Bitcoin currency (merged topics)

[FreeLancer]

Has anyone setup recurring purchase?  e.g. dollar cost averaging?

I haven't set up a recurrent purchase yet, but I hear many are happy with it.

Coinbase takes awhile to process transactions, something on the order of a week, based on my experience, so it's definitely not for day-traders wanting to move in and out in a hurry, but I think it's a good choice for people wanting a reliable entry into the market.

[Smurf Hunter]

By "transactions" you mean between USD and BTC?

Hopefully I can send a merchant or anyone else my bitcoins a little faster than that

[skas]

By "transactions" you mean between USD and BTC?

Hopefully I can send a merchant or anyone else my bitcoins a little faster than that

FreeLancer meant a purchase from or a sale to coinbase to convert Federal Reserve Notes to BTC or vice versa.

BTC to BTC transactions happen considerably quicker (I'd measure it in seconds for the initial transaction, and then minutes for confirmations).

[FreeLancer]

Yes, like skas said, I meant USD <=> BTC. 

USD is deducted from my linked bank account on about day 1-2 after the transaction date and BTC is then available in my coinbase account on day 5-7.  Maybe it's quicker if your account is granted some special status, but that's how it works for me.

[k2kidd]

Jack said there was a video on YouTube of a guy breaking down bitcoin, I can't remember the episode though.  Helpful links for purchasing and learning about. 

[skas]

Maybe it's quicker if your account is granted some special status, but that's how it works for me.

If you go through all their authentication/verification steps, you should be able to purchase more BTC, more quickly.

Additionally, sites like localbitcoins.com, and cashintocoins.com are generally quicker options if coinbase is too slow and you need it RFN.

[FreeLancer]

If you go through all their authentication/verification steps, you should be able to purchase more BTC, more quickly.

Additionally, sites like localbitcoins.com, and cashintocoins.com are generally quicker options if coinbase is too slow and you need it RFN.

Hopefully, it doesn't always take a week, but who knows?  These companies come and go in a fly-by-night manner, change their policies on a whim, and are notoriously difficult to reach for customer service. 

The conversion with fiat is the Achilles heel of cryptocurrency.  You've got to trust an ethereal entity on the internet to be ethical/competent/solvent long enough for you to complete your transactions, or you can take your chances with that guy you met on localbitcoins.com and hope he isn't undercover trying to nail your ass in a money laundering sting (like in Florida last week).

[Smurf Hunter]

I'm now setup.  This morning I transfered $20USD into my coinbase.  The funds haven't shown up as of this post, but I'm confident it'll work.
I noticed that coinbase charges 1% + my bank changes a flat $0.15 per transfer into coinbase.

I want to make sure I really understand the various forms of wallet, including paper wallets before I goof up and lose any real money.

[Hootie]

I'm now setup.  This morning I transfered $20USD into my coinbase.  The funds haven't shown up as of this post

let me know how it goes. I have a friend that wants to start using coinbase.

[Prodigy]

let me know how it goes. I have a friend that wants to start using coinbase.

It's a very easy process, no need to wait.  Like FreeLancer said, the only real issue is the wait time between putting in your order and actually getting the bitcoins (same with selling them).  Just to note to everyone so there's no confusion, you put your orders in and are locked into that price.  So if the price swings wildly in that 5-7 days, it doesn't matter - your price is locked in at the time of purchase.

It sounds like Coinbase is getting really popular (not just on these forums, but in general).  As someone who has watched this scene for awhile now, this scares me.  It's always the bigger dogs that get hit the hardest by hackers and regulators.  I don't have a lot there, but I'm still going to be moving it to a home/paper wallet very soon.  I'm playing around with small transfers right now to make sure I'm 100% familiar before I offload from Coinbase.

[FreeLancer]

I want to make sure I really understand the various forms of wallet, including paper wallets before I goof up and lose any real money.

It's wise to be cautious and start slow.  But, honestly, I think goofing up somewhere along the line is pretty much par for the course.  All us early adopters are facing the risks that come with being on the bleeding edge of technology.

All the exchanges are under heavy attack in the last few days and are hunkering down, several are now not allowing bitcoin transfers out of accounts until things calm down.  Apparently the "malleability" issue brought up by Mt. Gox is the focus of these attacks.  Honestly, I don't understand the issue well enough to know how much of a factor it will be, but I doubt that it will be more than just a bump in the road. 

