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Author Topic: Can someone explain this simple question to do with BTC Wallets.  (Read 1300 times)
brendongl
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September 07, 2016, 08:39:53 AM
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Hello.
I am fairly new, i have purchased some btc on localbitcoin which i used to buy some digital goods, but there is a small remainder there.
I am looking to make some btc now thru selling some services myself, Do i ask my buyers to send the bitcoin to that wallet, or should i move the bitcoin from my localbitcoin wallet to a different one? I notice there are small fees which apply.

What are the benefits / pros / cons of using localbitcoin as my general wallet? If i do move my btc out of localbitcoin, will i get charged a fee?
Can you suggest which wallet to use?

Thanks for the help in advanced!

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September 07, 2016, 08:42:24 AM
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Hello.
I am fairly new, i have purchased some btc on localbitcoin which i used to buy some digital goods, but there is a small remainder there.
I am looking to make some btc now thru selling some services myself, Do i ask my buyers to send the bitcoin to that wallet, or should i move the bitcoin from my localbitcoin wallet to a different one? I notice there are small fees which apply.

What are the benefits / pros / cons of using localbitcoin as my general wallet? If i do move my btc out of localbitcoin, will i get charged a fee?
Can you suggest which wallet to use?

Thanks for the help in advanced!

technically, you probably could use localbitcoins as your "wallet". However, you'll be missing a lot of functions, like signing messages, coin controll features,... AND most importantly, it would be an online wallet, meaning you're not the only one controlling your private keys, so you're not the only one controlling your funds.

Since you're rather new, i'd suggest a HD desktop wallet, i personally prefer electrum, but multibit HD might be even more newbie-friendly.

Once you're past your newbie-months, you might consider running bitcoin core, or storing the bulk of your funds on hardware wallets or paper wallets Smiley

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September 07, 2016, 09:06:55 AM
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Personnally , I only use Desktop wallet for my storage, but some times I use blockchain.info for investing
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September 07, 2016, 09:31:01 AM
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I wouldn't use the LocalBitcoin wallet as your main wallet.

It is advisable to download a desktop wallet such as MultiBit as this tends to keep your BTC a lot more secure. As we have seen in the past, websites can get hacked and you can lose your capital. Now I am not saying that LocalBitcoin isn't secure it is just more advisable to have your BTC in a desktop service for maximum security.

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September 07, 2016, 09:59:34 AM
 #5

Hello.
I am fairly new, i have purchased some btc on localbitcoin which i used to buy some digital goods, but there is a small remainder there.
I am looking to make some btc now thru selling some services myself, Do i ask my buyers to send the bitcoin to that wallet, or should i move the bitcoin from my localbitcoin wallet to a different one? I notice there are small fees which apply.

What are the benefits / pros / cons of using localbitcoin as my general wallet? If i do move my btc out of localbitcoin, will i get charged a fee?
Can you suggest which wallet to use?

Thanks for the help in advanced!
If you are transacting in localbitcoins if not one of them using escrow service so all transactions made at there are secure.

brendongl
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September 07, 2016, 10:39:03 AM
 #6

Hello.
I am fairly new, i have purchased some btc on localbitcoin which i used to buy some digital goods, but there is a small remainder there.
I am looking to make some btc now thru selling some services myself, Do i ask my buyers to send the bitcoin to that wallet, or should i move the bitcoin from my localbitcoin wallet to a different one? I notice there are small fees which apply.

What are the benefits / pros / cons of using localbitcoin as my general wallet? If i do move my btc out of localbitcoin, will i get charged a fee?
Can you suggest which wallet to use?

Thanks for the help in advanced!

technically, you probably could use localbitcoins as your "wallet". However, you'll be missing a lot of functions, like signing messages, coin controll features,... AND most importantly, it would be an online wallet, meaning you're not the only one controlling your private keys, so you're not the only one controlling your funds.

Since you're rather new, i'd suggest a HD desktop wallet, i personally prefer electrum, but multibit HD might be even more newbie-friendly.

