Securely Storing Bitcoin

MJB
By MJB on Thu, Nov 17, 2016 - 3:25pm

I recently made my first purchase of Bitcoin from coinbase.com.  A couple of observations.

Holy cow was this intrusive. There are 3 ways to buy: PayPal, a bank account or credit card. First I tried the credit card route because it allowed for immediate purchase. Coinbase asked for the usual stuff, name, address , email. It also wanted cell phone number (this is where the intrusiveness started for me). For a credit card transaction they also required a picture (front/back) of my driver’s license!

Needless to say I stopped there for the night, frustrated. I looked for more anonymous ways of buying. I found a Bitcoin ATM through the site localbitcoins.com. I was very unimpressed with the selection in St. Louis, MO. At the time they were asking  5-8% premium with a $2,500 min purchase. The ATM is operated by athenabitcoin.com.

So I reluctantly went back to Coinbase and set up an account using my bank account, which didn’t require a driver’s license but who cares now they have my bank account info! I was charged a 1.49% Service Fee with a $0.15 minimum purchase. Coinbase has a $2,500 weekly limit on bank account purchases (unless of course you upload your driver’s license then your limit will go up, not sure how much). Once you buy a specified amount the price is locked in but takes 5 business days for the Bitcoin to transfer to your account and be accessible.

Now that I have the Bitcoin in a wallet on coinbase I want to get it off.. this is where I hope members of PP can help. What is the best way to store Bitcoin offline? There are a few options I’ve researched. One is to create a wallet on a USB Stick offline and transfer them (using MultiBit.org for the wallet creation). The other option is to create a paper wallet using bitaddress.org. Here are two video tutorials I’ve watched on the subject.

How to store on a USB Stick:

https://www.weusecoins.com/how-to-store-bitcoin-USB-stick/

How to create a paper wallet:

Does anyone have a preferred method? If so why? Also how many bitcoins would one recommend storing/sending to one wallet address?

Thanks for the help!

,

28 Comments

skipr's picture
skipr
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secure wallets

You store your bitcoins in wallets.  Coinbase is a web based wallet.  Hardware wallets are the most secure.  Here are a few. 

https://en.bitcoin.it/wiki/Hardware_wallet

http://bitcointrezor.com/

https://www.keepkey.com/

Trezor was the first one to come out and is the standard, at least for now.  Keepkey just purchased the software wallet Multibit.  They will be integrating their Chrome app functions, which includes altcoin exchanges through shapeshift.com.  I use coinbase to buy my bitcoins.  I then send them to one of my hardware wallets.

Trezor also has a web based password manager that is accessed using their hardware wallet.  It doesn't have the flashier functions of Lastpass etc, but it's probably the most secure.

https://passwords.mytrezor.com/

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Ethereum

Thanks skipr! Any thoughts on Ethereum storage? I saw on Reddit that trezor is working to get into the market. I wonder if I purchase a unit now if it will be able to support Ethereum storage in the future? $100 is the most expensive storage device I've ever purchased but they had me at easy to use :)

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eth storage

Hi MJB. 

I asked Trezor support about whether they were going to create a mytrezor.com for the other altcoins.  They said no.  There are separate Electrum software wallets that work with the Trezor for Bitcoin, and Litecoin.  A fully released version for Dash will be released soon.  I haven't heard about another Electrum wallet for Ethereum yet.

I know for sure that Keepkey's Chrome app now supports bitcoin, litecoin, and dogecoin.  They are all contained within a single wallet.  Their web site says that it also supports Dash.  I may need to update that app and/or firmware since I didn't see it.  They also said that they will be supporting Ethereum and others soon.  When they do, it will be the first hardware wallet to do so.  They say that integrating all of this functionality into Multibit will take a little bit of time.  You can easily exchange bitcoins for litecoins etc etc. within the app-wallet.

The Jaxx and Exodus software wallets say that hardware wallet support will be coming soon.  You can do altcoin exchanges with them too.

Skip

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The one I use

The beauty of BTC is the possibility to make economic transactions outside of the fiat/banking-system around the world in just a few seconds. Therefore, I prefer to have a majority of my coins online (perhaps not as secure, but if needed, I want instant access for transactions) using the Blockchain.info app on my iPhone. Some PM's dealers also accept Bitcoin and it is nice to purchase silver with BTC. 

