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Author Topic: Moving bitcoin from online account to local wallet?  (Read 5347 times)
candtalan
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April 08, 2013, 08:20:13 PM
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Newbie here. With a modest bitcoin sum in my mtgox account (is this called my mtgox online wallet??) I guess it is time to transfer some or all of this to my local wallet. Is this called a 'transfer' or is it called 'spending' to my wallet? I am inclined to transfer all of the bitcoin over. However, if I would decide to only transfer some over, with some remaining, is that a normal, sensible, action? Does the process calculate the remainder ok.....? :-)
Is there any obvious advantage in keeping the bitcoin all together in one lump - if it is split up into smallish amounts, am I correct in thinking each 'amount' has its own address (?)
tia
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PachucoBro
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April 08, 2013, 08:29:31 PM
 #2

In MtGOX yo uwould use the 'Funding Options' button and 'Withdraw' your BitCoins using the address of your local wallet.

In my case I like to trade BTC so I keep 90% of my BTC in my 'online wallet' at MtGOX. The other 10% I am kind of using as my Savings account so I won't try trading it and let it ride up with the price of BTC.

If you keep withdrawing BTC just keep using your local wallet address unless you want to sent lil bits o BTC all over. There is no good or bad points about keeping it all together unless you have specific reasons to do either of the two options.

Just remember...
Your local wallet is dependent on your hardware (hard drive) not failing or getting stolen.
Your online wallet is in the hands of the website you have it at. If they close down or disappear, so do your Coins.

Good Luck!

DannyHamilton
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April 08, 2013, 11:51:32 PM
 #3

- snip -
Just remember...
Your local wallet is dependent on your hardware (hard drive) not failing or getting stolen.
Your online wallet is in the hands of the website you have it at. If they close down or disappear, so do your Coins.
- snip -

^^ this ^^

It really comes down to your ability to decide for yourself which you think is more likely.

With a local wallet any of the following are possible:

  • You fail to have adequate and properly secured backups and lose the bitcoins in your local wallet to a computer crash, fire, tornado, flood, etc.
  • You fail to properly secure your local wallet from theft, and a hacker (or someone with access to your computer) steals all your bitcoins
  • You successfully secure your wallet from theft with encryption using a GREAT password, and then fail to remember the password

With an online wallet (such as MtGox) any of the following are possible:

  • The wallet provider decides to steal all your bitcoins and disappears
  • The wallet provider is hacked due to inadequate security, and your bitcoins are stolen by the hacker
  • The wallet provider fails to properly backup your bitcoins and they are lost due to computer crash, fire, tornado, flood, etc.
  • The wallet provider is shut down unexpectedly (by government? of their own choice?), and your bitcoins are no longer accessible

If you don't have confidence in your ability to secure your local wallet, it may be less risky to use an online wallet.

If you have a lot of confidence in your ability to secure your local wallet, it may be more risky to use an online wallet.

Only you can know your abilities and understanding.

Landstander
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April 09, 2013, 12:04:50 AM
 #4

If you don't have confidence in your ability to secure your local wallet, it may be less risky to use an online wallet.

If you have a lot of confidence in your ability to secure your local wallet, it may be more risky to use an online wallet.

Only you can know your abilities and understanding.

It's worth noting that most people are capable of safely securing a local wallet with just a few hours' worth of research on the forums/wiki and a bitcoin worth of investment (cold storage). A few minutes every evening for a week, say. This beats online wallets in terms of security.

I'm not an expert, but I believe blockchain.info/wallet incorporates features to make it more resistant against hacks/disappearance/theft/destruction, making it a convenient compromise between security/ease.

1LnV7h5xrFQ98HNxctKaASbB4xRBccT5Gm     Thanks!
DannyHamilton
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April 09, 2013, 12:30:33 AM
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It's worth noting that most people are capable of safely securing a local wallet with just a few hours' worth of research on the forums/wiki and a bitcoin worth of investment (cold storage). A few minutes every evening for a week, say. This beats online wallets in terms of security.

And yet a surprising number of people can't be bothered to gain that understanding until after they've already lost a significant sum.


I'm not an expert, but I believe blockchain.info/wallet incorporates features to make it more resistant against hacks/disappearance/theft/destruction, making it a convenient compromise between security/ease.

Yes.  https://blockchain.info/wallet is MUCH more like a local wallet than a hosted wallet.  In general, as long as you create adequate backups of the wallet file anytime you add a new address, I'd consider blockchain.info to be as secure as any of the "lightweight" local wallets (Electrum, MultiBit).

