Dorion Mode - A blog by Robinson Dorion.

Give yourself some time and spark a stogie or pour a tumbler of your choice beverage or both because this article goes wide and deep.

How Bitcoins come into existence was covered in a prior article. Here we'll discuss how ownership is exercised over the coins and how disputes are resolved if and when ownership comes into question.

Understanding Some Key Terms

First a quote from the font, which may or may not cause you to fall off your chair :

III.3. While it is true that some people spend money or other capital to acquire such in-game currency, it is not true that :

a) Any authority exists which could issue Bitcoins, promise to issue Bitcoins, or make any representations as to Bitcoins whatsoever ;

b) Any state, government or organisation issues Bitcoins or could conceivably issue Bitcoins either as legal tender, for the payment of taxable income, as a currency of account or to be used in local or international trade.

Because of these reasons it can not be said that anyone holds any title in either law or equity to any Bitcoin. Since there is no first owner of the Bitcoin that could then pass title as part of a contract, all purported Bitcoin "purchases" are contracts for no consideration and as such legally without merit.⁽ⁱ⁾

Alrighty, pick yourself up, dust yourself off and sit back down. Have another swig or puff or both. Ready ?

Let me explain to you, it's not a weakness that no one has any title in law or equity to Bitcoin, it's actually a strength. You see, Bitcoin is an alodial title system, which means it's property in the proper sense, i.e. can actually be owned by its owner and not subordinated to any higher-ranking proprietor, whether the claimed higher-ranking proprietor styles zherself⁽ⁱⁱ⁾ as "law enforcement", "judge", "government", "king" or "our democracy" and so on and so forth matters not. It's a strength because if you're reading this, you likely live in a hellish Korea where Justice was long ago dispensed with leaving behind nothing more than husk and pretense. The husk is decomposing rapidly and the pretense is growing so as to make the slaves think feel like they're free⁽ⁱⁱⁱ⁾ ; the tax cattle yield more milk for the farmers that way. Once you realize you have no legal recourse in Bitcoin, you look then for the tools your betters implemented before the first block halving, such as the WoT and GPG Contracts. Then you begin to realize that Bitcoin isn't merely a currency, it's here to replace everything. Dundundundun.

Ownership means the power to exclusively destroy an economic good. In Bitcoin, the private keys are the identity required to unlock the property. Whoever exercises ownership over the private key to produce a valid signature is the rightful owner. The challenge and reward Bitcoin presents is : protect the secrecy of the private key and the property is yours. More on this private key business in a moment, but first we still have some more table setting to do... no one said this would be easy, aight ? If you want "easy" and "comfortable", close the page, go back to the dopamine drip the Chicoms and Silly Con Valley have been feeding you via the cancer phone and stick with fiats. But mind, dear reader, no one is going to save you from the rats.

The title of the Bitcoin Whitepaper reads, "Bitcoin a Peer-to-Peer^(iv) Digital Cash System".

P2P means there is no trusted third party exercising authority over the history of the system, Peers can conduct commerce directly and there is no third party that can stop them if they know what they're doing. You might've heard people who are cavalier with the words they parrot say that Bitcoin is a "trustless system". This is not the case whatsoever, as discussed previously on Dorion Mode.

Digital means it's rooted in mathematics.

Cash means "money in hand", mind its etymology :

1590s, "money box" also "money in hand, coin," from Middle French caisse "money box" (16c.), from Provencall caissa or Italian cassa, from Latin capsa "box".

Perhaps this rings some alarm bells if you're in the habit of saying you "have cash in the bank or your brokerage account". Unless you're the owner of the bank, you have IOUs with the fiat bank. Even if you are the owner of a fiat bank, it's not likely you have all the cash to cover if everyone wants the cash you owe them tomorrow and if you're a smaller fiat bank, the ~90% of the digitally represented assets on your balance sheet are most likely in the custody of a fiat correspondent bank. Even if you're one of the central fiat banks you don't have enough berries to make jam for all the claims outstanding, since by their own numbers, only ~10% of the FRNs in circulation exist in physical form. The latest data (archived) (cached ASCII) on the cash comes from Dec 31st, 2021^(v) and clocks in at $2.1875 Trillion. Their reported (archived) (cached CSV) quantity of M2 for January 1, 2022 clocks in at $21.640 Trillion. The war on cash starts with the language, leading you to think you have cash rather value stuck in a labyrinth of IOUs. Then it's limiting the value of the bills, $100 is a joak, yo.^(vi) And don't get me started on the theft the socialists label, "Civil Asset Forfeiture". You're somehow the criminal if you're carrying a measly $10k and they're somehow upholding Justice when they take it from you for hookers and blow. It's not Justice, it's bullshit.