Cold-storage is for the true believers. I'm not entirely convinced of BTC's long-term viability just yet. Remember that this 'project' - for lack of a better word - is just 8-9 years old. PM, on the other hand, have been money for more than 5000 years.  When the current digital/paper system comes crashing down I'm pretty sure people will want something tangible. But hey, who knows with all the millenials..

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Thanks Again!

Thanks again Skip, I know there have been many new crypto currencies come online, many you point out I have never head of. 

To A23's point, I am a cold-storage person. I do not use my cell phone for transactions at this point; also the options are limited as far as 'acceptability' in the midwest. I view it as another way to personally diversify into 'hard assets'. 

I would like to pick your brain though Skip.. Are you a believer in crypto currencies as a long term viable solution? Do you like one that you mentioned above more than another? I like the fact that China and India are early adopters and believers (HUGE market).

Michael

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my hobby

Hi Michael....

There are hundreds of altcoins out there, but only a few of them are significant.  I'm also a cold storage guy.  I think cryptos will really take off when the SHTF.  I read that some people in Venezuela are buying up a bunch of them.  The short term correlation between the dollar index and the price of gold is strong.  When the index goes up gold goes down and vice versa.  During several of these most recent cycles BTC continued to go up.  I wonder what that is saying about what's really going on and what's about to happen.

Right now, cryptocurrencies are more of a hobby, though I use BTCs to pay my Dish TV bill.  My plan right now is to duplicate the metal traders' strategy of selling gold and buying silver when the gold/silver ratio (price of an oz of gold divided by the price of an oz of silver) peaks and vice versa.  The ratio usually varies between 30 and 80.  The idea is to accumulate as much metal as possible, not its dollar value, so when the SHTF you will be sitting in as nice of a place as possible.  It's a pretty safe long term strategy since there's a lot history there.  I was hoping to do the same with cryptos.  This site has a nice graphical display of price of the other coins in terms of BTC:

https://www.cryptocompare.com/

It showed a fairly regular cycle in the DASH/BTC ratio during the last few months, so I exchanged some BTCs for DASH when the ratio looked like it bottomed out.  Of course, when I did so, BTC started taking off and the others were left in the dust.  This strategy is pretty risky right now since there is so little history with them.

Maybe I should start a new forum/group for the cable TV series Mr. Robot.  It’s a fascinating show about a small group of hackers trying to counter the 0.01%.  They are lead by a genius hacker who also has some "personal problems” (I don’t want to spoil it for you).  During the end of the 2nd season the evil multinational CEO talks about how BTC is putting a crimp on his plan to take over the world and how he has to create his own privately controlled digital currency to counteract it.  Of course, the real world to-big-to-fail banks are trying to do the same.  A few minutes later the hero receives a cell phone call with what looks like the symbol of the relatively new cryptocoin Monero on the display.  There’s all sort of stuff like that in the show.

 

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Circle

MJB, check out Circle. You might like their setup more than Coinbase's,

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MJB
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My Hobby Too

Thanks for the info Skip, I'll have you know I made the first transfer over to the TREZOR device today. I thoroughly enjoyed it from an educational standpoint.. Now to get all my friends on board :)

I will say I was a little shocked how long the transfer took. I did one just to try it, followed by another. The first took 20 minutes and the second hasn't gone through yet, its been over an hour.

I don't have cable, to expensive for the very little I watch TV. Maybe its on Netflix though? I'll check it out if it is because Mr. Robot sounds like a show I would be interested in.

 

mmortal03, I looked up Circle.. interesting but only something I'd subscribe to if the bitcoin buying fees are cheaper than Coinbase's 1.49% of total transaction cost. Do you know what the fees are? I am not a big mobile payment person, as I said before the bitcoin I have aren't for transactions. I am using them strictly as a diversification tool, for the time being anyway.

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transfer rates

Hi MJB...Though it takes a while for BTCs to clear, my visa is actually slower.  Some of the newer cryptos are faster, but they are not the big boy in town.  BTCs are supposedly the best way to transfer large amounts of money/value/etc....  Hopefully the other faster cryptos will be accepted for small retail transactions soon.

I bought the DVDs of the first 2 seasons of Mr Robot.  Since I don't have a photographic memory I have to rewind it a few times to pick up all of the little details that become significant in later episodes.

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Brand new address?

