By "put bitcoins in your system" I take it you mean be able to spend/send bitcoins somewhere else.

If someone hands you a Casascius physical bitcoin with the hologram not disturbed then you own it. You can carry it around and save it or hand it to someone else, just like money.

In order for someone to actually send the value stored in the private key of the physical coin to another Bitcoin address then the hologram must be removed and the private key input into some software which can then send the coins over the Bitcoin network.

As far as I know Mt.Gox allows you to redeem private keys and so does Blockchain.info. Of course both of these services must be accessed online. However, at some point in the future I'm sure there will be software you can download to your own computer allowing you to input a private key offline for sending the value when online again, if it doesn't exist already.

Best answer so far. 

Bitcoin has a way to go for easy security. At this point most everyone involved with cryptocurrency is an early adopter. That can come with obvious rewards, but can also mean inconvenience and outright loss while bumps are smoothed out.

There are stickies about coin safety and many threads on storage options, but I feel there is still room for coin security mishaps.

As Bitcoin adoption expands from those who like getting their hands dirty under the hood, users will become much less knowledgeable about safe usage common sense.

Ultimately each user is responsible for their own actions. I consider a good rule of thumb to be keeping the majority of your coins stored yourself in cold storage. I think it's fine to use services like blockchain.info, MtGox, BTC-e, etc., but don't get lazy. Get in the habit of draining your online third party account balances often. Don't leave them sitting. You never know what can happen to a service, and with Bitcoin a lot can happen.

Next, be extremely careful with your private keys. I think it's a bad idea to put 100% trust in using an online site like BitAddress.org to generate your private keys, for example. There are then two points for leaking your keys instead of only one. To have any high level of trust in generating private keys you should use very trusted software, like the Bitcoin-Qt client, which you download locally so the software can't change without you being aware.

To recap:

1. Only trust yourself with the bulk of your coin security
2. Minimize loss from events beyond your control by draining balances held by third parties often
3. When generating private keys do it as securely as possible; this includes using a local machine free from malware and trusted software which can't easily change without you being aware

That's true. I deleted my post. I'll start a new topic.

Actually I'm the one that started seriously promoting using litecoins as well as bitcoins for reasons I outlined here:

Solution to the Bitcoin Foundation

My forum account is almost as old as yours, but I heard of Bitcoin far earlier (on Hacker News in 2010).

OP you might also ask this in the Alt-coin subforum as altcoins are clearly not yet as mainstream as Bitcoin.

Unfortunately, no it's not possible because you're including data from the block, as a means for block chain verification, in the problem/answer. So any math problem you use has to include that data. Second you have to be able to adjust the difficulty of the problem so that no matter how much computing power goes toward solving it solutions can remain limited over time.

That was an interesting video. The one thing Bob Gelfond was way off on is comparing Bitcoin to Napster. He mentioned "they" and "them" needing to find ways to comply with government regulations or possibly be squashed like Napster. What he doesn't seem to grasp is there is no "they" or "them". Bitcoin is decentralized so different people can use it different ways. Some companies may operate faithfully within the bounds of regulation and some users may not. Bitcoin itself isn't any single group, individual or company.

As for selling certificates worth computing time, that's an interesting idea but it's still based on IOUs. A certificate holder has to trust the issuer will provide the computing time as agreed.

That's a good question. It's hard to know for sure. As they talk about in that Argentia/Bitcoin documentary video the government already takes a heavy handed approach not allowing citizens to buy gold, dollars etc. legally. I think Bitcoin would pose a different challenge, though. Governments can use different tactics to restrict buying of certain things/currencies, but Bitcoin is hard to restrict because it's so much more nimble. It doesn't really exist in physical form and can be transferred as easily as sending email, without middlemen. Argentinians are already buying dollars illegally so I imagine it would be harder to prevent them buying and using bitcoins.

I think Argentina could be first to take off with Bitcoin used for trade and not only speculation.

The reason is their situation, as has been pointed out in this thread. Most other places in the world, especially the US, have complacent citizens who are happy with their finances, relatively speaking. People may admire some of Bitcoin's strengths but see no real reason to use it for exchange when dollars/euros etc. already work so well.

