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Author Topic: QUESTION....A truly secure wallet? etc  (Read 426 times)
cheachea
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November 21, 2013, 03:16:12 PM
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I have been taking in info and trying to understand (wrap my brain around it) lol.  However, I do not know a lot of the terminology, so it has been quite difficult at times.  I think I have a pretty good understanding now of the basics....concept/idea of bitcoin, purpose of private exchanges, securing a wallet, buy and sell process.

A TRULY secure wallet, is one I am trying to educate myself on.  I know about backing it up, changing it, and a few other obvious things.  However, my understanding is limited!

Newbie to bitcoin, and computers in general as well.  So please answer as basic as possible...if my question even makes sense!

Question.....
When I obtain a wallet through an exchange (MtGox, Localbitcoins, or even Blockchain.com, etc), and then use it for transactions, is it truly MY secure wallet??  OR is it my "internal" wallet, that has been assigned by that exchange/service?  Therefore, giving them some(or all, really) control and ACCESS to my wallet?  Perhaps I am thinking in traditional bank practices....when I deposit cash into my bank account, it doesn't actually/physically remain there at the branch.  It is used/transferred around etc.  With the hopes that when I walk in and want to withdraw the entire balance, it will be available immediately haha. 

Is there a way (easy to do/not super technical!!) to create a truly secure wallet that really does BELONG to me? It appears everyone is doing it, and this is the way it is done....through a service!  But I cant help feeling that I am giving my power/trust to another party.  Therefore, the potential to get screwed exists. Or once government steps in (and Im sure they will!!) the exchanges/services, will be regulated, and I will be forced to comply to whatever they require, whether I choose to or not (if I want access to my bitcoin).

I likely am not articulating properly, what it is I am trying to ask haha  But there is just "something" about this process that doesn't smell right to me lol.  Am I overthinking it, and just not fully understanding??

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Gator-hex
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November 21, 2013, 05:12:38 PM
 #2

Bitcoin Wallet is probably the best for a tech noob, see..

http://bitcoin.org/en/choose-your-wallet

If you make a wallet through a 3rd party you have to trust them like having your cash in a bank, except there is no regulator to bail you out if they go bust or get robbed!

cheachea
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November 21, 2013, 06:04:03 PM
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Thanks...I haven't checked out the link, but I will.

So assuming this wallet can be created free of a 3rd party...I could independently store my bitcoin in it(feeling more secure).

However...In order to TRADE, I would still have to go through an exchange correct?  Therefore, have to set up a wallet with them.  I could do my transactions, then simply transfer my bitcoin to my own (more secure) wallet.

From what I am reading (mostly MtGox) it is becoming near impossible to cash out.  Seems the exchanges have no problem (for now!!) transferring bitcoin, but another story when it comes to dollars.  So again, my concern would be the same...the exchange could easily dictate what I needed to do, in order to continue using their service right(getting full access to my bitcoin-while in limbo before I transfer it out).

Perhaps my brain is working overtime here...idk.  But the way I see it, buying in person from one wallet to another (eliminating the exchange/service) is the best bet.  But of course, with that, comes a whole different set of problems, and not practical!  I am just trying to figure out what this whole process would look like years down the road, but maintain personal control.  I guess I view it as that is one selling feature of bitcoin...personal control of it.  Hmmmmm or not!


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November 21, 2013, 06:13:34 PM
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An exchange is just for converting one kind of money into another.

Bitcoins can live in their own wallet that only you have control of.

You can spend bitcoins directly into the economy with anyone who accepts bitcoins as payment. www.takeaway.com

Like owning a gold coin it will be up to you to keep it safe.

cheachea
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November 21, 2013, 06:18:55 PM
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This is where Im not getting it I guess....How would I go about purchasing more bitcoin down the road?  Wouldn't I HAVE to use a service/exchange? How else could I buy more, other than face to face?
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November 21, 2013, 06:25:47 PM
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This is where Im not getting it I guess....How would I go about purchasing more bitcoin down the road?  Wouldn't I HAVE to use a service/exchange? How else could I buy more, other than face to face?

Yes to buy more Bitcoins for Fiat you would use an exchange but you could transfer them to your own wallet after purchase.

You could also sell items and say "accepting Bitcoin" and get them to pay directly into your own wallet.

You could buy a Bitcoin mining machine, and get it to pay directly into your own wallet.

cheachea
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November 21, 2013, 06:37:32 PM
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Hmmm....I likely wont be selling any or mining.  I think best bet for me right now, is to just buy and hold.  And hope, that at some point becomes acceptable for merch mainstream.

I guess Im being devils advocate here...
I see the longer term problem being...the exchanges/services will simply end up with the "control" in the end. Cant help but feel I would be delusional to think anything different.

This grade 12 GED doesn't always get me too far hahaha....Im sure this has occurred to others, and much much smarter people than I, will work it out!

Appreciate your feedback
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November 21, 2013, 06:44:13 PM
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The problem with leaving money on an exchange is that your 3rd party is unregulated and if the they go bust, get hacked, or simply run off with the money, you're the one left out of pocket! Always keep that in the back of you mind if leaving $thousands there!

cheachea
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November 21, 2013, 06:48:34 PM
 #9

Thanks again   Wink
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