Bitcoin Learning

[kiba]

What you guys have learned during your time in the bitcoin community?

Here's my list:

1. Paypal sucks.
2. Don't trust escrow agents with a short posting history.
3. Economic of bitcoins. Is deflation bad or good? Stealing bitcoins is a different process than stealing physical goods.
4. Visa organization
5. How to run a microcompany based on only trust(In progress)
6. The process of letter campaign writing and raising donation.
7. How bitcoin work(roughly)
8. You can use the GPU to do bitcoin mining.

[1713242974]

1713242974

[1713242974]

1713242974

[The Madhatter]

1. Paypal sucks.

I learned this 'the hard way' over 8 years ago.

2. Don't trust escrow agents with a short posting history.

Well, that should be common sense.

4. Visa organization

I'm not sure what you mean by this.

5. How to run a microcompany based on only trust(In progress)

There are many ways to accomplish this. Hopefully someone can get something running soon.

These lessons are yet to be learned by most of you:

8. Corporate REGIStration for Bitcoin-accepting businesses is always a bad idea. (Look up the latin word 'regis'. Understand 'juris' and 'diction' too.).

Edit: For those who are lazy: Regis is Latin for "of the King". Who really owns your registered corporation? You have a privilege (private law) to use the charter, but you don't own it. The "king" ("the state" in modern times) does. When/if they pass a statute banning Bitcoin (or use existing anti-money laundering statutes) you'll have your charter revoked (returned to it's rightful owner; the "king") so fast it will make your head spin. This includes any/all property owned by the corporation as well.

9. Accepting Visa/Mastercard for Bitcoins will get your bank accounts frozen eventually. (Not to mention get you scammed rather badly.) This was partially learned by buybitcoins.com, despite my vocal oppositions. (Out of concern for his financial well-being, of course.)

10. Any 3rd-party processors that deal with Visa/Mastercard will get scammed and will pass this fraud onto you eventually. This includes such 'brilliant' ideas such as using Alert/Liqpay to deal Bitcoins. Enjoy getting ripped off. It will happen. I guarantee it.

11. 'Money laundering' investigations are easy to attract when your bank doesn't understand your business model. You can easily get your bank accounts frozen too. Corporate charters can be revoked by local government for almost any reason; including your inaction to a request or inability to explain what your corporation did/does.

12. Learn the difference between a privilege and a right.

13. ACH payments can be disputed and revoked. Expect scams.

14. SWIFT payments can be disputed and revoked. Expect scams.

15. Counterfeit money orders/cashier's checks do exist. Expect scams.

I've posted many times in the past along these lines, but no one seems to listen. Oh well. I've just been sitting back and watching everyone learn these lessons like I did -- the hard way.

Without any ill will, malice, or vexation,
The Madhatter

[Bitquux]

Good post by The Madhatter.

Here's a couple:

1. Everyone here is paranoid.
2. Everyone here has good reason to be paranoid.
3. I have this inexplicable desire to obtain more bitcoins.
4. Number 3 is made difficult by paranoia.
5. Pumpkins rot rather quickly once carved.

[jgarzik]

Scams are inevitable for the chargeback-capable forms of payment, yes.

But your potential audience is far, far larger when you accept chargeback-able forms of payment.  It then becomes a matter of trying to prevent fraud at your store, while also budgeting a percentage for crime.  That's how the Big Boys do it.

Just don't do something silly like buybitcoins.com and offer to accept chargeback-able payment in direct exchange for hard currency.

[Timo Y]

I have invested some of my wealth in bitcoins. It's an amount I can afford to lose but it's still big enough that it would hurt if I lost it.

This has forced me to think carefully about how to backup up my wallet.dat files in a way that a) the chance of losing the data is very small and b) the chance that a third party can somehow gain access to that data is very small.