I wonder if the fact that the TREZOR wallet was brand new with a never before used receiving address had to do with the delay? I transferred the rest out of Coinbase today with significantly less transfer time, 2-10 minutes as opposed to 20 minutes for the first and hours for the second.. 

I'm assuming coinbase has a way to verify transactions? Once the order was placed there was a period in which the transaction had to be processed. As I said when I sent more bitcoin to the wallet using the same receiving address the transaction was sped up significantly.  

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MJB wrote:mmortal03, I
MJB wrote:

mmortal03, I looked up Circle.. interesting but only something I'd subscribe to if the bitcoin buying fees are cheaper than Coinbase's 1.49% of total transaction cost. Do you know what the fees are? I am not a big mobile payment person, as I said before the bitcoin I have aren't for transactions. I am using them strictly as a diversification tool, for the time being anyway.

 

Last I checked, the fees with Circle were better than Coinbase when wanting to instantly buy, but I don't keep constant tabs on that. Keep in mind that Circle's fees are essentially built into their exchange rate, whereas Coinbase separates the two, so make sure to calculate it after all factors are considered.

For instant buying, I can just use a debit card on Circle. On Coinbase, there are higher fees with using a debit card, so, to get the lowest fee of 1.49% for an instant buy, you need a checking account and a backup credit card. For me, I do have both a debit and credit card, and a checking to choose from, so all that matters to me are the fees for the best case scenario on each platform, and the convenience factor of the interface. For others, it could be a different story.

Besides the fees, I like Circle's convenience factor more than Coinbase's. I've happened to choose Circle ever since they added the feature to keep my funds in USD, meaning that it only converts the USD to BTC at transaction time when paying someone in BTC (or when sending myself BTC to an external wallet address that I own). Similarly, Circle automatically converts the BTC that I receive to USD. This saves me a step for most of my transactions, because I never look to hold my BTC investments on an exchange, and I generally don't want to hold BTC if someone is paying me for something.

More recently, Coinbase did add a somewhat similar feature by way of their fiat wallet feature, but from the sending perspective, you still have to deposit the USD funds to your fiat wallet first, and *then* send that amount of value from there to the external Bitcoin address, which requires a few extra clicks as compared to Circle.

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Wallet answers

I use both Circle and Coinbase.com.  Circle.com is a bit smaller and more limited dealing only with bitcoin, but they are respectable. They advertise zero percent to “transfer” dollars to bitcoin and back to your regular bank through wire transfers. Coinbase charges 1.5%, but I’ve seen Circle’s price a bit higher at the same time to purchase so I think they are making that difference up by marking up the cost of the bitcoin for a spread. Avoid debit cards on both to save the 3% fee that credit cards charge.

Coinbase is the way to go if you want to trade currencies often as they have a trading company as well. www.gdax.com. I think the fees are much smaller than Coinbase if you set up and account and transfer coins here directly.

 

For cold storage - the KeepPass wallet is cool. I've got both the trezzor and now the keeppass as well. The keeppass has a much bigger and better screen that is easier to read, and it supports Multibit software *they both do now*. And the Keeppass supports Ethereum.

For cold storage - the KeepPass wallet is cool. I have both but like KeepPass better. It has a much bigger and better screen that is easier to read. It supports Multibit software *(hey both do now). And the KeepPass supports Ethereum.

Phone wallets:

There are some good phone app wallets. I like JAXX the best as you can own both Eth and BTC (and a few others). You can trade one for another right on your phone using a service called “ShapeShift” which is built right in.  I also like Airbitz, and “MyCelium.”

Seeds:

You can back up your phone wallet with ‘seeds’ that will allow you to destroy your phone, or have it stolen, then download the app on any other phone, choose the ‘recovery’ option – put in your 12 seed words and, boom, your full wallet with coins are back.  It's one easy way to avoid capital controls and move money across borders. Just write down the 12 easy words (or memorize them) without EVER putting them in a computer that can be hacked. Good old Pen and Paper is the trick.

 

That said, I usually only keep ‘spending money’ on my phone wallets. Probably not more than I would keep in my physical wallet. I spend bitcoin all the time on websites when I can so I don’t have to enter credit card information that can get hacked later. That is the killer app as far as I’m concerned right now.  Internet cash, not a promise to pay. No bank account info required.

