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Steamtyme
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October 11, 2019, 12:16:58 PM
 #1

So I'm a big fan of learning from ones mistakes and thought this could be applied in a different way. Everyone here started out with no knowledge of crypto and had to pick things up along the way, unfortunately not everything is useful, factual or complete. So I thought why don't we all take a minute and share some of our past learning moments, or misconceptions that once figured out were a "lightbulb" moment.
The goal here and reason for this board is it could be a fun and informative read for newbies to pick through. Best case scenario someone learns something, worst case scenario everyone points and laughs at your folly. Kidding, you won't see people pointing.

Consolidating inputs... huh, that's a thing?

So I'm going to start off. This still rings out in my head when I consider that I overlooked an opportunity to have adopted BTC much earlier. When I look into something I tend to dive in, multiple tabs open of explanations on the same point to try and encompass a full picture. Sometimes though, you find out later on these people weren't well enough informed themselves. I took a pass on carrying on with BTC, as I assumed TX fees would become astronomical with each additional transaction your BTC was involved in compounding infinitely without relief. Essentially the concept behind calculating fees and consolidating inputs, was lost and not properly conveyed through these articles. In my mind BTC would fail, as eventually those BTC would have so much history attached they would cost more to spend than they were worth.

Obviously a few years later the explanations had become better, and I realized that my particular issue was easily resolved. It still took me a while to figure out the best practices for this and I will link to a thread that covers it well. [OCT 2019] Fees are low, use this opportunity to Consolidate your small inputs!

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October 11, 2019, 12:29:10 PM
 #2

My misconception involved me thinking that, to profit from bitcoin you have to constantly multiple your bitcoin which lead me to investing in different investment platforms over the years which all ended badly. I took it a step further by trusting my bitcoin to platforms advertising themselves as trading/mining site which also ended awfully. Took me some time to realize you're far better holding your bitcoin then trying to double them through any of those means out there. If you're that passionate about doubling your bitcoin then I advice you ignore any other doubling opportunity and just learn how to trade.

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October 11, 2019, 12:46:50 PM
Merited by Steamtyme (1)
 #3

The hardest thing to grasp for me was the difficulty adjustment and the ASIC arms race. I had this dumb idea at one point (and it lost me quite a bit of money mining LTC at the wrong time) that difficulty would rise nicely and gradually. I learned the hard way that it can rise 20-fold withing a matter of months rendering mining equipment worthless.
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October 11, 2019, 08:25:19 PM
 #4

It still took me a while to figure out the best practices for this and I will link to a thread that covers it well. [OCT 2019] Fees are low, use this opportunity to Consolidate your small inputs!

Before anyone rushes off and starts consolidating, I just want to draw attention to this point:

Quote
Privacy
Consolidating your inputs links them together on the blockchain. This wouldn't be any different when you use the same funds in any other transaction, but you should consider this before doing it.

I usually take care to avoid linking certain address clusters together -- particularly those that have or will interface with a KYC service like an exchange. The fee savings of consolidating outputs is great but it's something to keep in mind. Consolidating all the outputs in your wallet at once could link together most of your past wallet activity.

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October 11, 2019, 08:55:35 PM
Last edit: October 12, 2019, 06:55:01 AM by Steamtyme
 #5

Quote from: GSpgh link=topic=5192047.msg52724309#
~snip~
That's a great one. I remember when Diff adjustments first registered with me. Luckily it was a few months before I saw repeated double digit jumps. It was always explained but a link to solid sites that tracked it at the time would have been a great visual.
~snip~
That's a fair point but the thread isn't about consolidating that was just my experience. The link was so that others could go review and read information provided by a knowledgable person.

Now come on I'm sure you have an instance yourself you could share. Given the privacy nature of your reply maybe something along the lines of anonymity.

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October 12, 2019, 09:34:47 PM
Merited by Steamtyme (1)
 #6

Now come on I'm sure you have an instance yourself you could share. Given the privacy nature of your reply maybe something along the lines of anonymity.

Like how we all used to believe that Bitcoin was anonymous? Cheesy

I was pretty careless in my early years and I'm thankful I managed to avoid KYC for the most part. I'm not sure when my "lightbulb moment" was exactly. I had significant funds on BTC-e when they were shut down in 2017 and I remember becoming really paranoid about taint when we got refunds. I started looking into mixing and Coinjoins, and eventually realized that our privacy problems actually go much deeper than just blockchain analysis. One of the scariest problems today is web trackers and third parties leaking transaction data and other PII.

Combining previously unrelated wallet inputs is just the tip of the iceberg, but it's something I think newbies should start thinking about.

