Forums > General Discussion   Shooting the breeze...

Cryptocurrency

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Created by Razzonater 1 month ago, 31 May 2017
Jupiter
1643 posts
10 Jul 2017 12:04PM
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evlPanda said..

Jupiter said..
With the virtual currencies, no one is ultimately responsible for it coming and going but a spaghetti mess of algorithms limited only by Geeks' imagination.



I wouldn't go so far as calling it a spaghetti mess. The same "spaghetti mess" is behind all banking transactions; cryptography.

Cryptocurrencies use cryptography in a very different way to banks. It's quite ingenious really.

By the way I think a critical, negative, "this is bull****" attitude is a safe, and intelligent one to have.


Thank you for posting the information, EvilPanda. Yes, I do agree with you about the equally tangled mess of the "orthodox" banking systems. However, other than some get-rich greedy merchant banks, most conventional banks have "reasonably healthy" checks and balance.

As I had consistently used the spates of Ransomeware attacks as the negatives of Bitcoins and the likes, I still maintain my assertion that something dodgy is happening somewhere, somehow, and by somebody. As Razzonator said that he made a 30% gain since his relatively short period of dipping his toes in his investment. Now any sensible person would sit up and asks "It is for real ?". Then most people with even the minutest of financial understanding would think "It looks like too good to be true !"

Then of course my usual argument is that orthodox banking systems loan money for projects and receive profit for the services. Now I am not sure if any bank can skim off 30% profit in such a short time as Razzonator has done. Mind you, that is what he, the investor earned, the Bitcoins mobs must be making much more than the 30% to pay the investors.

So the old question remains...Where is the profit come from? What products is it selling, buying, growing, and/or whatever, are capable of generating such huge margins ?

By the way, I am not being negative about the investors like yourself and Razzonator, I am only pleased for you to have made such a good run. However, I am firmly skeptical about this whole virtual money capers. I am also concerned about the way Bitcoins and the likes are being used as a "legal" render for illegal activities such as the Ransomware attacks.

evlPanda
NSW, 7919 posts
11 Jul 2017 2:00PM
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Whoah, whoah. I'm no investor. I'm a speculator. I fully expect bitcoin, litecoin, etherium might all go to $0.

And they might not. I do fully expect some cryptocurrency to, eventually, become the first, real, international, digital currency. Eventually.

Razzonator's 30% return in such a short time, and my 20% loss, only indicates the volatility of the new currencies. And they are new. It's all untested waters. Think of them more like penny stocks, for now : )

The overall returns that we've been seeing are from simple supply and demand. That we are even having this conversation reflects the growing demand. There seems to be a lot of money being moved into BTC from China, and perhaps the Middle East too. I imagine Russia, Brazil and co as well. Seems to be the way to move money out of a country now, and into something (ahem) reasonable stable. Again, if you watch the transactions going through there are a lot of big ones; $1m+.

Oh yeah; supply and demand. As more people use the currency it gains trust, and acceptance, and then stability, and then more exchangeability, and then more trust, acceptance, stability, exchangeablility and so on and so on.

The value of bitcoin comes from Proof of Work. This is where real, actual energy (a lot) has been put into creating the blockchain so far. And the real, actual energy going into continuing that. It's real, physical electricity going into all those server farms enabling all the transactions; enabling all the security. That's the value. That's what has actually been created. It's real and tangible. It has a value.

Still on supply and demand: It is interesting to note that the demand for BTC has been outstripping its inflation. Inflation is built into BTC because miners (the one doing the proof-of-work) are rewarded with bitcoins if they solve a block. There are more bitcoins being created, which creates inflation, because each coin is worth less every time another is found. At present there are about 16m coins in circulation (sans the ones that were lost, forever). But, importantly, there will never be more than 21m bicoins. In the near future the last bitcoin will be mined and BTC will be a deflationary currency. This means 1btc will be worth more and more.

bashco.github.io/Bitcoin_Monetary_Inflation/

Honestly, for now, do not put in more than you are willing to lose. It's still early days and volatility is high. Of course if you buy in later there will be less volatility, and less speculation/high profits. Eventually it won't be much different from other currencies; rather stable.

The current state of investing/speculating in cryptocurrency:



By the way this doesn't stop you from just using it. Microsoft accepts is. Expedia accepts it. The list is growing, not shrinking.

Jupiter
1643 posts
11 Jul 2017 3:51PM
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evlPanda said..
Whoah, whoah. I'm no investor. I'm a speculator. I fully expect bitcoin, litecoin, etherium might all go to $0.

