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Author Topic: STOP storing your Bitcoins on ANONYMOUS WEB!  (Read 2338 times)
newguy05
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September 12, 2011, 01:11:37 AM
 #1

I like to think most of us involved with bitcoins are not completely retarded and has some technical understanding of computers and internet...

SO WHY DO YOU GUYS CONTINUE TO STORE BITCOINS ON ANONYMOUS WEBSITES?
Then come here to whine and cry when got taken out by said website.

- Every single bitcoins service operators currently in existence, no matter if it was pools or marketplace, are just basement outfits without ANY accountability and could disappear tomorrow. They are not regulated nor insured.
- Mtgox, mybitcoin, etc.. the list goes on and on of those sites losing your bitcoins.
- Everytime a major site gets scammed/hacked, bitcoin loses legitimacy and market crashes because so many idiots keep their bitcoins on those websites.  Are you all really this lazy that you cant be bothered to keep your own wallet file on an offline usb? I think it's in all of our interest to keep bitcoin alive.

Bitcoin by itself is a brilliant and secure system, it's the shady services operators and stupid people who trust those operators that gave false impression that bitcoin is not secure.

Below are some VERY SIMPLE steps you can take to protect yourself.


1) NEVER store more than 1 BTC on any website services for long periods of time.
 - To sell bitcoin, transfer the BTC to the motgox/tradehill etc.., sell immediately, then transfer the fund back to your bank.
 - To buy bitcoin, transfer the money to mtgox/tradehill, buy immediately, then transfer the btc to your wallet.

2) NEVER store more than 1BTC on any pools.  Deepbit etc..all allow automated btc transfer once they reach 1BTC.  If a pool doesnt allow that or need to wait a long time,  switch.

3) NEVER store your BTC online!  I honestly cannot wrap my head around why people would choose to store their BTC on some anonymous sites like mybitcoin.  If mybitcoin is a subsidiary of a sp500 company then i may consider it, otherwise no.  If i create a website tomorrow called mydollar.com and said i can keep your dollars safe, will you send them to me?

4) Create a separate wallet for long term BTC storage, have a USB drive with your wallet file, plug it to your computer to sync up and transfer BTC as needed, then unplug and store the USB offline.

It's really not rocket science, all this stuff is VERY basic. Bottomline: DONT STORE YOUR BITCOIN ANYWHERE ELSE BUT ON YOUR OWN COMPUTER/USB.   Then when the next website gets scammed/hacked (it is guaranteed to happen), you will not lose all your bitcoins and if everyone did that it in turn minimizes the market impact of bitcoin prices.



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September 12, 2011, 01:19:50 AM
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Holding them in your own client wallet has risks as well. Mainly due to user error... but user error is a risk. For this reason, it may make sense for people to store some amount online with exchange or ewallet, and some offline.

For a casual user with low amount of Bitcoins, I would not recommend even bothering with client software.

Online services will get more trustworthy over time as the market weeds out the bad ones. But it's very important for anyone involved with Bitcoin to understand that anywhere they are stored carries risks. Learn the risks and act accordingly. This is the price we pay to be early adopters of this new system without the taxpayer subsidized insurance of the FDIC =)
newguy05
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September 12, 2011, 01:27:58 AM
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Holding them in your own client wallet has risks as well. Mainly due to user error... but user error is a risk. For this reason, it may make sense for people to store some amount online with exchange or ewallet, and some offline.

For a casual user with low amount of Bitcoins, I would not recommend even bothering with client software.

Online services will get more trustworthy over time as the market weeds out the bad ones. But it's very important for anyone involved with Bitcoin to understand that anywhere they are stored carries risks. Learn the risks and act accordingly. This is the price we pay to be early adopters of this new system without the taxpayer subsidized insurance of the FDIC =)

You are kidding right? tell me you are. Name ONE bitcoin online service that is legit and not just a guy running it out of his basement on some island.  The risk of storing your bitcoin on your offline usb vs on some anonymous website, isnt even up for debate. 

