The current release of the Bitcoin client still does not recognize short Bitcoin addresses, but this feature is expected in the .5 release.

The Casascius Bitcoin POS system is a desktop retail point-of-sale acceptance system for Bitcoin “in a box”. The system is based on a VeriFone Vx510 or Vx570 payment terminal, and allows merchants to easily accept Bitcoin payments from customers. It can optionally allow merchants to dispense (sell) Bitcoins.

The POS system features an Ethernet network connection, a 128×64 pixel backlit monochrome display, a receipt printer, and a 24-key keypad, all in a compact terminal. The Vx570 terminal also includes a USB port, to which a QR barcode scanner can be attached.

The POS system is a client-server application with the client application run on the payment terminal, and the server application run on any machine that is available to the shop. Known herein as Somebody, Inc.

The POS system acts as a client for a central server run by Somebody, Inc. It does not maintain a Bitcoin block chain, but rather, sends SSL-encrypted queries to servers belonging to Somebody, Inc. in order to retrieve rate quotes and perform transactions. Consequently, it requires a constant Internet connection in order to function. Transactions cannot take place and rates cannot be quoted without a functional connection to the Internet.

The POS system and its server are an open source project that is mainly in the planning stage. The POS system is not fully functional.

To read the full article, visit here.

An off-line Bitcoin address is one that has never been exposed to keyloggers or other malicious software. It is now extremely easy to generate these extremely safe addresses. We recommend you follow this procedure to create several Bitcoin addresses and distribute your coins across each address. Doing so will protect the value you don’t need when it comes time to bringing them online and spending them.

For example, if you need to store 1000 Bitcoins, rather than store all 1000 in a single Bitcoin address, store 100 Bitcoins in 10 addresses. Later, if you need to spend 150 Bitcoins, you only need to import two wallets. If malware was present on your computer during the import process, only 100 Bitcoins at a time would be vulnerable to digital theft compared to the entire 1000.

Important: If you’re only storing a small saving off-line, these procedures might be enough security for you. However, if you are going to be storing a large number of Bitcoins off-line, you will want to take more precautions to ensure your computer is malware free before doing these steps. Such procedures would include booting your computer with a Live CD, or building a computer from scratch without ever letting it connect to another computer on the Internet.

Creating Off-line Bitcoin addresses

Visit http://BitAddress.org and unplug your computer from the Internet. Alternatively, you can simply set your browser to “offline” mode. This will block your browser from communicating to a web site while you’re generating and printing your keys.

Go to the “Paper Wallet” tab and click Generate a few times until you feel you got some magical numbers. Once is enough, but hey, they are free!

Once you’re happy with your addresses, print them out. Feel free to go overboard with this – if you only think you need 10 addresses, print out 20. They may come in handy later.

While each page is displayed, copy the Bitcoin Address and add it to your Bitcoin client as a sending address. Label it so that it is easily recognizable as one of your own an off-line addresses.

With your offline addresses saved in the client, close your browser and reconnect your Internet. Do not enable your browser’s online mode until you restart it.

Now you’re ready to distribute your Bitcoins to your Off-line addresses. After doing this, you will be unable to spend those Bitcoins until you import the Private Key portion on the printed sheet.

Retrieve Your Bitcoins

So, you want to spend some of those secured Bitcoins… Lets bring some back to life!

Currently, the .4 version of the Bitcoin client does not allow you to import keys so you’ll have to use another service to access your money.

A simple and cost effective way is to simply import the private keys into an exchange where you can immediately trade or withdraw your Bitcoins.

If you don’t have an exchange account, you’ll need to use an online wallet service to import your private key and send the money back to your wallet. StrongCoin is providing this service for 1% up to a maximum of 1 BTC. Soon, however, the native client will allow this function for free.

Follow the instructions listed for Project: Hidden Treasure to import your key. But rather than choosing ‘Mini-key” import, you’ll want to choose the “Base58 encoded” option.

Once you have successfully imported the key, you’ll be able to spend the Bitcoins back to your original wallet (under a different Bitcoin address).

