I loosely followed how bitcoin exchange rates skyrocketed during last week and a half. Which means in the evening I usually uttered "Wow, bitcoins are up $100 again! And on 2nd November one BTC was just $200! This is insane!" when reading news. Today, it seems BTC/USD rate gained about $40-$60, daily change being "only" 3.5%-5.5%. According to bitcoincharts, BTC/USD trading volume at Mt.Gox bitcoin exchange has been very respectable 1.11 million BTC & 613 million USD in last 30 days. Mt.Gox will not take trade fees during four days, celebrating "Black Friday through Cyber Monday" and attempting to keep the cryptocurrency party going. Also, they launched bitcoins.com to promote bitcoins and their advantages.
During quiet moments, it is nice to ponder whether mathematically limited virtual bitcoins have more real value than the US paper dollars created at Federal Reserve from 1 part of linen and 3 parts of cotton (mixed with thin air). Currently not, as speculation is the driving force behind the exchange rate, not real services offered for bitcoins. But services extend and even infamous Silk Road, lead by "new" Dread Pirate Roberts, is back online1. Speculation can create either "real" value or bubble, it just needs to go on long enough.
I never mined or bought bitcoins. I have little understanding about how they work and the reason that I did not even experiment with them was that using conceptually truly secure local wallets seemed overkill, with e.g. Bitcoin Armory reportedly requiring 4 GB of memory to run. I imagine that is mostly because of the trust issue that rises in bitcoin peer-to-peer transactions, one cannot know whether offered bitcoin is a fake that has been already "spent", unless one keeps the record of all transactions in the currency system2. Due to constrained computing resources, it is not currently feasible for every node in the system to be an equal party who knows about all the historical transactions. "Überpeers" offering their services to resource-bound network are needed, will thus arise and must be trusted somewhat (at least until everyone has device as powerful as rack of servers at their personal disposal).
Fact that I did not have single µBTC stashed (or even a place to stash them) became dreadfully annoying during the BTC craze, so to begin with, I decided to play around with wallets. Nice to have wallet ready in an off-chance that someone actually offers to transfer me bitcoins.
Expecting installation and usage to be simpler on my Android smartphone than on my current Linux distro, I went to search for bitcoin wallet applications at Play Store. There were several and all were free to install:
- Bitcoin Wallet by Andreas Schildbach
-
Blockchain Wallet by Qkos Services Ltd
- Open-Source (GPL) fork is available at GitHub
- I disregarded it because it asked for "discover known accounts" permission and had coin storage on central server (
You to retain full control of your bitcoins while at the same time able to access them on any device.
)
-
Coinbase - Bitcoin Wallet by Coinbase, Inc
- Open-Source (APL 2.0), code available at GitHub
- I disregarded it because of coin storage on central server (
Funds are stored securely online in case you lose your phone.)
-
Mycelium Bitcoin Wallet by Mycelium Developers
- Source code available at GitHub, but licensing is view only (MS-RSL).
- Promises
100% control over your private keys, they never leave your device unless you export them
and did not require many permissions.
The least I wanted was predictable application behaviour with private keys remaining in my own hardware, so I chose to install mysteriously named Mycelium wallet. It started without problems, generating wallet identifier on first start and showing impressive zero balance. Perfect. Time to sleep.
1Just a month after shutdown, Silk Road 2.0 emerges (Nov 2013, Ars Technica)
2Victor Grishchenko's notes on Bitcoin (May 2011, Delft University of Technology, Netherlands)
3modify/delete USB storage contents, prevent phone from sleeping, take pictures and videos, control near-field-communications, create Bluetooth connections, full Internet access, start automatically at boot, send sticky broadcast, control vibrator
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