The value of bitcoin comes from Proof of Work. This is where real, actual energy (a lot) has been put into creating the blockchain so far. And the real, actual energy going into continuing that. It's real, physical electricity going into all those server farms enabling all the transactions; enabling all the security. That's the value. That's what has actually been created. It's real and tangible. It has a value.



I think Razzonator needs to grab you by the ears and give you a serious lecture on what NOT to do.

Are you saying that ...because (1). it consumes much energy to produce such virtual currencies, and (2). they also enable transactions, hence it makes them valuable ?

I am not sure about the first reason though. Pushing and shuffling pieces of papers in the office is also energy consuming, does it make pieces of papers valuable ? Basically it produces nothing tangible is my main argument. Yes, it is becoming repetitious !

Yes, as an enabler of transactions, that is a valid point. But it also re-enforces my argument that they are providing shadowy routes for some dodgy and highly criminal activities which create chaos rather than order. Personally I am not sure if that is the kind of trend we ought to be going into.

The Chinese is using virtual currencies to smuggler capitals out of the country. That proves my point, innit ? Transfer of money illegally is a crime in just about any country.

albers
NSW, 1230 posts
11 Jul 2017 6:04PM
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This may help to further understand the more detailed aspect of transaction validation and mining.

dmitri
VIC, 750 posts
11 Jul 2017 6:41PM
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Come on.. honestly..does anyone on this forum understand blockchain ? apart from Panda..

I must say I am not well educated..I have 3 mates: 2 are brains in IT and the third one is a scientist..non of them have a clue about blockchain

The internet is full of hipsters with explanations who are only remaining me the weird people who knock at my door on Sundays offering free books "Blockchain is Love and Savior"

Jupiter
1643 posts
11 Jul 2017 5:27PM
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I am in the process of renovating my own house with the purpose to sell it. Tradies are expensive, and they will charge $100 or more just to turn up. So I am totally DIY, with many trips to Bunnings buying tools I don't even know existed !

All about learning and self-taught with materials from the Internet. So here I am, sawing, sanding, drilling, gluing, screwing (actually putting screws into something, you dirty mind ), installing a sliding patio door set, etc.

I call it semi-productive work as half of the work I did would probably needed to be patched up later on anyway. Regardless of the damaged fingers and the glue which stuck on all my fingers and finger nails, I call it remotely "productive" as eventually, the house will be ready, well... almost.

Virtual money? Who actually done any real physical work to earn it ? Talking about the Sydney and Melbourne properties being potentially a bubble in the making, how about virtual currencies ?

bene313
WA, 1254 posts
11 Jul 2017 10:43PM
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Jupiter said..
Virtual money? Who actually done any real physical work to earn it ? Talking about the Sydney and Melbourne properties being potentially a bubble in the making, how about virtual currencies ?



If you had to do real physical work, to earn 100% of the real money required, to buy a house in Sydney, there would be no property bubble, property would be priced considerably less.

That's the point of some of the earlier posts. You borrow from the bank, you're not doing real physical work to earn this money you borrow. It is literally created digitally by our banking system.

Personally I am a big believer in the Block Chain. It is coming and will change everything we know about business and transactions. Legal contracts, property settlements, accounting, finance, how we buy stuff. CBA ran a trial of an international shipping transaction and did the deal in a couple of days instead of the standard week.

It's self perpetuating now. Big business are investing hundreds of millions into the technology annually - adoption is simply inevitable.

bene313
WA, 1254 posts
11 Jul 2017 11:26PM
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Bears all round though. Ethereum down to $200

A good way to think of block chain technologies in 2017 is to think about the internet in 1990. Adoption won't be overnight, but it won't be long before it changes everything we know and do......

evlPanda
NSW, 7919 posts
12 Jul 2017 1:11PM
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Jupiter said..
I am not sure about the first reason though. Pushing and shuffling pieces of papers in the office is also energy consuming, does it make pieces of papers valuable ? Basically it produces nothing tangible is my main argument. Yes, it is becoming repetitious !


So many people think something is only of value if it a good. Something tangible that they can hold in their hands. Imagine a carpenter creating a chair or something.

What about services? Most of the economy is services. G.S.T. anyone? Hell, the oldest profession is a service.

Services might not produce a beautiful, wooden table, or anything physical, but they do something. Often something very important to society. Add in teachers, doctors, drivers and so on as service based professions. Are they just standing in front of a chalk board, measuring temperatures, turning wheels and pushing pedals?