Now i can sort of understand how the scammers managed to get all the bitcoin so easily,  it's people like this guy.



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September 12, 2011, 01:40:44 AM
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What is your definition of legit? I don't think MtGox, Tradehill, ExchB or CampBX operate out of basements.
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September 12, 2011, 01:54:59 AM
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+9001

never have and never will trust a 3rd party to have claim over any of "my" coins. its just stupid.

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September 12, 2011, 01:56:13 AM
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I suppose Lehman Brothers and Countywide are "legit financial companies" not being run by some guy on an island.  How did they turn out?  There will always be people trying to take money from others, at least Bitcoin doesn't do it by force - like a taxpayer bailout/buyout.

Losing hundreds of Bitcoins with the best scammers in the business - BFL, Avalon, KNC, HashFast.
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September 12, 2011, 02:23:20 AM
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it is just me or did almost every internet business start out of a garage, basement, dorm room, etc...
how in the flying pig do you think any business starts? with millions of dollars to create the perfect business with?

but i do agree i think it is stupid to keep btc on shady websites.
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September 12, 2011, 02:26:48 AM
 #8

Storing your bitcoins on paper wallets is also a VERY SAFE way to go.

Generate your own paper wallet with open source software like the Casascius Bitcoin Utility (for Windows, source available at github).

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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September 12, 2011, 02:30:23 AM
 #9

If Mark Karpeles ups and walks away with all of the money on Mt.Gox, I will f*%king eat my shorts.

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September 12, 2011, 02:36:57 AM
 #10

If Mark Karpeles ups and walks away with all of the money on Mt.Gox, I will f*%king eat my shorts.

He's already walking with plenty as it is.  Just think - not just in fees, but in the ability to execute preferential trades knowing in advance what's going to happen.  (see a million dollars of bank wires coming in?  he'd likely buy before posting them!)

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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September 12, 2011, 02:40:43 AM
 #11

If Mark Karpeles ups and walks away with all of the money on Mt.Gox, I will f*%king eat my shorts.

He's already walking with plenty as it is.  Just think - not just in fees, but in the ability to execute preferential trades knowing in advance what's going to happen.  (see a million dollars of bank wires coming in?  he'd likely buy before posting them!)

Great, but that doesn't mean he's stealing my Bitcoins, which is what this thread is about.

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September 12, 2011, 02:41:54 AM
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He's already walking with plenty as it is.  Just think - not just in fees, but in the ability to execute preferential trades knowing in advance what's going to happen.  (see a million dollars of bank wires coming in?  he'd likely buy before posting them!)

Great, but that doesn't mean he's stealing my Bitcoins, which is what this thread is about.

Sure, but it's relevant as a good reason for him to NOT steal your bitcoins, honest or not.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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September 12, 2011, 02:47:26 AM
 #13

Holding them in your own client wallet has risks as well. Mainly due to user error... but user error is a risk. For this reason, it may make sense for people to store some amount online with exchange or ewallet, and some offline.

For a casual user with low amount of Bitcoins, I would not recommend even bothering with client software.

Online services will get more trustworthy over time as the market weeds out the bad ones. But it's very important for anyone involved with Bitcoin to understand that anywhere they are stored carries risks. Learn the risks and act accordingly. This is the price we pay to be early adopters of this new system without the taxpayer subsidized insurance of the FDIC =)

You are kidding right? tell me you are. Name ONE bitcoin online service that is legit and not just a guy running it out of his basement on some island.  The risk of storing your bitcoin on your offline usb vs on some anonymous website, isnt even up for debate. 

Now i can sort of understand how the scammers managed to get all the bitcoin so easily,  it's people like this guy.


It's people like me that enabled scammers to get all the bitcoin so easily?

I merely said that holding one's own wallet carries risks, which it does. If you know how to safety use your own client and wallet, then it is safer than 3rd party sites, but that is a big IF. Before MyBitcoin scandal happened, more bitcoins were lost by mistakes by client users than from any online scandals.

