Friday, May 23, 2014

Bitcoin Banking Software (Open Bank)

Following on from my post about BitCoin Banks I suggest some developers with banking security-level experience start a project to develop software whereby Banks can build systems to handle BitCoin.  

Maybe a donation from one of the many publicly-owned banks of the base source code could be made to ensure the demise of banks as we know them today, as a little thank you and payback for comprehensively ruining the world economy.

An Open Source project such as this would be very profitable for its developers as premium services can features are usually part of the project such as this.  It would be run very similarly to the Open SSL project.
So this would be an open source project to provide the storage, transmission and manipulation, control of Bitcoin by any institution e.g. a bank, or one of the new generation of BitCoin banks that I envisage will be starting up.

It will have  routines to perform the process above which would be Open Source and will be edited by whoever chooses to do that and these of course then would  be able to be used by an institution, typically a bank at this stage but later on people could develop their own smaller BitCoint banks and charge money.

I suspect that  because of the 'honey pot' type nature of BitCoin in a bank that cyber criminals, would be extremely interested in any entity online that is storing s BitCoin and it would relentlessly be attacked.

Maybe then BitCoin can’t have banks, there is no requirement for them to exist with Bitcoin, so maybe people will just store and transmit then personally: Where there are numbers of bitcoin stored in wallets on millions of hard drives or in a particular locations online like Bit locker. 

It will be interesting to see if Wild West style, the bank I was referring to earlier, makes a resurgence.

Bitcoin Bank

For the purposes of this post I will refer to Bitcoin as an example of all crypto-currencies as Bitcoin was the original, but the following applies to all derivatives of it.

I have just been reading about the failed bitcoin exchange Mt. Gox  and a bank called Flexicoin Bank, it was robbed and has gone bust and it occurred to me that it would be interesting for a large commercial bank to start a Bitcoin operation, probably as a separate entity.

My reasoning is thus:  Since Mt. Gox and Flexicoin simply didn’t have the resources to secure their systems in a manner sufficiently effectively to prevent the hacking, only people in Bank or similar companies that have track records for this kind of work can reasonably attempt it.

They would be able to deploy the highest levels security, as their security team as part of their development team, which would be familiar with attempted hacks into the accounts and systems and would have the technical know-how to have a reasonable chance of storing Bitcoins safely.

As the chain of thought continued then it occurred to me that there may be an opportunity for a business, pretty much along the lines of the old style Wild West banks where Gold bullion and other currency which had real value e.g. silver, jewels, etc. as well as paper notes could be deposited in buildings with physical secure access
Now it is possible to email a Bitcoin to somebody else as an attachment, or on a USB key. So this bank would be a physical building
I am thinking about Andorra where I reside, which is an extremely safe country, which doesn’t have the kind of banking reputation that Switzerland does but there is no reason why it shouldn't.

So I envisage a physical structure, physically secure, containing a lot of USB keys or some other devices (as maybe USB devices deteriorate over time?) but there would of course be some way of storing them physically in the building and the bank / institution handling these would charge a fee for storing the Bitcoin
I mean you can't really charge interest... well you can try and charge interest but I suspect it probably wouldn't work, what would probably be better a business model would to be to charge some form of holding fee.

Clearly the more valuable the coins stored there are  the more likely that someone is going to going to want to come and steal it, so there has to be security in place and that will increase as the value of the Bitcoins increase.  This could be chargeable as percentage fee, which is akin to interest, and then you could also charge on a transaction basis.

The building itself would need the computers to send/receive the bitcoins with otherwise limited access to the internet to prevent hacking and stealing via that route: It would also have a tellers where customers could walk up with their own USB keys for deposit. So if somebody would like to retrieve or deposit their BitCoin, they could turn up in person with the physical device, their USB key or their CD or whatever their Bitcoins are stored on.

If the bank can accept encrypted email there and no network access other than the transmission of the email and receipt of the text and the email with the BitCoins encrypted in the text format but inside an encrypted envelope. 

Who is going to take it on?

Wednesday, May 14, 2014

Importing a car into Andorra

We moved to Andorra in the summer of 2011.  I'd bought a 1 year old Land Rover Discovery 3 car with left hand-drive the summer before, with the prior knowledge that I could import it into Andorra when we gained residency as it would be less than 3 years old (or certainly less than 5 which is a special exemption that they give to car owners that are changing their residency, even if things did drag on a bit...).

