Why doesn't bitcoin have a "freeze" function? - page 3.

Pmalek

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Quote from: Kakmakr on August 20, 2021, 11:43:39 AM

The "freeze" option is not a feature that was introduced for the Bank client, but rather a regulatory feature that was implemented to protect the Banks. They are not allowed to have "dormant" accounts, because those accounts might be used for money laundering.. (the excuse given to me from my Bank, when I did not use my Credit card for 8 months.)

This is 100% bullshit and just some excuse to "force" you politely to "use" your account... because "dormant" accounts does not generate "fees" and they need the "fees" to pay for their expenses. Roll Eyes

That's part of the problem. I have an acquaintance who works in a local bank in my country. That bank recently sent out letters to all their customers informing them that in a few months they are planning to introduce new monthly fees for bank accounts whose clients have no type of active time deposit. When I asked her what it was all about, she said that the bank has high costs in insuring money on accounts with no time deposits. Those costs are at a minimum or non-existent once a part of your money goes into some kind of investment fund or time deposit. It could all be bullshit, of course, but it could also be true. Whatever it is, they don't want to see your money just laying around in your account, not being used, they want a bigger piece for themselves.

larry_vw_1955

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Quote from: kano on August 20, 2021, 08:49:10 PM

In reality, the concept is completely different between a bank and a core wallet:

Many people in the bank, and anyone who has enough access to your details can unfreeze your bank account.

Not only that but they can see everything you're doing, all the transactions, what you use your money for everything. And you have to keep in mind they are just people. People tell other people things that they find interesting or peculiar, people that don't even have any business knowing.

I know this is a bit off topic to the thread subject but still...

larry_vw_1955

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Quote from: Kakmakr on August 20, 2021, 11:43:39 AM

They are not allowed to have "dormant" accounts, because those accounts might be used for money laundering.. (the excuse given to me from my Bank, when I did not use my Credit card for 8 months.)

This is 100% bullshit and just some excuse to "force" you politely to "use" your account... because "dormant" accounts does not generate "fees" and they need the "fees" to pay for their expenses. Roll Eyes

Yah the old "money laundering" key word they love to pull that out of their asses from time to time lol. But when they do you know you better watch out!

kano

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If you run a core node with a wallet, your bitcoins are always 'frozen'.

Only those who know your private keys can spend them.

If others have access to your private keys, that would be considered the same as having access to your bank account login, and being able to press the 'unfreeze' button, and you also having given them full access to your cards that allow you to spend money in your bank account.

In reality, the concept is completely different between a bank and a core wallet:

Many people in the bank, and anyone who has enough access to your details can unfreeze your bank account.

Only those who have access to your wallet keys can spend your bitcoins.
So ensure they are secure ...

i.e. with a bitcoin core wallet, you are the bank, you must handle the security.
(and on a typical windows computer that security is almost non-existent)

Kakmakr

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The "freeze" option is not a feature that was introduced for the Bank client, but rather a regulatory feature that was implemented to protect the Banks. They are not allowed to have "dormant" accounts, because those accounts might be used for money laundering.. (the excuse given to me from my Bank, when I did not use my Credit card for 8 months.)

This is 100% bullshit and just some excuse to "force" you politely to "use" your account... because "dormant" accounts does not generate "fees" and they need the "fees" to pay for their expenses. Roll Eyes

If Bitcoin implement something like this, then changes need to be made to the protocol and that will probably never happen.. because consensus for things like this is almost impossible... or alternatively something like the Lightning Network (side chains) can implement this. Huh

o_e_l_e_o

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Quote from: PrimeNumber7 on August 16, 2021, 04:43:31 PM

I was referring to the cost of moving your coin back and forth between your hot wallet and what is basically cold storage unnecessarily, and due to the nature of the goal of the setup, almost always having to pay 'next block' level transaction fees.

And as I pointed out, in OP's proposal he was still having to make a transaction to and from his special freezing address whenever he wanted to freeze or unfreeze the coins in his hot wallet, and he would be paying "next block" fees for these transactions too, meaning my multi-sig suggestion is no more expensive than his own proposal. I agree the fees are unnecessary and I would never do this, but it is not any more expensive than what he wanted to do anyway.

