Newbie questions crypto thread

MikeS

Pelican
redonion said:
What is the technology behind hardware wallets and how they recover your bitcoins?

I have a friend who physically lost his Trezor, but was able to recover all of his coins via his 30-word passphrase and a new Trezor. This makes me think that the coins aren't physically stored on an individual Trezor, and there must be some central registry somewhere for him to do the recovery. If this is true, doesn't this contradict the security features of a hardware wallet? What would happen if Trezor closed shop and went out of business?

The "central registry" is the blockchain that's the technology behind cryptocurrencies.
Read up on it or wait for someone here more knowledgeable than me to give a brief primer (assuming that's even possible in less than a few pages), but as far as I've rudimentarily understood it and remember it, it's (and many cryptocurrencies have their own blockchain technology so there can be differences) a decentralized ledger consisting of blocks of data - transaction and various other things, for Ethereum for instance it can also be executable program code - connected into a chain, and it's pretty much impossible to go back and change individual blocks because that would mean having to modify every single connected block in the chain to reflect changes.

As such hacking attempt of blockchains would be prohibitively expensive in computation power, just like crypto mining energy costs are now higher than those of some individual countries.

The wallet is... I think someone used the term keychain earlier?... to your data, addresses, transactions etc. on the blockchain. And it can thus be restored with your seed to any wallet that supports the same encryption standards for the seed.
 

Genghis Khan

 
Banned
Roosh said:
What determines the byte size of a Bitcoin transaction. Is it just the amount of Bitcoin you're trying to send?

It's a bit complex as each transaction has inputs (where the BTC comes from), output (where it goes) and stuff like signatures to validate transaction.

But the actual Bitcoin amount - no, that won't change the size of the transaction. So sending a million BTC versus sending 0.000001 BTC won't change the size of the transaction (all other things being equal).

However let's say you were to hold a RVF appreciation contest and the winners each got a BTC. You could create a transaction with one input (your BTC) and 10 outputs (the addresses of the 10 individuals). This would increase the size of the transaction.

Miners get paid for the transactions they confirm in a block. Block sizes are limited, so they typically pick the best transactions to add based on transaction fee/kB.

Hope that answers your question.
 

Genghis Khan

 
Banned
Leonard D Neubache said:
I appreciate you making this thread and I hope some of the gurus will contribute.

My personal questions are these.

a) Is it reasonable to run all your trading through a smartphone.
b) Have the markets become buy/sell intensive to make money or can you still drop some cash in something like bitcoin, forget about it and see good returns in 6 months to a year.

I know nobody has a functioning crystal ball but I'd happily settle for a best guess.

Hey Leonard,

a) what do you mean with trading? Some people trade very actively (daily) while others like me just buy and hold. If you're trading very actively, smartphones may not be the best choice - there's a higher probability you accidentally type in the wrong number and loss a massive amount of money. It's called 'fat-fingering' and there's quite a few stories around.

If you're planning on just buying, holding for a long time and the. selling, Coinbase is a great option. They currently only have BTC, ETH and LTC. That said, if you have a Coinbase account - you automatically can login into GDax (an exchange, aka where you can do a lot of active trading).

Coinbase has a smartphone app, which I recommend. It's very easy to use and a create way to get your feet wet.

b) I think there's still plenty of opportunity for growth. A lot of people believe 2018 will be a big year. Maybe it will, maybe it won't. That said, my opinion (and this is purely mine):

I think Bitcoin will probably see a big rise in the next few months, if not years - however I think long-term it's going to lose out to Ethereum. I'm sure people will disagree, and in general too there are some people who thinks it's ALL a big bubble waiting to pop. Though I think Ethereum especially will be huge.

But yeah if you buy BTC or ETH right now, I'd be very surprised if you can't make a good profit in the next 2-3 years (it might take a year, or barely a month, but the prices will go up).

(And for full disclosure the vast majority of my stack is in Ethereum, so yes I'm biased).
 

Genghis Khan

 
Banned
Leonard D Neubache said:
Are there any good wallet options for linux users that don't involve running windows emulators?

I run basic zorin but I haven't gotten into any of the command prompt stuff.

How do you feel about online wallets?

Blockchain.info is very simple to use and supports both BTC and ETH.

