Step-by-Step Guide for Distributing Bitcoin
While current events have made this problem more timely, this paper is not intended for the protestors in Canada, but rather as a guide that anyone can use to distribute bitcoin in a trust minimized way to a large group of people so that donors or other interested parties can have a high degree of confidence the bitcoin reached the intended parties. Other use cases include distribution to homeless or underprivileged children.
This is more like a Mr. Beast project than a high security and privacy project.
Note: This project assumes funds have not been disbursed as they were received and the goal is to distribute a large amount to a large amount of people as quickly and easily as possible. But it would be worth considering distributing donations as they arrive.
* Avoid any public perception of impropriety or insider theft.
* Distribute bitcoin to non technical users quickly.
* Minimize the labor involved.
* Maximize transparency.
* Ensure that every last satoshi is not lost. If 80% of the bitcoin reaches the intended recipients and is not discarded it is a successful project and exceeds the effectiveness of most charitable distributions.
* Provide the recipients with excellent privacy protections. If they receive the bitcoin and are able to spend it, the project is a success, but we will include instructions for additional learning.
* Support illegal activity. This process assumes all activity taking place is legal. It prioritizes minimizing the risk of theft by volunteers over privacy and security.
All equipment should be purchased prior to beginning the procedure.
* Two smartphones (iPhone or Android)
* A laptop that can run Tails operating system. Almost all laptops purchased that sell with Windows can run Tails.
* Two printers, printer paper and ink. Assuming 200 recipients, 1000 sheets of paper and enough printer ink to print 1000 full text pages should be purchased. The second printer can be left boxed and returned if unused.
* Tools to destroy the printer and (optionally) destroy the iPhone and Android.
* Large pliers (3x)
* Leather gloves that cover wrists (4 pair)
* Metal cutting shears (4x) - the most expensive available (cheap shears are dangerous and gap when cutting)
* Screwdriver screwdriver set (1x)
* 3 USB drives for use with installing Tails (two are for backup).
* 10 DVD disks.
* An Internet connection via Wi-Fi (for downloading software and broadcasting transactions to the bitcoin network). A hard wired connection isn’t needed for the laptop and the phones.
Identify Intended Recipients
In order to have confidence the funds were distributed to the intended recipients we need to find a way to reduce the likelihood the funds are distributed to cut-outs that then return the funds to the fund raiser.
The criteria for distribution needs to be as difficult to meet as possible.
In the case of the truckers protest in Ottawa we can take advantage of the cost of acquiring a semi-truck and getting into position to receive a donation.
The goal in that case would be to distribute bitcoin to owners of trucks who have been present at the protest for at least 5 days and are closest to the capitol building.
Because the donors need to be confident the procedure is followed correctly it is important to identify at least 8 people that can be trusted to follow the procedure and warn donors if any part is not followed.
Unfortunately this process requires trust and the only solution to mitigate this is reputation.
Wallet Setup Volunteers
These volunteers will create the envelopes handed out to the truckers.
Volunteers need to remain in the room until the process is completed with no more than one leaving at any time to use the facilities. Food should be delivered to avoid having more than 1 of the 4 people outside the room at any time.
These volunteers will distribute the envelopes to the truckers. The wallet setup volunteers will also act as distribution volunteers. This will provide a total of 4 volunteers to distribute wallets.
As a result each volunteer will only need to hand out 25% of the envelopes.
A minimum of 4 escort volunteers, but preferably 10 will escort each distribution volunteer. The main purpose of the escorts is to establish credibility and prevent a casual bag snatch thief. They should stand behind the distribution volunteers and “keep their head on a swivel.” Preventing armed robbers or anything that serious is outside the scope of their job - causal kid stuff type protection only.
If there are at least 4 escorts that can focus on security then others can also be used to record video of the distribution. Ideally at least 2 will record in case a phone is dropped or a recording fails. Recordings will be posted after the fact to social media - not streamed.
Recruiting additional escorts from among the people receiving the distributions is a good idea if they are willing. A large, friendly, crowd of people that a bag snatcher would need to navigate is the best prevention.
When the intended recipients are not prior bitcoin users and the total amount of each distribution is under $10,000 the goal is to get those funds onto a phone wallet that is properly backed up on paper.
This is because a phone wallet is the most user friendly bitcoin wallet available, they already own the equipment and are comfortable with it and it makes spending bitcoin much easier than any other option.
The amount distributed needs to be substantial (more than $1,000) so that it justifies the work involved for the recipient to learn how to use bitcoin, hold the envelope until his neighbors confirm that it is valuable, and seek out and transmit to his neighbors information about the envelopes.
Provide Recipients Loaded Phone Wallet Backup
If the distribution is to more than 50 people, to minimize time and labor, the phone wallets should be pre-created. A volunteer will create a phone wallet and print out the seed words and deposit a small random amount of money (under $100) and erase the wallet. The next volunteer will restore the seed words, verify that the wallet has a non-zero balance and deposit the remaining funds into the wallet before erasing it.
Instructions for restoring the wallet should be included and should be as simple and direct as possible. Additional resources for learning about bitcoin can also be included, but it should be a single URL and be clear that this is not needed for obtaining or spending but just for expanding their knowledge if interested.
Once the volunteers place the instructions and the seed words into the envelope and seal it, it should be numbered and squiggly random lines should be drawn on the envelope to help with later identification. Finally, a photo of the envelope should be taken and posted to social media before distribution. The purpose of this is to allow recipients to complain on social media with reasonable evidence if they do not receive the funds.
The four volunteers should hand out envelopes and video the interaction. They should be sure that they capture the general area, the face of the recipient and show the distribution criteria has been met. For example, at the trucker protest the trucker should confirm that this is his truck, he is close to the capitol and he has been in place for 5 days.
After the distribution is completed the videos should be uploaded to social media.
While this is not good for privacy, the priority is to minimize the likelihood that volunteers steal the bitcoin directly or use cut outs to do so.
Destruction of Devices Used
Devices used in setup need to be destroyed or erased to ensure that the funds are not moved out of the recipients’ wallets after they are received. This could happen weeks or months after the recipients believe they have the funds in their sole possession.
The printer is the single best device to steal because it holds a copy of all of the seed words. The volunteers should work together to destroy the printer.
All chips need to be destroyed and in the case of a laser printer the cartridge needs to be destroyed as well.
The iPhone should be factory reset 2 times and destroyed. Destruction by breaking using pliers, removing the battery and then microwaving after would be preferred, but might not be a good option if a cheap phone isn’t available.
Factory Reset iPhone
Open the Settings app, tap General then “Transfer or Reset iPhone.”
Tap Erase All Content and Settings.
On the “Erase This iPhone“ page, tap Continue.
Enter your passcode.
(Optional) if the phone starts backing up, Tap on Skip Backup.
(Optional) if the phone asks to disable features like “Find My”, enter your password then tap Turn Off.
On the confirmation screen, tap Erase All.
You will see an Apple logo and progress bar appear several times as the phone resets. This process may take up to 15 minutes.
When the screen shows “hello”, swipe up from the bottom of the screen.
Tap English, then choose your country.
Tap “Set Up Manually.”
Choose Wi-Fi. Your phone will then activate with Apple.
On the Data & Privacy screen, tap Continue.
On the Face ID screen, tap Set Up Later.
Create a temporary passcode.
Re-enter your passcode.
Tap the option “Don’t Transfer Apps & Data”.
On the Apple ID page, tap “Forgot password or don’t have an Apple ID.”
On the next Apple ID page, tap “Set Up Later in Settings.”
On the confirmation popup, tap “Don’t Use.”
Agree to the Terms and Conditions.
On the “K