Quote from: PrimeNumber7 on August 16, 2021, 04:43:31 PM

If you are not comfortable having a certain amount of coin in your hot wallet all the time, it is probably not a good idea to be moving that amount of coin to your hot wallet on any kind of a regular basis.

I agree, but the whole point of my multi-sig suggestion is that he doesn't need to unfreeze his entire stack at once as he would with his proposal. He can store, say, 5 BTC on his multi-sig wallet, move 0.1 to his hot wallet when he needs to spend it on the go, and return whatever he doesn't spend to his multi-sig at a later date.

larry_vw_1955

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What script? Generating all the keys for a multi-sig wallet on the same device at the same time negates a large portion of the additional security that a multi-sig brings. Also, please tell me you didn't send all your coins to an unfamiliar wallet before first testing you knew how to spend from said wallet?

Just a little script. Well that's the problem there is no wallet. When I made the address I guess I thought there has to be a way to import it into a wallet and then just spend from it but no! And yes you right that I didn't generate the 3 address on 3 different computers. probably not the best idea.

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Quote from: o_e_l_e_o on August 16, 2021, 04:59:21 AM

Quote from: PrimeNumber7 on August 15, 2021, 03:46:26 PM

There is also the issue of cost.

In OP's initial proposal, he was suggesting having a second address which would control the frozen state of the primary address by way of sending special transactions to and from this second address. Given that, then the fees he would pay in my system are not significantly higher, and once taproot shrinks multi-sig transactions, won't be higher at all.

I wasn't even referring to the added cost of using multisig (although that is also a temporary issue), I was referring to the cost of moving your coin back and forth between your hot wallet and what is basically cold storage unnecessarily, and due to the nature of the goal of the setup, almost always having to pay 'next block' level transaction fees.

If you are not comfortable having a certain amount of coin in your hot wallet all the time, it is probably not a good idea to be moving that amount of coin to your hot wallet on any kind of a regular basis. If your hot wallet keys are compromised unknowingly, the attacker does not need to immediately spend coin from that hot wallet, and they probably won't if they know that a large amount of coin is regularly sent to said hot wallet.

IMO the proposed setup involves poor security practices, even if it meets the OP's (misguided) stated goals.

o_e_l_e_o

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Quote from: PrimeNumber7 on August 15, 2021, 03:46:26 PM

There is also the issue of cost.

In OP's initial proposal, he was suggesting having a second address which would control the frozen state of the primary address by way of sending special transactions to and from this second address. Given that, then the fees he would pay in my system are not significantly higher, and once taproot shrinks multi-sig transactions, won't be higher at all.

Quote from: larry_vw_1955 on August 15, 2021, 10:30:06 PM

But I used a script to create a 3 of 3. I didn't stop to consider how hard it might be to actually spend from it.

What script? Generating all the keys for a multi-sig wallet on the same device at the same time negates a large portion of the additional security that a multi-sig brings. Also, please tell me you didn't send all your coins to an unfamiliar wallet before first testing you knew how to spend from said wallet?

larry_vw_1955

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Quote from: BlackHatCoiner on August 16, 2021, 02:16:07 AM

I think you're somehow missing the point if a collision were to ever happen.

I was talking about instead of hashing the redeemscript to get a p2sh address, you just use the redeemscript itself as the address. I never heard of that but someone said you can do that. not sure if it is true. But I took a redeemscript and pasted it into a block explorer and it said it wasn't a valid btc address. so either block explorers don't understand some addresses or that information was just wrong. i'm betting on the latter Grin

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Quote from: larry_vw_1955 on August 15, 2021, 10:22:23 PM

On the one hand, you're giving away your public keys but on the other hand, you can bypass the p2sh collission issue

I think you're somehow missing the point if a collision were to ever happen. I don't know exactly what's is written in the Bitcoin's source code, but just because you revealed the public keys doesn't mean that you get away the collision issue. In P2SH, the nodes firstly verify that the hash of the public keys gives you, indeed, the HASH160 you gave them at first, when you later want to spend from that multi-sig address.