You may be asking, "Why is he taking me on this apparent tangent to talk about filthy fiats in a Bitcoin article ?" Good question. It's because the vast majority of people are like fish in water when it comes to money : they're completely dependent on it and while some are good at swimming in it, most are completely clueless about the concept and the history. They wouldn't know a $4 silver quarter from a 5 cent nickel painted copper quarter if it hit'em squarely between the eyes.^(vii) Believe me, I've weighed many "fish" over the years. Such ignorance is the real pandemic and how we got stuck with the counterfeit coins in the first place. So it's fine to be skeptical about Bitcoin, go right ahead, but let it also be an opportunity to exercise at least a little bitty teeny tiny baby bit of skepticism --or at least curiosity-- towards the water you're swimming in. After all, if you want to know the truth, follow the money.

So, the table set and hors d'oeuvres devoured, lettuce turnip the beets^(viii) and proceed to the main course, buen provecho !

The Public Key Cryptography of Bitcoin

What are the tools which enable one to hold in one's hand and actually own this digital cash ? Asymmetric cryptography and hash functions, both of which are examples of mathematical trapdoor functions, let's dig the details.

Asymmetric, or Public-key, cryptography employs pairs of related keys. Each pair consists of a private key, which must remain private, and a public key, which can be openly shared. Key pairs are based on mathematical trapdoor functions, as previously explained :

They're called trapdoors because it's easy to go one way, but hard to go the other way, i.e. it's easy to fall into a trapdoor, but once you're down there, your chances of getting out are slim.

If you have the private key, you can use it to generate a signature. Third parties can verify the authenticity of the signature using the public key without the need for the signer to reveal the private key. That is, if you start with the public key, it's darned near impossible to derive the private key. Bitcoin uses the Elliptic Curve Digital Signature Algorithm (ECDSA) with parameters called secp256k1. The 256 denotes the key space is 256 bits. How big is that ? As previously illustrated :

2²⁵⁶ is approximately 10⁷⁷. To give this number some context, the earth is estimated to weigh 5.98 x 10²⁷ grams. That is, if each gram of the earth were cut out and all lined up in a row, that would only form one side of a cube that holds all the possibilities.

The private key has a corresponding number called the public key. Below is a summary^(ix) of how we go from public key to payment address :

1. The public key is hashed by our old friend SHA256.
2. The output of the SHA256 hash is then hashed with an algorithm called RIPEMD-160.
3. A version byte (0x00 for Main Network) is added to the front of the RIPEMD-160 result and hashed twice with SHA256 to generate a checksum.
4. The version byte, RIPEMD-160 output and checksum are combined and then encoded with Base58 to produce the address.

The address is what you share with someone when you tell'em, "Gimme the Bitcoin !".

An important note to make at this juncture is valid Bitcoin addresses use the Pay to Public Key Hash (P2PKH) standard, which can be readily identified because the first character of the address is always the number "1".^(x) All other purported address schemes are being pushed by known scammers and their victims^(xi) and carry catastrophic risk, so mind your step, will yee ?

Wallet Management

The first step to getting your hands on some Bitcoins is running some software called a wallet, e.g. Gales Bitcoin Wallet (GBW). GBW-signer^(xii) is designed to draw from a secure source of entropy when it generates a private key. Having a strong source of entropy is essential to generating a key that is actually private because here's the rub : even if a number looks random to you, there is no such thing as a random number ; there are only random processes from which numbers can be mined. Entropy comes from nature and nature alone. The strength isn't in the outcome, but the process that produced it. If you're using a process that is deterministic, such as a psuedorandom number generator, you're acting out a contradiction and your ownership of the key material is diminished.

JWRD Computing sells verifiable True Random Number Generators (TRNG) which mine Johnson-Nyquist noise which is the electronic noise generated by the thermal agitation of the charge carriers (usually the electrons) inside an electrical conductor at equilibrium.

Secure private key derived, the wallet then computes the public key and then the address. There is no "account" assigned to you, there are no accounts at all ! This is alodial cash we're talking about people. Digital cash drawn from a space of numbers so large it's nearly incomprehensible, but therein lies the security of the system : the key space is so big and the computational intractability^(xiii) of escaping the trapdoor so difficult, attackers who want to attack competent agents are more likely to fail in their attack and waste their finite resources than succeed.

