Newby - looking for a 3 to 5 year investment

[andyg1]

Pure noob here. Sorry!

I have decided to take the plunge into bitcoin investment. I am thinking of around £1000 ($1300) and leaving the investment alone for 3 to 5 years. Half in BTC and half in ETH.

I have done loads of reading (the bitcoin value has increased $700 since I started doing my research!!) and I am here to have you experts sense-check my understandings to ensure I have it all right.

Wallets:

- My understanding of wallets is that it is simply an address. That address appears in the blockchain when a transaction happens, so there is a historical record of it. This is how we know what coins are where, and how many there are. (A bit like a commit ID in Git?)

- Your wallet address is all that's needed to receive coins. But to send coins out you need your private key. If you compromise that pair (wallet address and private key), someone could take all your coins. If you lose your wallet address and/or the private key, you can never get your coins back.


Questions:

1) Is the above understanding correct?

2) If I am going for long-term investment, I should use a paper wallet. What's to stop me keeping my wallet address on one piece of paper and my private key somewhere else? So the two aren't kept together.

3) Can I choose my private key? For example, could I generate my private key from the first paragraph of my favourite book? That way I will never have to write it down nor store it with my wallet address. I will never forget it, provided I use the same method to recreate it each time I need it.

4) Does my wallet address ever change?

5) How do I create a wallet? Is the address allocated to me?

5) Living in the UK, where can I get my coins from in the first instance? I've heard bad things about Coinbase. What is this localbitcoins.com website? Is it safe to buy this way?

Thanks for your help.

[OgNasty]

Questions:

1) Is the above understanding correct? 

Sounds like it.  I like to explain it to regular folks like this...  Think of your public Bitcoin address like your home address.  Anyone with your home address can send you mail (BTC), but you can't access the mail (BTC) without the mailbox key (private key).

2) If I am going for long-term investment, I should use a paper wallet. What's to stop me keeping my wallet address on one piece of paper and my private key somewhere else? So the two aren't kept together.

Nothing.  Where you keep your public address is irrelevant.  All you need to keep safe is the private key.

3) Can I choose my private key? For example, could I generate my private key from the first paragraph of my favourite book? That way I will never have to write it down nor store it with my wallet address. I will never forget it, provided I use the same method to recreate it each time I need it.

Yes, but it is highly likely your coins will be stolen.  This is called a brainwallet.  Google it.

4) Does my wallet address ever change?

No.  However, when you spend bitcoins, many wallets will use a "change address" where your change from a transaction is sent to another public address.

5) How do I create a wallet? Is the address allocated to me?

Depends what software you're using.  There are many options.  My favorite way is to use software called "vanitygen" that lets you search for addresses that begin with characters you select.

5) Living in the UK, where can I get my coins from in the first instance? I've heard bad things about Coinbase. What is this localbitcoins.com website? Is it safe to buy this way?

Exchanges are probably the easiest way.  You could also try selling things on this forum or even mining your own.

Thanks for your help.

You're welcome.  Good luck!

[iluvpie60]

The most important thing I can say to you, is that if you are looking to invest in Bitcoin you need to be prepared for it to be worth millions per BTC or nothing.

If you lose all of your investment are you going to be ok? Is losing this investment a lot of money and will it hurt you financially? If not that is good.

Next thing is that you need to create multiple backups of your wallets. Save one to each drive of your computer, save one onto flashdrives, save one onto a CD or DVD. Make sure you have 5 or 6 backups in total. When you back it up it is called wallet.dat. That is what you search for if you ever need to restore it. To restore it you need to know your private keys.

Watch some of these videos here https://www.youtube.com/results?q=backup+bitcoin+wallet+private+keys

[HabBear]

Given the size of your investment ($1300), I'd consider going all in on Ether.

Bitcoin and Ethereum both have very good long term growth opportunity, the challenge is that Ether is way earlier in its run than Bitcoin. With Ether currently trading at ~$250 you can buy more Ether than you can bitcoin and it's the number of "shares", coins you own that will give you real leverage to gain return on investment from any price growth in the future.

It's feasible that Ether gets up to the $2000s level and beyond (just as Bitcoin has). And with a cost bases of $250 you stand to make a 10x return on investment. However it's less likely that Bitcoin would take the same 10x run over the same time period...do you think Bitcoin could hit $25000 in just 3 years?

In the end you need to be happy with your investment, and diversification definitely plays a part. I just wanted to add my thoughts as someone who knows a lot professionally about these sorts of things.

-------------------------
One more comment...

5) How do I create a wallet? Is the address allocated to me?