The same way Bitcoin Faucet has helped technical people get their first Bitcoins, BitcoinIntro’s Hidden Treasure seeks to introduce Bitcoin to the universe through another massively connected group of people: GeoCachers. These people interact with other treasure seekers, sharing pictures, tags, and other little trinkets via their hidden geo caches.

The Hidden Treasure project will promote knowledge of Bitcoin by hiding Bitcoin keys and a URL to retrieval instructions. Each key will have a small fraction of Bitcoins sent to them before the treasure is placed in a cache. The first GeoCacher to retrieve the Bitcoins gets to keep them. During their quest to obtain the Bitcoins, they will have learned about all the awesome properties that Bitcoins afford. To the unfortunate GeoCacher’s that do not receive the hidden treasure, will also have become slightly more enlightened and still have an opportunity to obtain Bitcoins through the Bitcoin Faucet. We believe these treasure hunters will fall in love with this idea and eventually begin to help spread the word of Bitcoin throughout the globe during their hunt for their own next treasures.

If you would like to help promote this idea of Bitcoin promotion, please send a small donation to 1N9MW7LaAEX4GaiCng2ZjjyKZYYZqmr3YA. All donations will go directly to GeoCaching treasures in $1 USD increments as previous caches are retrieved. In the event the project is ended, any remaining donated coins will go the Bitcoin Faucet. We currently have trusted collaborators that will help distribute separate fliers to Geocaches in Vietnam, South Korea, Canada, and the Las Vegas areas.

If you would like to start your own local version of Hidden Treasure in your area, you can use our Flier template. However, you will have to fund your own endeavour. Please let us know you’re doing it so we can help your promotion.

Hidden Treasure retrieval instructions are here.

2011-12-04 Update:

The key import interface at StrongCoin was proving to be a significant hurdle for new users so we’ve updated the method to access the free Bitcoins by issuing InstaWallets instead. Unfortunately, due to the way InstaWallet manages their balances, it will be impossible to monitor the status of the caches.

That being said, Bitcoin is definitely an enabler of Anonymity. You can be completely anonymous with Bitcoins – provided you minimize the information leaks around your transactions. The more you understand how Bitcoin works, the easier it is to avoid these information leaks and remain anonymous.

As an example, let us consider a software developer. His product is completely digital. There is no physical items that need to be shipped. He can receive his project details via email, collaborate via skype, and deliver his product via the Internet, protect the Intellectual Property with encryption, and he can establish a reputation and verifiable virtual identity via digital signatures – and he can receive compensation for his work via Bitcoin. There is no requirement to exchange a real-world identity or items.

To remain anonymous there’s a lot of possible ways to leak who you are, but when care is taken, it can be done.

• Never cross IRL and virtual worlds. If your transactions can remain entirely digital across the Internet, then you can employ other anonymous techniques to maintain your anonymity. This means using things like throw away email accounts, TOR, etc.
• Make sure your bitcoin client (and methods of communication) only route through the TOR network.
• Use new/unique receive addresses for each transaction or, at minimum, sender.
• Maintain separate wallets for each anonymous identity you maintain. This is necessary to prevent “Bitcoin change” from being spent by another identity.
• Launder your Bitcoins before sending between virtual identities.

If real world interaction is required, then you can think about some of these techniques and practices.

• Minimize the information you reveal to your buyers and sellers.
• Create an off-line bitcoin address, send money to it, give the keys to the address (written on paper, as an example) to the seller. They can verify funds via block explorer and immediately transfer money to their own safe address once they have the keys.

A Postscript on Money Laundering

Why is it OK to use encryption to increase my privacy, yet money laundering is illegal? Both are valid techniques to increase my personal privacy. I understand why criminals launder money – but they are criminals doing legitimately illegal acts and will eventually get caught and punished. But the average citizen should not be ashamed to launder their Bitcoins any more than when they use SSL to protect their bank account login.

It is a work in progress and will be updated as new news about Bitcoin becomes available.

If you are an experienced Bitcoin user and find a mistake, please let me know so it can be corrected. And regardless of your experience, if you know of a better way to do something, know of a new link or piece of news, please share! I’m always very eager to learn too!

Tuxavant