Society has never been down this road before and it's hard for us to know what we don't know about trusting ownership to a distributed ledger protected by cryptology.  There will be mistakes on the part of individuals, incompetence on the part of companies, and malice on the part of government, all of which makes this a risky arena in the short-term. 

[Smurf Hunter]

I've actually met two of the coinbase founders a few years ago when I was interviewing for a position at google (did not get the job).  The names looked familiar on the "about" page and I checked my linkedIn and verified the same folks.  Seems like coinbase is an easy, convenient abstraction designed to onboard new folks.  It integrates easily with US banks, etc.  The downside being it's a central location/entity and not necessarily anonymous.

I can email someone without a wallet and it'll direct them to coinbase to setup a new account to receive payment.  In that regard it's Paypal using BTC.

[Thorgrim]

Another option for those of you who want to buy small amounts of Bitcoin is: https://localbitcoins.com/

You can look people up in your area and buy for cash in person.

I have mined most of my coins but the ones I did buy I used this service because it is much more private.

[FreeLancer]

BTC continues the downward slide, with the CoinDesk index dropping below $600 and the doomed Mt. Gox closing in on $400. 

Silk Road 2.0 has announced that all of their customer's 4500 coins were stolen and are blaming the transaction malleability issue for their being hacked, which is causing more panic about a fatal flaw in the cryptocurrency. 

Who knows, is it time to buy, or get out before losing everything?

[skas]

The transaction malleability story SR/2 is positing is pure garbage.  You can't steal BTC from someone else's wallet with TM.  This was an inside job, and the people screaming that the BTC sky is falling are akin to people looking at a bank robbery and saying "ha! money is stupid!" (not saying you're guilty of this, FreeLancer).

I'm not going all in anytime soon, as I think it has much more correcting to do (I still think BTC should be closer to $2-300/BTC). I wouldn't even go all in at that point, but I'd probably buy a coin or two and let them sit.  I'm interested in BTC (and sadly [due to the name and source] Doge) because of the IDEA. All money I've put into it has been money I've been willing to lose, and I don't see it as an investment vehicle.

[FreeLancer]

The transaction malleability story SR/2 is positing is pure garbage. 

Agreed.  Anyone buying drugs from them should have had a clue that they were dealing with either a government honeypot or a criminal con game (actually I guess those are both kind of the same thing, except the government hides behind the veneer of law).

As for Mt. Gox and their fear mongering, they could be pulling this malleability crap out of their ass in an attempt to drive the price down and scoop up coin for cheap, but they're more likely just incompetents who got in over their heads.

I've had some play-money profits sitting at MtG for a few months now (I jumped the gun and seriously misjudged the crest of the last surge), which I was thinking I'd use to buy the Litecoins they keep saying they will start trading.  With all this new drama, I expect to never get any of it back.  Fortunately, I can still sleep with the thought of losing it, unlike that poor guy who flew to Japan and still couldn't get them to give him his money.  But if their price goes below $250 I've got some limit orders scheduled to trip, on the possibility that they might stay afloat long enough to transfer those coins off the exchange.  Otherwise, I'm just holding steady.

Long-term, my rational mind continues to see this as a minor bump in the road.  But it's still scary to see any amount of wealth gyrate around like this, I can't imagine what the guys who bought in at $1200 must be feeling.  It's hard for reason to get the upper hand over the emotions of fear and greed.

[CharlesH]

I still don't understand Bitcoin, and while I may have missed the boat on some "can't miss" opportunities over the years, my tendency not to invest (or test the waters, gamble, speculate, or whatever you call it) in things I don't understand has served me well. I will continue to sit on the sideline and just learn for now.
 
I can't imagine a future that does not have some sort of e-currency in it (SHTF scenarios withstanding of course).  There will be something.  But many of us remember the .com bubble in the 90's: there was a lot of turbulence and turnover as the winners and losers got sorted out.  I suspect there is more of that to come in the e-currency world before a standard finally emerges.
 
In the meantime, those of you who bought lifetime MSB memberships with Bitcoin a couple weeks ago may have got the deal of the century!

[Prodigy]

As for Mt. Gox and their fear mongering, ....  they're more likely just incompetents who got in over their heads.

This.

I just see this as a buy-at-a-discount opportunity.  I -do- think the recent high price over the past months was inflated in good part due to speculation, but I also see the underlying demand continuing to rise a hell of a lot faster than coins are being minted.

