Cryptocurrency in Laymen’s Terms: TSP Interview Notes for Episode 2005

I have expounded upon the notes I used in my interview with Jack Spirko on Episode 2005 of the Survival Podcast.  I hope you find these notes helpful as you start your journey into cryptocurrencies and DApps.

What’s the difference between onchain and offchain transactions?

Onchain transactions

The native types of transactions to a blockchain. They are immutable (irreversible), but are subject to miner’s (or transaction handlers) fees and transaction confirmation delays.

Disadvantages

  • Can take time to confirm (Bitcoin confirmation times are running over an hour presently)
  • Fees to confirm (Average fees have grown from cents to dollars over the last year)

Advantages

  • Immutable (irreversible)
  • Viewable on a blockchain explorer (subject to any privacy protocols that may have been used)

Offchain transactions

Internal to an online wallet or exchange using a central database but not confirmed on a blockchain. Coinbase to Coinbase transactions are an example.

Advantages

  • Nearly instant
  • Zero or very little fees

 Disadvantages

  • Counterparty risk. You are trusting the central database will make good on the transaction and will maintain sufficient reserves should you desire to withdraw
  • Not viewable in a blockchain explorer
  • Makes it possible for the exchange or wallet to hold less than the total of their accounts

Other notes

Evaluating different wallets

Which blockchain? Multicurrency or single currency?

What’s the use case?

  • Store of value (i.e. replacement for gold or silver), ie. Holding (Lower liquidity requirement)
  • Payments (i.e. VISA or Paypal replacement) (Liquid)
  • Trading and/or speculation (i.e. brokerage) (Highly liquid)

Security

Tradeoff between liquidity and security

Private keys are absolutely critical.  They are what proves you own what is in a wallet and what allows you to move those coins or tokens.  The different wallet types are all about how/where those private keys are stored.

Online wallets

Private keys

  • Stored in the cloud
  • Login to access
  • May or may not have access to private keys

Concerns

  • Account login security (Coinbase’s is fantastic)
  • Who owns the assets in case of insolvency of the wallet service, you or the wallets creditors?
  • How are the private keys protected from hacking?
  • Uptime (will the service be online when you need it?)
    • Coinbase seems to have some issues during high volumes
  • Coinbase is insured….. to an extent
  • “Coinbase is trying to become the cryptocurrency version of Paypal and we need something like that if it is to become a mainstream tool” – Jack Spirko
  • You are subject to outages and policies of that particular wallet.

Use cases

  • Pass-through purchases of coins or tokens from the banking or credit system. Move to other wallets
  • Trading

 Examples

Bitcoin ETF

Jack and I digressed into a discussion of the Bitcoin ETF.  We both feel that eventually this will happen and lend legitimacy to the cryptocurrency space.  Bryan wonders though at what cost?   Jack and I both agree that the only reason to really do this is to be able to hold it in an IRA or for institutional investors since they must investor only in registered securities.  Bryan is concerned about Wall Street being involved what with their ability to sway the market and create crazy derivatives for now until the market is more mature.

Software wallets

A piece of software that run on your laptop, phone or tablet.

Private keys

Stored on a device in you physical possession like a laptop, phone or tablet.  Physical security is now much more important.  Without your device or recovery words, your coins and tokens are lost.  Also, malware becomes a concern

Use cases

  • Point of sale uses
  • Pocket coins and tokens

Examples

  • http://jaxx.io
    • Multiplatform (Chrome, iOS, Android)
    • Multicurrency/multitoken (BTC, ETH, LTC, etc)
  • http://mycelium.com
    • Bitcoin only
    • iOS version is not full featured compared to Android

Discussion on Exchanges

Jack and I discussed the best practice of purchasing from an Exchange and then moving coins or tokens to a wallet you control due to the concerns of Mt Gox.  Bryan points out that it was offchain transactions that allowed the hack of Mt. Gox to affect its customers.  Of course this is subject to your particular use case.

Hardware Wallets

Private keys

Stored on a special purpose device.  Software on a general purpose device (laptop, tablet, phone)  creates a transaction, communicates it to the hardware wallet where it is signed with the private key and then returned to the general purpose device’s software to be transmitted to a blockchain.