Once you're past your newbie-months, you might consider running bitcoin core, or storing the bulk of your funds on hardware wallets or paper wallets Smiley

I am a BTC newbie but generally tech-savy. I like the idea of a offline wallet. Why should i wait a couple of months before trying bitcoin core?
I like the idea of storing the BTC on a small thumbdrive. If i were to make a backup / copy of this thumbdrive, then use some the funds....how does the other backup know the btc is no longer in my possession?

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September 07, 2016, 11:06:16 AM
 #7


I am a BTC newbie but generally tech-savy. I like the idea of a offline wallet. Why should i wait a couple of months before trying bitcoin core?
I like the idea of storing the BTC on a small thumbdrive. If i were to make a backup / copy of this thumbdrive, then use some the funds....how does the other backup know the btc is no longer in my possession?

Well... Bitcoin core is great... The downside is that you'll have to synchronise your wallet... Basically download and verify all the transactions in all the blocks.
There are options to prune the blocks, in order to keep the used diskspace lower, but you'll still need several gigabytes of storage and several days to sync (if i remember correctly).

Also, bitcoin core generates random private keys, so you'll need to re-backup your wallet.dat very often, since new private keys will be added.

A HD wallet (electrum, multibit HD) uses a seed to generate private keys. If you saved the seed, the wallet can re-create all private keys from this seed, so can worry less about backing up.
A HD wallet also only stores the block headers, so it syncs really fast and it's really small (a couple of minutes + a couple of megabytes).

I personally like electrum the best because it gives you more controll over your coins. It lets you pick inputs, re-broadcast, export/import private keys while multibit HD hides a lot of these, more complex, features.

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September 07, 2016, 12:13:27 PM
 #8


I am a BTC newbie but generally tech-savy. I like the idea of a offline wallet. Why should i wait a couple of months before trying bitcoin core?
I like the idea of storing the BTC on a small thumbdrive. If i were to make a backup / copy of this thumbdrive, then use some the funds....how does the other backup know the btc is no longer in my possession?

Well... Bitcoin core is great... The downside is that you'll have to synchronise your wallet... Basically download and verify all the transactions in all the blocks.
There are options to prune the blocks, in order to keep the used diskspace lower, but you'll still need several gigabytes of storage and several days to sync (if i remember correctly).
Several being less than 10 Gb. It is a significant reduction from the 80+ Gb that is normally required. The sync time depends upon your network connection and computer. For example, my computer with 4 cores and 8 Gb of ram can sync the entire blockchain in less than one day.

Also, bitcoin core generates random private keys, so you'll need to re-backup your wallet.dat very often, since new private keys will be added.
Not anymore. As of Bitcoin Core 0.13.0, a BIP32 HD wallet is used, so you only need to backup once. If you set a password or change on though you will need to backup again.

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September 07, 2016, 12:16:27 PM
 #9

Not anymore. As of Bitcoin Core 0.13.0, a BIP32 HD wallet is used, so you only need to backup once. If you set a password or change on though you will need to backup again.

Still running on 0.12 here Smiley... I honestly didn't know 0.13 is deterministic.

@OP: if 0.13 is deterministic, one of the two main reasons i gave is now void. core is still a lot bigger and it still takes a lot longer to synchronise compared to electrum/multibit HD, but it's up to you wether or not you chose this one Smiley

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September 07, 2016, 03:26:56 PM
 #10

I am a BTC newbie but generally tech-savy. I like the idea of a offline wallet. Why should i wait a couple of months before trying bitcoin core?
I like the idea of storing the BTC on a small thumbdrive. If i were to make a backup / copy of this thumbdrive, then use some the funds....how does the other backup know the btc is no longer in my possession?

Using Bitcoin Core is great as it's the "real" way to use Bitcoin (I mean you're actually participating as part of the network, which has different meaning than just using a web or even lightweight wallet). People don't really suggest newbies use Bitcoin Core because it can be more challenging to get up and running (including long sync time) than a web wallet where you just point and click, which might turn people off.