Check out this site for a list of a lot of wallet options: https://bitcoin.org/en/choose-your-wallet

Welcome to Bitcoin!

[Nagadota]

Given the size of your investment ($1300), I'd consider going all in on Ether.

Bitcoin and Ethereum both have very good long term growth opportunity, the challenge is that Ether is way earlier in its run than Bitcoin. With Ether currently trading at ~$250 you can buy more Ether than you can bitcoin and it's the number of "shares", coins you own that will give you real leverage to gain return on investment from any price growth in the future.

It's feasible that Ether gets up to the $2000s level and beyond (just as Bitcoin has). And with a cost bases of $250 you stand to make a 10x return on investment. However it's less likely that Bitcoin would take the same 10x run over the same time period...do you think Bitcoin could hit $25000 in just 3 years?

This is a terrible, terrible explanation of Bitcoin's relation to Ether and their respective prices.  Ether's supply is more than four times higher than Bitcoin and its market cap is more than half that of Bitcoin.  Therefore a price of $2000 would only be practical if Either ended up being worth about four times more in market cap than Bitcoin is now. 

Also, who's to say that Ether isn't "the one" and that another cryptocurrency doesn't have everyone throwing all their money in a few years later?  If we were actually judging new coins based on merit this would happen 24/7.

Not to mention that Ether's transaction fees are much higher than several other coins, that problematic bugs have been found in it and that it's not a Bitcoin competitor but a platform for decentralised blockchain applications.

Ether could go higher but the two are not in the same boat.

In the end you need to be happy with your investment, and diversification definitely plays a part.

It does indeed.  With a small investment like that just Bitcoin and Ether is okay - if you were investing more I'd consider several others too.

I just wanted to add my thoughts as someone who knows a lot professionally about these sorts of things.

I honestly doubt this.

[Velkro]

Given the size of your investment ($1300), I'd consider going all in on Ether.

I would not recommend that decision. Bitcoin is safe bet in a way its proven technology without critical holes like they are discovered in ethereum every month.
Bitcoin is more well known, its better designed and have limited coins, not like ethereum (unlimited) so your money will be nothing in future in Ether.

[HabBear]

To the OP, read everyone's opinion and make your own decision.

I have mine and Nagadota has his.

First, Nagadota's comments completely ignore the fundamentals of investing. Second, he doesn't represent that he really knows the opportunity that Ethereum offers to the world outside of the "crypto-currency community". Forget about outstanding volume of "coins" and transaction fees. Real demand (and therefore price growth) isn't stifled enough by those details to keep Ether from hitting the levels I suggested.

Ethereum is the first company to bring blockchain technology to the mainstream world. Blockchain technology has an incredible amount of value to every single corporation on the planet, and not just in one way but in multiple ways. A few examples; reducing audit risk, facilitating transactions with customers, facilitating inter-company transactions, database functionality for multinational conglomerates, housing supply chain and logistics data, the list goes on. And there's governmental benefits in terms of enabling more efficient and fair elections, facilitating tax receipts and payments, etc.

The world is only just beginning (with investment banks first and now a few forward thinking corporations) to realize the potential of blockchain technology and Ethereum is first to market, offering a relatively easy to implement framework or template of the blockchain which companies can tailor to their own needs.

Ethereum is the most exciting thing to come out of bitcoin since Bitcoin.

The value of Ethereum as an investment isn't the "currency" it's the fact that Ether is the only way to get the resemblance of participation in the growth of that idea and company (until they issue an IPO, and if they do sell your Ether and get in on the IPO.)

Ethereum could hit four times Bitcoin's market cap easily - it has greater relevancy to the world and the entities that will find it most relevant have very deep pockets.

From the standpoint of your first investment, and assuming that past results aren't indicative of future performance, the upside with Ethereum is much greater today than it is for Bitcoin...especially with just $1300 to place your bet.

Good luck to you!

Given the size of your investment ($1300), I'd consider going all in on Ether.

Bitcoin and Ethereum both have very good long term growth opportunity, the challenge is that Ether is way earlier in its run than Bitcoin. With Ether currently trading at ~$250 you can buy more Ether than you can bitcoin and it's the number of "shares", coins you own that will give you real leverage to gain return on investment from any price growth in the future.

It's feasible that Ether gets up to the $2000s level and beyond (just as Bitcoin has). And with a cost bases of $250 you stand to make a 10x return on investment. However it's less likely that Bitcoin would take the same 10x run over the same time period...do you think Bitcoin could hit $25000 in just 3 years?

This is a terrible, terrible explanation of Bitcoin's relation to Ether and their respective prices.  Ether's supply is more than four times higher than Bitcoin and its market cap is more than half that of Bitcoin.  Therefore a price of $2000 would only be practical if Either ended up being worth about four times more in market cap than Bitcoin is now.  