I don't know how much further it will fall, but I am confident it will eventually bounce way back up.  This is not the first time we've seen this story.

[archer]

The anonymous online marketplace Silk Road 2 says it has been hacked resulting in the loss of all its customers' bitcoins.

An administrator for the site said hackers had manipulated computer code enabling them to withdraw $2.7m (£1.6m) worth of the virtual currency.

It follows similar attacks on two exchanges that trade in bitcoins earlier in the week.

Silk Road 2 is known for selling drugs and other illegal items.

http://www.bbc.co.uk/news/technology-26187725

[FreeLancer]

I still don't understand Bitcoin, and while I may have missed the boat on some "can't miss" opportunities over the years, my tendency not to invest (or test the waters, gamble, speculate, or whatever you call it) in things I don't understand has served me well.

Bitcoin is very much an out of character investment for me, I'm not a gambler, but here I am.

I don't know how much further it will fall, but I am confident it will eventually bounce way back up.  This is not the first time we've seen this story.

True. We have seen this several times now.

The anonymous online marketplace Silk Road 2 says it has been hacked resulting in the loss of all its customers' bitcoins.

FUD - Fear, Uncertainty, and Doubt

SR 2 is most likely an FBI honeypot.

[Prodigy]

The anonymous online marketplace Silk Road 2 says it has been hacked resulting in the loss of all its customers' bitcoins.

An administrator for the site said hackers had manipulated computer code enabling them to withdraw $2.7m (£1.6m) worth of the virtual currency.

It follows similar attacks on two exchanges that trade in bitcoins earlier in the week.

Silk Road 2 is known for selling drugs and other illegal items.

http://www.bbc.co.uk/news/technology-26187725

I don't understand this one.  So, you have bitcoins, and you want drugs, so you go to silk road 2.  Why the hell would you ever let a site like that hold onto your money?!  I admit I have no idea how they work, but I just assumed it was a place that coordinated trade between sellers and buyers for a small percentage/finders fee.  Who the hell leaves money on a site like that, and why?!  This is definitely a case of being too stupid to deserve any safety with your currency.

[Smurf Hunter]

Yeah, if you could download drugs or prostitutes it might make sense to use a software crypto currency.

Given that you still need to take physical possession of drugs, it doesn't seem unreasonably inconvenient to pay with physical money of some sort.

(not that I have experience dealing drugs)

[Hootie]

wonder if there is anyway to create a bit coin account, where I don't have to link it to centralized manager (coinbase, bit wallet)?

I still don't understand Bitcoin

I like this video. It is short and explains the basics. http://youtu.be/Um63OQz3bjo
My geekier friends usual find this video better http://www.youtube.com/watch?v=mrlgw5KpkXM



Thanks to all of you who mentioned https://localbitcoins.com/ and cashintocoins.com. I never even considered that a Local Buy/Sell of bitcoins was going on.

[FreeLancer]

My geekier friends usual find this video better http://www.youtube.com/watch?v=mrlgw5KpkXM

This Steve Gibson explanation back in 2011 is what convinced me that BTC had serious potential. 

wonder if there is anyway to create a bit coin account, where I don't have to link it to centralized manager (coinbase, bit wallet)?

Control of the private key matched to a specific public key on the blockchain (which is a distributed peer-to-peer electronic ledger, not a centralized entity) is the only requirement for proving ownership of bitcoins. 

You must communicate with the blockchain in order to establish the public/private key pair for your address(es) and also to perform transactions.  This can be done by running a wallet application on your own web-connected computer, using an online wallet or exchange (which are frequently centralized, but not necessarily, as in the case of the blockchain.info wallet), or even just using a program like bitaddress that generates valid keys for you to commit to memory, write down, or print for offline storage.  There's pros and cons with each method and most use multiple different methods, depending on their desire for security vs. convenience.

[Jeff NH]

wonder if there is anyway to create a bit coin account, where I don't have to link it to centralized manager (coinbase, bit wallet)?

Yes. Download the standard bitcoin client, or the multibit client and manage your own wallet. I only use coinbase to 'get' the bitcoins but I immediately move them to my own wallet. Once you are full verified, you can buy on coinbase and have instant access to the bitcoins with no wait.

Personally, I use blockchain.info for (most) of my wallet needs. It is not a centralized manager per se and if you set it up right, blockchain.info could go away tomorrow and you still have access to all of your coins.