I had the V5 Registration document, and the invoice from the dealer that I bought it from.  What could possibly go wrong?

The car was 2nd hand, so there was no VAT to consider or claim back.  The price I got from the dealer was a good one, and I didn't want to buy new, as you can generally get a excellent car for a serious discount if you are prepared to have one with a couple of tens of thousands of kilometres on the clock.

If you are bringing in a new car you should look at this blog [update:JAN-17 now deleted but available via wayback machine; information maybe getting outdated too] entry, but don't forget about ensuring you have a CoC.... read on to find out about that....

I was so confident that I didn't bother doing anything about the importation until April 2012.  My first mistake.

Andorra give you one year from arriving to get the thing imported so I figured that I had 5 months or so to get it done.

I went down to the ITV station in Sant Julia fully expecting for them to take a few Euros off me and grant me a positive inspection.  But no.  The guy there told me that a) the lights were probably wrong b) that I needed some European homologación number or contraseña.

They checked the lights, which were fine, but came unstuck with this code, which they were expecting to find somewhere on the metal plates.  It is a long code number beginning with an "e". Anyway I said, I'll just ring Land Rover in the UK and get them their number.

On returning home I called Land Rover and the lady told me it would be £100 please give me the VIN.  So I trotted that off.  "Sorry, that car does not have Certificate of European Conformance."   Doh!   So now what.  Anyway several hours of internet research ensued.

It turns out that manufacturers of mass produced cars issue a type-certificate when they are producing cars, but my car, which was originally produced for the Russian market (it is left hand drive and had a zone 5 DVD player - so that explains a lot), and by some convoluted means via Holland and back to the UK was sold to me in Spain, and then ultimately I hoped, for use in Andorra, did not have one from LR because it was destined for outside of Europe.

Andorra is not part of the EU customs union, but they insisted that this car have a rather unfortunately named CoC or Cerficate of conformance, before they would give me the ITV,  which is the equivalent of a UK MOT test certificate.

I guess they are just assuming that a car that conforms to EU standards is good enough for them.  Fair enough.

OK, a bit more internet digging and I found a few places that appeared to sell CoCs online. EuroCoC for example. Great,  except that unless you have a manufacturer issued CoC originally, they can't help.

Yet more digging and it turns out that the UK will have issued an IVA/SVA  Individual Vehicle Approval for this car, as it has UK plates.   So I look at the log book, and lo-and-behold there is a typed reference to a IVA/SVA being issued in June 2009 (when the car was new, and registered in the UK).

So I take this to the chap down at ITV and he says that's not good enough, but he does know somewhere in Spain that I can take the car to get it tested.  It's in Tarragona - where we used to live, and return often, so I think well maybe I just take the car there to get tested, come back with the new certificate and job done. They are called IDIADA.

I think maybe I try to retrieve this old IVA Certificate too, so I call VOSA in the UK and they tell me that after one year, they send everything to DLVA Swansea.  So I call them, and they tell me after negotiating their IVR press 8 if 7 etc. blah blah... that they don't have it.

So I call IDIADA in Tarragona.  Their test is going to be 1700 Euros + Spanish IVA at 20%.  I nearly faint. So with renewed vigour I call DVLA back and tell them I want them to try harder with this certificate that they have some place.

This time they tell me that any documents that they have for the car will be on microfiche somewhere and I need to fill in a V888 form, send a fiver, and they will get digging.   So that's what I do. It takes 6 weeks.

If you do this, I recommend you send a postal order, as it means they don't have to wait until your cheque clears before they do anything.

So an anxious time for me as I wait for DVLA to dig around and see what they got.

In the meantime I'm aware that I still need to actually import the car before the 1 year time limit expires. Time is ticking on now and so are the summer holidays when nothing will get done. So we go to see the people at "tramits" industria i vehicles down at Baixa de Moli, near the roundabout beyond the Govern.  Very helpful chap there says that they not concerned about the year limit as long as I have a "Papel de Vall", meaning the thing has passed the Duana stage.  No problem I've still got time.

