Beginner question: What is the master public key and how are addresses generated

Abdussamad

legendary

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This is something for you to consider after you've used electrum for a few days:

I should like to add that regarding 1) above you may have to raise the gap limit for your electrum "merchant" wallet to see some payments.

Think of the gap limit as how many addresses forward electrum looks for for transactions. By default it looks for 5 addresses since the last address where you received money. For a merchant wallet you may want to increase it to something like 75 or 100.

To change it switch to the console tab and type the following:

Code:

wallet.storage.put( 'gap_limit', 75 )

Then exit and reopen electrum.

Abdussamad

legendary

Activity: 3682

Merit: 1580

Quote from: rezilient on March 20, 2014, 04:06:59 PM

Great explanation. Thank you!

Is keeping a significant amount of BTC (50+ BTC) in Electrum safe enough, or do you recommend that I print them out to physical paper wallets?

For a large amount of bitcoins you should use an offline electrum wallet. It is superior to a paper wallet because you get unlimited addresses and other features that come with a full fledged wallet. There is a guide for this on the electrum site but this is not a setup for a newbie. First get comfortable using electrum then try for an offline setup.

rezilient

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Activity: 574

Merit: 500

Quote from: Abdussamad on March 20, 2014, 03:55:30 PM

Quote from: rezilient on March 20, 2014, 03:41:06 PM

Now are you saying the Bitcoins sent to this address cannot be spent? I'm a bit confused...

Knowledge of the private keys (private not public) determines bitcoin ownership. *You* can spend the bitcoins because you have the bitcoin wallet running on your computer. That wallet file has, among other things, the seed from which all your bitcoin private keys are derived.

Installing the MPK on your web server allows your WP installation to independently generate addresses without risking your bitcoins in the event of a server compromise. You cannot generate the private keys behind the addresses with just the MPK therefore your bitcoins cannot be stolen.

Great explanation. Thank you!

Is keeping a significant amount of BTC (50+ BTC) in Electrum safe enough, or do you recommend that I print them out to physical paper wallets?

Abdussamad

legendary

Activity: 3682

Merit: 1580

Quote from: rezilient on March 20, 2014, 03:41:06 PM

Now are you saying the Bitcoins sent to this address cannot be spent? I'm a bit confused...

Knowledge of the private keys (private not public) determines bitcoin ownership. *You* can spend the bitcoins because you have the bitcoin wallet running on your computer. That wallet file has, among other things, the seed from which all your bitcoin private keys are derived.

Installing the MPK on your web server allows your WP installation to independently generate addresses without risking your bitcoins in the event of a server compromise. You cannot generate the private keys behind the addresses with just the MPK therefore your bitcoins cannot be stolen.

rezilient

hero member

Activity: 574

Merit: 500

Quote from: Abdussamad on March 20, 2014, 03:22:58 PM

Using the MPK you can generate addresses, but you can't spend bitcoins sent to them. Bitcoins sent to your addresses will show up in your electrum window.

Thanks for the quick reply. As you can see here (https://wordpress.org/plugins/bitcoin-payments-for-woocommerce/screenshots/) the wordpress plugin asks for the Electrum MPK. Now I did a test payment and I can see the payment came to an address that I guess was created automatically. Now are you saying the Bitcoins sent to this address cannot be spent? I'm a bit confused...

Thanks.

Abdussamad

legendary

Activity: 3682

Merit: 1580

a) Electrum is a desktop client. See the screens here: https://electrum.org/

3) The seed is explained here: https://electrum.org/seed.html . Yes, if the seed were to be discovered by a thief you will loose your coins. But the seed is a random number so it can't be guessed.

2) Maybe if they allow you to add watch-only addresses, but see a) above.

1) The master public key allows you to generate addresses independently of the seed. Using the MPK you can generate addresses, but you can't spend bitcoins sent to them. Bitcoins sent to your addresses will show up in your electrum window.

rezilient

hero member

Activity: 574

Merit: 500

Hello. I am using a Wordpress plugin on my e-commerce website to accept Bitcoin payments and it uses an Electrum address for receiving the payment. Some questions:

1) The Bitcoin payment gateway plugin asks for the Electrum Master Public Key. When a payment is received how do I know which address it is going to?

2) I currently use Coinbase for buying/sending BTC. Can the Electrum balance be "tracked" somehow in my Coinbase wallet so I can keep track of and consolidate my BTC balances?

3) If I understand correctly, the Electrum wallet can be re-generated simply using the "seed phrase" - what if someone finds this phrase, is that all they need to steal my coins?

Thanks in advance!
Rezilient

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