My recommendation, if you have any substantial amount of coins, is to learn how to use your own wallet safely and store most bitcoins there. But, keeping a minority of them on a few ewallets and exchanges is not a foolish thing to do as long as one understands the risks.

And there are many online bitcoin services that are "legit." Can you name more than one ewallet service or exchange that "ran off" with everyone's money? The truth is that any established site that manages to gain the trust of the community to the extent that it has many bitcoins has an immense profit incentive to maintain that trust. This doesn't mean everyone is trustworthy, but saying something like "don't ever store any bitcoins anywhere online" is pretty silly.


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September 12, 2011, 02:48:41 AM
 #14

He's already walking with plenty as it is.  Just think - not just in fees, but in the ability to execute preferential trades knowing in advance what's going to happen.  (see a million dollars of bank wires coming in?  he'd likely buy before posting them!)

Great, but that doesn't mean he's stealing my Bitcoins, which is what this thread is about.

Sure, but it's relevant as a good reason for him to NOT steal your bitcoins, honest or not.

Agreed.  That's why I disagree with the OP.  In many instances, MtGox being one of them, it's more profitable to run a legitimate business than to steal.

newguy05
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September 12, 2011, 04:38:19 AM
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You guys dont seem to understand the basic concept of i am talking about. It has nothing to do with not supporting bitcoin startups, i am not saying dont use tradehill/mtgox. My point is dont store your bitcoins there for longer than you have to,  you have absolutely no protection against any of those service providers if they just got up and left, and it has already happened many times.  And everytime it happens, hundreds of thousands of bitcoins are stolen and dumped on the open market crashing the price and create chaos.  All because some of you idiots dont have common sense.

This is the very basics of how the business world works, your counterparty risk of storing your bitcoins on those anonymous websites is the same as you storing your money in some company in africa...

And i cant believe someone brought up mtgox, did you guys forget what happened to that site? The hacking, password dump, and the complete bs explanation they provided. The website is made by a bunch of guys running some scripts in their basement. They got lucky last time and didnt lose everything. I guarantee you if the loss was large, the site would be gone. Mtgox further reinforces what I am saying you are trusting your bitcoin to anonymous websites that 1) will purposely try to scam you then run or 2) poorly built, unsecure and easily compromised.

Why do you want to expose yourself to those risk when you could just keep your own bitcoins.  Is this really such a foreign concept to understand?  And everytime one of those sites get hacked with all the bitcoins you guys store on there, it shocks the market and make bitcoin less popular when they get dumped.  By contrast, if everyone kept their own bitcoins then if the website goes down it will be a non-event, as the loss will be minimal and it will not create market volatility.  

Cant believe I actually have to sit here and explain why storing your money on an anonymous unprotected website is a bad idea.   Is there a triple /facepalm photo somewhere?






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September 12, 2011, 04:50:50 AM
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yeah but if something happens to your machine or if that usb drive is corrupted, it's basically the same thing if not worse. Your argument is null.
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September 12, 2011, 04:55:28 AM
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You guys dont seem to understand the basic concept of i am talking about. It has nothing to do with not supporting bitcoin startups, i am not saying dont use tradehill/mtgox. My point is dont store your bitcoins there for longer than you have to,  you have absolutely no protection against any of those service providers if they just got up and left, and it has already happened many times.  And everytime it happens, hundreds of thousands of bitcoins are stolen and dumped on the open market crashing the price and create chaos.  All because some of you idiots dont have common sense.

This is the very basics of how the business world works, your counterparty risk of storing your bitcoins on those anonymous websites is the same as you storing your money in some company in africa...