Use cases

  • Long term store of value
  • Large amounts

Examples

  • Ledger Nano S (USB) or Ledger Blue (Bluetooth/NFC) https://ledgerwallet.com
    • Multicurrency/multitoken
    • BTC Sessions How To Video https://www.youtube.com/watch?v=YI1OntWB7wc&t=319s
  • Keepkey (USB) https://www.keepkey.com/
    • Multicurrency/multitoken
    • BTC Sessions How To Video https://www.youtube.com/watch?v=7wWID4Mpmg4&t=625s
  • Trezor (USB) https://trezor.io/
    • Bitcoin only

 

Paper wallets

A paper wallet is a public address and private key pair that are generated offline and usually printed on paper. The public address and private keys are usually presented as QR codes

Private keys

Private keys are generated by client side javascript on a web page which can be run on a PC that is not connected to the internet.  The idea is that the private keys do not have to be exposed on a general purpose device connected to the internet UNTIL you are reach to sent them somewhere else.

Advantages (if done properly)

The private keys are sequestered completely offline. They are not in a position to be compromised to a network.

Disadvantages

  • A bit cumbersome to do properly
  • All the typical issues with paper
    • Yellowing
    • Smudging of the ink
    • Fire

Use cases

  • Long term store of value

Examples

Procedure

  • Save the page off on a USB stick
  • Use an airgapped computer, perhaps with a Live CD boot
  • Generate the wallet
  • Print on a USB printer
  • Turn off and wipe computer
  • A video tutorial from BTC Sessions

Backing up wallets

Software and Hardware Wallets

  • Write down the private key recovery seed. This is usually a 12 to 24 word phrase.
  • Add a small amount to the wallet ($5 worth)
  • Wipe the private key from your wallet
  • Follow the wallet’s procedure for recovery and enter your recovery phrase
  • All went well, you are now confident you can restore from the backup phrase
  • Store the recovery seed on paper in a secure location (safe)

Paper wallets

  • Print several copies
  • Test test test

Cryptocurrency has no government backing or security

  • Fiat bank accounts are FDIC insured, yet in financial meltdown, FDIC would be broke too
  • Cryptocurrency forces the user to mind his own security
  • Crytpocurrency is like cash in your pocket.  No one can get it back if you’re mugged.

Bitcoin Hardfork (Segregated Witness vs Bitcoin Unlimited vs ?)

Blockchain hard fork

  • End result is two blockchains with the exact same parent chain
  • Miners may continue to mine either or both chains
  • If you have control of your private keys, you can access both chains.
    • You may want to. Ethereum classic still has value
  • If a hard fork is imminent, Coinbase recommends withdrawl to other wallets if you want to access both chains https://blog.coinbase.com/update-for-customers-with-bitcoin-stored-on-coinbase-904dea08ac5f

Resources

 

My thoughts on the Oregon 40 volt cordless chainsaw

Amazon Affiliate link to this saw http://amzn.to/2dzLMBj (I make a small commission on whatever you buy through this link)

First of all, this is still a chainsaw so follow all chainsaw safety rules and wear the recommended personal protective equipment.

I already own a Stihl Farmboss but was hoping this saw would make my life easier around the farm and save me some time for small jobs. I rate this as a light duty or maybe occasional medium duty saw for farm and home use and it fits the bill for what I needed it to do. If you’re looking for an everyday saw, you might want to look elsewhere.

The features I like best are the on saw chain sharpener and the easy tension adjust (how many hours have I spent looking for a scrench?)

Surviving an Ice Storm with Style

Ice on trees

By LASZLO ILYES [Creative Commons] via Flickr

Ok, that big snow storm everybody was talking about that was going to hit the south?  Guess what?  No snow.  It’s worse.  Ice.

This is one thing northerners don’t understand about southern drivers.  Most of us are really good in the snow.  But we usually get ice, sleet and freezing rain which is much more difficult to navigate.

So, the storm is upon you and the roads are icing up.  What now?

Tips for Surviving Ice Storms with Style

  1. Stay put.  If you’re not a doctor, nurse, firefighter, policeman, or the operator of a nuclear power plant, stay off the roads.  Rescuing you from a ditch or removing a stop sign from your spleen is not what these people need to be doing right now.  If you or a loved one isn’t hurt or stranded, stay home.
  2. Don’t walk outside either.  Everything is slick including your deck, driveway, patio, sidewalk.  If you have a huge reason for going outside, like caring for farm animals, you’d be wise to invest in ice cleats or crampons.
    .  A slipped disc or broken arm is no fun on a nice, sunny day and it’s much less so on a cold, icy day.
  3. Charge all your electronics and rechargeable batteries.  Keep your phone and laptop topped off in case the power goes out.  Know where your flashlights and radio are and check the batteries in them.  Ice builds up on tree limbs and power lines (and telephone and cable) making outages much more likely and more difficult to repair.  Download music, movies, and podcasts to keep everyone entertained.
  4. Know where your auxiliary heat and blankets are.  When you fire up a propane or kerosene heater, crack a window.  These heaters consume the oxygen in the room and can build up CO2 in today’s tightly constructed buildings.
  5. If you have a generator, know where you’ll use it.  It doesn’t belong in your house or garage.