5 weeks later a poorly photocopied image of the VOSA IVA certificate arrived.  The signature of the tester has been blanked out because of the Official Secrets Act or somesuch, but it clearly shows my VIN number, some text that says "this vehicle can be registered in all member states with left hand drive and speedometer in kilometres   which is fine, and also sports the very important official stamp.  All documents you ever need to produce here, by the way, definitely need some sort of stamp to have any official credence..

So I again full of expectation clear off to the ITV.  The young boss guy seems intrigued by my scrappy IVA certificate, but a guy in blue overalls who clearly was having a very bad day soon passed on the depression to me.  "No, we want a Spanish Certificate of Conformance."  I pointed out this was a European test and my little document does say "Valid in All Member States", but his day was so cloudy he could see nothing.

I thought I'd see my mate at Tramits about this rejection.  He said it was a matter for his boss.  So there I am in the car park with the hood up talking to an Andorran Government Official.  I question why they are asking me to get a Spanish certificate  when I already have one from the UK.  Andorra is not part of Spain, so why choose them?  Why not a French one for example.  Just seemed a bit "computer says no" to me, and of course there was the small matter of 2000 Euro that would have be shelled out to gain one of these said documents.

She will look at it for me.  I get home, I hope she's asked some really knowledgeable people about this, and they've come to the correct (for me) decision.  I read my email.  "The Andorran government will only accept certifications from these two Spanish Agencies."   So she's basically contacted the ITV guys and now she's trotting that back out to me.  Double Doh.   The other agency is one in Madrid, that do the same as the Tarragona lot.

I really need to go down to the Spanish border (because I've seen a row of Import/Export companies down there, and it just seems busier than the French side) to get this "Papel de Vall".   I have a V561 which was generated for me by DVLA (it came very fast, as I faxed the request), maybe a week to Andorra.  You can use the V5, but knowing how these people work, more paper is better and something that says "Export Certificate" is definitely going to be a "good-thing".

One thing that a lot of people involved in this process don't realise is that if you have owned the car for more than 6 months prior to moving to Andorra you do not have to pay the import tax currently 8,4%.  Even the customs officials at the Duana wanted to hit me for the money.  Luckly my friend at Tramits had made it clear you do not have to pay.  And he's clearly further up the food-chain, so stand your ground if you find yourself in a similar situation.

OK, so the guy at the Duana tells me I need to visit one (any one) of these cabins by the Duana.  They tell me I need a Certificat de Exportacion.   I show them by V561 which in big letters on it says "Certificate of Export",   shaking heads.  No you need a "Certificat de Exportacion."   Again plenty of banging head against the wall opportunities.

In desperation I ring my neighbour Jane who has been here 25 years, married an Andorran, and has gone pretty native.  She helps people out that are completely new to Andorra, and/or have no Spanish or Catalan.

This is where things to start to change, albeit slowly, for the better.

She knows my problem, and is aware of a way round.  Via the French border and a compliant Duana agency.  It turns out the Spanish side are looking for this document which shows you have removed your vehicle from the Spanish vehicle registry....  clearly something that is not possible with a UK registered car!

At 8.30 we go in convoy with a camper van owned by a hilarious Irishman to the French side.  A hour or so of coffee and waiting and nervous sweating and Jane comes back with the long awaited "papel de vall", zero import duty paid, just a couple of hundred to the agency for some hefty pen pushing.

I explain my woes with my lack of CoC... yeah.   She says "Why don't you just go to Costa and get him to do it."  This is a really good idea.   There I am struggling along with my limited Spanish and non-existent Catalan trying to figure out what's going on.  I should just play the game and let him sort it out.

I then had to go to India for a month for work.

I came back at the end of August.  I go see Costa.  He says "I will get the ITV, don't worry".  But I explain it might not be so easy.  He's confident.   I leave it with him.

I figure if I can get the IDIADA (the Tarragona 2 grand Euro guys - see above) or INTA the Madrid agency, in an email, to agree that my UK IVA is equivalent to whatever they will be giving me... then I can go back to the people here and say "look the people in Spain say it's the same, so what gives...."  or something on those lines.

So I start emailing, which is much better because I have Google Translate on my side, thus avoiding those frowns and queried/frowning-looks from people as I butcher their language.  After about 5 or 6 exchanges, I have an email that says "In this case, we would ask the manufacturer [Land Rover] to produce a technical document detailing the requirements of [the Spanish law implementing the European Conformance legislation]."  OK, so movement there, they don't want to see the car, they just want something from LR giving the performance figures, the safety standards etc. that the car possesses.... and then they will issue a certificate.  By no means home and dry, but at least there is a Plan B.

