Complete Newbie: Am I ready?

[bitzenbits]

@Birdy - Thank you again.

I see there are a few conversations going on in here at the same time, so maybe I should start a new thread with my new phase/questions. lol

Everyone here has been so helpful!

[Birdy]

@Birdy - Thank you again.

I see there are a few conversations going on in here at the same time, so maybe I should start a new thread with my new phase/questions. lol

Everyone here has been so helpful!

I think we can still handle the discussion here, only 2 pages here - that is nothing
Sadly there are also quite a bunch of scammers and other troublemakers in this community (well, it's about money, what would you expect?), so don't be fooled to trust everyone.

[BenJ]

Lots of useful stuff in here, cheers y'all.. I'm in the same boat, I've spent a lot of time in the last few days trying to figure everything out but I'm still struggling with how to actually buy BTC if face-to-face isn't an option, and all the while the price is shooting up.. I'm uneasy about having to register and prove my identity to any website after all that NSA shit, not sure if my paranoia about that is misplaced or not.

What percentage of people do you think go the full cold-storage route? Is it pretty common or more the domain of the extra-cautious?

[Birdy]

Lots of useful stuff in here, cheers y'all.. I'm in the same boat, I've spent a lot of time in the last few days trying to figure everything out but I'm still struggling with how to actually buy BTC if face-to-face isn't an option, and all the while the price is shooting up.. I'm uneasy about having to register and prove my identity to any website after all that NSA shit, not sure if my paranoia about that is misplaced or not.

You could try to find someone on this forum (use someone trustworthy as escrow!) or try localbitcoins.com.

What percentage of people do you think go the full cold-storage route? Is it pretty common or more the domain of the extra-cautious?

You really should have the most of your Bitcoins in cold storage, there are many many websites and users that got hacked/malware infected.
The extra-cautious will also generate those paper wallet addresses completely offline.

[BenJ]

Lots of useful stuff in here, cheers y'all.. I'm in the same boat, I've spent a lot of time in the last few days trying to figure everything out but I'm still struggling with how to actually buy BTC if face-to-face isn't an option, and all the while the price is shooting up.. I'm uneasy about having to register and prove my identity to any website after all that NSA shit, not sure if my paranoia about that is misplaced or not.

You could try to find someone on this forum (use someone trustworthy as escrow!)

Yep, just waiting til I get sprung from Newbie Jail for that one

Is cold storage only worth it if you go the offline laptop or similar route? If I kept a wallet on an encrypted USB stick for example, is there basically no benefit to this over using a password and encryption on a wallet stored on my laptop?

Thanks again.

[Birdy]

Is cold storage only worth it if you go the offline laptop or similar route? If I kept a wallet on an encrypted USB stick for example, is there basically no benefit to this over using a password and encryption on a wallet stored on my laptop?

Thanks again.

A good encryption of the wallet on your laptop should also be fine (vulnerable at creation and everytime you type in the password), but you should at least have some backup, e.g. in case of hardware failure.
If you use a strong encryption method you probably could even have a backup hosted in a cloud or your mail account. I prefer something I can see that it's still there like paper wallets though.

[KingCole]

I am also a bit of a newbie and have a basic question...

If bitcoins are selling at $600 at mtgox (as they are right now) why is it when you try to buy some at bitbargain.co.uk the price there (per unit) is a lot more?

i.e. $600 = £372

but at bitbargain.co.uk the going rate seems to be around £500

can someone explain why this is pls ?

Because bitbargain is overcharging you.

This is my understanding and I'm a relative newbie as well.

MTGox is a Bitcoin exchange, whereas BitBargain.co.uk is a market. With bitbargain.co.uk you are dealing direct with the seller and transfer funds immediately using a number of options. Bitbargain.co.uk requires sellers to pass some tests and they must upload coins to prove they own what they are selling. I'm reading into this that bitbargin.co.uk is faster for the buyer and seller. At end of the day it is a sellers market if people are paying for coins at a higher pound rate then you can't blame the sellers, you can always buy yourself and sell later at a higher rate using bitbargain.co.uk. Commission is 1% and a one-off check for sellers of 0.1BTC at moment.