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Trezor 2

It looks like Trezor is feeling the heat from Keeppass.  They just showed a prototype of their upcoming Trezor 2.  It has a bigger color screen, though not as big as Keeppass.  I forgot what other functions it's supposed to have.  Keeppass is so well made I don't know how they make any money.

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Unfortunately, it looks like

Unfortunately, it looks like Circle is no longer going to be a place to buy and sell bitcoins: https://www.reddit.com/r/Bitcoin/comments/5gxy5e/new_ventures_of_old_bitcoin_circle_phasing_out/

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KeepPass..

I was not able to find KeepPass. When I googled this website kept coming up: http://keepass.info/

I haven't spend much time on the site, looks intimidating to me. I am not very computer savvy.

Anyone mess with paper wallets at all? I like the idea for cold storage. Any downside on security? Any downside other than:

1) Liquid spilling and not being able to read addresses (overall destruction would fall into this category)

2) Someone physically stealing

3) Ease of transaction (assuming paper takes more time than a phone based wallet)

I think paper would be neat to show/introduce the family this Christmas. 

Price has been rising lately, saw a 'cup and handle' pattern emerging when pricing in Chinese yaun. Personally still buying and holding.  

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MJB, I think he meant the

MJB, I think he meant the KeepKey hardware wallet, not KeepPass.

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Oops

My second hobby is password managers smiley

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Keepkey not keeppass

Yes, sorry, I did mean keepkey.

https://www.amazon.com/s/?ie=UTF8&keywords=keepkey&tag=googhydr-20&index...

 

I put a little Eth (Ethereum) on it to try it out. It gives many warnings that it is still in beta for ethereum so I don't trust it yet enough to load it up with much until it's out of beta. I tested it to make sure I could move it back and forth to take it off and back on so it looks good so far.

 
MJB's picture
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ETH storage

Mrees how do you store your ETH then? I don't own any yet but have created a small Bitcoin stock and will be looking to purchase ETH soon. For diversity and the lower cost. I do think ETH has a future along with Bitcoin. We shall see..

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Eth storage

I also recommend the JAXX wallet

 

You can download this for a phone (android and apple), also windows. 

https://jaxx.io

It should prompt you right off to set a backup and you 'seed words'. Write them down with pen\paper and put them somewhere safe. DO NOT enter them anywhere online. Consider about everything you do online can be hacked so be super paranoid. Make a copy of your seed words and store them in a 2nd location off-site in case of a fire or other emergency.

This wallet is special because you can store a handful of currencies including bitcoin and ETH, and you can trade one for another inside the wallet itself. It connects to a service called "Shape shift' that allows you to convert them without setting up an account, so it's somewhat private.

With the seeds, you can delete, uninstall - throw away your phone, and it won't matter. You can install the software on any other phone, select (recover from seed). Type in the seed words you'll have your entire balance again.  Great way to transfer wealth across borders when needed.  Memorize you words? They will be random easy English 12 words, but when you add them together, that is one long password. And it's one of the magic qualities of crypto currency.  - The Trezzor and keepkey (and ledger) wallets use this same technology as well. 

Just don't store a ton of money on a phone wallet as smartphones themselves just aren't as secure. However it's a good place to start, and you can install the app, move coins to it after you write your seed words down, and then delete the app. The app only stores your private keys and it can be rebuilt any time so no need to keep the app on your phone in the meantime. Test this with just one coin *or less* to make sure you understand how it works before moving any serious money onto it.

Or if you're not worried about privacy and just want the investment - use Coinbase *GDAX account is cheaper to buy and sell than its parent company Coinbase... Also Gemini exchange (https://gemini.com/) out of New York, they will handle the security and insure it, but there will be no privacy if that's ok with you. - Gemini is a big one working on the ETFs and will be the vehicle the mutual funds and Wall Street  Financial district will be funneling through once the SEC reviews and authorizations are complete.

Once big money starts to funnel in, get ready for the price to explode. :-)

This is still frontier territory so get comfortable with the technology while it is still rough around the edges and I think you'll be rewarded nicely for it once it is acting as the backbone for financial services in future years. I think Eth will be the oil of the next century. 

 

 

 

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mrees Wrote: I

mrees Wrote:

I think Eth will be the oil of the next century. 

WOW. What a statement. I follow Barry Silbert on Twitter and he had an interesting tweet on Friday (12/16/16):

Sell stocks = done

Sell bonds = done

Get out of long-term commercial lease = done

Buy bitcoin = done

Coming global financial crisis = ready!