PachucoBro
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April 09, 2013, 12:54:17 AM
 #6

Yes.  https://blockchain.info/wallet is MUCH more like a local wallet than a hosted wallet.  In general, as long as you create adequate backups of the wallet file anytime you add a new address, I'd consider blockchain.info to be as secure as any of the "lightweight" local wallets (Electrum, MultiBit).

I didn't realize blockchain had a Wallet function. LOL

So what are the benefits to BlockChain as opposed to MtGOX? As far as the possibility of being hacked? I see that you can download your wallet which MtGOX does not offer.

DannyHamilton
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April 09, 2013, 01:06:10 AM
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Yes.  https://blockchain.info/wallet is MUCH more like a local wallet than a hosted wallet.  In general, as long as you create adequate backups of the wallet file anytime you add a new address, I'd consider blockchain.info to be as secure as any of the "lightweight" local wallets (Electrum, MultiBit).

I didn't realize blockchain had a Wallet function. LOL

So what are the benefits to BlockChain as opposed to MtGOX? As far as the possibility of being hacked? I see that you can download your wallet which MtGOX does not offer.

With MtGox, you are turning over control of your bitcoins to MtGox.  They have your private keys and can spend the bticoins however they like.  You are trusting that they will not spend the bitcoins unless you ask them to, and you are trusting that they will spend them in whatever way you ask them to.  You are also trusting that they won't get hacked, that a government agency won't force them to turn over the bitcoins, and that they will still be there to send the coins when you want them to.

With blockchain.info they only have an encrypted copy of your private keys.  They don't have the encryption password.  Therefore it is not possible for them to spend the bitcoins.  If they are hacked, the hacker does not have access to spend/take the bitcoins.  A government agency can't force them to turn over the bitcoins.  As long as you have a backup of your wallet, you can still access the bitcoins (albeit with some inconvenience) if they are not there when you want access.

Of course, since MtGox has full access, they can help you in situations such as forgetting your password.

With blockchain.info, if you don't know your password, and don't have the mnemonic that they provide you when you create your password, there is nothing that can be done.  It is up to you to make sure that you have a recent backup properly secured and that you don't forget your password.

PachucoBro
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April 09, 2013, 01:35:58 AM
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Yes.  https://blockchain.info/wallet is MUCH more like a local wallet than a hosted wallet.  In general, as long as you create adequate backups of the wallet file anytime you add a new address, I'd consider blockchain.info to be as secure as any of the "lightweight" local wallets (Electrum, MultiBit).

I didn't realize blockchain had a Wallet function. LOL

So what are the benefits to BlockChain as opposed to MtGOX? As far as the possibility of being hacked? I see that you can download your wallet which MtGOX does not offer.

With MtGox, you are turning over control of your bitcoins to MtGox.  They have your private keys and can spend the bticoins however they like.  You are trusting that they will not spend the bitcoins unless you ask them to, and you are trusting that they will spend them in whatever way you ask them to.  You are also trusting that they won't get hacked, that a government agency won't force them to turn over the bitcoins, and that they will still be there to send the coins when you want them to.


Yes all the reasons you mentioned about MtGOX are true and necessary if I care to trade them on the exchange. So the real benefit to the BlockChain wallet that I can see (I have two wallets now with them one personal and one business) is that the wallet is not actually stored with them only. I can download it to my computer and copy it to different places for safe keeping. MtGOX is only available on MtGOX website, which I understand.

Cool... thanks for the explanation!

candtalan
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April 09, 2013, 07:42:43 PM
 #9

Thank you for the great information here.
The wallet I start with is the one which appears after download and running of the bitcoin-qt from the www.bitcoin.org site. Does that mean my wallet is called  the 'bitcoin-qt wallet'? I believe this wallet now has a facility to encrypt it, if required. This one seems to need the entire blockchain (?) to be first downloaded, and it all runs p2p presumably as a full node (?) which I guess is very ethical, and I like that idea, although somewhat inconvenient for wallet portability.
Landstander
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April 09, 2013, 07:57:14 PM
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QT is the no-frills, vanilla bitcoin client. You get a standard wallet.dat file with encryption, and you do need to download and keep the entire blockchain up to date.

You can find the alternatives with descriptions here:
http://bitcoin.org/en/choose-your-wallet

I personally like Armory and its easy cold-storage solution.

If you're looking for speed and ease of use, try Electrum, as that doesn't need to download the entire blockchain.

As noted above, if you use blockchain.info/wallet you don't need to worry about keeping your client up to date and can still recover your wallet even if the website goes down.

