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Author Topic: Falling down the rabbit hole...  (Read 1251 times)
OmegaStar
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October 31, 2013, 07:34:53 PM
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I'm new to the world of the Bitcoin, I've been reading about it a lot over the past few months and I'm intrigued. I'd be looking into buying and selling not mining, where would I start? I was also wondering if there's a major rival to the Bitcoin/ Litecoin that might grow in the next year, or if one of those two would be a better investment? Also, how much money do I need to invest at this stage?
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Birdy
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October 31, 2013, 07:40:05 PM
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Welcome to the wonderland ^^

First you should aquire a small amount of Bitcoins to learn how it works
Best exchanges vary from country to country, Bitstamp and localbitcoins.com are used a lot

You can start with an online-wallet at blockchain.info or a local wallet
Then proceed to learn about storing your coins securely (cold wallets, paper wallets)

For charts I like this website: http://bitcoinity.org/markets/bitstamp/USD

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I was also wondering if there's a major rival to the Bitcoin/ Litecoin that might grow in the next year, or if one of those two would be a better investment?
Imo Litecoin is way more riskier than Bitcoin, it doesn't offer much new.
I wouldn't recommend to invest any bigger sum in altcoins (the word for all those alternate crypto-currencies, Litecoin is the biggest one of them).

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Also, how much money do I need to invest at this stage?
There is no minimum amount you have to invest, but you should only invest an amount that doesn't give you a heartattack every time the Bitcoin price tanks.
Bitcoin has the potential to be very big, but it could also go to zero and it will be a rollercoaster to either way.
OmegaStar
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October 31, 2013, 07:59:21 PM
 #3

Thank you!

So does Blockchain show literally what has just been mined?

I apologise if what I say next sounds stupid but I really am teaching myself from scratch. I'm just investigating wallets because I don't even know much about those - are there different hosts for wallets then? I just downloaded Multibit but your signature has a different wallet provider and there's one on Blockchain too? Do you get a generic wallet file that can be imported into any host? Does it matter which host you use?

I've seen people posting a wallet address - is that their own personal wallet reference to send stuff to? It looks like a long series of letters?

Wow I really am lost down this rabbit hole bare with me!
strmir
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October 31, 2013, 08:18:06 PM
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I've seen people posting a wallet address - is that their own personal wallet reference to send stuff to? It looks like a long series of letters?

You probably mean a public address, does the series of letters begin with 1? If so, that indeed serves as the receiving point. If you want, you can check all transactions going from/to any such address by using the search box at blockchain.info site.
Birdy
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October 31, 2013, 08:20:59 PM
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So does Blockchain show literally what has just been mined?
blockchain.info shows a lot of stuff, the front page shows the mined blocks and new transaction in the Bitcoin system.
(Guess I will have to explain that next ^^)

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I apologise if what I say next sounds stupid but I really am teaching myself from scratch. I'm just investigating wallets because I don't even know much about those - are there different hosts for wallets then? I just downloaded Multibit but your signature has a different wallet provider and there's one on Blockchain too? Do you get a generic wallet file that can be imported into any host? Does it matter which host you use?

I've seen people posting a wallet address - is that their own personal wallet reference to send stuff to? It looks like a long series of letters?

Wow I really am lost down this rabbit hole bare with me!

Ok let's start with some general stuff how Bitcoin works (going to get a bit mind-blowing):
Bitcoin works with a history of all transactions (yes all ever made), this is the blockchain.
You never have any actual Bitcoins on your computer, what you have are Bitcoin addresses and the corresponding private keys to that addresses.
The private keys allow you to spend the Bitcoins on an address. (So keep in mind that everyone who has access to the private key can spend the coins!)

All those wallets are different ways to manage these private keys and bitcoin adresses.
But actually both are just strings of numbers and letters and you can literally store your Bitcoins on a piece of paper (called paper wallet)
For an example check here: https://www.bitaddress.org
(yes you can have as many Bitcoin adresses as you want)

There are local wallets (bitcoin-qt, Electrum, Multibit) which you can download on your PC.
The original bitcoin-qt client downloads the whole blockchain (>12 GB), the other two are light clients that don't need the whole blockchain.

The blockchain.info online-wallet does work quite similar to the local wallets,
Inputs.io is more like a Bitcoin bank, it has some nice features, but also requires you to trust the owner of that website.

All of those are good for daily use, but not secure enough for storing bigger amounts of Bitcoins.
Paper wallets or cold storage are the best way to store them securely.

