Bitcoin Forum

Hi

I've been into Bitcoin since May 2011, but I haven't created an account here until now.

I read some topics here and some things come up over and over again, so I thought I'd write something that would have been useful to myself if I were a total Bitcoin-newbie now.


1) Stay away from mining

If you wanna try mining just to see how it works, that's fine of course. I haven't mined since 2011, more recently I owned ASICMINER shares, but now I stay out of all mining companies. As far as I can tell it's a gigantic lottery right now, maybe others can see more clearly. But don't mine yourself, you'll be up against professional miners with increasingly slim margins.


2) You're still an early adopter

Everybody wish that they had been earlier into bitcoin, it was the same when I first started. But truth is it's still early.
Don't be tempted to invest in altcoins instead to feel more like an early adopter. A few altcoins have some technical novelty (although not a percent of a percent of the innovations that bitcoin had when it came), but it is very obvious that the vast majority of altcoins came into existence because people were annoyed that they missed the bitcoin gravy train.


3) If you want to get your hands on as many bitcoins as you can you should...

Not visit faucets, not look for giveaways, not beg, not mine, but...

Get a regular job, don't buy unnecessary shit and save in bitcoins. Sorry, but the "easy solutions" lead nowhere like always in life. Register on an exchange and buy BTC for fiat. This is a marathon, not a sprint.

sounds like sound advice.

thanks.

it is a bit like a gold-rush. In the very very beginning (before the rush) you could make good profits while starting from close to zero investment, now you should be prepared to get your calculator out and make a decent business plan. If you dont or if you dont manage to aquire sufficient starting capital (in fiat) you lost already.
So it seems now the best way to make a good profit of this rush is to sell "shovels"...

Apart from that there is also the intrinsic value of a monetary system out of governments reach, which is best protected and served by using btc to actually buy and sell stuff.

If everyone gives up mining bitcoin will end up centralized.

If you hold a sizable amount of coin I think it's only wise to invest in network diversity a little bit. You will not get rich though, that's for sure.

So true, if everyone would just buy BTC and holds, Bitcoin would not have future - like pyramid scheme

That would be true,....IF mining wouldn't be centralized pretty much already.

Most of todays "miners" actually aren't miners, they're just hash-sellers, selling their ressources to a pool.
The only real miners are the operators of those pools.

Great advice! I agree with all the things you have talk about especially mining.

Agree  ;D

I would advice also to read information on the technical forum.

It pays back in the long time , although appear for some difficult ;D

Apart from never-going-to-happen (just imagine everyone gave up mining and only you would continue...),
the term "pyramid scheme", although obviously not unpopular amongst fraudsters on the internet, gets thrown around a bit out of place. Don´t you think?  ;)
It´s the same with oceans. They are all salty, but not everything salty is an ocean.

BOOM! Extremely sound advice! Great post! Thank you!!


Following on that: learn how to secure your money. That can't hurt and will pay off. Get comfortable with the security measures you have.

Brain wallets, paper wallets - extremely valuable tools you have, but know their weaknesses (insecure computers, insecure code, weak passwords). Learn how to use a linux live CD. How to create and manage cold storage wallets.

Even if bitcoin dies, same principles will apply to all cryptographically protected currencies.

We will see, but I don't think that people coming today are still early adopters.

Everyone should stop mining, then it will be good for me. Less difficulty to mine. So all newbies don't mine and tell all your mining friends to stop mining.  ;D

How exactly is mining centralized now? Sure, miners on a pool don't know what block they are working but that doesn't mean a pool of miners can't democratically vote on decisions of a pool by moving to another. If tomorrow BTCGuild plus a few others decided to start pushing 50BTC block rewards people would catch on quick and withdraw their resources from the pool. If we ever had a hard fork I know I'd sure want one or two million people choosing which pool and therefore which chain to mine instead of a few dozen people.

I mine, and I have what I think most true bitcoin newbies would consider quite a bit invested in mining. I still want more people to start mining, because I believe that more individuals (no matter where or how they mine) invested in mining will keep the coin more stable and in the end that is best for all.

I agree. Bitcoin is totally mainstream now. Bitcoin has been around so long that even my grandmother has a wallet. Bitcoin is so last decade.

I read somewhere, "when mainstream media is talking about it, any real investor knows its way too late". I couldn't agree more. The thing about Bitcoin is that, it still has potential to rise if the Cyprus scenario happens again elsewhere. What are the chances? Well, no one really knows.

Compared to those days when there were no pools (and yes, i've been around at that time), mining really is pretty much (you missed that) centralized now, done by only a handful, or maybe a couple of hundred pools.

Of course you can still switch to another pool if you don't like the decisions of one pool-operator, but first you have to actually know about those decisions.
However, it was way less centralized back in 2010, although there's way more "miners" today (rather call them "workers", that's more accurate).

Maybe I am not getting it, but isn´t "going mainstream" exactly what we all had hoped bitcoin would do?
Without busineses and customers using it on a broader scale it has no substantial value but the hope that it one day will.

Maybe the goldrush and time of extreme profits is starting to end, but that is actually a good thing from the viewpoint of the principles bitcoin was constructed on.
At least I see it that way.