Two days later I go back to Costa.  He's not so confident.  "We are having a meeting to decide if you can register the car here or not."  He's not in his usual mechanics overalls but has trousers and smart shoes.    He's going to see the Govern.  What a star.

The next day I go to see him.  He's not there, but I know something's happened.  One of his boys tells me what he think that Costa is actually a policía encubierto - "undercover policeman".  And sure enough I go in the office and there is a duly stamped and signed ITV.

The rest was plain sailing, take the whole lot V5, Passport, Andorran Insurance (much cheaper that Spanish or UK insurance by the way), ITV document (note down the contraseña, for they will ask for the homologation document) another couple of hundred Euros, then wait a couple more days, and you can get the Yellow Card, and go collect the new plates from the Andorra AA (next to what is now previously Hiperandorra).

In case your wondering, I gave Costa a bottle of the finest bubbly I could find in Escale.  He deserves more I guess, but he has got a customer for life.

Postscript:  I've just found something that makes this all this much much clearer.  I was just adding links to the text and noticed something.  I noticed that both the IDIADA and the websites redirect to a subpage one and the other  which struck me as similar, on closer inspect the colours are very similar and also the use of ..:: name of company ::.. format in the title.

I did joke much earlier in the process to my wife that the boss of the ITV company here was probably related to the IDIADA lot.  How wrong I was,  it is actually the same company!  This explains why they were so keen for me to get a "Spanish" European conformance....   and then provided me with their sister companies contact details (er.. 2 grand Euro please - kerching!), whilst not mentioning any connection... and then completely refused point blank my subsequently found UK VOSA issued certificate.

I better stop now because Andorra is a very small place...

Good luck with your Importation!

Monday, May 12, 2014

Bitcoin Extensions to the SMTP protocol

Today’s post is a theoretical method of a way to reduce spam in email.

An extension to the SMTP mail protocol that will allow transfer of a very small amount of Bitcoin in the message transmission process which would alleviate spam.

Part 1: The Problem.

To break this process down:

1)   We have email, which is transmitted “under-the-hood” by the SMTP protocol which is a transmission protocol, language if you like, communication standard between computers on the internet.

2)   We have spam, which is unsolicited email. We’re all familiar with this, various mail use drugs or millionaires from Nigeria who wish to send us millions of dollars, there’s various permutations, and it’s very annoying. You didn’t ask for it and there doesn’t seem to be any way to stop it.

3)   Then we have Bitcoin which is a new crypto-currency which came out in 2009 and it’s a digital means of transmission of monetary funds. Again, it’s a fiat currency. Like all currencies really, there is no intrinsic value to the data, or the paper bills that you have. But there is a value assigned to it currently in the market, which does fluctuate. But nevertheless, my personal view is that it will increase and stabilise over time.

Just using the term Bitcoin to cover all variations on this, there’s Bitcoin, Namecoin and various other “coins” why are all crypto-currencies but Bitcoin was the first one and I’ll use that as the example currency but it could apply to anyone of these currencies, anyone that gains traction anywhere and has mechanisms for transmission.

So how are we going to combine SMTP and email and the Bitcoin currency to massively reduce spam? I can’t say it’s ever going to completely stamp it out. But we should be looking at a large reduction in spam.

The way it currently works, email using the underlying STMP protocol: Say I want to send a message to somebody else. I compose my message in my email composing program which is probably Outlook or Gmail, if it’s online. And I press send. That message then is accepted by the machine that I’m working on and needs to be sent. So it’ll wind up in a queue somewhere. This queue has the destination domain of for example.

What the machine, the transmitting server will do, is it will do a name lookup. A DNS, Distributed Name System lookup, DNS lookup for, it’ll read that record and see that there is a mail server allocated to that, or in Yahoo’s case probably several mail servers.

It finds the mail server, it then does another DNS lookup which gives it the numeric address of the mail server. It’ll then attempt to open a connection to this machine on a standard SMTP port of 25. So hopefully Yahoo’s servers are listening and an incoming request will be received from my server, or whatever server is sending the mail for me.