It's important to note that the true computational complexities of the cryptographic primitives underlying Bitcoin are not known, but are widely believed to be intractable. There is not published, mathematical proof that they are intractable. Thus, someone could, maybe, someday make a break through and sink the ship, until that dark day though... alea iacta est.

What do the private keys and public addresses look like you ask ? Here :

Example Private Key :^(xiv)

6b2c 0335 3c50 f50b d9ed da0a 9856 a89d 911b 8c7a 5289 fa3f 10f5 b47d a2c6 d5a7

Corresponding Public Address :

1DtQXKanLPFYBszPPTGToA6YWnxeeiowQM

Keeping such a number private is the crux of the custody and ownership in this game. Think for a second, how small could you write such a number ? How well could you hide it among the thousands of other digital files you carry around ? 256 bits is ~nothing compared to the typical file size on a typical computer.

Now, the best practice is to encrypt it and to refrain from writing it to disk when it's unencrypted and you're working with it. Both practices are integrated into the design of GBW. In this small number, the proverbial straw in the needle stack,^(xv) one can transport an arbitrary amount of wealth on his person. Compare that to fiat cash or gold, how much easier is it for the Inquisitor Generalis to steal those from you ? Even if hardware is stolen from you, if you've applied strong encryption to the wallet and have back ups, you can fully recover your asset and all the thief got for his work is a paperweight. Are you beginning to see ?

It's best practice to perform key generation and transaction signing on a machine that never connects to the Internet. If you're needs merit, a Faraday cage may be warranted. JWRD Computing has experience covering those fronts too. There is not such thing as perfect security. The name of the game is raising the costs for attackers such that they have to spend more resources on the attack than the prize is relatively worth.

Transaction Settlement

Armed with your signed transaction, you either broadcast it using your node or find someone who will broadcast it using their node.^(xvi) Eventually^(xvii) a miner will hear about it and include it in a block they're mining.

The maximum size of each block is fixed at 1 Megabyte. Due to this scarcity, there is competition for block inclusion of transactions. In the process of signing your transaction, you want to check the market price for transaction fees and set your fee depending on your needs. The fee is determined not by how much money you're sending, but the size of the data that composes the transaction. In GBW-signer, the fee is expressed in BTC/kB. Transactions with more inputs and/or outputs will cost more because they carry more data and take up more space in the block.

When the miner finds a valid proof of work over a block in which he included your transaction, your transaction is considered to have one confirmation. As that miner and others build on that block looking for more rewards, the likelihood of transaction finalization increases. It's best practice to wait until the block containing your transaction is at least six blocks deep to consider it settled.

Carrying Costs

Gold and cash have high carrying costs because when you have a big enough stack, you need a vault strong enough and guards competent enough to protect it and vaults and guards and weapons aren't cheap to maintain.

In Bitcoin, the carrying costs are the ability to hide a 256 bit number well enough. The cost of securing the state of the systems' balances are outsourced to the nodes and miners.^(xviii) You can be a peer and maintain your own node(s) and the costs to do so are quite feasible if you're literate or patient enough to become literate.

The bottom line is, in that 256 bit number, which is relatively cheap to protect, you can carry an arbitrary amount of wealth.

Dispute Resolution

From time to time, disputes arise on the network as to which block is at the tip of the chain, and thus, which is the true state of the history. This is simply the nature of the beast in a decentralized system : different segments on the network hear different versions of the latest gossip, but with some time, the truth manifests.

Furthermore, Bitcoin, like the Internet, is designed to be anti-fragile and is able to recover when parts of the network go offline. For example, your view of the network, via your node(s), might become impaired at times, e.g. you lose power or Internet connection or you take a node down for maintenance.

How then is the true version of the history decided ? In Bitcoin, the blockchain with the most accumulated proof of work is the true chain or history. That is, the blockchain with the most computation resources contributed to it is the valid Bitcoin.

This does not mean, per se, the chain with the most blocks because a chain could have more blocks which were solved at a lower difficulty. The superlative example of this is BitCHcoin^(xix) (BCH), which broke the Bitcoin protocol rules while attempting to hijack the history. Last I checked, it has more blocks, because it suffered the woes of Altcoin, but the computational resources committed to it and thus, vouching for it, are much much lower.