The blockchain as it is used for bitcoin is a transaction service, and includes all the aforementioned points.

evlPanda
NSW, 7919 posts
12 Jul 2017 1:33PM
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bene313 said..
Bears all round though. Ethereum down to $200


Ethereum is, at the moment, snake oil. The underlying tech is OK, but the way these ICOs (Initial Coin Offerings) are it's not unlike the IPOs of the internet companies circa 1999; 90% bull****; hyperinflated valuations based on an idea.

Before you invest in Ether ask yourself "which of these Ethereum based companies actually have something up and running?" I can't find one. And there's someone's face on so many of them. Stinks a bit.

And like the late 90's internet gold rush it's kind of the same now with cryptocurrency; most will fail; some will go on to be the Amazons and Googles of the next decade or more, perhaps much more.

importantly Bitcoin right now is undergoing some changes. There is a lot of fighting going on between the miners and core developers about how to improve scaling; the transaction rate and costs.

I wouldn't start investing in bitcoin right now unless you enjoy rollercoaster rides. It may skyrocket in price next month or so, and vice versa. Nobody knows.

Litecoin is my other pick, although It'll be affected by what happens to bitcoin, hard to tell which way, how, etc.

Jupiter
1643 posts
12 Jul 2017 11:33AM
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bene313 said..

If you had to do real physical work, to earn 100% of the real money required, to buy a house in Sydney, there would be no property bubble, property would be priced considerably less.

That's the point of some of the earlier posts. You borrow from the bank, you're not doing real physical work to earn this money you borrow. It is literally created digitally by our banking system.



Disagree with your analogy there. Although I borrowed money from the bank to build my wealth, the bank then used my money in terms of interest I paid to invest, or to facilitate others to invest in other projects. So while I am doing what I am trained for in my profession, my money had helped to create employments for others, and hence for the good of the society.

Banks, many people dislike them, and I don't blame them. However, one must remember that they are there to facilitate the functioning of our society. Not all people have a cool million lying around to start a new business. So you borrow, you pay interest. The banks get profitable, and they survive to continue lending to other up-starts.

No, I don't work for the banks, and I heard the misbehavior by the them in insurance claims, etc. But still, they are part of the institutions that hold up out modern society.

I am nothing against virtual currencies. What I do have issue with them is the fact that there must be a very strong reason for crooks like the Ransomware to use them for ransom money. Now as a concerned citizen, and an intelligent person like yourself, wouldn't you see the link between illegal acts and the virtual currency? The fact that transactions can go under the radar thanks to their seamlessness and secrecy is more than enough reasons for me to dislike them.

Jupiter
1643 posts
12 Jul 2017 11:45AM
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evlPanda said..
So many people think something is only of value if it a good. Something tangible that they can hold in their hands. Imagine a carpenter creating a chair or something.

What about services? Most of the economy is services. G.S.T. anyone? Hell, the oldest profession is a service.

Services might not produce a beautiful, wooden table, or anything physical, but they do something. Often something very important to society. Add in teachers, doctors, drivers and so on as service based professions. Are they just standing in front of a chalk board, measuring temperatures, turning wheels and pushing pedals?

The blockchain as it is used for bitcoin is a transaction service, and includes all the aforementioned points.


I wish I have a decent carpenter or a proper tilers right now who can do a proper job. These professions created items we can use for functional purposes.

Teaching, driving, doctors are services which generate tangible results. You get well after a visit to the doctor. You learn something form teachers which prepares you for a future career. Bus drivers deliver passengers to destinations to conduct businesses, private or work.

Virtual money is just, like you said, a bunch of algorithms understood only by some serious geeks. The ups an downs in values of them are probably as secretive as the algorithms themselves. As I said in my earlier posts, monetary transactions are based on trust. If you trust the other mob to take money form you, and are able to pay it back, hopefully with interest, then it is a fair and square deal. But there must be auditable trials along the way, so that crooks can't mask the illegality.

bene313
WA, 1254 posts
12 Jul 2017 9:42PM
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Jupiter said..
But there must be auditable trials along the way, so that crooks can't mask the illegality.


Like cash?

Has anyone ever paid USD or any other currency into a scam Nigerian bank account?

Kidnapping for USD or Euros or whatever?

No doubt BTC is good for hackers because it clears instantly. Have a read of this though:

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Originally bitcoin was touted as an anonymous payment vehicle. But over the years it has become clear that bitcoin is pseudonymous rather than truly anonymous.

