You Already Have a Bitcoin Cash Wallet

EarthBucks now has a Bitcoin Cash (BCH) wallet. You can deposit BCH and withdraw BCH. Open the Bitcoin Cash page of your wallet to see it.

You do not have to create this wallet. You already have one. It uses the same master key and the same key derivation as your EarthBucks wallet. When you signed up for EarthBucks, you also got a BCH wallet.

This post explains:

1. How the BCH wallet works.
2. How the wallet protects your privacy.
3. Why we watch a deposit address for only 10 minutes.
4. What comes next: BCH in EarthBucks Pay, and atomic swaps.

How the BCH wallet works

The BCH wallet is fully self-custodial. Your browser holds your keys and signs your transactions. The server never has your private keys, the same as for EBX.

Your BCH keys come from your master key, with the same scheme as your EBX keys. Thus one master key controls your EBX and your BCH. If you rotate your master key, your new BCH addresses also come from your new master key.

The wallet has three pages:

• Receive: get a new address and deposit BCH to it.
• Send: withdraw BCH to any BCH address.
• History: see your BCH transactions and their confirmations.

Confirmations

BCH is different from EBX. EarthBucks finalizes an EBX transaction before it goes into a block, and it never reverts. A BCH transaction can revert if a block that contains it is replaced (a reorganization), or if a different transaction spends the same coins (a double spend). Each new block makes a revert less probable.

Thus the wallet shows the number of confirmations of each BCH transaction. EarthBucks treats a BCH transaction as final after 6 confirmations, which is about one hour. If a transaction reverts, the wallet shows that, and it corrects your balance.

Privacy: a new address every time

The BCH blockchain is public. Anybody can see each transaction, its amounts and its addresses. If you use one address many times, anybody can connect all of those payments to you, and see your full balance and history.

Thus the BCH wallet does not reuse addresses:

• Deposits: each time you select Get new receive address, the wallet makes a new address.
• Withdrawals: when you send BCH, the remaining amount (the change) goes to a new change address, not back to an address that you used before.

Each address comes from your master key, so you do not have to back up each address. Your master key controls all of them.

When we add BCH to EarthBucks Pay, Pay will also use a new address for each payment. This gives you as much privacy as possible.

One limit: the wallet cannot stop another person from sending to an old address of yours again. To keep your privacy, give each sender a new address.

Why we watch a deposit for only 10 minutes

When you select Get new receive address, the wallet shows a new BCH address. We watch that address for 10 minutes, or until the first deposit arrives. Each account can watch one address at a time.

If you send BCH to an old address after its watch stops, your BCH is not lost. It is still yours, because your keys control that address. Enter the transaction ID in Find a deposit by transaction ID, and the wallet adds the deposit.

Why not watch every address forever? Other wallets do. The answer comes from how a payment to an address works.

A payment to an address is a check in a pile

When you pay to an address, you do not give the transaction to the recipient. You put it on the blockchain with the transactions of everybody else. Then the recipient must find it.

To find it, the recipient’s wallet must examine every transaction on the blockchain. It examines each output of each transaction, and it compares that output with each address that it watches.

Think of a check. To pay to an address is to put your check into a big pile of the checks of other people, and to tell the recipient, “Your check is in that pile. Find it.” The recipient must search the full pile to find one check.

There is a better way: give the check to the recipient. If the sender gives the transaction directly to the recipient, the recipient does not have to search through the transactions of everybody else.

Watching every address does not scale

A wallet that watches each address forever has a big problem. Each user gets many addresses, and most of those addresses never receive another payment. But the wallet must compare each new transaction with all of them, forever. With N addresses, the work and the data grow with N, and N always increases.

To do this, wallets usually use an address index. An address index is a large database of each address that has ever been used, with its transactions. It is a separate server that you must run next to the blockchain node, and it uses much disk space.

EarthBucks does not watch addresses forever. Thus:

• We watch only the addresses that are about to receive a deposit: one for each account, for 10 minutes.
• Most of the time, very few addresses are watched, or none.
• We do not need an address index. Our server uses only the BCH node and its transaction index. It finds any transaction by its ID.

This keeps our software much simpler, and it scales much better.

Addresses are easy to mix up

A payment to an address has a second problem. It is not user friendly. A BCH address looks like this:

bitcoincash:qr95sy3j9xwd2ap32xkykttr4cvcu7as4y0qverfuy

It is a random string of characters. People mix up addresses frequently: they copy the wrong address, or they paste an address for the wrong coin. When this occurs, the funds are usually lost.

Why EarthBucks Pay

These two problems are part of the reason that we made EarthBucks Pay. With Pay:

• You send to a name, such as alice@earthbucks.com, not to random characters.
• The payment goes directly to the recipient, with a message. The recipient does not search the blockchain for it.

A payment to an address is a legacy form of payment. We think that it will soon be obsolete. Thus EarthBucks does not have deep support for it. But today it is the standard, and you need it to deposit BCH from another wallet or an exchange. Thus we support deposits to an address, with the 10-minute watch.

What comes next

The BCH wallet does not yet work with EarthBucks Pay or with atomic swaps. These are the next steps:

• BCH in EarthBucks Pay: send BCH to a name, with a message, in the same way as EBX. This will be a much better way to send BCH.
• Atomic swaps: exchange BCH and EBX with another user, so that both of you get the agreed amounts, or neither of you does.

Try it

Open the Bitcoin Cash page of your wallet. Select Receive, then Get new receive address, and send a small amount of BCH to that address within 10 minutes. The deposit shows by itself.