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Several interesting applications of bitcoins involve a scenario where they are intentionally "destroyed". Is there an open source tool that can be used to destroy bitcoins?
And if so, is it possible to programmatically verify (via the same tool or another) that the bitcoins have indeed been destroyed?
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The most secure way to destroy bitcoins is to send them to a script that can never return true, and which includes the reference code that confirms the goal of destroying these coins. I don't know of readily available software tools that can do that, and I'm not sure the network will accept these transactions.
Here's a simple method everyone can try at home: Take the reference code, apply RIPEMD-160 and encode it as an address. Do a transaction which sends a satoshi to this address, and the the coins-to-destroy to 1BitcoinEaterAddressDontSendf59kuE.
To demonstrate my point, here is me destroying 1 mBTC - http://blockchain.info/tx/f374fb91ea29b02d295d535da537c7770caa71c4937095c51467b4d8b1b60c1b. Address is hash of https://bitcoin.stackexchange.com/a/7443/575.
Signing a message with the address used to send can also be employed as extra verification.
1 You could also use 1111111111111111111114oLvT2, which has an internal hash of 0000000000000000000000000000000000000000.
Removed remark that the hash can be used as a recipient of the coins, it's too easy to game. – Meni Rosenfeld – 2013-02-03T19:07:52.840
1Perhaps not the most elegant approach, but it is 1) very simple, and 2) works with a lot of existing tools. +1 for that. – Nick ODell – 2013-02-03T23:09:37.337
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Why destroy the coins?
This post at bitcointalk.org discusses using Bitcoin for email micropostage, in a similar way to Hashcash.
1 1) A legitimate email provider only needs to destroy the coins once, whereas a spam sender will need to do it every time his server is blocked. 2) This page estimates that there are 280,000 legitimate email messages sent per day. Imagine if all those required a bitcoin transaction. Sure, some can be batched up/not sent, but what about the other ones?
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I'm not aware of any tool that does this specifically.
One easy way to burn coins would be to send them to a junk bitcoin public address.
To convince people the public address is indeed junk Generate it with a public formula relying on crypto hash function : truncateToCompressedPublicAdressLength( sha512( "anything : for example the cause for which you are burning the coin" ) )
Generating the key from its compressed representation should give a 'valid' (representing a point on the elliptic curve) public address, with a probability > 0.5, so you just have to twiddle a few bits if the key is not valid.
The address would be considered junk by design, provided you trust sha512 and bitcoin.
You can even let them choose freely the last few bytes of the public key (after the hash was applied), to convince them even more you can't know the associated private key.
Blog article about people hiding data into the blogchain: http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photographs.html
You may find information relative to proof of burning: https://en.bitcoin.it/wiki/Proof_of_burn
similar answer : http://bitcoin.stackexchange.com/questions/1851/how-to-generate-a-valid-bitcoin-address-for-destroying-bitcoins
I don't think there's an existing solution because there isn't a big need for one. A) People don't usually want to destroy their bitcoins, and B) you can send some bitcoins to one of a few known unspendable addresses and verify the transaction on any block explorer. – morsecoder – 2014-10-28T04:15:52.507
2just send them to 12xpePzAGeJP68Fe6wfLrRgLwDmEWsYgHy, i'll take care of the dirty business discretely :) – Willem Hengeveld – 2014-10-30T01:47:22.000
possible duplicate of Can a bitcoin be destroyed?
– Stephen Gornick – 2013-02-03T07:59:42.1105@StephenGornick That question asks whether it is theoretically possible. I think we can all agree that the answer to that is "Yes." What I'm asking is whether there's an existing solution for it before I go off and reinvent the wheel. – Nick ODell – 2013-02-03T08:20:40.183