 

I’d say Barry might agree with you. I need to do more research on ETH. Mainly the difference between ETC and ETH and BTC.

 

I told myself if I could get in under $8/ETH on Coinbase I would buy. Well that day has arrived but worried about cold storage options as you point out above.

 

On a side note about the market in general: It seems like the BTC market is set in China, in China they use the Shanghai Gold Exchange, a physical market as opposed to the Chicago (or NY) Mercantile Exchange’s paper one. I have found it very surprising that while paper gold has tumbled recently BTC has not. Also we see a widening gap between the SGE and CME gold spot prices (currently about $50/ounce). I don’t think there is a strong correlation at the moment but as BTC, ETH, ETC and gold are all medium of exchanges one would think a correlation should arise..

 

mrees Wrote: 

Once big money starts to funnel in, get ready for the price to explode. :-)

 

I hear that big money is already coming in, slowly so not to disrupt the market. After all BTC literally spits in the face of govt backed, printed out of thin air, fiat money. Governments are in a tough spot I believe because they can’t manipulate the price of BTC the way they can with paper precious metals. They can’t use BTC derivatives they have to use the real thing. This is another reason why we haven’t seen a fall in the price of BTC the way we have in gold recently.

 

Thoughts?

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Eth = Oil for next paradigm

Yes, once you understand the significance of how Ethereum, and Eth work, it is easy to see why it will become the digital equivalent of oil. 

Ethereum has one big "World Virtual Computer" that makes all smart contracts using the Ethereum network tick.  It is the heart and heartbeat that calculates all the logic that completes the automatic smart contracts to evaluate if they are 'true or false'. It does the math and for every calculation, there is a cost. 

To make the economics work, and to prevent abuse of the system (Endless loops of logic), the 'cash' to expense on the calculations is in the form of what they call 'gas'. Guess what medium of exchange is required to buy this gas? - ETH.   This keeps the entire eco-system honest and creates the intrinsic value of Eth. I like to think of ETH as the red blood cells in our circulatory system. There will be tons of companies building systems on top of this system but when they want to exchange value with each other they can't act as closed loops and they will need a common open network to transfer value between them all.  To do this - they will need an arbitrator to validate and verify the contracts complete as they were written (which can be done incorrectly as seen with the bug in THE DAO contract system). 

Many people are working to commoditize contract pieces so they will be standardized chunks of code that you can 'plug and play' inside of  other contracts. These are foundational blocks and layers in a stack. They will be standardized and evaluated by regulators in the future to be 'true' and accepted industry\world wide. In the future, people will build companies using these predefined contracts stacked in unique ways that create new business models. Also, new industries and likely government structures built on top of this foundation. 

The "World Virtual Computer" will be like bitcoin itself - replicated on thousands of computers around the world in real time so they can't be taken over or gamed. This will make them unstoppable as they will each check each other's work and audit everything in real-time. The Ethereum programmers are really, really going out of their way to not create "Skynet". :-)

This development is complex as it is creating a whole slew of new technologies in uncharted territory and they are making it up as they go along as people that discovered the properties of electricity did (Ben Franklin himself created many of the terms we use every day (positive and negative current being a couple of examples). So I expect there may be some bumps and bruises along the way as they have to rise to new unexpected challenges.  In the meantime, I expect there will be big gains and dips in the price as everybody gets ecstatic, and then dispair with each hurdle. But the upside could be historic if it works correctly and we could measure value in trillions, not billions. If the entire value of usefulness comes to fruition where everything in the real world can be tokenized, recorded and exchanged using this new public standard, it will be as important as oil is to the world today.

As far as Barry:

I agree with a lot of what he says and he was influential for me to start to take bitcoin seriously in the early days.  His company is committed to bitcoin and they have purchased or are part owners in something near 100 companies. Needless to say he has a big personal stake in the success of bitcoin as that's the horse he hitched his wagon. Bitcoin is perfectly suited to act as a new age digital gold. However, it is limited in scope as it was intended to act like gold. It actually had code written to act like a smart contract platform as well but the code was deactivated because it would have been too time-consuming to test all of those options and rather than trying to 'boil the ocean' they simplified it to restrict it to only act like a currency.  