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October 19, 2019, 08:22:00 AM
 #7

That's exactly the type of post I was thinking about. It's something I'm still pretty bad at, it's like 2 steps forward one step back usually. Then there's the times I just need to send something off quick and it all goes out the window. I still generally only deal with rather small amounts, but at least I'm aware of the mistakes I'm making along the way now.

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October 19, 2019, 10:01:13 AM
Merited by Steamtyme (1)
 #8

I thought Bitcoin would become just another FAD or craze or whatever people call it these days. A craze are usually a enthusiasm for a particular activity or object which appears suddenly and achieves widespread but short-lived popularity. Source : Oxford

So, I did not invest in it at the start, because I thought it was "Nerd money" and only meant for super intelligent people. <People who understands complex algorithms and computer programming>  Roll Eyes

I quickly realized I was wrong and that you do not have to be a genius to use the technology.

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October 19, 2019, 11:07:00 AM
 #9

Consolidating inputs... huh, that's a thing?
Additional with this is knowing first the current transaction fees when consolidating inputs, we can try to check it here: https://coinb.in/#fees

Correct me if I'm wrong, is that the UTXO the one you consolidating to one, right?
What I usually do is when the fee is 1satoshi/byte then that's the time I can consolidate some inputs of my bitcoin wallet into one.

And also I found that every bitcoin wallet has some coin control, where you can manage the funds of particular address in your wallet, but unfortunately most of bitcoin wallets don't have this, like when you have multiple addresses in particular bitcoin wallet, you can use one of the addresses in your wallet and spend the amount inside of that address only w/out touching other address' funds.

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October 22, 2019, 07:39:08 AM
Last edit: October 22, 2019, 08:42:52 AM by hd49728
 #10

Regarding to consolidation, I have my topic on that method, too.
Bitcoin transaction fees - Everything in one
It is always better to choose the right period to move Bitcoin at low fees and shorter waiting time; but if someone don't mind about waiting time, they can set up transactions at 1 Satoshi/ byte and just wait for hours or days.
In Electrum wallet, users can choose a option (Use Replace-By-Fee) to increase fees later, just in case their initial setup-fees are too low and rejected by miners. Anyway, I don't think we can not move Bitcoin at 1 satoshis/byte; only people in hurry have to use high fees.

And also I found that every bitcoin wallet has some coin control, where you can manage the funds of particular address in your wallet, but unfortunately most of bitcoin wallets don't have this, like when you have multiple addresses in particular bitcoin wallet, you can use one of the addresses in your wallet and spend the amount inside of that address only w/out touching other address' funds.
This is why choosing good wallets to use is important. I would prefer to use wallets that can allow me to activate coin control features, and allows me to both receive from and send my bitcoin to Segwit address. There are some wallets that can only receive transactions from Segwit bitcoin address but are unable to send to same type of Segwit address. For all of the reasons, Electrum is my most favorite wallet, that is light and convenient.

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October 22, 2019, 06:31:44 PM
Merited by fillippone (4)
 #11

I quickly realized I was wrong and that you do not have to be a genius to use the technology.
It's funny the first time I bought BTC I being a DIY'er I looked into mining and thought there is no way I can grasp the concepts going on. The more I read the further I found BTC to be way out of my depth, combined with my lack of understanding some of the more basic concepts I felt it wasn't for me. So I bought some, made my purchase and forgot about it for a few years. Glad I tooki a lot more time to dig into things in 2017.
Correct me if I'm wrong, is that the UTXO the one you consolidating to one, right?
For consolidating I was just referring to combining your inputs like you have mentioned so that when fees are higher you have already taken steps to reduce the inputs that might make up your transaction. 
The purpose of the thread here though, isn't to get to bogged down in the specifics of this, that's why I referenced another thread where it is discussed. This is just simply about anything that might have been a barrier or a mistake that people had to learn from or overcome when entering crypto.
Understanding dynamic fees is a big one as well, a lot of people can't grasp that at times if you don't need to send BTC, you can wait a day or 2 maybe even a couple hours and save. This is a good example of things people often misunderstand.
This is why choosing good wallets to use is important.
This part here fits nicely when elaborated on, not all wallets are the same. Especially when looking at an online wallet or non custodial wallets like exchanges.

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October 22, 2019, 07:11:44 PM
Merited by Steamtyme (1)
 #12

One of the newbie mistake/misconception I have is when I thought that tokens and altcoins are the same thing when in fact they are completely different from one another.  I thought that after Bitcoin every other cryptocurrencies can either be called tokens and altcoins without them differentiating from the two. The thing is Altcoins have their own blockchains while tokens are only dependent on the blockchain they reside in on part of that Altcoin. With this my whole concept in participating ICOs became different and look less for tokens and watch more on Altcoins that has the potential to grow, I'm not saying all tokens are bad but it's better to look into the one who has the blockchain tech first rather than the ones who are created in it.

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