Tying ownership to current context

By now it's clear to everyone with two eyes and most with one that the socialism that crawled out of 20th century has reached its terminal phase. The inflation genie is out of the bottle and although it's "not fair" to the working class, it can't be re-bottled because to do so would mean interest rates have to become positive in real terms. For interest rates to become positive in real terms, the soi-dissant sovereigns will no longer be able to service even the interest expense on their debts,^(xx) which would quickly cause them to default honestly. Socialists are allergic to honesty though, which is why they're socialists in the first place, so instead, they'll do what they always do : debauch the currency, continue to default though inflation, lie about it and look for a witch to loot then burn. The inflation and societal decay will be very chaotic because consumers have come to expect free shit and all of a sudden all Santi Claus doesn't even have coal to dole, only dust and dust doesn't yield much heat in the frigid, frozen tundra.

Smart people, who have something to protect, look for smart ways to protect what's theirs. As long as the math holds up, Bitcoin will continue to be the superlative asset protection instrument for the simple fact that it's the most economic form of property to own for those capable of ownership. There is no longer effectual security in legal asset protection structures, for the Emperor is naked and broke and there is no legal system. In Bitcoin, possession in 10/10th of the law and it's the hardest form of property to steal from an informed operator. So ask yourself, are you working today to strengthen your grip on things that matter ?

If you were waiting for an invitation, here it is. If you want to save time and money in getting up to speed, have a review of our Key Management kit and training and contact us today. Remember, "learning is not compulsory, neither is survival".

Ca tot... s-a tras tot s-a fumat tot s-a baut tot cum e peste tot ? La fel ca peste tot.

1. Emphasis mine. [^]
2. They're all zhers by now, aren't they ? Or are they going with shim ? Who cares to keep up with the nonsense ? [^]

3. No one is more a slave than the man who thinks himself free while he is not.

   - Goethe, via James Anthony Froude and R. Dillon Boylan translation. [^]

4. P2P [^]
5. Quite retarded, wouldn't you say ? [^]
6. You know there are still $500, $1`000 and $10`000 notes in circulation and they're legal tender too. Back from a time when just a couple of them bought a house. [^]
7. They'd certainly feel the difference, but the propagandized brain box tends to override sense data. Cognitive dissonance is real. [^]
8. JK, I eat rabbits I kill, not their food. Hat tip to Aldo Antinori for the turnip and beets. [^]
9. Via the Bitcoin wiki [^]

10. What does it take to be number 1 ? 2 is not a winner and 3 nobody remembers.

    Nelly anyone ? [^]

11. Opposite, essential sides of the stuple coin. [^]
12. Designed to be used on an offline computer, but can in principle be used on an online machine. [^]

13. A computational problem is considered easy or tractable if it can be solved in (expected) polynomial time, at least for a non-negligible fractions of all possible inputs. In other words, if there is an algorithm which can solve a non-negligible fraction of all instances of a problem in polynomial time, then any cryptosystem whose security is based on that problem must be considered insecure.

    Handbook of Applied Cryptography, Chapter 3, page 87, by A. Menezes, P. van Oorshot, and S. Vanstone, 1996. [^]

14. Which is obviously no longer private. If you've seen some of our prior presentations you might've noticed the reusage. [^]
15. Deliberately changed because each attempt to crack a key costs resources. [^]
16. Maybe you have a friend who has a node or you use a website open to the public that broadcasts raw transactions. [^]
17. Typically within seconds or minutes if the node is well connected. [^]
18. Now, it's worth noting that the miners, at some point in the distant future, will likely defect and start a new Bitcoin. It's also worth asking yourself, "how many years you got ?" It's something to be aware of and think through and weigh against the untenability of the competition. I'm not here to tint your glassy rosy, but to explain how things are as I understand them and let the chips fall where they may. [^]
19. Because it got bitched for eternity. [^]
20. Shortly after Billary Clinton executed his military coup in the 90s he refinanced the debt from long to short duration. In the short term, this yielded savings in interest expense because during expansion, shorter dated debt tends to yield less than long dated debt. In the long term though, this increases the sensitivity to fluctuations in interest rates because if interest rates are rising, the debt has to be rolled over* at a higher rate. In essence, Billary put the national debt on an adjustable rate mortgage.

    The debt has increased 30 fold in the interim and debt to GDP has more than doubled. Before the end of 2024, something to the tune of $11 Trillion in treasuries matures and will have to* be rolled over. This is a long way of saying to cool down the fiats burning a hole in everyone's pocket, they'd have to honestly declare bankruptcy and holders of USTs would have to take a haircut. Furthermore, all the fiat funds who lie to themselves that they hold investment grade would have to look in the mirror and see the junk and mark it to market for what it is. Look out below.

    ___ ___
    * "Have to". It's never paid off, that'd be racist-patriarchical oppression, lolz.
    ** Which is more than double the total national debt in the 90s, heh. [^]