What tips do you have to share about surviving an ice storm AFTER it’s begun?

 

 

 

 

My Personal Furnace Checks

It’s finally fall and time to check my furnaces.  I’d had some minor issues towards the end of last winter and I want to avoid that this season.

Last winter during subfreezing weather, I had to call out service technicians because my main furnace wouldn’t stay lit.  And I hate working outside in subfreezing temperatures, so their fee, while high, was worth it  While the work they did cleaning the burners was minor and took less than 30 minutes, I still had problems after they left and I paid them over $200.  When I inspected the burners myself, I was able to diagnose that my burners in small spots had rusted and in some spots there were holes.  I was able to source the burners online for about $120 and replace them myself in about an hour.

While I had the burners out, I took a look inside the heat exchanger.  I think I’m getting toward the end of the usable life of the heat exchanger, as I saw some exfoliating rust laying inside it.  I took a shop vac and got that out while I had the burners out.

I also had a vibration in my draft inducer for which I was quoted over $300, but was able to find online for less than $100.  It took me about an hour to replace myself

 

2014 Updates to the homestead

Just wanted to update you on the progress of our homestead here over the spring, summer and part of fall.

I decided to focus on perennials since they take the most time to get productive, but pay huge dividends into the future.  Here’s what I’ve planted

  • Apples
    • Gala
    • Honeycrisp
    • Pink Lady
    • Jonathan
    • Mollie’s Delicious
    • Stedman’s Winesap
  • Pears
    • Moonglow
    • Ayers
    • Bartlett
  • Almonds
    • All in One
    • Hall’s Hardy (this weekend)
  • Peaches
    • Red Haven
    • Belle of Georgia
  • Hardy Kiwi
    • Meader (male, this weekend)
    • Arctic Beauty (male)
    • Saanichton kiwi (female)
  • Li Jujubee (this weekend)
  • Brown Turkey fig (this weekend)

This is a mixture of things I picked up in late spring and planted, some of which I summered in the shade then planted in early fall, and some of which I’m planting this weekend.

That which I’m pleased with the most is the progress of the All in One Almond that I planted bare root in last Spring.  Other than fighting Japanese beetle, these have done fabulous here.

Honestly, apples have been a challenge here due to the duel threat of cedar apple rust and fire blight.  I planted several varieties intentionally to see which does best here.  Perhaps once I have that established, I’ll graft some of the best genetics onto rootstock and propagate.

Prepper 101: Backup Heat Review

I took the opportunity of the ice storm we had back in March to do some heater testing.  The daily highs were in the mid to high 20s and the evening lows were in the low teens.  My home is an A frame style, with about 700 square feet open to a pinnacle of 25 feet or so.  This is the room I chose as a test location.

Test methodology

I used the central furnace to raise the temperature to 65 degrees.  I then lit my test heat source and turned the central furnace down to 60 to see how well the heat source maintained the heat.

Dynaglow Kerosene heater

My Kerosene heater
The kerosene heater kept this room nice and toasty all day.  It’s a 23kBTU unit that was my grandfather’s but they still sell similar models.

Pros: Maintained the temperature extremely well

Cons:  In order to avoid smoking, you have to run a kerosene heater like this almost full blast, so if it gets too hot, you turn it completely off.  Also, it’s messy and a bit of a hassle to refuel outside.

Mr. Heater Big Buddy Portable Propane Heater

My Propane HeaterThis is a great unit, but with this much volume, it really struggled, with temperatures dropping to around 60 within a few hours.  It would probably have down well without the extra volume created by the vaulted ceiling.  Note that I did not use the built in fan, which might have helped.  I’ll try that at my new opportunity.

Pros: Pretty much odorless and easy to use.   It has quite a bit of turn down (ability to run at lower output) so if you get too hot, you can turn it down lower.

Cons: Didn’t maintain temperature in the test location

Propane logs

These are thermostatically controlled logs, about 22kBTU and worked about as well as the kerosene heater above, with very little temperature drop.

Pros: Got the job done, with little odor.  They are also connected to the large bulk tank that supplies my stove and furnaces.