Myetherwallet (MEW) is outstanding, very smooth when Ethereum has its updates and a very easy user interface as well (literally it's two step process to create a wallet: 1. Press create wallet, 2. Save private key).
 

Savage

Robin
Gold Member
Roosh said:
First question: I'm using Electrum for Bitcoin. What's the best way to set the transaction fee to aim for low cost while ensuring the transaction eventually goes through? I'm in no rush.

There's this page that suggests anything above 0.0001 mBTC/byte (10 satoshis/byte) will go through:

https://bitcoinfees.earn.com/

Is therefore setting a fee of 0.0001 mBTC/byte safe?

That should go through eventually, although it may take up to a week or possibly even longer if the bitcoin network was under heavy load.

A better website for estimating the fee to use is: https://estimatefee.com/

If you want to look at a cool graph to visualize all past transactions and the fee paid check this out:

https://jochen-hoenicke.de/queue/#30d

The purple color represents transactions from 10 - 20 satoshis/byte, as you can see in the past 30 days there was one period from 9 November to 19 November where hardly any transactions in that price range were confirmed.

In regards to if it is safe, you are not really risking anything as the bitcoins would eventually be returned to the sending wallet if the transaction is not confirmed. This would happen after about 2 weeks.

There are a couple of ways you can speed up a transaction sent with low fees.

One is to use a tool run by one of the big mining pools, you can give them your transaction ID and they will include it in the next block that they mine.

https://pool.viabtc.com/tools/txaccelerator/

A lot of the time you will receive an error message, this means that they already have hit the maximum amount of transactions they can confirm in one block, once they have mined a block you should be able to use it again.

Another way is for the address that receives the bitcoins to send them in a new transaction, this time paying a higher fee. Some exchanges will do this with deposits to speed the process up. Some wallets will not allow you to send bitcoins that have not yet confirmed, so this is not always easy to do. (Of course you can import your private key into any other wallet software if you wanted to.)



Leonard D Neubache said:
a) Is it reasonable to run all your trading through a smartphone.
b) Have the markets become buy/sell intensive to make money or can you still drop some cash in something like bitcoin, forget about it and see good returns in 6 months to a year.


a) It is possible and it should be okay if you are just trading occasionally, if you are day trading you are going to want a proper screen to view charts and you don't really want to be messing around on a touch screen when entering trades that need to be executed quickly.

b) In my opinion most people new to cryptocurrency would actually be a lot better off just buying and forgetting about it rather than trying to predict the market and buying/selling. Even better would be Dollar cost averaging to buy in rather than buying all at once, this protects you from losing a huge percentage of your investment if you happen to buy in at a high price right before a crash.


Roosh said:
What does "sweep private key" mean in the contact of a wallet app like Electrum?


Roosh said:
Without incurring any transaction fees, correct?

Without the private key remain the same? I'm guessing not since you have to create a new wallet on Electrum to use the sweep option.


Each private key contains multiple addresses, sweeping a private key will send all BTC balance from all of these addresses to a new address controlled by a new private key. It will require transaction fees.


Roosh said:
What determines the byte size of a Bitcoin transaction. Is it just the amount of Bitcoin you're trying to send?

It's not related to the amount of bitcoin being sent. It depends on the amount of inputs and outputs in your transaction.

For example you could send 1 BTC to someone, but you don't have it all in one address, you need to send from 5 different addresses each containing 0.2 BTC. This can all be sent as one transaction , but means that the person recieving the BTC will recieve 5 inputs, one from each address. To spend this 1 BTC the reciever will have to send a larger transaction than if they had just recieved 1 BTC from one address, which would only be one input.

Outputs are the different addresses that you are sending to, it would typically be at least 2 outputs as you will be sending to someone elses address and the change to another address of your own. For example if you have 1 BTC in an address and send 0.8 BTC to someone else you will actually send a 1 BTC transaction, 0.8 to the other persons address and the 0.2 left over to another address controlled by you. (This is typically handled automatically by the wallet software.)

Royalist and Legitimist said:
What is your preferred online exchange for bitcoin trading?

It depends on what you want to do, if buying or selling bitcoins and wanting to deposit from or withdraw to your bank account it will depend what country you are in. www.bitstamp.net is one of the less dodgy ones.