1LnV7h5xrFQ98HNxctKaASbB4xRBccT5Gm     Thanks!
candtalan
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April 09, 2013, 08:31:17 PM
 #11

Thanks. There are so many questions (!)
In, say, wallets (such as bitcoin-qt or armory), when a bitcoin balance exists, what is the essence of the balance value - is that what the 'private keys' are? Is the 'value' associated with these private keys, like, they are the actual (money)?
Am I correct in thinking that with, say, a paper wallet, it is the private keys which are printed out?
Is it unusual for the private keys to be shown visibly in wallets? I guess the answer may be yes unusual, because I hear talk of them but I do not see them offered as examples nor printed out...
Am I correct in thinking that part of the usefulness of a wallet is to handle and convert private keys into a total 'value', regardless of the complexity of the composition of the grand total?
And sort of associated question - is it useful to try to arrange a transfer into my wallet of a single sum (single private key??) or try to split the value into more than one single transfer (several private keys??) for future convenience? Or is this somehow missing a point?
tia
DannyHamilton
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April 09, 2013, 08:47:14 PM
 #12

Thanks. There are so many questions (!)

Yes there are.  I'll try to get through them one at a time.

In, say, wallets (such as bitcoin-qt or armory), when a bitcoin balance exists, what is the essence of the balance value

The "balance" is the sum of the values of all unspent outputs in the blockchain for which the wallet has the associated private keys. Note: the values are stored in the public blockchain, not the wallet.  This means the value is "backed-up" in thousands of copies all over the globe on every single full peer.

- is that what the 'private keys' are? Is the 'value' associated with these private keys, like, they are the actual (money)?

The private keys can be thought of as special "passwords" that give you permission to "spend" an unspent output in the blockchain by creating a transaction that assigns the value to one or more addresses, and providing the public key and a cryptographic signature created with the private key.  Once you've created the transaction, the outputs become "spent", and the new outputs can only be spent with the private keys that are associated with each of the new addresses.  It is impossible to know what the private key is if you only know the address and public key, but it is quite easy for a computer to validate that a "signature" has been provided by the private key as long as you have the public key and address.

Am I correct in thinking that with, say, a paper wallet, it is the private keys which are printed out?

Exactly.

Is it unusual for the private keys to be shown visibly in wallets? I guess the answer may be yes unusual, because I hear talk of them but I do not see them offered as examples nor printed out...

With the exception of a paper wallet, the private keys are generally not shown.  Other than make copies of them, there isn't much use to seeing the private key.

Am I correct in thinking that part of the usefulness of a wallet is to handle and convert private keys into a total 'value', regardless of the complexity of the composition of the grand total?

Yes.  The wallet takes care of doing all the necessary math to figure out what the associated bitcoin address is for each private key that the wallet knows about.  It then scans the blockchain for each unspent output sent to those addresses and totals up the associated value.

And sort of associated question - is it useful to try to arrange a transfer into my wallet of a single sum (single private key??) or try to split the value into more than one single transfer (several private keys??) for future convenience? Or is this somehow missing a point?
tia

If you break up the total into parts that are too small (less than 0.01 BTC), you can start to run into situations where transaction fees become necessary and even large.  On the other hand you increase your privacy a bit by splitting up your balance.  For most people it really doesn't matter much which way you do it.

dawn
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April 09, 2013, 08:54:02 PM
 #13

You all forget the biggest advantage of all (for Gox): If time matters, if you have it @ GOX then you can trade it against $. If you have to send them first to GOX then can be too late. Also they have two factor authentification and other security functions. I think they have learnt their lesson - if they fail they loose trust and can't make money as now.

0.011BTC/GH contract for 5 years !!!!!: >>Get it now! (weekly payouts)<< Got my 5th weekly payout
candtalan
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April 09, 2013, 09:16:43 PM
 #14

In MtGOX yo uwould use the 'Funding Options' button and 'Withdraw' your BitCoins using the address of your local wallet
Thanks. Just a clarification here - am I correct in understanding that my local wallet (or maybe any of my notional wallets) can generate any number of addresses for the purpose of receiving bitcoin?
So - I might generate an address to receive a withdrawal from mtgox, whatever?
Also, it sounds like Funding Options>withdraw is not the same as 'spending' something in my own direction (to my own wallet)?
Quote
Good Luck!
Thanks :-) it feels a bit like deep water at this stage!
DannyHamilton
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April 09, 2013, 10:47:06 PM
 #15

am I correct in understanding that my local wallet (or maybe any of my notional wallets) can generate any number of addresses for the purpose of receiving bitcoin?

Most wallets will let you generate as many wallets as you might want.  There is a good recommendation that you use a new address for every transaction.

So - I might generate an address to receive a withdrawal from mtgox, whatever?

Yes.

Also, it sounds like Funding Options>withdraw is not the same as 'spending' something in my own direction (to my own wallet)?

Unless I'm missing something, I think that's exactly what it is.  MtGox will spend one (or more) of their unspent outputs and assign the value to the address you provide.

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