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Unfortunately I am way behind the times when it comes to Bitcoin. I would like to open an account so I have access to buying Bitcoin when need be and have the ability to send and accept Bitcoin. I really have not done my homework or researched the best places to do so. I have an account at Coinbase but have not funded it.
Is Coinbase a reputable place to have a Bitcoin account? If you do not recommend Coinbase where do you have an account or where would you recommend?
Thanks
Yes, you are behind as you say, but good choice to jump in still :)
There is nothing like "opening an account". Bitcoin de facto does not exist. To have a bitcoin means that you have access to part of blockchain and you can give the access to someone else.
It is very stupid to give your bitcoins to anybody else, like when you have money in a bank. Yes, most people will do it this was, like with Coinbase, but there is no reason for middlemen. You can have the private keys only for yourself.
There are two reasons why to do that:
1. Nobody can ever steal your "bitcoins", unless they steal your privatekeys/hack your wallet.
2. Coinbase and other online wallets are already regulated and it will be even worse. Gamblers from US were complaining to me, that coinbase (pushed by US gvmnt) denies them to use bitcoins for gambling. Incredible but true. No need to go through this.
So I use for example Electrum wallet. It is safe, very easy and intuitive. There are 2 ways how to do backup of it. This is like my cold wallet. Then of course for online transactions some online wallet is handy. I use the one at blockchain.info, but Coinbase will be fine as well.
Maybe you are asking where to buy Bitcoin. For me Kraken is perfect, the best place but for EUR <-> BTC, not for USD.
Bottom line is that nobody should ever leave most of his bitcoins at online wallet or at exchange, like many people did it at MtGox.
Coinbase seems to be the front runner, their vault allows people to lock their bitcoin from them from 48 hours. I have heard good things about StrongCoin as well
Hope this link will be useful for you https://bitcointalk.org/.
I suppose this forum is the biggest(best) info source for Bitcoins and other crypto currencies.
Another good forum to keep an eye on is http://www.bitcointrading.com/forum/index.php
A useful guide to choosing a wallet is https://bitcoin.org/en/choose-your-wallet
No offense, but I think everybody can google around.
For the wallet, it is important that it is offline, as I said b4.
And then it has to be certified by Bitcoin community + it MUST allow user to export his own private keys. The private keys are the control of everything.
As for forums like bitcointalk. I am a member from 2011 and honestly it is a weird forum. The few guys who are not complete idiots stay rather silent and most of the posts are some kids living with parents, who speculate with their 30 USD and have no clue about business and other things. On the top they are the radical leftists in the most stupid way + doomsayers. If they could they would rather hang everyone from this forum, everyone who works and everyone who has more than 30 USD. Their affection to btc is some crazy hope that once btc will take over, they RESET will come and everyone will be equal. So of course, as more and more serious people invest to bitcoin, they feel just wrath.
There is not much useful information about Bitcoin. Just very silly discussions as I just described + many affiliate sites that want you to spend money with them (as we know, it is a complete joke, like with gambling).
I read only coindesk.com, but the quality of articles varies a lot. The discussions are usually pointless even there. Then I read trollbox at btc-e.com, it is at least fun.
But the best idea is NOT to listen to anyone and use your own brain as much as possible.
Zero offence :), I was member of bitcointalk in 2014 (well, still I am, but no active), when some guys started the "coinyecoin project" and after their crash I lost my interest. I thought maybe there could be some new, good opportunities related with this new coin, but C. West "killed" them all.Quote:
Originally Posted by Sherlock
I just was collecting info about cryptocurrencies...
Hmmn..... so I think I get what you are saying for the most part. So I can go buy BTC at Kraken for example. Then the code they give me which is my "ownership" of the BTC I can keep offline? Then if I ever wanted to pay someone or use it to buy something or exchange it for dollars I would use an online wallet like Coinbase? Man I am so far behind - haha.Quote:
Originally Posted by Sherlock
I get your point of MtGox and it is a very good one, but the code I have which gives me ownership of the BTC still needs to be held somewhere right? I guess that is where you say Electrum comes in? But is the difference between leaving my BTC at Electrum verses a Coinbase?
Sorry if this is making no sense, just trying to get my head around this.