Bitcoin addresses, payments and transactions are all visible on the blockchain. And by analyzing transaction patterns, it is possible to trace money and find the actual parties behind the public keys - strings of numbers bitcoin uses to identify its participants.

As WannaCry is the most widespread bitcoin ransomware attack in history, the criminals behind it have garnered a lot of attention. So, if they want to actually spend their funds, they will have to find a clever way to remove all links from the original bitcoin addresses.

As of right now, though, the bitcoins are still sitting untouched, and the trail is cold.


www.coindesk.com/the-world-is-watching-can-wannacrys-creators-cash-out-their-bitcoin-ransom/

dmitri
VIC, 750 posts
13 Jul 2017 12:53PM
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Holly Molly another 30000 Blockchain believers got hacked last week

www.businessinsider.com.au/south-korean-bitcoin-exchange-bithumb-hacked-ethereum-2017-7?r=UK&IR=T

Jupiter
1643 posts
13 Jul 2017 11:57AM
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bene313 said..

Like cash?

Has anyone ever paid USD or any other currency into a scam Nigerian bank account?

Kidnapping for USD or Euros or whatever?

No doubt BTC is good for hackers because it clears instantly. Have a read of this though:


Bitcoin addresses, payments and transactions are all visible on the blockchain. And by analyzing transaction patterns, it is possible to trace money and find the actual parties behind the public keys - strings of numbers bitcoin uses to identify its participants.

As WannaCry is the most widespread bitcoin ransomware attack in history, the criminals behind it have garnered a lot of attention. So, if they want to actually spend their funds, they will have to find a clever way to remove all links from the original bitcoin addresses.

As of right now, though, the bitcoins are still sitting untouched, and the trail is cold.



www.coindesk.com/the-world-is-watching-can-wannacrys-creators-cash-out-their-bitcoin-ransom/


So if it is possible to track the movements of Bitcoins, how come then the world over is still being plagued by such cyber crimes ?

I am neither stupid enough or horny enough to get involved with the on-line dating bits. So I am not familiar with the Nigerian scams. However, at least it is possible to catch some of the crooks in Nigeria by the smell of money trials.

By the way, if the Bitcoins paid towards the ransom demanded by WannaCry is left untouched, surely there is a record of the receiver ? I mean you can't have transaction which goes to nowhere. There must be someone who owns the bloody account, or "wallet" ? (I don't even know what that means !)

evlPanda
NSW, 7919 posts
13 Jul 2017 2:12PM
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dmitri said..
Holly Molly another 30000 Blockchain believers got hacked last week

www.businessinsider.com.au/south-korean-bitcoin-exchange-bithumb-hacked-ethereum-2017-7?r=UK&IR=T


Holly Molly an entire bank got hacked earlier this year:
www.wired.com/2017/04/hackers-hijacked-banks-entire-online-operation/

evlPanda
NSW, 7919 posts
13 Jul 2017 2:37PM
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Jupiter said..
By the way, if the Bitcoins paid towards the ransom demanded by WannaCry is left untouched, surely there is a record of the receiver ? I mean you can't have transaction which goes to nowhere. There must be someone who owns the bloody account, or "wallet" ? (I don't even know what that means !)


Nope.

(btw it's digital money, not virtual money. It's accepted in more places that World of Warcraft currency, for example. Australia now recognises bitcoin as currency as of July 1)

A wallet's address can be created completely offline.

Off top of my head the address that is created is your private key (pass phrase) one-way encrypted into your public key, concatenated with the network (test or main), plus some more encryption.

Now, interestingly someone else could actually generate the same address, but the chances are so ridiculously, almost infinitely remote that it doesn't even matter (something like every grain of sand on earth to the power of every grain of sand on earth). For all intents and purposes you have just created a unique address, completely offline.

People can send money to that address now. You do not need to connect to the internet at all.

This, by the way, is the safest way to store bitcoin. You are now your own bank. Seriously. Cold storage. A paper wallet. You can even use purely your memory. Unhackable.

links : )
programmingblockchain.gitbooks.io/programmingblockchain/content/bitcoin_transfer/bitcoin_address.html
bitkey.io

Note: it will be difficult to take money out of that wallet, anonymously. Think about it. The only option is to split it up into many wallets, and have a bunch of mules withdrawing. It's the same as our digital $AUD, but in fact easier to trace because the blockchain is public.