Cold storage is having your coins on a digital medium that is always offline (laptop/usb stick/sd card..).
You can receive Bitcoins to any address without connecting to the internet.
A professional use of cold storage is the Armory offline client, which also allows spending Bitcoins without internetconnection on a cold storage laptop.


The rabbit hole goes deep, it's hard to know where to start explaining ^^
OmegaStar
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October 31, 2013, 08:47:32 PM
 #6

Wow thank you for helping me scratch the surface.

So now what i'm confused about are the addresses. I go to bitaddress and 'generate new address' and am given a bitcoin address and a private key - what do I do with them now? How do you keep that number as your own? Do you attach it to your wallet? If I give someone that address to send me bitcoins would they find my way to my wallet?

Haha >.<
OmegaStar
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October 31, 2013, 08:54:07 PM
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Sorry I just found I have an address already in Multibit. *Feels stupid*
Birdy
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October 31, 2013, 08:54:34 PM
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Wow thank you for helping me scratch the surface.

So now what i'm confused about are the addresses. I go to bitaddress and 'generate new address' and am given a bitcoin address and a private key - what do I do with them now? How do you keep that number as your own? Do you attach it to your wallet? If I give someone that address to send me bitcoins would they find my way to my wallet?

Haha >.<
Wallets can create those addresses on their own (, but most allow import of other private keys)
You need no internet connection to create new addresses.

I will give you an example:
this is a public address
18QirKFadUMFEwiCXMG1118LjsJZohDmof
and everybody that has Bitcoins can send it to this address

and this is the corresponding private key
5HwPQqBxJxDA4xiLwMb6V6W96CHF3Zo5K9eitvVmhDNZ7Rsimqm
everybody that knows this key can spend the Bitcoins on 18QirKFadUMFEwiCXMG1118LjsJZohDmof (aka everyone reading this thread, so don't that address ^^)

Birdy
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October 31, 2013, 09:08:39 PM
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Just try this: Create a new address and post the public address here (not the private key)
Btw: public adresses start always with 1 and private keys always with 5
OmegaStar
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October 31, 2013, 09:16:13 PM
 #10

I generated this new address on bitaddress - 12rwSKo4YaE5usyosPXLHcAb2w2nUdwHP2

But on my downloaded multibit I have - 1A5MXXnbsobGB5rHGxe2eanVfzfqQfmRWM

I see on multibit I can generate as many as I like HmMmMmmmm!!! I think I understand my address now, lol! ^_-
Birdy
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October 31, 2013, 09:21:01 PM
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Quote
I generated this new address on bitaddress - 12rwSKo4YaE5usyosPXLHcAb2w2nUdwHP2
Remember that you need to have that private key to the address, it doesn't automatically jumps from bitaddress.org to your wallet ^^
If you write it down(dangerous, because of typos! triple check)/print it out you can import it to most wallets.


I've sent you 0.002 Bitcoins to 1A5MXXnbsobGB5rHGxe2eanVfzfqQfmRWM to play with.

You can also watch it here:
https://blockchain.info/address/1A5MXXnbsobGB5rHGxe2eanVfzfqQfmRWM
OmegaStar
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October 31, 2013, 09:26:51 PM
 #12

Thank you, it appeared like magic!

What do you use for transactions do you think multibit is safe for my to start with?

I will see if I can do a transaction back to you using the address in your sig...
Birdy
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October 31, 2013, 09:32:32 PM
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Thank you, it appeared like magic!

What do you use for transactions do you think multibit is safe for my to start with?

I will see if I can do a transaction back to you using the address in your sig...
You will have to wait until the transaction has at least one confirmation from the network (~10 minutes, but it varies a lot, can also be 1 minute or 30 minutes) until you can send them again.

I haven't used Multibit myself, but it has a good reputation, so I think it's safe to start with.
I use blockchain.info, inputs.io and bitcoin-qt for daily use and cold storage/paper wallet for the rest of the Bitcoins.

(bitcoin-qt probably isn't the best one to start with, because you need to download the whole blockchain)
OmegaStar
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October 31, 2013, 09:38:31 PM
 #14

Thanks again for all the advice, I'm going to rest my head a bit now and will try and learn more tomorrow! Night ^_^
Birdy
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October 31, 2013, 10:08:45 PM
 #15

I will see if I can do a transaction back to you using the address in your sig...

I've received that ^^

(Btw on topic of sending back: Don't assume you can send Bitcoins back to the address where they came from and the other user will have them back. It's true most times, but some websites use mixed adresses. e.g. the exchanges and inputs.io, so make sure the other one owns that address)
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