I Kind of get it. . . Please help me that little bit. . .

[zo0omer]

Hi all,

Just wondering if I can get a bit of Help please - I feel as if I'm missing something here.

I've downloaded Bitcoin - Wallet (currently syncing with the network, its done about 90%).

I've signed up to a pool (Mt.Red) and have created a worker.

I've got GUIMiner and have installed all the correct drivers - Hashing at about 310mh/s.

I Can withdraw my coins to an Address using Mt.Red, but I'm not quite sure where the wallet comes into play?  I've seen people talk about backing up the wallet?

After i withdraw my coins to at address using Mt.Red, what do I do next?

And after that, how do I get my coins onto something link Mt.Gox as so then I can cash these coins out for $$

Cheers,

Steve.

[Foxpup]

I Can withdraw my coins to an Address using Mt.Red, but I'm not quite sure where the wallet comes into play?

Your wallet contains the keys to your address(es), allowing you to spend coins sent to them. Click Recieve Coins in the client to see a list of your addresses. You will already have one address by default, and you can create as many more as you want.

I've talked about people backing up the wallet?

Because your wallet contains the keys needed to spend your coins, if you ever lose your wallet, you will lose the ability to spend your coins. This is why it is so important to back up your wallet. But before you do that, you should first encrypt your wallet, otherwise anyone who manages to gain access to your wallet will be able to steal your coins. Once your wallet is encrypted, a passphrase is required to spend your coins (but do not forget your passphrase - if you do, you won't be able to spend your coins).

After i withdraw my coins to at address using Mt.Red, what do I do next?

Once the coins are in your wallet, you can do whatever you want with them. Buy things with them, donate them to charity, sell them for dollars, whatever. When whoever you're doing business with is ready to accept your bitcoins, they will give you a Bitcoin address to send your coins to. Click Send Coins in your client, enter the address they gave you and the amount of bitcoins then click Send. Easy as that.

And after that, how do I get my coins onto something link Mt.Gox as so then I can cash these coins out for $$

After you create an account on an exchange site, you will be given a deposit address to send your coins to.

[DannyHamilton]

I Can withdraw my coins to an Address using Mt.Red, but I'm not quite sure where the wallet comes into play?

Your wallet serves several purposes.

It provides a way to generate addresses for receiving coins.  You state, "I can withdraw my coins to an address using Mt.Red," but where are you getting the address that you will use?

It provides a way to keep track of the total coins that you have control over if you happen to have them spread out over multiple addresses.

It provides a way to transfer coins that you have control over to a new address (such as an address at Mt.Gox).

I've seen people talk about backing up the wallet?

Note that all you need for receiving coins is a valid address, but if you ever want to send those coins anywhere, you also need the specific private key associated with that address.  Anybody who has that private key has control of those coins and can send them.  The wallet stores all the private keys associated with the addresses that it generates, and provides a way to use those keys to send the coins.  This means you want to protect the wallet (or at least the private keys that it stores) from loss and from theft. There are multiple methods of protecting the private keys.  Encrypting the wallet is one method that protects it from theft.  Backing it up is one method that protects it from loss.  Depending on your technical proficiency there may be better methods of accomplishing both tasks.

After i withdraw my coins to at address using Mt.Red, what do I do next?

That depends on what you want to do with them.  There are merchants and individuals that accept bitcoin as payment, so you could just use them directly for purchase of goods.  You could just keep them for a long time and hope that bitcoin continues to grow in popularity.  As bit coin gains popularity, the usefulness for purchases will grow and the exchange rate for other currencies will improve.  If you want to convert the bitcoin to some other currency right away, then you can transfer them to a currency exchange (such as Mt.Gox) and then exchange them.  You will then need to follow the instructions of whatever exchange you use to receive the changed currency.

And after that, how do I get my coins onto something link Mt.Gox as so then I can cash these coins out for $$

If you want to use Mt.Gox, start by signing up for an account at their website.  Then provide them with all the information that they require for withdrawing.  When you log into the website you should be able to find a deposit address that Mt.Gox will provide you for transferring bitcoin to them.  You can use the Bitcoin Wallet to transfer your coins to that address.

[DannyHamilton]

It seems that Foxpup is a bit faster than I am.