Ethereum went back to those old ideas and started over implementing much of that theory. But this carries dangers because it is a much bigger 'attack surface' for things to test and go wrong that they have to fix and figure out. It's much more ambitious and they don't consider ETH a currency. They refer to it as a digital asset, but people themselves trade it and speculate on its future so it has become a de-facto currency. 

 Because Barry has to answer to investors that he's convinced that bitcoin is 'the one' - he has to remain consistent with himself or appear not as confident or reliable to his investors. In this regard, he largely dismisses Ethereum as an experiment. Yes, it is and bitcoin itself actually. Bitcoin is versioned at .13 - it's not even a 1.0 technology out of 'beta-testing'. But bitcoin does have a several year head-start, network effect, name recognition, first mover advantage and is 'good enough' to act as a monetary unit of account.  Although it currently has big limits for scaling, there is technology on the way to help ease that.  

The one thing that gives Barry away, is although he continued to dismiss Ethereum, once Ethereum did a 'hard fork' split in code - a small splinter group (Some believe these people were true bitcoin hard-core developers) which were jealous of the ethereum advances,  decided to continue to develop its diverged alternate ego (called ETC). 

The point of confusion about Barry:  Why was Barry was all excited about ETC - even though the day before (Before it was split from its twin) he was dismissing it when it was still called ETH.  Why the change?  He was encouraging his investors to pile investment dollars into this version which was the exactly the same as the day before when he was dismissing it. Why?  This made me loose a lot of respect for him with the duplicity. His investors aren't likely technical enough to see through this.

In my opinion, ETC doesn't have the mindshare or innovation that the mainstream group of developers have in the Ethereum foundation and end up 'copy and pasting' the new development is done in Ethereum rather than any new innovation from what I can see. ETC was great for a few weeks as the 'left behind' bitcoiners hurried to throw money into it so it could have a value to exchange and perhaps throw the Ethereum crowd into some disarray (which would draw attention back to themselves as the 'real' cryptocurrency).

That just meant that people who owned ethereum before it was split essentially owned the same amount on the ETC network as well - and most of us just grinned as we then sold it on the exchanges before we suspected it would loose value as a 'dead chain'.  As Ethereum has forked (changed its version so all the processors had to upgrade to a newer version) a few times since then (and is planned to fork several more times in the future as several more planned enhancements are added), the reasoning behind the existence of ETC becomes weaker. 

All of this is likely much too complex and confusing for the average investor who has trouble wrapping their head around cryptocurrencies to begin with. The net result is that it keeps the price lower for longer and the 'secret' 'in-the-know' money is stealthily moving in. The rich stay rich.

Of course the 'little guy' with my provided 'inside knowledge' can also benefit. ;-)  *if* this all plays out like I suspect.  Thing evolves unexpectedly as nobody could have predicted Netflix, Google Earth, Youtube, Facebook etc. back in the early 90s when the internet was still a fuzzy concept.

Good times.

 

 

 

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KeepKey Back Order

A lot of people agree with you Skip.. I ordered a KeepKey 3 weeks ago and they have me on back order until February. I wonder if they will raise the price soon because I cannot find one for immediate delivery under $199 ($100 over KeepKeys quoted price). It reminds me of when a new game system comes out.. In college I bought several Xbox 360's and sold them all at a tidy profit! Mostly to the west and east coasts where the systems were sold out.

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KeepKey and ETH

Hey MJB...You don't have to buy ETH directly.  Keepkey allows you to exchange BTC for ETH and several other cryptos via Shapeshift.  Dash will be included soon.  I must admit that I bought my Keepkey back when it went for $250.  $99 seems to be way underpriced for what you get when compared to Trezor.  Trezor does have a few advantages like an option of using a password.

Hey mrees999....I just heard that ETH is going to be merged with Zcash.  Does this make ETH really juicy?

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BTC Conversion into ETH,DASH,OTHER

mrees999 wrote: 

This is still frontier territory so get comfortable with the technology while it is still rough around the edges and I think you'll be rewarded nicely for it once it is acting as the backbone for financial services in future years. I think Eth will be the oil of the next century. 