Leonard D Neubache said:
Are there any good wallet options for linux users that don't involve running windows emulators?

I run basic zorin but I haven't gotten into any of the command prompt stuff.

Electrum runs on linux if you want a wallet just for bitcoin.
 

Fortis

Crow
Gold Member
newbie question: I put some play money into VEN and it's now worth well over 2x what I put in. At what point do you just go "fuck it" and pull out with your profit?
 

Fortis

Crow
Gold Member
Another newbie question:

This is a little bit of a weird question, but I often see guys arguing over the merit of the tech involved in the creation and use of the coin and I think that's an important metric, but how does one know when the tech will carry a coin through or when pure hype will carry a coin through. I've seen a bunch of coins that people wrote off as shitcoins that skyrocketed randomly just because of hype and buzzwords, and I've also seen coins that seemed technologically-sound just floundering at .20 cents.

What principles do you guys use when selecting coins?
 

kiryu

Sparrow
Gold Member
Fortis said:
Another newbie question:

This is a little bit of a weird question, but I often see guys arguing over the merit of the tech involved in the creation and use of the coin and I think that's an important metric, but how does one know when the tech will carry a coin through or when pure hype will carry a coin through. I've seen a bunch of coins that people wrote off as shitcoins that skyrocketed randomly just because of hype and buzzwords, and I've also seen coins that seemed technologically-sound just floundering at .20 cents.

What principles do you guys use when selecting coins?

This is a common issue that investors find out. What matters more than anything for these altcoins and ICOs is not the fundamentals or tech, but the hype. That's how a nonexistent (Confido) or scammy (Bitconect) coins can suddenly balloon up in value. Meanwhile projects with solid fundamentals/tech (i.e. Chainlink) bleed slowly due to lack of hype.

Note: Market cap matters too, a hyped project with $30m ICO cap has less upward potential than say, a similar project with $2m or $3m ICO cap.
 

Fortis

Crow
Gold Member
Olav said:
Fortis said:
Another newbie question:

This is a little bit of a weird question, but I often see guys arguing over the merit of the tech involved in the creation and use of the coin and I think that's an important metric, but how does one know when the tech will carry a coin through or when pure hype will carry a coin through. I've seen a bunch of coins that people wrote off as shitcoins that skyrocketed randomly just because of hype and buzzwords, and I've also seen coins that seemed technologically-sound just floundering at .20 cents.

What principles do you guys use when selecting coins?

This is a common issue that investors find out. What matters more than anything for these altcoins and ICOs is not the fundamentals or tech, but the hype. That's how a nonexistent (Confido) or scammy (Bitconect) coins can suddenly balloon up in value. Meanwhile projects with solid fundamentals/tech (i.e. Chainlink) bleed slowly due to lack of hype.

Note: Market cap matters too, a hyped project with $30m ICO cap has less upward potential than say, a similar project with $2m or $3m ICO cap.

Yeah, this sounds about right. I'm in a reasonably large cryptocurrency group on a social media platform and many of the guys are actually targetting coins to flip based purely on hype as opposed to fundamentals--and it's working pretty well. I'm not totally sold on taht approach since gauging hype can be hard, but I can't say it hasn't been effective.

You can even see it in some of the crypto threads on this forum. People are bashing IOTA for logical reasons but the hype around a currency with no blockchain is massively intriguing to the average joe blow who has a few thousand dollars to throw into cryptos.
 

Genghis Khan

 
Banned
Fortis said:
Olav said:
Fortis said:
Another newbie question:

This is a little bit of a weird question, but I often see guys arguing over the merit of the tech involved in the creation and use of the coin and I think that's an important metric, but how does one know when the tech will carry a coin through or when pure hype will carry a coin through. I've seen a bunch of coins that people wrote off as shitcoins that skyrocketed randomly just because of hype and buzzwords, and I've also seen coins that seemed technologically-sound just floundering at .20 cents.

What principles do you guys use when selecting coins?

This is a common issue that investors find out. What matters more than anything for these altcoins and ICOs is not the fundamentals or tech, but the hype. That's how a nonexistent (Confido) or scammy (Bitconect) coins can suddenly balloon up in value. Meanwhile projects with solid fundamentals/tech (i.e. Chainlink) bleed slowly due to lack of hype.