But, if another set of public keys gives you the same hash once is hashed, both are considered correct during the verification part. The nodes won't realize that this multi-sig address with these public keys can't spend just because another person had spent in the past from one with the same hash, but with different keys.

If you want to get rid of the collision issue, just use P2WSH multisig. There are a total of ~2²⁵⁶ private keys you can use which is a smaller number than the total addresses you can create (2²⁵⁶). (Of course, there are still cases with collisions, but much less)

You can observe they're more supposedly secure in a brute force than the others from their length:

Code:

tb1q7hqy8sfea6nr5gfghjtl6emxfas9mv5rqragxppcfgxhwqdsu7psluzu2e (testnet)

larry_vw_1955

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Quote from: o_e_l_e_o on August 15, 2021, 03:14:06 AM

Yeah, as BlackHatCoiner has said, I would probably use Electrum to achieve what you are looking to achieve. If you want to be able to spend bitcoin on the go as you would with a credit card, but then "freeze" it when you are not planning to use it, then this is what I would do:

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Solid advice, thanks. I wish I would have set it up that way to begin with. But I used a script to create a 3 of 3. I didn't stop to consider how hard it might be to actually spend from it. But I'll definitely try your idea in the future, seems like the way to go.

larry_vw_1955

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Quote from: BlackHatCoiner on August 15, 2021, 01:46:54 AM

What do you mean that you created by hand? If you've used multi-sig in the past, how did you manage to do it so? Probably, the most known non-custodial multi-sig wallet out there is Electrum.

I mean I took 3 private keys and created a multisig address using a script that requires 3 of 3. Since I did everything from a script, there was no wallet software or anything. So I wasn't sure if I could import those private keys into some wallet software to let it help me do transactions. That's the problem. Not sure if electrum would help me with that problem, since I know it lets you create multisig wallets but if you already have existing one I dont know.

Oh, also I don't know if this is true but I read somewhere that you can actually use the redeemscript as your btc address instead of the p2sh address. Damn that would be cool. On the one hand, you're giving away your public keys but on the other hand, you can bypass the p2sh collission issue ... I know it's probably not reasonable to be using a redeemscript as an address but someone said you could. don't know how that would work! Hey joe, here's my btc address, you'll notice it's kind of long!

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Quote from: o_e_l_e_o on August 15, 2021, 03:14:06 AM

The only downside I can see here is that you can only unfreeze coins when you are at home.

There is also the issue of cost. Tx fees are cheap now, but they will not always be this way. If you want to unfreeze some of your coin, it will typically be because you want to spend it, thus it will probably not make sense to pay a fee that results in it taking days (or longer) to confirm when unfreezing your coin. Similarly, when freezing your coin, if you pay a fee lower than next block confirmation, while your tx remains unconfirmed, there is the potential for it to be double-spent by someone who has access to the private keys on the phone wallet (in your example).

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Quote from: garlonicon on August 15, 2021, 09:03:39 AM

Quote

The only downside I can see here is that you can only unfreeze coins when you are at home.

To solve that, you can prepare some signed transactions upfront, in this way you can broadcast them without accessing your "freeze/unfreeze key", if you have 1 BTC, you can have some transactions spending for example 0.01, 0.02, 0.05 and 0.10 BTC, in this way the rest of your funds are safe, because all such transactions will unfreeze only a part of your funds, sending the rest to some fresh multisig address.

It's a good idea, but those coins in the pre-signed transactions do lose some security by doing this.

If I am carrying around pre-signed transactions moving multi-sig funds to my hot wallet, then those coins are really only as secure as those funds which are already in my hot wallet. If someone is going to compromise either me or my phone and steal the coins in my hot wallet, then they can probably steal the coins in these pre-signed transactions (which are presumably saved on my phone) as well. I suppose if you encrypted the transactions them then it does give you plausible deniability against a physical attack.

It's definitely still preferable to carrying a hardware wallet which can be wrench attacked to empty your entire multi-sig wallet, though.

garlonicon

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Quote

The only downside I can see here is that you can only unfreeze coins when you are at home.