[FreeLancer]

Personally, I use blockchain.info for (most) of my wallet needs. It is not a centralized manager per se and if you set it up right, blockchain.info could go away tomorrow and you still have access to all of your coins.

I'm a big fan.  I believe blockchain.info has had their heart in the right place from day one and have more faith in their operations than just about anyone else, due to the fact that they are one of the few open-source bitcoin sites that have been designed with the ability to safeguard your wallet even if they totally go offline forever.  Almost everyone else's systems are built on a proprietary and centralized system that puts you at more risk of theft, fraud, or government seizure.

Here's a good interview with Roger Ver, the majority owner whose gained the moniker "Bitcoin Jesus", which I think it provides some good insights into the philosophy of the company.

[Prodigy]

Anyone have experience with the bitcoin software Armory?  I have only been using it for a little bit, but it seems pretty solid.  They also claim the way their software is written, just about anyone could duplicate it's core easily enough to access your bitcoins, should the company somehow vanish from existence (and every copy of the software also somehow vanished from existence).

It seems like a very easy and secure way to control your own wallet.

[Thorgrim]

I believe that this latest incident at Gox is the second time they have been hacked. The first time it happened it sent BTC from $30 back to $2. So either they are supremely incompetent or something else is going on.

I have a theory that Gox is somehow government run or controlled. Not based on a huge amount of evidence just speculation on my part.

There have been persistent rumors that Litecoin will at some point be added to Mt.Gox yet it never happens. Pretty sure I even read something about it happening right on their own website. The owner of Mt.Gox and the creator of Litecoin are brothers and it is very easy to simply add another coin to an exchange once you have a working trading engine and account system. So the question is why haven't they done it yet? Other exchanges like Cryptsy add news coins almost weekly.

Another suspicious thing and a reason I never considered using Mt.Gox was that the BTC price on Gox has been consistently higher then all other exchanges for months. Usually about $100 or so higher, around 10%. One would think that would be a perfect opportunity for arbitrage which would then close that gap.

The only thing I can come up with is that they don't actually want to add Litecoin to Gox because if you add it and everyone's money goes missing it would do huge damage to the reputation of the number two coin.

If Gox isn't somehow part of a government operation then how come they aren't closed down, charges pending now that peoples money have gone missing twice? There were many complaints that people could not withdraw money from Gox in a timely manner or at all and that customer service was terrible.

Just my thoughts. Governments and Banks are threatened by cryptocurrency and one way they can fight against them is to destroy their reputation which is what has happened with this Silkroad 2 and Mt.Gox fiasco.

[FreeLancer]

Anyone have experience with the bitcoin software Armory? 

Haven't used it, but it seems to have a really good reputation.  The only downside is it supposedly hogs a ton of resources on your machine, but I keep hearing that a more svelte update is in the works, which I would like to try.

Another suspicious thing and a reason I never considered using Mt.Gox was that the BTC price on Gox has been consistently higher then all other exchanges for months. Usually about $100 or so higher, around 10%. One would think that would be a perfect opportunity for arbitrage which would then close that gap.

I don't know that it's suspicious, but the fact that the gap never closed points to the problems Gox had getting dollars off the exchange for their customers, people would pay more for the bitcoin and take those instead.  I agree, in a smooth market where fiat and BTC flowed without any friction, arbitrage would have quickly closed that gap. 

If Gox isn't somehow part of a government operation then how come they aren't closed down, charges pending now that peoples money have gone missing twice? There were many complaints that people could not withdraw money from Gox in a timely manner or at all and that customer service was terrible.

I don't know what Japan's attitude is toward bitcoin or Mt. Gox, but that's the jurisdiction that will have to settle any legal matters.  The US has gone after them hard, they seized $5 million held in their US-based Dwolla account, which I think could be argued to have been the beginning of the latest crisis for Gox.  That's a significant amount of money to lose when you need to be growing your business.  I believe they were forced to start making some tough choices at that point and have progressively backed themselves into a corner since then. 

I am skeptical they will survive, but it sounds like blockchain.info is heavily involved with assisting in correcting their transaction malleability issue and getting them back online, which seems like a positive sign to me.  I don't think you'd see a transparent organization like that helping a crooked member of the bitcoin flock.  Gox might be able to squeeze out another recovery after all.

[Thorgrim]

Honestly I hope not. Gox needs to die. It is bad for BTC and crypto's in general. There are several other large exchanges now and many small ones. A couple years ago that wasn't the case.