So, I'm brand new to bitcoins and has spent the last few days reading up about it - but I've still got quite a bit of questions - as such I figured I might as well make an inverted guide, where rather than explaining how everything works, I'll ask the things I fail to grasp from reading so far, and to get clear all the vague things that I'm not sure if I got right.
To make it easy for anyone to response and answer the various questions I'll keep them numbered - and preferably edit my first post with the answers if it's possible to edit the original post later on.
Before posting here I read the guide and the first few pages on:
https://bitcointalk.org/index.php?topic=17240.0 but I gave up on reading through all the hundreds of pages of comments - and figured that compared to other things I've read that post might have some outdated info - as well as some questions rising when I tried to follow the guide.
1: Wallets and Private Key(s).How is the connection between the wallet and the private key? If someone gets my wallet.dat - they will also get my private key? as I understand the private key as well as public keys are both stored inside the wallet.dat?
If I lose my wallet.dat.. but still got my private key - can I remake/rebuild the wallet.dat? If so will I get the public addresses along with it? So the question is if I need both the file and the private key to be able to use my money, or if I only need one. Which in turn basically also means weather or not a thief would need one or both to steal my bitcoins. Can I have more than one private key for a wallet, or can a private key have more than one wallet?
2: Public Addresses.I read that to start you get 10 (or 100) generated public addresses - but that you should use a new one for each transfer? how come? why is it bad to use the same one over.. or is it not?
And if so what happens when I've spent the 10 or 100 addresses, how do I get new ones? And what happens to old ones?
Also.. is btc stored on those addresses when transferred? I read something about when you transfer bitcoins later you might have various addresses holding different amounts of bitcoins, and that you will have to chose what happens with the extra bitcoins when sending. Say I have an address with 10 bitcoins, and I want to send 1 to a friend, but keep the 9 others - then I can chose to send those 9 back to myself at another address? I also read that before you could mess up and the remaining 9 BTC would be lost as transaction fee.. but I also think I read this is no longer the case in new versions of the bitcoin client (bitcoin core etc.)? If so.. which programs and versions to stay away from?
3: Generate a good Private Key.I also read that I should make sure to have a good private key - just to ensure it does not translate to a very low number, or a phrase that is easy to break.. how can I check my private key for this..?
4: Passphrase / encrypted Private KeyI read that it's important to encrypt the private key - I guess this means the same as giving it a pass phrase in bitcoin core? If so.. if someone should ever acquire my wallet.dat - would they ever be able to take coins from it given they don't know my passphrase? and likewise, if they get my wallet.dat - would they be able to steal from it?
5: Buying BitcoinsI see one can use a lot of ways to buy bitcoins, I've looked at LocalBitcoins, Kraken, Bitstamp and Coinbase. Considering I live in a country which does not use USD or EUR - what would make the most sense? If I were to invest a lot on bitcoins, say 1-5000 EUR - what platform would it make sense to use? As I understand its not recommended to leave my coins on an exchange - where can I transfer my bitcoins over to a offline wallet on Bitcoin core without having to spend a lot on fees? after all the idea behind bitcoin is to avoid throwing fees at the banks for moving and converting values.
6: Selling BitcoinsWhere is it good to sell bitcoins with ease and without heavy fees? Let's say my coins skyrocketed and I wanted to sell at a peak - and lets say the value had gotten extreme like a million dollar euros - how can I easily sell the bitcoins without issues like limits or high fees? I noticed that several of the bitcoin exchanges got limits for both transaction and per month.. which seem very odd as you'd end up spending years selling your coins if you had a lot.. Also, how to go about transferring the BTC from the cold wallet and onto an exchange or place to sell them vs money?
7: Storing BitcoinsIs it best to store all bitcoins on one wallet, or is it good to split them up? I plan to keep my wallet.dat and or private key (depending on answers on the first posts) on a few usb storages which is not attached to an online computer for backup purposes, so if one storage dies I still got the files. I plan to use a Ubuntu LiveCD to access the wallet while keeping the computer offline to be able to use one of my regular computers to handle wallets in as safe a manner as possible. I wanted for security's sake to compress the wallet.dat with something like RAR to give it both encryption as well as a hard password to crack - this way if someone grabs one of the usb storages they will find a compressed folder which is password protected as well as encrypted - they would then not be able to see what files are within, and have no reason to send it off to some cracking expert to get the files out.. Thus making it very unlikely that anyone would ever catch interest in the file at all. The same goes with if I store a file at something like Dropbox.. if the file is only accessible to me, or up there along with a ton of other files, and saved as an anonymous archived file - it should be pretty safe I'd assume. Is there any major security breach in this? I see that it's best to keep the wallet (and private key) as far away from others as possible, but I also want to have it enough places that I ensure that even if my house burns down I'd still be able to acquire the file (and key) if needed.
8: Bitcoin SoftwareSo I downloaded Bitcoin Core onto my Windows PC and made a wallet as well as syncing the entire 145TB file onto my drive. Now, after reading I made a ubuntu livecd instead and fired it up.. and the guide tells me to install the Bitcoin Client.. which client exactly? As I understand the LiveCD and everything I install on it will be stored in RAM.. and I can't exactly download 145TB into my memory.. so can I use a lightweight Bitcoin client which does not need to be up to date all the time? I prefer to leave the ubuntu livecd running with the computer offline, so I plan to just download all software I need installed on a usb drive (while using ubuntu livecd online first run) in order to be able to install them on each boot.. then I assume I can just copy the wallet.dat over from a usb-storage - do whatever changes I want - then save the wallet.dat back to the usb storage (and backups). And this is where the first questions gets important.. what happens if I mess up the wallet.dat? let's say I make changes, save to wallet.dat but somehow does not get it updated on the usb device - pc shuts down and the changes are lost. if I then made transactions meanwhile on the other PC and transferred money to the wallet, will this somehow cause problems? And what if I overwrite my wallet.dat with an older version by mistake - will new public addresses with coins get lost?
9: Other softwareWhat is possible software to use on ubuntu in order to compress and encrypt files with passwords (alla WinRar). (I've never used ubunto, so perhaps it even has one pre-installed?)
10: Transferring from offline to online computer (and back)So I read I can actually copy over public addresses and contracts or signatures or something of that kind over from the offline computer onto a usb device - then copy them over to a different online computer and make transactions that way - then copy the result somehow back over to the offline computer? How does this work, and what programs do I need to do this? I don't really understand how a contract works, or signatures or which it is - and didn't grasp it from reading the guides. Is this something I do from within the bitcoin client inside ubuntu?
I'll add questions as they arise, and I hope others looking to understand better how to safely buy, sell and store bitcoins will also benefit from this inverted guide as it gets filled with answers