And then the protocol states a discussion will go on then. Anyway, this protocol, this discussion between the two computers has a vocabulary. It’ll start off with a ‘hello’ or an equivalent type of statement where the machines introduce each other. The other one will respond ‘hello’ back and then there’s some addressing information. ‘Here’s the message for:’ and the user name. ‘Where is it coming from?’ It’s as simple as that. The message basically is just transmitted from one machine direct to another one.

Part 2: The Solution.

Now, what I am proposing is to add another word or two into the vocabulary of this transmission and include a Bitcoin address for sending Bitcoin cash through this transmission. Now it needs to be an option though, because obviously at this point in time, today, there is no implementation of this. So the first server that implements the additional Bitcoin transmission is going to be talking to itself.

So, it needs to be an extension to the SMTP protocol rather than a complete revision but I don’t know if eSMTP protocol has a similar, extended protocol with a different ‘hello’ at the beginning. Maybe, if later on a different word is received most servers will just respond ‘not understood’ but if they have the Bitcoin transmitting ability on the top then they will understand the next verb.

It will be relatively easy to implement an extra Bitcoin verb or “Bitcoin transmission wanted”-expression.

The mail servers will have to “loaded” with Bitcoin. This has to be loaded onto the system in a Bitcoin wallet inside my computer and then as it sends the message to Yahoo it will send a very small amount of Bitcoin.

Now the beauty of Bitcoin is that it can be divided into extremely small divisions, much smaller than a penny or a US cent. You can easily send a thousandth of a cent or a hundredth of a cent which makes this particularly attractive. The fact that there’s no transmission cost, there’s no bank involved, there’s no PayPal, there’s nobody creaming a percentage off every transmission. I can send a very small amount and all of it will be received.

So I’d imagine a typical scenario of a husband and wife or some friends who are probably evenly communicating with each other at a similar rate. The husband sending roughly as many messages as they are receiving.

Not only are the messages extremely cheap, we’re looking at over the course of a year maybe 10 US cents. Or even 50 cents for heavy email going on between two people, or just one person sending I would imagine. Depending on the price.

But the key is that the typical person will send maybe 1 or 2 or 3 or 5 or 10 messages a day. You’re looking over the course of a year, let’s say he sends 10 messages which is probably a heavy user I’d imagine. Now this person, if he sends 10 a day, and there’s 356 days in a year. He’s sending three and a half thousand messages a year. It’d be costing him even 1 cent which I think is way, way over the top. What are we looking at there? Is it $30 or is it $3? Anyway, we’re talking about extremely low figures here.

The thing is spammers, people who are trying to sell Viagra or con people have to send millions of messages in order to get a positive response in their eyes. There’s not that many gullible people and there’s not that many people interested in viagra. And most people hate spam so they wouldn’t respond to it anyway. So the trick is that these people, not only is it one way. Whereas between husband and wife money would be going forwards and backwards all the time so the net transmission would be extremely low.

These people, the spammers are sending out enormous amounts of messages and are not getting anything back so it’s going to start to cost them and I suspect that it would probably diminish their activities.

Now obviously, maybe if somebody is targeted. Let’s say somebody responds to some spam or buys some Viagra. This signal to the Scammers that “they’re gullible”. Other scammers may then target this person. I believe this is happening already. The amount of messages you would have to send to his person are a lot lower. So we may see a refining of the scammers techniques but then we’re really moving away from the generic spam email to the custom targeted scamming which exists anyway in the world. So I’m not concerned about the evolution of this. I just don’t want any spam.

Bitcoin was developed in 2009. In 2009 I remember thinking as the governments were turning on the printing presses and targeting inflation as the saviour of the world. I remember thinking about various alternatives to standard currencies which were not controlled by the any governments or central banks. There is obviously gold, - this has been used throughout history as a currency – but has problems with the supply and storage of it and compared to Bitcoin - its transmission. I remember considering a unit of energy maybe a “Wattmeter”. A wattmeter calculation which would be redeemable by going to any sort of power source e.g. Power company or Solar grid.