This proved trickier than I thought because a) and b) are somewhat conflicting. I was forced to learn the basics of cryptography and computer security in the process. (I strongly recommend even the non-geek Bitcoin user to read up on these topics as dauting as they may seem at first).

[jgarzik]

I have invested some of my wealth in bitcoins. It's an amount I can afford to lose but it's still big enough that it would hurt if I lost it.

This has forced me to think carefully about how to backup up my wallet.dat files in a way that a) the chance of losing the data is very small and b) the chance that a third party can somehow gain access to that data is very small.

This proved trickier than I thought because a) and b) are somewhat conflicting. I was forced to learn the basics of cryptography and computer security in the process. (I strongly recommend even the non-geek Bitcoin user to read up on these topics as dauting as they may seem at first).

Agreed, though I think "average users" will choose easier routes such as mybitcoin.com.

[jimbobway]

I have invested some of my wealth in bitcoins. It's an amount I can afford to lose but it's still big enough that it would hurt if I lost it.

This has forced me to think carefully about how to backup up my wallet.dat files in a way that a) the chance of losing the data is very small and b) the chance that a third party can somehow gain access to that data is very small.

This proved trickier than I thought because a) and b) are somewhat conflicting. I was forced to learn the basics of cryptography and computer security in the process. (I strongly recommend even the non-geek Bitcoin user to read up on these topics as dauting as they may seem at first).

Agreed, though I think "average users" will choose easier routes such as mybitcoin.com.

I have learned to pick who you can trust carefully when buying bitcoins.

However, I don't trust anyone holding onto my bitcoins.  Someone could get to the server, the house could burn down, who knows.  I have used TrueCrypt and have three copies of my wallet, all encrypted.  I put them on two USB sticks and plan to hide them in different places for the long term too.

[Timo Y]

I have learned to pick who you can trust carefully when buying bitcoins.

However, I don't trust anyone holding onto my bitcoins.  Someone could get to the server, the house could burn down, who knows.  I have used TrueCrypt and have three copies of my wallet, all encrypted.  I put them on two USB sticks and plan to hide them in different places for the long term too.

I store my wealth in more than one wallet.dat. Encrypting your wallet.dat is a good move, but you can't get around the vulnerability that there is an unencrypted version of it sitting in the .bitcoin (or AppData) directory while bitcoin is running.  No firewall is 100% impermeable. Third party programs such as Adobe Flash can have security holes that allow hackers to bypass your firewall. Even if you delete and shred the plaintext wallet.dat, and keep only the encrypted backup, how can you be sure that the data doesn't remain hidden as a duplicate somewhere on the HD? or in memory? or in some cache? or in the antivirus quarantine? For ever second that your computer remains connected to the internet, you are exposing yourself to the risk of bittheft. That risk will only increase as Bitcoins become more valuable.

Ugh, there are just so many things to think about when it comes to securing Bitcoins.

[davout]

Maybe it's a little naive, but why not generate some addresses on a wallet held on a USB stick, safely store it somewhere and then send coins to these adresses ? the risk would be limited to someone actually getting a hold of the physical stick.

or for more safety, do it on a bunch of them, but store the wallet encrypted and learn the private key by heart =)

[Timo Y]

I've posted many times in the past along these lines, but no one seems to listen. Oh well. I've just been sitting back and watching everyone learn these lessons like I did -- the hard way.

Thanks for sharing your experience. All this jurislation and regisdiction is making my head spin!  

[jimbobway]

Maybe it's a little naive, but why not generate some addresses on a wallet held on a USB stick, safely store it somewhere and then send coins to these adresses ? the risk would be limited to someone actually getting a hold of the physical stick.

or for more safety, do it on a bunch of them, but store the wallet encrypted and learn the private key by heart =)

Yes that is what I did.  I have two wallets.  One is essentially a "savings" account which is encrypted which I don't plan to spend, only receive.  The other is the wallet which I consider the "checking" account.  The checking account has less bitcoins in it and is not encrypted.

[LZ]

Good practice.