Paul

[bitzenbits]

Thank you to all who helped me get started with choosing a wallet/client etc...

I generally consider myself relatively intelligent, but I don't feel so smart right now... even after spending ALL of last week watching videos, reading and getting myself mentally prepped to begin this venture.

So two people sent me small fractions over the weekend to get started...

I see them in my Blockchain wallet...

I went to the import/export tab and clicked on "import using paper wallet" and up popped a printable sheet with two QR codes, my addy and what I assume is the private key beneath the addy.. along with a mnemonic that is different than the original one I was given when I set up the wallet...

Questions:

1. What if I hadn't printed this sheet? Like, if I were out of printer ink or something... would I have lost access to the key associated with this address forever?

2. What would scan these QR codes, and when would I ever scan them (assuming my intent is to save BTC, not spend anytime soon...)

3. Is scanning just an alternative way to access the key/could the key be used without the scan?

4. Am I correct that the tiny series of numbers/letters etc beneath my BTC address is the key?

5. What is with the two-step verification? Is that necessary when I'm not spending? At what point is that relevant?

6. I'd like to choose a seller on localbitcoins w/high feedback, etc to buy a small amount of BTC from today. I know that'll mean going to a bank, etc - I've been reading through the different sellers' requirements, etc... but am I ready for this step, or would I be risking losing $ because of the fact that I'm not really understanding the whole "key" process/paper wallets, etc?

7. So my private key is sitting online in Blockchain, essentially, because it came from my wallet... right? So... oh, forget it... I'm just SOOOOO confused.

Thanks in advanced to any and all who can help me start getting the hang of this!

[Birdy]

1. What if I hadn't printed this sheet? Like, if I were out of printer ink or something... would I have lost access to the key associated with this address forever?

Afaik on blockchain.info it only shows you all adresses you have on the blockchain.info wallet. So they would still be there.

2. What would scan these QR codes, and when would I ever scan them (assuming my intent is to save BTC, not spend anytime soon...)

You can scan them with a smartphone app, there is a QR code for the Bitcoin address (to receive) and for the private key (to spend).
All the QR code does is saving you the time to type those.

3. Is scanning just an alternative way to access the key/could the key be used without the scan?

yes

4. Am I correct that the tiny series of numbers/letters etc beneath my BTC address is the key?

Probably, Bitcoin addresses always start with "1", private keys always start with "5".

5. What is with the two-step verification? Is that necessary when I'm not spending? At what point is that relevant?

It's an additional security feature to the online wallet. It makes spending your Bitcoins from there way more difficult for an hacker.

6. I'd like to choose a seller on localbitcoins w/high feedback, etc to buy a small amount of BTC from today. I know that'll mean going to a bank, etc - I've been reading through the different sellers' requirements, etc... but am I ready for this step, or would I be risking losing $ because of the fact that I'm not really understanding the whole "key" process/paper wallets, etc?

I think you should at least understand private keys, that's kinda important. I guess high frequency sellers there are probably used to answer a lot of questions, so maybe you.

7. So my private key is sitting online in Blockchain, essentially, because it came from my wallet... right? So... oh, forget it... I'm just SOOOOO confused.

Try this explanation: It's just like a key to a vault. If you want you can copy those and have multiple of the same key on different places.
Wallets like blockchain.info manage (/hold) those keys for you.

[redwoods]

This is my understanding and I'm a relative newbie as well.

MTGox is a Bitcoin exchange, whereas BitBargain.co.uk is a market. With bitbargain.co.uk you are dealing direct with the seller and transfer funds immediately using a number of options. Bitbargain.co.uk requires sellers to pass some tests and they must upload coins to prove they own what they are selling. I'm reading into this that bitbargin.co.uk is faster for the buyer and seller. At end of the day it is a sellers market if people are paying for coins at a higher pound rate then you can't blame the sellers, you can always buy yourself and sell later at a higher rate using bitbargain.co.uk. Commission is 1% and a one-off check for sellers of 0.1BTC at moment.