Cons: There really are none.

Conclusion

I will likely use the propane logs as a quick response heat in an outage, then supplement with kerosene if I’m around the house all day.  Should I need heat at night, or need to cloister myself in a smaller room for a longer outage, the Mr. Heater Big Buddy will be my solution.

What solutions do you use for backup heat?

 

Prepper 101: A Case to Prepare Early

Cooking with Kerosene Heater - This guy prepared early

By kc7fys ) [Creative Commons], via Flicker

As I write this, my area will be coming under a Winter Storm Warning, with predicted accumulation of up to 1/2″ of ice.  Now this is what we dread in the south.  We can handle snow fairly well, but usually we get some ice mixed in that makes travel a pure hell and snaps power lines and large branches like match sticks.  It either comes as freezing rain changing to snow (so there’s a nice slick layer of it under the snow) or the snow melts and then refreezes.  We’ve dodged at lot of winter precipitation this winter, but from the looks of the radar, our luck just ran out.

Grocery Stores: Prepare Early to Avoid Crowds

In the south, you stay away from the grocery stores about this time.  It was rather bustling when I stopped by.   I needed a few ingredients for chili that I wanted to make this evening, but I could’ve skipped it if I felt like it.  Everything looked to be in stock so far, but there have been many occasions when bread and milk are gone.

Hardware: Prepare Early to Get What You Need

I stopped by the big box hardware stores to pick up a few miscellaneous items and thought I’d check to see if there were any space heaters marked clearance.  There were no electric space heaters.  Or propane.  Or kerosene.  In two stores, I saw one heater and it was one of those electric fireplaces.  And those are pretty nice and work well.  Unless, oh say an ice storm and wind storm knocks out your power during subfreezing temperatures.  It’s not like they had them and had a run on them today.  They have the air conditioners out already.   Luckily,  I was just looking for deals and hopefully I won’t lose power tonight.  But if I do, I’ve got multiple ways to stay warm.  On the plus side, there were a few generators in stock.  They’ll need that and more if power lines start snapping.

Remember, your gas or oil fired furnace doesn’t work when the power is out.  They need power to run their controls and fans.  It’s always a good idea to prepare early and have some backup heat in the winter.  A set of gas logs, a propane or kerosene space heater, or a wood stove are all useful sources of heat when the power’s out.

The lesson: Prepare Early.  Anybody looking to purchase a backup heat source today around here is just out of luck.  What are your tidbits on preparing early (before the storm hits)?

UPDATE 8:47am 3/3/2014: It’s morning and there is about a 1/4″ layer of ice on everything.  Power is still on here, but if goes out, I’m set for a while.  Not so with one of my old friends.  She’s shivering in her home with her newly adopted puppy with no power and no backup heat.  Normally it’s a 30 minute drive to her place.  I can’t even get there right now to bring her a heater.  Prepare early folks.

Prepper 101: Don’t Forget Skills

dont forget prepper skills logo

By Nelson Enemy ) [Public domain], via Wikimedia Commons

If you’ve been following along in the series, you’ve realized the need to get prepared, have at least a rough draft of a prepping plan, and have started to put things away that will help you during a crisis. But what else do you need to do?

Learn to Use Your Preps

It may seem obvious, but knowing how to use your supplies and gear you’ve worked hard for is paramount.  For example,

  • That flour and salt you just put away and think it’ll help you in a crisis?  Do you know how to use it to make bread?  Do you have an oven you can even do this with when the grid is down?
  • The generator you just bought… do you know how to use it?  Or have enough extension cords for it?  Or fuel?  Guess what: Electricity is used to pump gasoline and you need money to pay for it, if you can even get it without waiting in line for hours
  • That high dollar water filter.  Have you even tried it?  Do you know when it’s working properly and your water is safe?

I could go on and on here.  if you don’t have the skills to use the supplies and gear you have, they’re just barter material for something you can use.  That or expensive paper weights.

Don’t Ignore the Primitive Skills

Have you ever needed a match or lighter?  All the wood in the world won’t do you any good unless you have something to make fire with.  While lighters and matches are great (and I do recommend you store some), I’d recommend you at least learn to start a fire with a Firesteel or Magnesium Stick.  Even better, try using the wood to make fire via bowdrill or other method.

Don’t think this is limited to fire.  Learn to MacGuyver things, make do with what you have, because you might not be able to run to the store to buy exactly what you need.