Jupiter
1643 posts
13 Jul 2017 3:21PM
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evlPanda said..

A wallet's address can be created completely offline.

People can send money to that address now. You do not need to connect to the internet at all.

Note: it will be difficult to take money out of that wallet, anonymously. Think about it. The only option is to split it up into many wallets, and have a bunch of mules withdrawing. It's the same as our digital $AUD, but in fact easier to trace because the blockchain is public.



Please do not take it as a negativity towards you and people who chose to invest/speculate or otherwise.

If a wallet address can be created completely offline, then how does others know where to send it to ? If you are offline, you are a nobody to no one.

Same as above, if you are not connected to the outside world via a common connection such as the Internet, then you must have an alternative shared connection such as a mobile phone. Isn't that a traceable media ?

If can't be that difficult to take money out of the wallet if the criminals are doing it now, again, and again !

Personally, I believe we are being too clever and tricky for our society's own good. The way things are going, we are approaching an anarchy where no one is clearly in charge, and people with the know-how can get away with crimes and we don't even know how to tackle them, or not a crime was committed !

Like Trump so frequently said: SAD !

dmitri
VIC, 750 posts
Saturday , 15 Jul 2017 5:42PM
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Found the best Blockchain explanation on the net..
Just what I thought !... It's a Cult, stupid !




medium.com/@fmartinka/why-bitcoin-is-a-religion-f605ff9689f0

evlPanda
NSW, 7919 posts
Sunday , 16 Jul 2017 5:26PM
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dmitri said..
Come on.. honestly..does anyone on this forum understand blockchain ? apart from Panda..


I honestly do not understand Bitcoin.

But it's a very interesting journey. It's hard (impossible?) to understand because it's a combination of money, computer networking, cryptography, and even some social philosophy thrown in (I'm sure there are correct terminologies I'm not using). And, it's constantly changing, with nobody at the wheel.

evlPanda
NSW, 7919 posts
Sunday , 16 Jul 2017 5:39PM
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Jupiter said..
If a wallet address can be created completely offline, then how does others know where to send it to ? If you are offline, you are a nobody to no one.


When an address is created there are two parts to it; a public address and a private key.

As an exercise make one now here: www.bitaddress.org

Now, you've obviously done that online. There are obviously tools to do the same offline. For example if you read the fine print on the page you can download that actual page to do the same offline.

People can send to that address as much as they like. For many years to come. You never need to be online again, ever for that address to receive transactions. Transactions are simply sent to it, recorded in the blockchain.

To spend from that address you need to have the private key. And you need to be online to broadcast the spend transaction.

The address and the key are paired. The key is used to generate the address. If you know the key you can generate the address again. If you know the key you are the owner of the address, and you can spend from it.

Note that addresses and wallets are not the same thing. A wallet is a collection of one or more addresses.

Razzonater
1370 posts
Monday , 17 Jul 2017 8:46PM
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Huge drops across all of them last 72 hours ,,, im in it for the long haul so yesterday put in 200 buckeroos...
Today they have all started to recover some dripped up to 50% prior to today and now they are all cranking up again, my 30% id made is now only 10-15 but the 200 i put in yesterday has made 9-10% super volatile market but hey gotta be in it to win it...
*or lose it.....)

bene313
WA, 1254 posts
Monday , 17 Jul 2017 9:12PM
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Jupiter said..
I wish I had bought a handful of Microsoft, and Apple shares too.


The next Apple or Microsoft is out there:

evlPanda
NSW, 7919 posts
Tuesday , 18 Jul 2017 7:32PM
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Razzonater said..
Huge drops across all of them last 72 hours ,,, im in it for the long haul so yesterday put in 200 buckeroos...
Today they have all started to recover some dripped up to 50% prior to today and now they are all cranking up again, my 30% id made is now only 10-15 but the 200 i put in yesterday has made 9-10% super volatile market but hey gotta be in it to win it...
*or lose it.....)


I'm buying more, so that is sure to cool the price again : \

Goldman Sachs predicted the recent dip, almost to the dollar : |
www.cnbc.com/2017/07/03/goldman-sachs-says-bitcoin-could-rise-another-50-percent.html

Fancy-pants technical analysts. I'm not sure if its self-prophesising though.

Hey Razzonater: where are you storing your btc? Being the bank makes one a bit more paranoid than usual.