Paul

Thanks for that, I notice that to sell on bitbargain they require an application to sell fee of 0.4BTC as well as 1% etc, 0.4 might have been acceptable when prices were fairly low but at $600+ ??!

[kamant]

Birdy, +1 for the information and kindness, incase I didn't do it right.

[markkram]

Hi, I'm feeling just like bitzenbitz! But what a really useful introduction from some great contributors. Now you are a few days in bitzenbitz, how are you finding things? I'm going to give blockchain a try too. How is that for you? Oh and is it me but the dodgy looking/sounding advertisments on this forum make me feel a bit (more) nervous. Or am i just being over sensitive?!

[DannyHamilton]

4. Am I correct that the tiny series of numbers/letters etc beneath my BTC address is the key?

Probably, Bitcoin addresses always start with "1", private keys always start with "5", "L", or "K".

Fixed that for you.

[Dr Bloggood]

Great thred there!

Hey bitzenbits, I'm in the same boat as you, trying to figure it out and partly confused. This thread cleared up a couple of things I was just about to ask on a separate thread about security.

I'm just wondering why all of your concerns are more of technical nature. Maybe you have asked about this stuff elswhere, but I have spent quite a bit of brainpower considering topics like "Can the blockchains ever get so long BC becomes unuseable" or "Are there too many speculators involved".

After all, if you do everything right technically, but BC goes to 5$, you won't have any benefit of it...

Other than that, keep on rocking!

[Birdy]

Birdy, +1 for the information and kindness, incase I didn't do it right.

Thank you very much :3

Oh and is it me but the dodgy looking/sounding advertisments on this forum make me feel a bit (more) nervous. Or am i just being over sensitive?!

You are right, most of them are good examples of places where you shouldn't spend your Bitcoins or are gambling at best.

4. Am I correct that the tiny series of numbers/letters etc beneath my BTC address is the key?

Probably, Bitcoin addresses always start with "1", private keys always start with "5", "L", or "K".

Fixed that for you.

Thanks ^^

I'm just wondering why all of your concerns are more of technical nature. Maybe you have asked about this stuff elswhere, but I have spent quite a bit of brainpower considering topics like "Can the blockchains ever get so long BC becomes unuseable" or "Are there too many speculators involved".

Yes, there are plenty of things you have to ask yourself to get an idea if Bitcoin could be viable.
The size of the blockchain is an issue that was discussed a lot and there are possible solutions like pruning/compressing to reduce the size.
The number of speculators contributes to volatility, but this should diminish when Bitcoin reaches higher market caps.

[Dr Bloggood]

Hey, birdy!

The extra-cautious will also generate those paper wallet addresses completely offline.

How do you do that?

Can I do that without a second laptop?

For sure, I want to stay as far away from the internet as possible with my wallet!

[markkram]

You are right, most of them are good examples of places where you shouldn't spend your Bitcoins or are gambling at best.

Ah, thanks, as long as it's not only me then!

[Birdy]

Hey, birdy!

The extra-cautious will also generate those paper wallet addresses completely offline.

How do you do that?

Can I do that without a second laptop?

For sure, I want to stay as far away from the internet as possible with my wallet!

You could use a linux-boot cd and generate your addresses there.
The website https://www.bitaddress.org, does also work offline. (and as you want to be extra-cautious: check, that the source code isn't rigged)

However I only have a rough idea of this, there are way more tech-savvy users than me at this forum (like DannyHamilton)
I remember also a step-by-step guide in this forum to do a secure setup, don't have the link at hand though.

[judasbenhur]

Thanks for the awesome information!

How are you guys handling your bitcoins? One local save wallet with the important big amounts and multiple online wallets for transactions/trading?