And i cant believe someone brought up mtgox, did you guys forget what happened to that site? The hacking, password dump, and the complete bs explanation they provided. The website is made by a bunch of guys running some scripts in their basement. They got lucky last time and didnt lose everything. I guarantee you if the loss was large, the site would be gone. Mtgox further reinforces what I am saying you are trusting your bitcoin to anonymous websites that 1) will purposely try to scam you then run or 2) poorly built, unsecure and easily compromised.

Why do you want to expose yourself to those risk when you could just keep your own bitcoins.  Is this really such a foreign concept to understand?  And everytime one of those sites get hacked with all the bitcoins you guys store on there, it shocks the market and make bitcoin less popular when they get dumped.  By contrast, if everyone kept their own bitcoins then if the website goes down it will be a non-event, as the loss will be minimal and it will not create market volatility.  

Cant believe I actually have to sit here and explain why storing your money on an anonymous unprotected website is a bad idea.   Is there a triple /facepalm photo somewhere?


Only those who take great risks will find great success.  Live a little!  If keeping a few hundred BTC on MtGox for immediate trading and profiteering means there's a slight chance that I could lose them all to a hacker, then I'm willing to take that risk.  FOR BITCOIN!!

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September 12, 2011, 10:36:02 AM
 #18

Holding them in your own client wallet has risks as well. Mainly due to user error... but user error is a risk. For this reason, it may make sense for people to store some amount online with exchange or ewallet, and some offline.

For a casual user with low amount of Bitcoins, I would not recommend even bothering with client software.

Online services will get more trustworthy over time as the market weeds out the bad ones. But it's very important for anyone involved with Bitcoin to understand that anywhere they are stored carries risks. Learn the risks and act accordingly. This is the price we pay to be early adopters of this new system without the taxpayer subsidized insurance of the FDIC =)
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September 12, 2011, 01:41:02 PM
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Holding them in your own client wallet has risks as well. Mainly due to user error... but user error is a risk. For this reason, it may make sense for people to store some amount online with exchange or ewallet, and some offline.

For a casual user with low amount of Bitcoins, I would not recommend even bothering with client software.

Online services will get more trustworthy over time as the market weeds out the bad ones. But it's very important for anyone involved with Bitcoin to understand that anywhere they are stored carries risks. Learn the risks and act accordingly. This is the price we pay to be early adopters of this new system without the taxpayer subsidized insurance of the FDIC =)

You are kidding right? tell me you are. Name ONE bitcoin online service that is legit and not just a guy running it out of his basement on some island.  The risk of storing your bitcoin on your offline usb vs on some anonymous website, isnt even up for debate. 

Now i can sort of understand how the scammers managed to get all the bitcoin so easily,  it's people like this guy.

I think most people here recognize (at least now) that keeping a lot of bitcoins online is fairly unwise. And that keeping one's entire stash in someone else's hands—whether a few coins or 25k—is just nuts.

That said, I'll ask you, what do you say to those wanting to spend their bitcoins on the go, wherever they may be? Keeping in mind that not everyone can setup an ssh to their home computer running bitcoin.

Bitcoin is the ultimate freedom test. It tells you who is giving lip service and who genuinely believes in it.
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In the future, books that summarize the history of money will have a line that says, “and then came bitcoin.” It is the economic singularity. And we are living in it now. - Ryan Dickherber
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newguy05
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September 12, 2011, 03:40:10 PM
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yeah but if something happens to your machine or if that usb drive is corrupted, it's basically the same thing if not worse. Your argument is null.

THEN BUY TWO USB DRIVE, OR THREE.  They cost $5 each.  I swear some of you would bought the brooklyn bridge if it was on sale, unreal.


I think most people here recognize (at least now) that keeping a lot of bitcoins online is fairly unwise. And that keeping one's entire stash in someone else's hands—whether a few coins or 25k—is just nuts.

That said, I'll ask you, what do you say to those wanting to spend their bitcoins on the go, wherever they may be? Keeping in mind that not everyone can setup an ssh to their home computer running bitcoin.


How many people actually need bitcoin on the go? seriously why?

And you can use logmein.com  5min setup and free. 
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