Don’t Forget Tools

You can make a lot of things you need if you have the tools, so don’t forget those for your preps.  Hammers, wrenches, screwdrivers, rope, nails, glue, tape, screws, and knives are all great tools to have.  I’m a tool and gadget nut, so it didn’t take a lot of convincing for me.  Having the tools to make or repair things would be very valuable if you can’t otherwise obtain them.

The bottom line is don’t stop learning.  What skills are you learning right now?

Prepper 101: Plan, Don’t Panic

So, you’ve read over the previous post in this series, or have had your own moment of realization of how unprepared you are.  Now what?

Keep Calm and Don’t Panic

That was my mistake.  Oh I acted calm, but inside I was flipping out.  Don’t worry though, it’s natural.  I spent nearly my entire bonus that year on prepping items.  Sometimes I bought two of the same item.  Unfortunately that left huge holes in my preparedness in other areas where my money would have been better spent.

But don’t worry though, panic is a completely natural reaction and will subside if you let it and let your rational thought take over.  How should you best do that?

Make a Plan

While I think it’s important in evaluating a plan, starting out don’t worry about particular scenarios such as economic collapse or a CME.  Begin by thinking about what would happen if the basic systems of support you depend on suddenly weren’t there and how likely it is that system wouldn’t be available, at least for a few days and what the impact of that loss would be.  Here’s a place to start

  • Loss of Income and access to the financial and commerce system
  • Loss of grid systems such as electricity, water, natural gas or propane delivery systems, telephone, cable and internet, gasoline, kerosene and diesel fuel, sewer and other sanitation systems
  • Loss of your primary shelter (eviction or foreclosure, natural disaster, fire)
  • Loss of access to food by normal means (i.e. grocery stores closed or shelves bare)
  • Loss of freedom of movement (quarantine, check points or vehicle problems)
  • Loss of police and fire protection
  • Loss of access to the supply chain of medicine and access to health professionals

(Feel free to leave a comment with the things I missed)

Where to start

Think about how prepared you are for a loss of each of those.  Are you prepared to lose each of those for a few days?  Then make it a week.  Got that?  Make it a month, then three months, then a year.

About the one to three year mark, you’re going to need to have your own systems in place and that’s what the supplies are for… give you time to get your systems productive if they’re not already.

If you take the time to build a plan, I will almost guarantee you the panic will subside and you’ll be better able to evaluate what steps you need to take.

But do something, no matter how small it may be.  Get a few extra cans of beans and a case of water when they’re on sale.  If you can’t afford anything, get creative like fill empty 2 liter bottles with water.  Just do something.

A Wakeup Call to Prepping: Reasons to Start

reasons to start prepping gas lines

Photo credit: ThatChryslerGuy, Flickr. Used by permission

Whether we realize it or not, each of us in the 1st world has allowed ourselves to become dependent on fragile systems, services, and supply chains.  Much of the corporate world that provides these services has adopted a lean or “just-in-time” approach in order to reduce inventory and costs.  They forecast demand, bring just enough in to meet that demand and avoid build up of inventory.  This works fabulously… except when it doesn’t.

Reasons to start prepping

  • In the southern United States, it is common for a grocery store to be nearly stripped bare in anticipation of a winter storm.  Imagine if demand peaked for a longer duration.
  • And speaking of grocery stores, in October, 2013, a computer glitch shut down Louisiana’s EBT cards which are used to distribute funds for food for the SNAP program (aka food stamps).  This Walmart, in it’s desire to be a good corporate citizen, decided to honor EBT cards during the outage.  The store was ransacked.  Check out the news video.  What if Walmart was the only place that had food and everyone was hungry?
  • In September 2008, Hurricane Ike shut down oil refineries on the Gulf Coast.  In typical lean, “just-in-time” fashion, gasoline inventories in Nashville, Tennessee were depleted once everyone began fearing a shortage.  While 87 octane was plentiful within a week, it was a month or more before the premium grade required by more efficient vehicles was readily available  Read the story on this self-fulfilling prophecy. And this was with little to no damage to the refineries.
  • In May 2010, also in Nashville, Tennessee, 15 inches of rain fell in 36 hours, overwhelming the Cumberland RIver and feeders.  One of two water treatment plants serving Metropolitan Nashville was overwhelmed by flood waters.  Unfortunately, flood waters cannot be easily treated at home due to the sewage and chemicals that are in it.  What about the other treatment plant?  It was being sandbagged by county inmates as the flood waters came within a foot of overwhelming it too.

What are other times when critical services and supply chains have failed you personally? What are some of the “wake up call” reasons you started prepping?