Note: Market cap matters too, a hyped project with $30m ICO cap has less upward potential than say, a similar project with $2m or $3m ICO cap.

Yeah, this sounds about right. I'm in a reasonably large cryptocurrency group on a social media platform and many of the guys are actually targetting coins to flip based purely on hype as opposed to fundamentals--and it's working pretty well. I'm not totally sold on taht approach since gauging hype can be hard, but I can't say it hasn't been effective.

You can even see it in some of the crypto threads on this forum. People are bashing IOTA for logical reasons but the hype around a currency with no blockchain is massively intriguing to the average joe blow who has a few thousand dollars to throw into cryptos.

Yeah I think the question is when the music will stop. It's definitely reminiscent of the dotcom boom and bust cycle. Almost anything can go up in price based solely on hype. I hope people aren't left stranded when a lot of it finally comes down. Though my estimate is that we've got at least another year of hype. Will need to re-evaluate end of 2018, but I wouldn't be surprised if we see an additional 2-3 years of hype. At least with Etheereum, there's a solid roadmap for the next two years.

Though even Ethereum will have to demonstrate at some point it can enable a large-scale real world applications for which blockchain technology makes sense.

I'd guess we might see a big crash around 2020-2021 maybe? At some point people will start asking where the real world applications and value are.

I'll see if I can find the article, but I read an analysis that was guessing there's only 40 million people with Bitcoin addresses. To put it in perspective, the internet/email had about 25 million users in 1994-95. We've definitely got a lot of growth ahead. Question really is - how fast will we get to a major bust. Technologies have reached mass adoption faster and faster:

http://marketrealist.com/2015/12/adoption-rates-dizzying-heights/

technology-adoption-rates11111111.png


So yeah 2-3 years...
 

Genghis Khan

 
Banned
gonzoman925 said:
two questions:

1) Bitcoin or Bitcoin cash? seems like the latter is cheaper to invest in but will it stay for the long haul? I'm thinking just a small amount over the next year.

2) Are britons fucked in terms of keeping digital currency? https://www.independent.co.uk/news/...crytocurrency-european-union-eu-a8090791.html

for any snoops, the second question should be taken as neither admission nor denial of british citizenship.

1) nobody knows. I'd recommend learning the difference between the two and feel out which one you think has the best potential for growth

2) that article reminds me of when US congressmen wanted to "regulate" the internet, not understanding how the internet works and that you can't regulate/control the flow of information. Same applies here imo, I don't think any of these British MPs understand how Bitcoin and other blockchains work - you can't shut it down or control it in anyway. As for your money - there are ways to buy BTC and send it to other addresses without there being a traceable link.

It should rightfully scare the shit out of governments. I was reading The Sovereign Individual recently - a pretty good book, written before 2000 - and it predicted this - the invention of cybermoney, how governments would try to control but ultimately fail (not that governments won't become more draconian in how they treat their citizens as they get more desperate for tax money).

Crypto could potentially be a killer blow to governments because it makes money collection infinitely harder. Good luck trying wage garnishment on crypto or freezing your crypto assets the way they can freeze your bank accounts.

Right now for most of us, we have to go through Coinbase, which requires an ID, to buy cryptocurrencies. But it won't be that long before other less intrusive ways exist and you can buy crypto without any trace to your identity. You already can through localbitcoins.com, but I imagine soon we'll have more robust ways of doing it. Governments are gonna be shitting their pants.
 
1) Bitcoin or Bitcoin cash? seems like the latter is cheaper to invest in but will it stay for the long haul? I'm thinking just a small amount over the next year.

Bitcoin Cash does well when people are scared about Bitcoin. People aren't scared about Bitcoin right now.

2.) No, read the article more carefully.
 

MrRemi

Sparrow
Guys, I have two newbie questions!

I have some bitcoin on my phone in the Jaxx app. I bought them 2 years ago and haven't touched them since. I want to sell now.

1. What's the easiest and most secure way to sell? I want cash in my bank account or on Paypal.

2. How do the forks affect me? I figured out, that I bought before the forks happening. Can I now sell my bitcoins on various forks and cash in multiple times?
 
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