But anyway, I was very pleased a year or two later to discover that a chap named Satoshi, this is supposedly a pseudonym for him. But he’s come up with the idea of a digital currency which does satisfy many of the requirements for a currency. Which is uniqueness of notes, a limited supply. There’s only 21 million Bitcoins will ever be produced. Some form of mining or increase in the money supply over time. There are downsides to it of course. As with other currencies you can always come up with another version of it. It’s simple software so instead of printing dollar bills I can have my pound notes or a competing currency. So you’re looking at other factors such as stability, transmission, security and other features of the protocol, of the currency protocol.

Anyway it’s interesting times. We had the MtGox failure a month or two ago which obviously has affected the Bitcoin pricing. But I suspect over time once people realise the true flexibility of crypto-currencies or digital currencies they will be swayed. Obviously the exchange rate to traditional currencies need to stabilise. The reason it’s jumping up and down so much, there’s numerous reasons, but one of the main reasons is there’s a relatively small amount of in supply. It is held in the hands of some small groups with large amount of it which means it will go up and down. Obviously, because it hits the headlines every time there’s a lot of volatility.

But nevertheless, this email transmission property that it can be used for. It will probably help in its acceptance. It doesn’t really matter if it’s a thousandth of a cent or a hundredth of a cent. The fact is that there is some money being transferred. If you are an even equilibrium user, you’re sending as much as you are receiving then you shouldn’t have to load the Bitcoin very often, and of course they are tiny amounts that you have to put in.

So, I wanted to consider a company that sends email and how it would impact that and just look at the numbers too. Of course there will be a cost to commercial organisations in the transmission. Actually, it’s only transmission that’s received. If you send a message to… This needs considering… There needs to be some adherence to a standard so the mail server won’t just sit there and accept messages for people who no longer have accounts there because they have a business and people leave and people are still getting messages. You could essentially make a very small amount of money by accepting their messages for delivery. Most of the time, companies switch off the email accounts and start to balance and say, Ann Jones is no longer here so the Bitcoin wouldn’t be sent to them.

But what I wanted to talk about was large companies who typically have large mailing lists. Now I think for the small cost involved, I haven’t got my calculator in front of me. But if they were sending, what would a small to medium enterprise, how many customers? If it was dealing directly with the public, business to consumer. Business to business would be a lot less. Business to business maybe a thousand. Business to consumer, a hundred thousand people and they might want to email them once a month. So that’s a 120 000 messages. Yes, I suspect the costs would still be low, even if it was 1 cent, that’s $1200 a year. But the messages are not going to wind up in the spam bin, or they shouldn’t.

Now of course, the fact that you’re sending some money doesn’t guarantee that the message is not spam. So I’m going to talk about that in a second.

Ok, so a quick discussion here about how this is not going to be the cure all, this is not the elixir, the life giving juice the life giving source. An elixir for removing spam but I think it will, unless it’s worked around it, initially it would have quite a large effect. So at the moment, a lot of spam filters use what’s called Bayesian, after the mathematician Bays. Bayesian probabilities for classifying email into spam. Having spam like structures, word structures, sentences, words, lack of other words which allow software to categorise it.

As we know very often spam does still arrive in my inbox in my Gmail account, Outlook account, my Hotmail outlook account which is being performed by major corporations who are very good at what they do. So I still wind up with a spam message in my inbox and real messages going to my spam tray. So it doesn’t work completely, there’s obviously room for improvement.

Now I would imagine that the fact that the Bitcoin has been transferred wouldn’t completely mark it as spam. If the message said something like ‘want to buy viagra?’ and that was it, and it also sent some Bitcoin. The Bayesian filters could probably still work that one out, I’d hope so anyway. So I’m not claiming that this is going to cure everything. But certainly, these things are only answered in practice.

How developers can make money from this:

The final part is how can developers, and people in the IT industry make money out of this? As I say it needs to be in addition to the SMTP protocol, an extra verb or two and then the transmission to the Bitcoin address and some verification that this has occurred and then eventual delivery of the message.

So what we’re really looking at here is an extension to standard software, so Sendmail or Microsoft SMTP or all the various mail servers that exist in the world. Either the vendors/developers or third parties could produce software that will add these extra verbs to the SMTP protocol and be sold as extensions.


I've looked at the problem of spam, and considered a way that Bitcoin could be included in the transmission process to lower the likelyhood that a spammer will want to send messages.

Distributed Backlink Service

Wouldn't it be great to work together and create a "distributed search engine" with the index spread across thousands of peer...