exception. If your coins are in a 2of2 account then you will need to recover your authentication - we cannot disable it in this or any other case. Alternately, if you had enabled nLocktime transactions then you can use them to recover your coins after the nLocktime expires 90 days by default.

If you transferred your coins to a 2of3 account then you can move them without two-factor authentication since you have 2 of the 3 required signatures. If not, then unless you can recover your authorization we cannot help you. As noted, 2of3 accounts can be used to avoid requiring authentication also. These future mitigations require careful design and development to ensure that they cannot be exploited by attackers.

There is no guarantee that the price of a bitcoin will increase or drop. This is very similar to investing in an early startup that can either gain value through its usefulness and popularity, or just never break through. Bitcoin is still in its infancy, and it has been designed with a very long-term view; it is hard to imagine how it could be less biased towards early adopters, and today's users may or may not be the early adopters of tomorrow.

Bitcoin is unique in that only 21 million bitcoins will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a bitcoin, such as bits - there are 1,, bits in 1 bitcoin. Bitcoins can be divided up to 8 decimal places 0. The deflationary spiral theory says that if prices are expected to fall, people will move purchases into the future in order to benefit from the lower prices.

That fall in demand will in turn cause merchants to lower their prices to try and stimulate demand, making the problem worse and leading to an economic depression. Although this theory is a popular way to justify inflation amongst central bankers, it does not appear to always hold true and is considered controversial amongst economists.

Consumer electronics is one example of a market where prices constantly fall but which is not in depression. Similarly, the value of bitcoins has risen over time and yet the size of the Bitcoin economy has also grown dramatically along with it. Because both the value of the currency and the size of its economy started at zero in , Bitcoin is a counterexample to the theory showing that it must sometimes be wrong.

Notwithstanding this, Bitcoin is not designed to be a deflationary currency. It is more accurate to say Bitcoin is intended to inflate in its early years, and become stable in its later years. The only time the quantity of bitcoins in circulation will drop is if people carelessly lose their wallets by failing to make backups. With a stable monetary base and a stable economy, the value of the currency should remain the same.

This is a chicken and egg situation. For bitcoin's price to stabilize, a large scale economy needs to develop with more businesses and users. For a large scale economy to develop, businesses and users will seek for price stability. Fortunately, volatility does not affect the main benefits of Bitcoin as a payment system to transfer money from point A to point B. It is possible for businesses to convert bitcoin payments to their local currency instantly, allowing them to profit from the advantages of Bitcoin without being subjected to price fluctuations.

Since Bitcoin offers many useful and unique features and properties, many users choose to use Bitcoin. With such solutions and incentives, it is possible that Bitcoin will mature and develop to a degree where price volatility will become limited. Only a fraction of bitcoins issued to date are found on the exchange markets for sale. Bitcoin markets are competitive, meaning the price of a bitcoin will rise or fall depending on supply and demand. Additionally, new bitcoins will continue to be issued for decades to come.

Therefore even the most determined buyer could not buy all the bitcoins in existence. This situation isn't to suggest, however, that the markets aren't vulnerable to price manipulation; it still doesn't take significant amounts of money to move the market price up or down, and thus Bitcoin remains a volatile asset thus far.

For now, Bitcoin remains by far the most popular decentralized virtual currency, but there can be no guarantee that it will retain that position.

There is already a set of alternative currencies inspired by Bitcoin. It is however probably correct to assume that significant improvements would be required for a new currency to overtake Bitcoin in terms of established market, even though this remains unpredictable.

Bitcoin could also conceivably adopt improvements of a competing currency so long as it doesn't change fundamental parts of the protocol. Receiving notification of a payment is almost instant with Bitcoin. However, there is a delay before the network begins to confirm your transaction by including it in a block.

A confirmation means that there is a consensus on the network that the bitcoins you received haven't been sent to anyone else and are considered your property. Once your transaction has been included in one block, it will continue to be buried under every block after it, which will exponentially consolidate this consensus and decrease the risk of a reversed transaction.

Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take much longer. Every user is free to determine at what point they consider a transaction sufficiently confirmed, but 6 confirmations is often considered to be as safe as waiting 6 months on a credit card transaction.

Transactions can be processed without fees, but trying to send free transactions can require waiting days or weeks. Although fees may increase over time, normal fees currently only cost a tiny amount. By default, all Bitcoin wallets listed on Bitcoin. Transaction fees are used as a protection against users sending transactions to overload the network and as a way to pay miners for their work helping to secure the network.

The precise manner in which fees work is still being developed and will change over time. Because the fee is not related to the amount of bitcoins being sent, it may seem extremely low or unfairly high. Instead, the fee is relative to the number of bytes in the transaction, so using multisig or spending multiple previously-received amounts may cost more than simpler transactions.

If your activity follows the pattern of conventional transactions, you won't have to pay unusually high fees. The bitcoins will appear next time you start your wallet application.

Bitcoins are not actually received by the software on your computer, they are appended to a public ledger that is shared between all the devices on the network.

If you are sent bitcoins when your wallet client program is not running and you later launch it, it will download blocks and catch up with any transactions it did not already know about, and the bitcoins will eventually appear as if they were just received in real time. Your wallet is only needed when you wish to spend bitcoins. Long synchronization time is only required with full node clients like Bitcoin Core. Technically speaking, synchronizing is the process of downloading and verifying all previous Bitcoin transactions on the network.