There is no need to have more cryptocurrencies, like there is no need for normal punter to bet elsewhere than at Bet365 :) It is just a common sense, that when there will be some money independent on states, some really universal way of payment, then there is no need for altcoins to exist (except when they are used for alternative movement of the primary currency or for "washing the dirty bitcoins", but in that case the alt-currency is pegged to the primary one and is not independent).
The problem with those bitcoin forums are the people. There are those kids, who are fiat haters - alt lovers, then some beggars and thieves and then the libertarian freaks. So if there is some newbie who actually does business (like everyone here) and is attracted to bitcoin and then this person goes to those bitcoin social networks, then he thinks they are all stupid (mostly true) and therefore bitcoin is a stupid idea (I honestly think that is not true). And I think this is not good, because bitcoin needs at this stage the people who deal with real money. The rational skeptics.
Yes you can buy at kraken, or rather at Bitstamp or Bitfinex with USD. You just send there wire and then you go to something like forex market https://www.kraken.com/charts where you can put your order. Once your order is matched, you will see immediately your BTC balance and you can withdraw it for a very little fee (0.1 USD or so). The fees for exchange varies and consist from 2 fees. For the deposit and for the trade. Alltogether it should be like 0.3-1.5%. Kraken btw. just lowered fees significantly from August and allow free SEPA payments, so it is unbeatable.Quote:
Originally Posted by TravG
The withdrawal then works in this way: you set up the wallet before at your computer (or there are alternative ways). That wallet is for example the Electrum. It is just a software that you install. This wallet generates the bitcoin address (the very long string of random signs). And that bitcoin address you then put into the kraken/bitfinex/bitstamp, while you withdraw your exchanged bitcoins... and in a very short time the bitcoins will appear in your Electrum wallet. You can then send them to any other address. But this way you can say, that the bitcoins are yours, because only you have access to them. The "password" to the bitcoin is called "private key" and you can always export or see the passwords for all your bitcoin adresses in the wallet and the most important part here is that ONLY you can see it.
When you have account at Coinbase, it is THEM who have the private keys and you must trust them that they will handle it well. And this is a bit problematic, because there are always some employees... and bitcoin transactions can be anonymized, so the money is in much greater risk than for example at your bank account, where they are always traceable. Also the bitcoin addresses are at uch higher risk of hack, like it happened to Bitfinex few months ago (lost 5M USD), because they have much larger balances and they are not MrNobodysAddress like your address at wallet can be.
Does it make sense?
Btw there are 2 kinds of backup of the Electrum wallet.
1. You export the addresses and private keys and put it to safe place, like strong passworded memory card.
2. You can create so called seed. That seed is either QR code or 12 words. You need to know the 12 words or to have the QR code and you can always create from that clone of the wallet that will have exactly the same addresses and balances.
It does make sense. Thanks for taking the time to help me understand this - I appreciate it.
Thanks again!
You are welcome. Because this feature of bitcoin or cryptocurrencies is the feature that makes it so awesome. It is known that bitcoin does not have central issuer and that is taken as main advantage of it. But that is not only that. It is also that there is no need for central authority to keep the records of transactions and cryptocertificates on which the transactions are based. Like each bank at its central has a safe with those certificates and only very few people can access them, because everything about our money flows is based on security of those certificates.
For cryptocurrencies the certificates are somehow "spread" across the information inside blockchain and the key to that are just the private keys. And everybody can have those keys. This is what makes crypto really revolutionary. Because both Google or Facebook or big corporations will try to create their own currency, but they will be the central and vulnerable authority (exactly like the central and commercial banks that create money now) that will issue the currency and guarantee the transactions and the access to the money. So those "digital money" is still the old concept, where people have no choice than to store the money by some authority. Cryptocurrency is the revolution here.
With Bitcoins there is the freedom to step aside, but the online wallets have still limited value value for lazy people who forget passwords all the time.
Security note:
It is better not to keep the wallet at the computer/phone one uses or takes out of house or connects to internet on regular basis.
There is also so called "cold wallet" which is even safer.
Third really safe solution where to store YOUR bitcoins are hardware safes like that: https://www.bitcointrezor.com/ but I think there is some backup option always, where the manufacturer can make a copy of the safe and I did not like this much, so I do not use it.