 

[zo0omer]

ok so...

I create an address with my bitcoin wallet and then i send my coins from MT RED(mining pool) to that address.  The coins are then stored in my wallet correct?  I can then send the coins from my wallet to the address on MTGOX and then trade with my coins on MTGOX? correct?

OR am i still missing something??

[zo0omer]

Also, I tried to do this exactly 1yr ago, i had sent 1 coin to an address which was in my wallet, I've since formatted my machine, those coins are gone correct?

[DannyHamilton]

Also, I tried to do this exactly 1yr ago, i had sent 1 coin to an address which was in my wallet, I've since formatted my machine, those coins are gone correct?

Unless you backed up that wallet, or somehow stored the private keys associated with the address.  Otherwise, yes, they are gone forever.

[zo0omer]

Also, I tried to do this exactly 1yr ago, i had sent 1 coin to an address which was in my wallet, I've since formatted my machine, those coins are gone correct?

Unless you backed up that wallet, or somehow stored the private keys associated with the address.  Otherwise, yes, they are gone forever.

Damn.. it sucks that.. because I know the address because its on my pool account.. DAMN! and on block chain its the exact amount ahh well.. its only 1 coin.. luckily it wasn't more!

[Foxpup]

ok so...

I create an address with my bitcoin wallet and then i send my coins from MT RED(mining pool) to that address.  The coins are then stored in my wallet correct?  I can then send the coins from my wallet to the address on MTGOX and then trade with my coins on MTGOX? correct?

Correct.

Also, I tried to do this exactly 1yr ago, i had sent 1 coin to an address which was in my wallet, I've since formatted my machine, those coins are gone correct?

Unless you're able to recover the wallet from the formatted drive (which is a long shot at best and usually impossible if you've been using the reformatted drive for any length of time) or from a backup, then yes. Hence the importance of backing up your wallet!

[DannyHamilton]

I create an address with my bitcoin wallet and then i send my coins from MT RED(mining pool) to that address.  The coins are then stored in my wallet correct?  I can then send the coins from my wallet to the address on MTGOX and then trade with my coins on MTGOX? correct?

For the purposes of using them in this way, it is ok to think of it that way.  In reality all that is stored in your wallet is the private keys and associated addresses.  The record of the coins existence exists publicly in the blockchain.  This is why coins can be sent to "paper wallets" or addresses even when the wallet program isn't running.  "Sending" coins really just means adding an entry to the public blockchain that says that those coins can only be transfered by the person who has the private key associate with the address.

But as for our question, yes, you create an address with your bitcoin wallet, then when you receive your coins from the mining pool to that address you will have the ability to send them on to wherever you like, including to the MtGox address if you want to trade them there.

[zo0omer]

Thanks very much for your helps guys.. it all makes sense to me now!!  Suppose I better get mining then! - lucky I don't pay for power

[zo0omer]

Sorry for double post, I just encrypted my wallet by clicking 'Settings' and then 'encrypt wallet' and now I don't know how to un-encrypt it.. fantastic.. :S I know the passphrase though.. lol

[Foxpup]

Sorry for double post, I just encrypted my wallet by clicking 'Settings' and then 'encrypt wallet' and now I don't know how to un-encrypt it.. fantastic.. :S I know the passphrase though.. lol

Your wallet is decrypted only when it is necessary for the program to access the keys to your addresses, ie, whenever you spend your bitcoins or create a new receiving address. You (and anyone who gains access to your wallet) will be required to enter your passphrase to perform these actions. The client does not provide any built-in way to remove encryption from a wallet, as this is never necessary and extremely unwise in any case.

[zo0omer]

Sorry for double post, I just encrypted my wallet by clicking 'Settings' and then 'encrypt wallet' and now I don't know how to un-encrypt it.. fantastic.. :S I know the passphrase though.. lol

Your wallet is decrypted only when it is necessary for the program to access the keys to your addresses, ie, whenever you spend your bitcoins or create a new receiving address. You (and anyone who gains access to your wallet) will be required to enter your passphrase to perform these actions. The client does not provide any built-in way to remove encryption from a wallet, as this is never necessary and extremely unwise in any case.

Thanks for your clarification foxpup.