LocalBitcoins.com is great. It's possible to use LBC as a wallet, but that's not really what they are designed to be.  Instead you should think in terms of your own preferred coin storage and spending model. This will depend on how much you plan on storing and keeping secure as well as how often you'll make transactions. If you're planning on storing large amounts you really shouldn't use any online service because they can all be hacked and/or have legal issues or just be incompetent. An exception is a company like Coinbase. They are subject to the same pitfalls, but they are large, VC funded, and insured. They are more like a real bank. It's fine to use online wallets for smaller, quick spending amounts. I'd just spread balances around a bit.  Check this advice I gave for more info on securing coins.

Last, for your question about updating balances of backup copies... This is one of the coolest things about Bitcoin. You don't actually store coins on a computer drive (or piece of paper etc). What you are storing is a secret account number called a private key. The Bitcoin network keeps track of how many coins belong to each private key (it's actually more complicated, but this is a way to think of it). Whenever you use any copy of that key to send coins on the network it applies to all copies. There is also a "public key" associated with your private key (which is basically the wallet address you give out to receive coins) and it's tied the same way.  This means you could, for example, generate a safe Bitcoin wallet address (which consists of public/private key pair) and print that out on a piece of paper which you store in a safe. You could then send unlimited amounts to that address, anytime, and it would remain updated and secure without ever opening the safe!! This is called putting a "paper wallet" in "cold storage".

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September 07, 2016, 03:47:06 PM
 #11

I am a BTC newbie but generally tech-savy. I like the idea of a offline wallet. Why should i wait a couple of months before trying bitcoin core?
I like the idea of storing the BTC on a small thumbdrive. If i were to make a backup / copy of this thumbdrive, then use some the funds....how does the other backup know the btc is no longer in my possession?

Using Bitcoin Core is great as it's the "real" way to use Bitcoin (I mean you're actually participating as part of the network, which has different meaning than just using a web or even lightweight wallet). People don't really suggest newbies use Bitcoin Core because it can be more challenging to get up and running (including long sync time) than a web wallet where you just point and click, which might turn people off.

LocalBitcoins.com is great. It's possible to use LBC as a wallet, but that's not really what they are designed to be.  Instead you should think in terms of your own preferred coin storage and spending model. This will depend on how much you plan on storing and keeping secure as well as how often you'll make transactions. If you're planning on storing large amounts you really shouldn't use any online service because they can all be hacked and/or have legal issues or just be incompetent. An exception is a company like Coinbase. They are subject to the same pitfalls, but they are large, VC funded, and insured. They are more like a real bank. It's fine to use online wallets for smaller, quick spending amounts. I'd just spread balances around a bit.  Check this advice I gave for more info on securing coins.

Last, for your question about updating balances of backup copies... This is one of the coolest things about Bitcoin. You don't actually store coins on a computer drive (or piece of paper etc). What you are storing is a secret account number called a private key. The Bitcoin network keeps track of how many coins belong to each private key (it's actually more complicated, but this is a way to think of it). Whenever you use any copy of that key to send coins on the network it applies to all copies. There is also a "public key" associated with your private key (which is basically the wallet address you give out to receive coins) and it's tied the same way.  This means you could, for example, generate a safe Bitcoin wallet address (which consists of public/private key pair) and print that out on a piece of paper which you store in a safe. You could then send unlimited amounts to that address, anytime, and it would remain updated and secure without ever opening the safe!! This is called putting a "paper wallet" in "cold storage".


Thanks for the advice on Bitcoin Core and Localbitcoin. Yea Localbitcoin is great for buying bitcoin with money. After i start figuring out what to invest / work for BTC i probably will move away from there but for now it suits it purpose of allowing me to buy BTC for money then sending that BTC to various people for services / goods. If i need to receive small amounts of BTC i don't see any harm in using that as well since that will be my main source at the moment.

I understand it, but am still puzzled when you talk about Bitcoin Network, there is no centralised hub where this information is held, much like P2P networks, im guessing that people using Bitcoin Core somehow help the network of bitcoin users? Or any of the web-based wallets would somehow be aiding in the running of the 'network'?


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September 07, 2016, 04:02:49 PM
 #12

What are the benefits / pros / cons of using localbitcoin as my general wallet? If i do move my btc out of localbitcoin, will i get charged a fee?
Can you suggest which wallet to use?