Your insight thus far has been spot on and I have only just realized that 1 ETH > 1 barrel of Light Sweet Crude (WTI)! I know that's not what you meant by "the oil of the next century" but found it interesting :)

I went back and read your old posts about GDAX. I am looking to convert some BTC to ETH and wondering if that is the exchange you, skipr, mmotal03 or anyone else would recommend? I know there has been a pretty significant run up in ETH compared to BTC but the more I learn, the more I understand how prophetic the above quote is.. so many new developments being implemented based on the ETH platform.

Follow up, novice question: any reason to get into ETC here? ETH is the platform I see most developers using but can that change? 

Thanks!

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 431
Ethereum now more expensive than a barrel of oil

Mjb that was a funny realization I hadn't thought of. 

 

GDAX is fine for doing those conversions. I prefer Shapeshift whenever I can as all transactions are private. Remember the cost implications of short-term capital gains is 35%. If you use a hardwallet (I suggest) and move it on the exchange, do the trade, then right back off, I'm not sure how they would calculate the basis points because as far as they know - if it all happens at the same price, there is no taxable event. So like holding gold\silver at home, you'll likely need to keep an accurate spreadsheet at home so you can pay your fair taxes when due. :-)  It's likely that somebody from some agency will be reading this at some point so it's always important to give proper tax advice as far as I know, although you might want to check with your own personal tax advisor.

This would be true with shapeshift as well because they don't do signup, or gather identities and so forth. It's more like an ATM where you put one currency in, and get another currency out. You give it the return coin address.

 

I just recently bought the Ledger Nano S. It's nice because it handles all of the ethereum-based currencies (ERC-20 based) like Golem and Iconomi etc.  It has regular ethereum addresses like you are used to and you can send the Golem (or whatever) to that ethereum address. Then once you've selected that ethereum address to access from the main screen - you can access the 'custom token' sub menu where it breaks out the ERC-20 tokens you have sent to that address. You can then add\spend from that menu. I don't think the other wallets have that technology (yet). 

Note that Dash, Monero and several others aren't ERC-20 Ethereum compliant so you should probably make sure you know which-is-which. 

The ledger nano is a bit smaller with a simple screen - and if you enter the wrong passcode three times in a row - it formats and erases all data. So that is really nice...if you have the 24-word seed backup. It also has some extra chip protection for protecting against silicon micrograph electron breaking. - If you are worried about super-spies trying to use those tools to pry for extract data.  I don't run in those circles - but I guess you never know.

They are a bit cheaper running $80ish on Amazon.  

As far as ETC - don't waste your time.

 

 

skipr's picture
skipr
Status: Silver Member (Offline)
Joined: Jan 9 2016
Posts: 167
BTC for Real Estate??

Does anyone know about the details of selling real estate for cryptos?  I have been looking at places to move to for awhile.  I just thought it would be really cool if I could sell this house of mine for a crypto,  I would be betting that they would really take off in a year or two.  I'm not risking that much since it's a pretty old place in a neighborhood that used to be really nice.  A rich Sacramento lawyer bought the place across the street for his spoiled rotten son since I'm about a mile from the UofA in Tucson.

MJB's picture
MJB
Status: Silver Member (Offline)
Joined: Jan 5 2016
Posts: 117
BTC for Real Estate!

Thanks for the input mrees999. Currently I have a TREZOR and KeepKey and not thinking about the Nano S.. We have a Bitcoin meet up group in St. Louis at the end of the month and think I will see if anyone in interested in the TREZOR so that I can get the Nano S. In my house having three, $100 'jump drives' as my wife calls them, will not fly :) I have kept a paper trail of all crypto purchases and my accountant is actually familiar with the tax laws regarding Bitcoin. He did a miner's taxes way back when.. believe it or not the IRS already had rules for crypto currencies. In regards to taxes, I know that if a person sells real estate that isn't a primary residence but then invests the proceeds of the sale into other real estate the taxes are minimal. It's a carried interest type of thing. I wonder if one could argue that cryptos fall under this provision as well? I do know there is a holding period, 2 years I believe... more on that when time comes.

Skipr, I think selling real estate for crypto is an awesome idea! good luck getting the buyer to comply though ;) I do plan on trying this one day myself in which I would be the buyer. I'd look to Utah or Nevada (I believe) for a land or home sale in silver or gold first. I say those two states because they are working on legislation now to make gold and silver money again. They want to eliminate state tax from the sale of metal because the legislature views gold and silver for what they have been for 5,000 years! I think if it can happen with precious metals, why can't it happen with cryptos? Time will tell. 

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