For some Bitcoin clients to calculate the spendable balance of your Bitcoin wallet and make new transactions, it needs to be aware of all previous transactions.

This step can be resource intensive and requires sufficient bandwidth and storage to accommodate the full size of the block chain. For Bitcoin to remain secure, enough people should keep using full node clients because they perform the task of validating and relaying transactions.

Mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. It can be perceived like the Bitcoin data center except that it has been designed to be fully decentralized with miners operating in all countries and no individual having control over the network. This process is referred to as "mining" as an analogy to gold mining because it is also a temporary mechanism used to issue new bitcoins. Unlike gold mining, however, Bitcoin mining provides a reward in exchange for useful services required to operate a secure payment network.

Mining will still be required after the last bitcoin is issued. Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs appropriate tasks to process and confirm these transactions. Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created bitcoins issued into existence according to a fixed formula.

For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes.

As a result, mining is a very competitive business where no individual miner can control what is included in the block chain. The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks.

When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power. Bitcoin miners are neither able to cheat by increasing their own reward nor process fraudulent transactions that could corrupt the Bitcoin network because all Bitcoin nodes would reject any block that contains invalid data as per the rules of the Bitcoin protocol.

Consequently, the network remains secure even if not all Bitcoin miners can be trusted. Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of Bitcoin entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy.

Although unlike Bitcoin, their total energy consumption is not transparent and cannot be as easily measured. Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When Bitcoin mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use.

An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it. Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain.

This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users.

Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.

In the early days of Bitcoin, anyone could find a new block using their computer's CPU. As more and more people started mining, the difficulty of finding new blocks increased greatly to the point where the only cost-effective method of mining today is using specialized hardware. You can visit BitcoinMining. The Bitcoin technology - the protocol and the cryptography - has a strong security track record, and the Bitcoin network is probably the biggest distributed computing project in the world.

Bitcoin's most common vulnerability is in user error. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is pretty similar to physical cash stored in a digital form. Fortunately, users can employ sound security practices to protect their money or use service providers that offer good levels of security and insurance against theft or loss.

The rules of the protocol and the cryptography used for Bitcoin are still working years after its inception, which is a good indication that the concept is well designed. However, security flaws have been found and fixed over time in various software implementations.

Like any other form of software, the security of Bitcoin software depends on the speed with which problems are found and fixed. The more such issues are discovered, the more Bitcoin is gaining maturity. There are often misconceptions about thefts and security breaches that happened on diverse exchanges and businesses. Although these events are unfortunate, none of them involve Bitcoin itself being hacked, nor imply inherent flaws in Bitcoin; just like a bank robbery doesn't mean that the dollar is compromised.

However, it is accurate to say that a complete set of good practices and intuitive security solutions is needed to give users better protection of their money, and to reduce the general risk of theft and loss. Over the course of the last few years, such security features have quickly developed, such as wallet encryption, offline wallets, hardware wallets, and multi-signature transactions.

It is not possible to change the Bitcoin protocol that easily. Any Bitcoin client that doesn't comply with the same rules cannot enforce their own rules on other users. As per the current specification, double spending is not possible on the same block chain, and neither is spending bitcoins without a valid signature. Therefore, it is not possible to generate uncontrolled amounts of bitcoins out of thin air, spend other users' funds, corrupt the network, or anything similar.

However, powerful miners could arbitrarily choose to block or reverse recent transactions. A majority of users can also put pressure for some changes to be adopted. Because Bitcoin only works correctly with a complete consensus between all users, changing the protocol can be very difficult and requires an overwhelming majority of users to adopt the changes in such a way that remaining users have nearly no choice but to follow.

As a general rule, it is hard to imagine why any Bitcoin user would choose to adopt any change that could compromise their own money.

Yes, most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don't yet exist and probably won't for a while. In the event that quantum computing could be an imminent threat to Bitcoin, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all Bitcoin users.

You can find more information and help on the resources and community pages or on the Wiki FAQ. Frequently Asked Questions Find answers to recurring questions and myths about Bitcoin. Table of contents General What is Bitcoin? Who controls the Bitcoin network? How does Bitcoin work? Is Bitcoin really used by people? How does one acquire bitcoins?

How difficult is it to make a Bitcoin payment? What are the advantages of Bitcoin? What are the disadvantages of Bitcoin? Why do people trust Bitcoin? Can I make money with Bitcoin? Is Bitcoin fully virtual and immaterial? What happens when bitcoins are lost? Can Bitcoin scale to become a major payment network? Legal Is Bitcoin legal?

Is Bitcoin useful for illegal activities? Can Bitcoin be regulated? What about Bitcoin and taxes? What about Bitcoin and consumer protection? Economy How are bitcoins created? Why do bitcoins have value? Can bitcoins become worthless? Is Bitcoin a bubble? Is Bitcoin a Ponzi scheme? Doesn't Bitcoin unfairly benefit early adopters?

Won't the finite amount of bitcoins be a limitation? Won't Bitcoin fall in a deflationary spiral? Isn't speculation and volatility a problem for Bitcoin? What if someone bought up all the existing bitcoins? What if someone creates a better digital currency? Transactions Why do I have to wait for confirmation? How much will the transaction fee be? What if I receive a bitcoin when my computer is powered off? What does "synchronizing" mean and why does it take so long?

Mining What is Bitcoin mining? How does Bitcoin mining work? Isn't Bitcoin mining a waste of energy? How does mining help secure Bitcoin? What do I need to start mining?