Also, who's to say that Ether isn't "the one" and that another cryptocurrency doesn't have everyone throwing all their money in a few years later?  If we were actually judging new coins based on merit this would happen 24/7.

Not to mention that Ether's transaction fees are much higher than several other coins, that problematic bugs have been found in it and that it's not a Bitcoin competitor but a platform for decentralised blockchain applications.

[ktabb]

For a 3-5 year investment bitcoin is not a horrible option, but you have to realize that there is a lot of risk involved. 5 years is more than half of the amount of time that bitcoin has even existed, and for most of that time it was so small that nobody knew about it. Furthermore, bitcoin is near all time highs right now.

I mostly trade stocks and I've had a lot of success with them. I have a set of hard and fast rules that I follow for trading, and one of them is to never buy at an all-time high. Personally I would not invest in bitcoin right now even on a dip in price, but it is not a horrible option if you are looking for a very large return but you are willing to take a significant risk of losing the majority of your investment. That being said, I would still strongly suggest waiting for a price dip before buying in.

I think it is smarter to buy with a higher degree of confidence and a slightly lower potential reward than to buy with a high degree of risk and only a slightly higher potential reward. Basically what I'm saying, is that even if the price goes up to $3k and then dips down to $2700, I think it would be a better purchase at $2700 in that scenario than to buy right now at $2600 because you will have a higher degree of confidence that the price can reach higher levels in the second scenario.

[Digitalbitcoin]

First of all welcome to forum.

Now investment is great option for securing future, and investment in cryptocurrencies can give more mobility and freedom.

I would like to explore few things about investment.

Investment in BTC and ETH is really great investment as price of BTC and ETH will skyrocket in coming years. But still there are other options to invest your money for better and higher returns, as If you invest your BTC and ETH in other rising cryptocurrencies then it will give more higher returns as money directly get multiplied.  

[mela65]

Welcome Newbie First of all congrat to explore this world. I advice you to do your own research. I can say my portfolio as an example;

%20 BTC
%30 DGB
%10 SC
%40 OTHERS

Good Luck

[honestis.network]

80% ICO Honestis.Network
20% Ether to operate it well.

[Blackout1321]

1) Is the above understanding correct?

2) If I am going for long-term investment, I should use a paper wallet. What's to stop me keeping my wallet address on one piece of paper and my private key somewhere else? So the two aren't kept together.

3) Can I choose my private key? For example, could I generate my private key from the first paragraph of my favourite book? That way I will never have to write it down nor store it with my wallet address. I will never forget it, provided I use the same method to recreate it each time I need it.

4) Does my wallet address ever change?

5) How do I create a wallet? Is the address allocated to me?

5) Living in the UK, where can I get my coins from in the first instance? I've heard bad things about Coinbase. What is this localbitcoins.com website? Is it safe to buy this way?

Thanks for your help.

As stated above previously, I would say your assumptions are correct, but I would look into diversifying more than BTC & ETH only. Try some different altcoins, but that's personal preference.

I would invest in a hardwallet. I actually just bought https://www.ledgerwallet.com/ the nano from this one. If I'm going to invest in as much as I believe I will, I want to be able to remove it from a computer and have it on me at all times. You can read more about them, but that's what I would do.

I haven't used coinbase, but I have used Bitstamp which will convert USD or EURO into BTC. Watch yourself though because sometimes Bitstamp is a higher priced BTC than other places so just double check before investing too much.

Welcome to trading

[HabBear]

80% ICO Honestis.Network
20% Ether to operate it well.

To the Newbie, ICO means Initial Coin Offering. This poster is suggesting you put 80% down is RISKY...and only guaranteed to serve the guy suggesting that investment.

His suggestion on Ether is sound, just put more like 80% into the Ether and maybe...maybe...put the 20% into an alt coin.

Good luck.

[bigcash2011]

No doubt btc and eth are best choices for long term hold, you can hold them 40-40% of your total invesent funds, with 20% remaining funds i suggest you to take part in good quality ICOs they will bring you very good profits in 2-3 months..

[mrcash02]

As you are looking for opinions, I will give you mine:

$1300 isn't too much, but you could make this amount grow by investing in Crypto casinos. 3-5 casinos would be enough to split this amount, $433-$260 on each (there are casinos accepting ETH investment too). The money grows well and you don't lose Crypto-Currency price increasement along the time. (It's not like to be a gambler, it's to invest in the casino bankroll, you make profit when the casino makes profit).