To solve that, you can prepare some signed transactions upfront, in this way you can broadcast them without accessing your "freeze/unfreeze key", if you have 1 BTC, you can have some transactions spending for example 0.01, 0.02, 0.05 and 0.10 BTC, in this way the rest of your funds are safe, because all such transactions will unfreeze only a part of your funds, sending the rest to some fresh multisig address.

o_e_l_e_o

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Quote from: larry_vw_1955 on August 15, 2021, 12:04:52 AM

what kind of multisig wallet software are you talking about? because i actually created one by hand once but i couldn't find any software to use it with lol.

Yeah, as BlackHatCoiner has said, I would probably use Electrum to achieve what you are looking to achieve. If you want to be able to spend bitcoin on the go as you would with a credit card, but then "freeze" it when you are not planning to use it, then this is what I would do:

Create a 2-of-2 multi-sig Electrum wallet using Electrum on your phone as one wallet and Electrum on an airgapped computer stored safely in your house as the second wallet. (Obviously using verified downloads, backing up the seed phrases on paper, and all the other usual security precautions.) Send your coins to this wallet.
Create a standard Electrum wallet on your phone, which will be used as your daily hot wallet.
When you want to unfreeze some of your coins, send a portion of them from the multi-sig wallet to the hot wallet. This will require signing a transaction from both your phone (which can be thought of as analogous to your credit card in this case), and your airgapped computer (which can be thought of as analogous to your credit card's freezing function). Return any coins you don't want to unfreeze as change to a new address in the multi-sig wallet.
The coins you just unfroze by sending to your standard mobile wallet can be spent normally, as and when you desire.
If you want to freeze them again, you can send them back to a new address in the multi-sig wallet. Since you are using your phone for both wallets, you can easily obtain a fresh multi-sig address while on the go.

The only downside I can see here is that you can only unfreeze coins when you are at home. You could work around this by replacing the airgapped computer with hardware wallet you can carry with you.

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Quote from: larry_vw_1955 on August 15, 2021, 12:04:52 AM

what kind of multisig wallet software are you talking about? because i actually created one by hand once but i couldn't find any software to use it with lol.

What do you mean that you created by hand? If you've used multi-sig in the past, how did you manage to do it so? Probably, the most known non-custodial multi-sig wallet out there is Electrum.

The example o_e_l_e_o gave you, correctly answers on what you want. You'll have to create a 2-of-2 multi-sig wallet, which means that for each address, it is required to provide two signatures to spend an output (not just one). Theoretically, you can consider one of them to be the freezing key and the other to be the private key that is used to spend outputs. Whoever gets access to your private key can't steal your funds unless they also gain access to the freezing key.

larry_vw_1955

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Quote from: o_e_l_e_o on August 14, 2021, 01:17:07 AM

Incidentally, this all happens automatically when you use a multi-sig wallet, with every new receiving and new change address that you generated automatically protected by at least 2 different private keys.

what kind of multisig wallet software are you talking about? because i actually created one by hand once but i couldn't find any software to use it with lol.

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Quote from: larry_vw_1955 on August 13, 2021, 11:50:21 PM

Well it's like someone said, you start with a public key that is 256 bits. You can't get anymore entropy out of the address space than that. That's why using sha512 would be a waste of resources.

Fair point, but I was assuming we used a curve to avoid that waste of resources (like secp521r1). Anyway, my point was clear; there's no reason to increase the security that much. It becomes extravagant and makes the chain heavier.

Quote from: larry_vw_1955 on August 13, 2021, 11:50:21 PM

Now I'm sure everyone is going to use that as an argument why a freeze/unfreeze feature should not be part of bitcoin! The reality is though that people do use the same address over and over.

I wouldn't say so, unless you do it on purpose. HD non-custodial wallets like electrum are made in a way to avoid reusing the same addresses. Once you spend money from one of your receiving addresses, the changes end up to a change address that was never used before. Once you spend from that change address, same thing happens. Even on custodial wallets like Coinbase, they never show you a previously generated address for deposit.

Topic: Why doesn't bitcoin have a "freeze" function? - page 3. (Read 1645 times)