Argentina is different, though, and people there have a better appreciation for alternatives to their national currency. Indeed shortly after their economic crash in 2001 people desperately tried making other trade/money systems. These failed quickly as they were no more sophisticated than what could be designed and printed, and therefore easily counterfeited, by home computers. So Bitcoin might be very well received.

The other reason I think they're particularly well suited is their economy exists at a lower, truer level. One might easily find someone willing to trade personal services like sewing, nanny, tutor, etc., anything of basic value to begin building a foundation of economic activity based on a currency like Bitcoin. That would mean those citizens could really begin to thrive.

It would take that on a growing scale to affect the Bitcoin US price, though.

A nice Bitcoin/Argentia documentary video for those that missed it:

http://www.247btc.com/bitcoins/154/bitcoins-in-argentina-a-brief-documentary/

I don't have a problem with Ripple making an entrance to the monetary market. I also don't have a problem with its creators pre-mining or centrally administering it. They are free to do whatever they want, and I believe in competing currencies. What I would have a problem with however is purposeful misrepresentation. If the Ripple guys want to maintain certain privileges that's fine with me, but be forthright about it and let the market take over from there.

That makes no sense. Everyone knows the best way to root out bugs is to make something open source.

Money on the other hand is a strange thing. Once it has traction and is widely accepted it's hard to take that away. Look at how inferior fiat money is, yet how hard it is to dislodge it.

Exactly. That or lulling them into a false sense of security. That's why I say installing more software isn't the route for security. It's sort of like the mess we have now with the Fed. The only thing the Fed can do is print more money, which doesn't solve the problem because the problem is larger and within the system itself. You need to correct the system.

I actually thought of starting a company that sells guaranteed virus-free computers. It basically stores files in a compartmentalized way then clean re-installs the OS with a click or on schedule. With computer security becoming more important as technology integrates more into people's lives, and now directly deals with money I think it may be essential.


Yes, but others reading and seeking advice may. Thanks for asking.

What are you talking about?

I guess you mean people that wannabe safe.


That depends on the situation. Computers are cheap, especially one which is only going to run offline for dedicated purposes needing minimal hardware specs.



My method is a no brainer basically guaranteed secure way to not lose bitcoins. That's all I care about. Whatever you want to say about the online computer is not my interest. Tell him to run whatever you like. It doesn't matter, because like I said the offline computer (spending bitcoins) is secure regardless.

This is unnecessary. In general, you should never depend on more software to secure your system.

As long as the OP had no viruses on the offline computer before setting things up (do a clean OS install), disables autorun to protect from a USB transfer virus, and encrypts the offline computer with a strong password to guard against physical use he is perfectly safe (provided his paper backups remain so) because the private keys to spend coins are not accessible to the outside world, period. It doesn't matter if the online computer ever gets infected. No coins can move without being signed by the encrypted offline computer.

That security is pretty good and you have a very low chance of losing coins that way. However, there are a couple weak points to be aware of. The first is your printed private keys. Remember, private keys unlock the bitcoins so if someone learns your private keys they can steal your coins regardless of your computer setup. Keep those maybe in a safe/safety deposit box, and guard against cameras/binoculars through windows etc.

Next, the one flaw I see in the Armory setup is shuttling data back and forth by USB which subjects even an offline computer to autorun viruses. Be sure to disable autorun.

Also, remember you must guard against someone using your offline computer. To guard against that be sure to encrypt the wallet with a strong password and protect the password. Then even if your offline computer is stolen your coins are safe.

Last, you may want to check this thread started by someone thinking of starting a Bitcoin Bank. In particular I agree this quote is the most secure and efficient method for storing coins:

Awesome! This is why Bitcoin will succeed sooner than later. People are actively engaged with it. You are not alone.

Yes every 2016 blocks is right. I included the target link but I probably should have put that in parentheses too.

The super horsepower device would quickly be detected and probably provoke a response from the Bitcoin network of support. The super device might win a fair number of blocks before the Bitcoin network caught and surpassed it, but it wouldn't mine all the bitcoins which is the original point.

The Year is a projection. Bitcoin doesn't operate based on strict dates. Time between blocks is supposed to be every 10 minutes, but has been as low as 2 minutes and as long as 2 hours if I remember correctly.