But it's a bit more risky than let the money in a paper wallet, so don't come back only after 3 years, always check the progress more frequently and if possible, collect the profit often.

[Dmitry.Vastov]

That's a bad idea. We can't tell how the market goes. 3-5 years investment i think is dangerous. There's lot of things can happen with that time span. Maybe bitcoin might be dead that time or all altcoins are dead. 1-2 years i think is enough. Maybe that enough to analyze things up and make some changes. Make find an ICO. Not just an ICO. Make sure it's a good and potential crypto in the future. Me, i bought IOTA and i will keep it for 2 years.

[jumbo]

Pure noob here. Sorry!

I have decided to take the plunge into bitcoin investment. I am thinking of around £1000 ($1300) and leaving the investment alone for 3 to 5 years. Half in BTC and half in ETH.

I have done loads of reading (the bitcoin value has increased $700 since I started doing my research!!) and I am here to have you experts sense-check my understandings to ensure I have it all right.

Wallets:

- My understanding of wallets is that it is simply an address. That address appears in the blockchain when a transaction happens, so there is a historical record of it. This is how we know what coins are where, and how many there are. (A bit like a commit ID in Git?)

- Your wallet address is all that's needed to receive coins. But to send coins out you need your private key. If you compromise that pair (wallet address and private key), someone could take all your coins. If you lose your wallet address and/or the private key, you can never get your coins back.


Questions:

1) Is the above understanding correct?

That is  correct, unless you use any extra layer of software (mobile wallet, web wallet, desktop application). I

f there is any middleware between you and bitcoin network, there is a chance such middleware to be compromised. It doesn't mean you should use one for convenience, but that mean you shall assess and consider such risks and pick a wallet provider carefully.

2) If I am going for long-term investment, I should use a paper wallet. What's to stop me keeping my wallet address on one piece of paper and my private key somewhere else? So the two aren't kept together.

That's a great solution, yet not very convenient or usable. And backups are essential, yet they are bad for the security. You can also put your key in a bank safe deposit cell. But in most situations it is an overkill.

3) Can I choose my private key? For example, could I generate my private key from the first paragraph of my favourite book? That way I will never have to write it down nor store it with my wallet address. I will never forget it, provided I use the same method to recreate it each time I need it.

I think, brainwallet has been mentioned already. And my advise is not to go with that option.

4) Does my wallet address ever change?

No, unless you are voluntarily transferring to a new address.

5) How do I create a wallet? Is the address allocated to me?

You can use bitcoin native client. Or any alernative software (like vanitygen). Or web-wallet, or mobile wallet etc.

6) Living in the UK, where can I get my coins from in the first instance? I've heard bad things about Coinbase. What is this localbitcoins.com website? Is it safe to buy this way?

Coinbase, Bitstamp, Coinomat etc.

[riskthebiscuit]

I would say either diversify between 3-5 different coins or just leave it in Bitcoin. If you leave it in bitcoin in theory your value should raise anywhere from 40-100%+. If you invest and diversify you may make 200%+ but you have to do some good research on a lot of coins and also monitor your investment from time to time

[fan_of_things_and_stuff]

Given the size of your investment ($1300), I'd consider going all in on Ether.

I would not recommend that decision. Bitcoin is safe bet in a way its proven technology without critical holes like they are discovered in ethereum every month.
Bitcoin is more well known, its better designed and have limited coins, not like ethereum (unlimited) so your money will be nothing in future in Ether.

Could you point to all of the "critical holes" that are being discovered in Ethereum every month? I've heard of very few

[Velkro]

Questions:

1) Is the above understanding correct?

2) If I am going for long-term investment, I should use a paper wallet. What's to stop me keeping my wallet address on one piece of paper and my private key somewhere else? So the two aren't kept together.

3) Can I choose my private key? For example, could I generate my private key from the first paragraph of my favourite book? That way I will never have to write it down nor store it with my wallet address. I will never forget it, provided I use the same method to recreate it each time I need it.

4) Does my wallet address ever change?

5) How do I create a wallet? Is the address allocated to me?

5) Living in the UK, where can I get my coins from in the first instance? I've heard bad things about Coinbase. What is this localbitcoins.com website? Is it safe to buy this way?

1. quite correct
2. yes paper wallet is best free solution, there are hardware wallets but they are expensive for amount u want to invest
3. this is called vanity addresses, you choose public address tho not private key numbers/letters
4. no, u can use always same address
5. u can generate it online, in online wallet or in software wallet
6. localbitcoins u buy from person in real life, other exchanges like coinbase, poloniex, bitstamp, gemini, kraken itd. u buy online

np, welcome in bitcoin world