If you use online wallet, somebody else can have access to the keys to your money.

If you use a wallet on your computer, you are in charge (and anything bad happens it's only because of you).
This means you have to make backup of your wallet, you have to protect your system for trojans and keyloggers...
The history has shown that businesses that keep people's Bitcoin are not as safe as we'd like and some get hacked (or just ran with the money) now and then. They are big attraction too because of the amounts of money there.
So for most people - especially if you know more than average about the computers - the wallet on computer is the best way.

I advise you use a light wallet. You have most functionality you need and you don't have to download the blockchain. I use Electrum.
And yes, the transactions cost money. The fee is a couple of cents, not something scary. Most wallets can set the correct amount for that.
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September 07, 2016, 04:17:24 PM
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I understand it, but am still puzzled when you talk about Bitcoin Network, there is no centralised hub where this information is held, much like P2P networks, im guessing that people using Bitcoin Core somehow help the network of bitcoin users? Or any of the web-based wallets would somehow be aiding in the running of the 'network'?

Yes, the Bitcoin network is all peer-to-peer. It's true that when you run Bitcoin Core you help the network (your node should be configured properly, meaning opened port 8333 and online most/all the time).

It may be easiest to explain it with Bitcoin's history. You see, without people running full-nodes as is done with software like Bitcoin Core, there is no network! Bitcoin only exists because of the people that run it. In 2007 there was no Bitcoin. Satoshi Nakamoto, Bitcoin's creator, in Jan 2009 launched Bitcoin by running an early version of what is now Bitcoin Core. It was only him on the network, so there was really no network. Satoshi had announced his project and soon a few others installed his software and connected to his node. This formed the network which has grown to be what it is today, which has thousands of nodes.

Bitcoin is based on nodes which produce blocks and transactions and relay this information to each other. When you run Bitcoin Core, you are one of these nodes. One key difference is that you no longer create blocks, you only relay them. Nodes which create blocks are called mining nodes, and this has largely become specialized. Together "miners" and others who run non-mining "full-nodes" form the entire network. When you use an online wallet like LocalBitcoins.com or Blockchain.info, they are running a Bitcoin Core node, and they pass along your transactions.

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September 08, 2016, 10:43:56 AM
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I understand it, but am still puzzled when you talk about Bitcoin Network, there is no centralised hub where this information is held, much like P2P networks, im guessing that people using Bitcoin Core somehow help the network of bitcoin users? Or any of the web-based wallets would somehow be aiding in the running of the 'network'?



Using Bitcoin Core means that you have the complete database of all transactions ever created on your computer and yes by running the software you are helping the network. The more nodes there are the more secure the network is. And without enough nodes, it would take ages for transactions to complete. Web wallets are no different in that they need to be running Bitcoin Core as well on their servers.
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September 09, 2016, 03:57:33 AM
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Forgive my ignorance, but can you mine directly from Bitcoin Core then?
I know mining is solving the blockchain transaction puzzles.
But since you are storing all the transactions on your PC anyway, doesn't that mean you are storing all the blockchains as well?
I am interested in mining since my PC is already on 24/7, would be nice to see how much btc i can net over a month if any.

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September 09, 2016, 04:03:19 AM
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Forgive my ignorance, but can you mine directly from Bitcoin Core then?
Not anymore. Mining with Bitcoin Core was just removed in 0.13.0 because CPU mining is absolutely pointless. It wastes energy and will destroy your CPU.

I know mining is solving the blockchain transaction puzzles.
But since you are storing all the transactions on your PC anyway, doesn't that mean you are storing all the blockchains as well?
I am interested in mining since my PC is already on 24/7, would be nice to see how much btc i can net over a month if any.
Don't do it. It's pointless, it won't help, and you will be mining at a loss. You will also end up shortening the life span of your computer.

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September 09, 2016, 04:55:56 AM
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Forgive my ignorance, but can you mine directly from Bitcoin Core then?
Not anymore. Mining with Bitcoin Core was just removed in 0.13.0 because CPU mining is absolutely pointless. It wastes energy and will destroy your CPU.