You aren't making any sense, then. The only sense I can make out of that is you disagree because I said "miners" and not "hash-sellers."

Fine, I'll rephrase my statement for the been around forever guy. "Bitcoin will end up centralized if hash-sellers stop selling." Excuse me, but I didn't think a newbie would understand that.

So since mining is "pretty much" centralized I guess people with an interest in bitcoin should give up and let it become totally centralized.

And there are 7 pools that make up around 75% of the network hashrate, kind of a far cry from a couple hundred.

If I were a BTC newbie today, I think the biggest piece of advice/wisdom I'd try to impress upon myself would be to treat BTC with much more respect, and to hold a lot tighter to my initial investment until I knew more about what I was doing.

Yeah, but that's pretty close to only a handful, isn't it? ;)

And that was exactly my point,
mining has once been done by hundreds, or even thousands of individual miners and now is done by a handful of pools,
so it doesn't end up centralized, it already is, no matter how many workers sell hashes to those pools, no matter how high the network hashrate.


However, if everyone stops mining, bitcoin is instantly dead anyway. 8)

I agree, the main bitcoin faze has been covered by time
Otherwise if you really want to mine you have to have at least 500 GIga HAsh for it to be worthwhile :(

dont say that. it would just be "sleeping" ;)

Just wondering if i would be able to Exchange my RSGP for bitcoins?

all bank system is a scam in some way.
2009 crisis prove it.

I can certainly support that one. I've been playing with bitcoins since when they were 10$ each, and the only time i got anything worth mentioning from faucets was the time i reported a serious bug found in one of them.

Faucets only exist because it's obvious anyone can afford giving away a tenth of a cent without thinking too much, even if they don't get five to ten times as much via advertising.

You want to get paid? Go and do something useful for others. That's how the economy works, after all.

As they say there's no such thing as a free lunch.

Faucets do, however, offer a free ten-thousandth of a lunch.

So if you're quick and you can do a faucet in 10 seconds, your free lunch costs you the measly sum of approximately 6 days of clicking. With no sleep.

What a bargain! :p

fully agreed on that.
there are still lots of opportunities* in the btc world to make a good profit.

*:
-think like an entrepreneur, not like a crook.
-make something that you are missing (others might be missing it aswell and might be willing to pay for it).
-use btc in the old-fashioned buy-and-sell-stuff way.
-earn in fiat (as op said), invest a third of your savings (really just the savings part of your income!) in btc.
-diversify. do all of the above.
-do not get greedy. you will then cause miscomfort to others (karma goes to hell) and very likely be put out of business by someone even more greedy than you.

but that´s just my 0.005 btc
 

Yes Bitcoin rules

I'm just talking to newbies here.

I don't invest in mining cos because I think there is too much people throwing around money cause it's the hot thing now. In general I am amazed at the willingness to take risks without compensation. I don't follow it very closely now, maybe it has gotten better last few months. I'll wait until the dust settles and invest then, mining cos are almost the only companies that you can invest in if you believe in a significantly higher bitcoin price in the future.

(For those that haven't thought about the consequences of having shared denominated in BTC: If you buy shares in bitcoins in a cheese-company and they have income in $/€  then their income seen in BTC will halve if the bitcoin price doubles, and the shares will go down. Mining companies have their income in BTC and some expenses in fiat, so they will only benefit from higher btc-price)

Yeah, see that's what I disagree with. If those "handful" of mining companies everyone invests in end up with 75% of the bitcoin network they could do practically anything they wanted making bitcoin centralized. They could block certain transactions, refuse transactions without fees that meet their demands, and at the worst fork the chain. All could be done with profit driven greed, or political pressure, anything you could think of really.

That is how bitcoin will end up centralized. Because although a few hundred thousand people with USB block erupors mine in pools they can easily move to another pool when theirs decides to try any funny stuff. So while some people might think that means it's already centralized (or not, I can't quite figure it out  ::) ) it is easily broken up and moved to greener pools when the need arises.

But if everyone happily buys into mining contracts there won't be any mining hardware to compete with.

So, like I said before, if you believe in bitcoin and aren't in it expecting anything more than break even mine away. It's never been easier to start mining.

I think you're gonna have to be a big player that can order large quantities from TSMC / GlobalFoundries / etc real soon. But I'm not worried for mining, in company-terms it is low entry, designs are very simple compared to gpus/cpus. I just hope that economy of scale doesn't somehow give too big of an advantage and we end up with three-four mining cos, that would be a disaster for bitcoin to the point a protocol change might be necessary.

As for concentration right now, imagine what a high rank Chinese politician could do to bitcoin. Is it possible to see how much mining there is within China's borders somewhere?

Yep, good one as well. Also, understand how change is sent back to you on a new address and when that makes your old backups obsolete (and when it doesn't).

PassTheAmmo, thank you for the post. You have written some ideas which came to my head after quite long 'test ride' in bitcoin world.

And once again for all newbies: do not use faucets. It's waste of time. I remember myself quite long time ago, every month I was learning something new about bitcoin economy and had few moments to say: I was stupid, today I earned more bitcoins than in all days before.