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    Background on Ether pre-sale mechanisms

    msmarkBy No Comments5 Mins Read

    During the lead-up to the Ether Sale, we will be releasing a series of blog posts relating to the development plans and intended organizational structure. Today we will describe some of the background details of the Ether Selling Module. The sale unit will be displayed on our website at https://www.ethereum.org For the duration of sale.


    What is this?

    Ether Sell is an HTML/JavaScript web application that enables people and organizations to pre-purchase Ether tokens using Bitcoin. Ether can be purchased by parties interested in using it to develop applications distributed on the Ethereum platform or simply to pay for the use of applications on the platform once the genesis block is released. The application works mostly within the browser, including pseudo-random number generation (PRNG) and encrypting/decrypting user secrets.

    Additionally, we will provide a standalone pure Python application that can be used from the command line interface to purchase ether instead of using the website store.


    Website workflow:

    1. After agreeing to the store’s terms and conditions, the buyer enters the required amount of Ether for the purchase, his email address, a password to use for encryption, and generates a “random” seed that forms the basis for the transaction’s Bitcoin and Ethereum addresses. .
    2. the user The buyer sends payment in Bitcoin to the generated address which is displayed on the store page and is also presented in a downloadable encrypted wallet file. When the browser, which is monitoring the Bitcoin chain, sees that enough funds have been sent to this generated address, the browser creates a new transaction to redirect the Bitcoin to the original selling address. This transaction is signed by the buyer’s browser and sent to the Bitcoin network. No transaction data is stored on the No servers because the Bitcoin blockchain serves as the purchase database.
    3. After completing the transaction successfully, user The buyer is again asked to download a backup of his crypto wallet as well as send another backup file via email. The purchaser should be aware that maintaining the Wallet as an email attachment in an email account for any period of time represents a security vulnerability. The email attachment should be downloaded onto a secure computer at the earliest opportunity and the email should be deleted from the email system.


    (The following is the technical information, the GUI we developed and the summaries, all in a very user-friendly way)


    Wallet encryption process:

    1. Randomgen seed.
    2. BKPKEY = sha3(SEED + “\x02”)[:16]
    3. key = pbkdf2(PW)
    4. ENCSEED = encrypt(key, SEED)
    5. Wallet = [ ENCSEED, BKPKEY ] (In addition to non-sensitive data such as Ethereum and Bitcoin addresses)

    The keys and addresses for BTC and ETH are derived from SEED.


    Seed recovery process:

    1. Wallet + PW Redeem: (Normal)
    2. key = pbkdf2(PW)
    3. SEED = decrypt(key, ENCSEED)


    Overview of website steps to make an Ether purchase:

    1. Buyer clicks “Buy Ether” and agrees to the terms and conditions
    2. The buyer enters initial purchase information

      1. The buyer enters the amount of Ether he or she wishes to purchase
      2. The buyer enters the email address as the destination for the wallet backup file
      3. The buyer enters the passphrase, which serves as the cryptographic seed. It is highly recommended to use a very strong passphrase

    3. The buyer creates entropy by moving the mouse or clicking on his screen. The “seed” is generated based on this generated entropy as well as other random system inputs. When the desired entropy length is achieved, the wallet is generated using the seed. The wallet contains:

      1. An individual BTC address to send funds to
      2. Individual ETH address
      3. Encrypted seed
      4. Backup encrypted seed

    4. The browser selling app checks the newly generated BTC address to see if the funds have arrived. Before sending any funds, the buyer has the opportunity to download the wallet. If a problem occurs between transactions, any funds sent to the buyer’s personal deposit address will be accessed using the passphrase. If the unspent balance of a BTC address > 0.01 BTC, the browser selling app will create a signed transaction from the newly created BTC address with two specific outputs:

      1. The result of the total unspent balance minus the miners’ fees to the main BTC selling address – this BTC address is where all the funds go, and is a fixed and known BTC address.
      2. Output 10,000 satoshis to a BTC address generated from an ETH address (chain) – This Bitcoin address is for confirming Ethereum addresses and is unique for each transaction.

    5. The browser selling app prompts the buyer to download their wallet again & It also sends the buyer an email containing a backup copy of the Ether wallet. The same caution as stated above applies. Do not leave the wallet as an email attachment in your email system. Download as soon as possible and be sure to clear the email.
    6. The browser selling app will display the number of Bitcoin transaction confirmations


    That’s it! Although there is a lot of technical stuff happening in the background, the GUI we have developed will make the process a click-by-click process.

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