I know mining is solving the blockchain transaction puzzles.
But since you are storing all the transactions on your PC anyway, doesn't that mean you are storing all the blockchains as well?
I am interested in mining since my PC is already on 24/7, would be nice to see how much btc i can net over a month if any.
Don't do it. It's pointless, it won't help, and you will be mining at a loss. You will also end up shortening the life span of your computer.

What if i don't pay for electricity? I have a GTX960 as well. How much roughly do you think it can make running 8 hours a day for a month?
I just want to see it work, it would be fun i think, i wouldn't be doing it for actual money, but if i can make $5-$10USD a month, might as well since the computer is idle at night time.

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September 09, 2016, 05:35:40 AM
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Forgive my ignorance, but can you mine directly from Bitcoin Core then?
Not anymore. Mining with Bitcoin Core was just removed in 0.13.0 because CPU mining is absolutely pointless. It wastes energy and will destroy your CPU.

I know mining is solving the blockchain transaction puzzles.
But since you are storing all the transactions on your PC anyway, doesn't that mean you are storing all the blockchains as well?
I am interested in mining since my PC is already on 24/7, would be nice to see how much btc i can net over a month if any.
Don't do it. It's pointless, it won't help, and you will be mining at a loss. You will also end up shortening the life span of your computer.

What if i don't pay for electricity? I have a GTX960 as well. How much roughly do you think it can make running 8 hours a day for a month?
I just want to see it work, it would be fun i think, i wouldn't be doing it for actual money, but if i can make $5-$10USD a month, might as well since the computer is idle at night time.

You certainly won't make $5-$10 USD/month, but the hardware damage will probably exceed $5/month when you try to mine.

https://en.bitcoin.it/wiki/Non-specialized_hardware_comparison doesn't list the GTX960. The GTX295 hashes at 117 Mh/s.
https://linustechtips.com/main/topic/268826-is-mining-with-the-gtx-970-at-650-mhs-worth-it/ tells tales of a hashrate of 650 Mh/s.

Let's plug these numbers into coinwarz: http://www.coinwarz.com/calculators/bitcoin-mining-calculator/?h=0.65&p=2600.00&pc=0.00&pf=1.00&d=220755908330.37200000&r=12.50000000&er=637.04740000&hc=0.00
1 dollarcent a month IF you run 24/7, at current difficulty, reward and price... Not counting the power cost, the hardware cost,...  I'm pretty sure this 1 cent is already rounded upwards.

In reality, you seem to want to mine on workdays during working hours, 20 days/month, 8 hours a day... So divide this 1 cent by 4,6 (the one cent a month is when you would mine nonstop using your GPU). You'll need to mine in a pool for several years in order to reach enough coins to cover the mining fee... I'm pretty sure you'll need to mine forever in order to reach the minimum payout.

BTW: mining using your CPU instead of your GPU is even a worse idear.

Sorry to sound so harsh, but it's the reality... Nowadays, mining without an ASIC is like flushing your cash down the toilet.

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September 09, 2016, 05:52:17 AM
 #19

Ok, thanks for the advice. Saved me time doing research on getting into mining then. I did know about bitcoin awhile back and did abit of research but ended up not moving forward. Now it seems obviously not worth it.

Still looking for a way to make some btc on the side though, once im out of newbie status signature campaigns look good, gives me an excuse to be active on a forum again. When i was like 13-15 that is all i would do. I became a moderator on afew as well, good communities, wish i kept in contact with some of those people...

Thanks for all the advice guys! (I feel like locking and ending the thread, but whatever lol)

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September 09, 2016, 09:57:28 AM
 #20

Actually, i didn't think about this right away, but a decent graphic card might be suitable for altcoin mining.
Personally, i don't have a lot of experience in this field, but maybe somebody else can point you in the right direction. Maybe you could rephrase your question and ask if your GPU is suitable for altcoin mining in the altcoin subforum, i'm pretty sure they'll be able to help you over there Wink

Mine altcoin with your GPU => deposit on an exchange => trade for BTC => withdraw to your wallet Wink

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