I have the wallet at the old computer I use only as Bitcoin storage now, where most of my btc is. And I keep little money (that I can miss if they are stolen) at the online wallet, which I use to pay things like VPN just with simple login. But the basic rule is to have more wallets/storage places at more devices and the most vulnerable device has to have only little money. The online wallets are always vulnerable.
+ there is an extra reason why not to use the online wallet for gambling affiliates from the US. Now some big affiliates like 5dimes, commission.bz, Heritage? pay with bitcoins. It is a great way how to pay people from US for US traffic that is the "bad actor". But since the companies like Coinbase must comply with UIGEA and they do, anything about gambling is in grey area. The addresses of bookies are known and seen, so when you receive the money for any reason from there, you might have troubles. But if you use your own wallet, there is nobody, who can tell you anything. Ever. That is the wonderful thing.
In 4 posts Sherlock gave very good advice and a summary of how to store Bitcoin safely - thanks for that.
But he also inadvertently explained why BitCoin is NOT going mainstream any time soon.
It may be or may not be right. It is hard to predict eruption of volcano, collapse of economy or adoption of any currency.
It is not necessary scenario for Bitcoin to work well and appreciate only under condition that it will be mass adopted. That is what I like about it. It is the common Bitcoin myth, that tomorrow everybody will pay with that. It is the stupid thing the hardcore bitcoiners say and that is why is better not to listen to them. Drugs and gambling together is a big market that needs its currency as the AML procedures get tougher and tougher with normal money.
Mass adoption would be an extremely nice bonus even for small holders, but it is nothing that should be taken into consideration now when there is a talk about bitcoin future. Most people do not own investment gold and it still has crazy value. The businesses can run B2B on Bitcoins in large transactions for example, so it would have effect on everybody (lower costs), but without mass adoption. Too many possibilities. Nobody expected darkmarkets, when bitcoin was new concept, but as bitcoin exists now and has value of 280 usd now... because of marihuana & cocaine junkies. Who knows what for example partial adoption in gambling industry on markets like USA can do? Who knows what would happen if Varoufakis will be at power again and he will have no other choice than to step out of Eurozone and adopt BTC in Greece? Who knows what can happen if the desperate states of the world will finally start an inflation and interest rates will be below inflation rate?
To estimate what will happen with bitcoin is like this: https://en.wikipedia.org/wiki/Black_swan_theory
Coinbase seems the best option if I'm honest. I've been on Coinbase for a few months and had no issues whatsoever from it. It's better than most.
Sherlock, not for the first time, your posts have been a really valuable source of information and opinion. Really interesting stuff.
Thanks. I see here demand for the balanced info (not too shallow, not too geeky and technical), so this thread persuaded me to buy some bitcoin related domains. I am sorry in advance if I said something wrong. I hope it will serve as introduction of selfstudy. I was the same - my girlfriend had to tell me some basics. It is always hard to make the first step into a completely unknown area. I remember how hard was to make 1st affiliate account. The same was with buying and then receiving and sending 1st Bitcoins. Now I even have 1st employee I pay with btc. It is easier than ewallet p2p. But pls remember everyone: bitcoin will be either something even more important than it is now (and will appreciate greatly) or it will be a complete disaster (and the value will be zero). The probability of the disaster is still much greater, even when with every day of btc survival it is getting smaller.
Next year will decide a lot, because of the bitcoin halving. A great appreciation should come. A great pressure from states will come. World economy will be in greater ****. 17 of 21 M bitcoins will be mined, so the miners will get dependant more on fees of transactions than on bitcoins mined, which will affect whole ecosystem I think. (The miners are people who mine the bitcoins, but they make money not only with bitcoins mined, but also with fees of transactions that are so far very low. The bitcoin mining process is a process where not only the new bitcoins are mined but also the transactions of the existing bitcoins are processed. It is the same procedure - the mining and processing.)
One of our objectives at Coinbase is to add as many funding mechanisms as possible to make exchanging digital currency easy. As a step in that direction, Coinbase now accepts PayPal (for bitcoin sells) and credit cards (for bitcoin buys).
Sherlock, question: why aren't you worried about the wallet the same way as with exchange. You said that there are many employees that can run away with your money. Can't Electrum people do the same with your wallet?
Thanks!