Took me a few attempts to generate a paper wallet. "Oops; I was online. Start again." "Oh for... missed a word when writing down my seed phrase. Start again." "Is this... damn it, I didn't check the signature of this paper wallet generator. Start again." "Oh for... I didn't check the signature of the application that is checking signatures! Start again."

I reckon it took me about 90 minutes. Maybe more. Could do again in 2.

I don't like the exchanges having my keys, and me not having them.

Razzonater
1370 posts
Tuesday , 18 Jul 2017 7:34PM
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Hey evil panda im looking at like ordering a usb stick arrangement i dont know which to go with more research required...
I have some in a paper wallet but i think thats a nightmare and too easy to lose .

A couple of my mates recommend coin jar? ??
I think i need to sort out a permanent storage for them but there is so much conflicting info...

SandS
VIC, 4844 posts
Tuesday , 18 Jul 2017 10:05PM
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I so confused !!! can anyone explain this concept ? what I know so far ........so I can buy a bit coin from a newsagent down the road . he get the AU$ I get what ? is it a piece of paper , a piece of metal , plastic ? or a number on a computer screen ?

does he send the AU $ to a third party and keep part of it ?

**** it I'm going to sleep !!

bene313
WA, 1254 posts
Tuesday , 18 Jul 2017 9:49PM
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Razz I have a CoinJar account but it only does BTC and it's a buy/sell/pay exchange. For ETH from what I have read MyEtherWallet is a common one, it's open-source. Here's a good article medium.com/@jamieskella/how-to-buy-ethereum-in-australia-dd49c555dd00

Panda are you following ICOs? There's something like 20 new ones a month. Brave (BAT) raised $35m in 30 seconds! Truly amazing stuff.

A Perth company I've been following are releasing their ICO in a matter of days. tge.powerledger.io/ and powerledger.io/ - Great concept and it's being used in some Perth property developments. The Whitepaper is quite detailed. (I have no affiliation with this mob)

bene313
WA, 1254 posts
Tuesday , 18 Jul 2017 9:54PM
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Someone bring me back to Planet Earth:

www.inc.com/john-koetsier/ico-bubble-startups-are-raising-hundreds-of-millio.html

evlPanda
NSW, 7919 posts
Wednesday , 19 Jul 2017 11:24AM
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Wow, long post. I've only been into bitcoin, really, only this month. Part of the "fourth wave" or something. It's been an interesting journey. Like most things it took ages to first figure out and now I can replicate in a few minutes with my eyes closed.

Explaining it to others helps me clarify it to myself.

ICOs


This is not bitcoin, this is another cryptocurrency called Ethereum. ICOs (initial coin offerings) are dodgy as the dodgy brothers. They are the same as a completely unregulated IPO (initial public offering) for a company going public on the stock market, but with no rules! Yeeeeehar! Basically, for Ethereum startups, I do not understand how they could possibly be worth that much. It makes no sense to me so I don't participate.

If anyone can show me anything actually running on ethereum, like really working, I might be more interested. Just one thing.

BTC Exchanges

I use CoinJar it as an exchange. The only exchanges I know of that accept $AUD are CoinBase and CoinJar. The former accepts only credit cards and adds on 4%. The latter is a "market maker" (look it up) so has different buy/sell prices to other exchanges, but adds 1% for transactions and does bank transfers. All-in-all it works out the same price for both exchanges (yes, I tried buying at lower price with CoinBase and selling at higher price with CoinJar, almost worked actually, lost about 0.5%)

...there's btradeaustralia.com but I recall they wanted 4% too.

If anyone can recommend a better exchange I'm all ears. : )

CoinJar

But, I move my btc out of CoinJar ASAP:
www.reddit.com/r/Bitcoin/comments/2xfag9/psa_zhou_tong_created_coinjar_the_service_behind/?st=j5a9wedh&sh=e609e24d

Scary, eh?

------------------------------

Storing BTC

After Mt. Gox I just wouldn't trust any online exchange to look after my btc and my keys. It's crazy if you think about it.
However, if I had to I'd go with CoinBase over CoinJar. They seem more legit.

The good news is that you can be your own bank. And that's how Bitcoin was intended to be used.

Download Electrum and have a play with it.
electrum.org

There's not really a "Bitcoin Guide for Dummies" that I've found. I have to admit it can be overwhelming, and it's bottomless (you could end up researching cryptography and game theory).

So here's my attempt at buying and safely storing bitcoin:

1. Get Electrum (or perhaps armoury)
electrum.org

2. Setup a wallet in Electrum. Now, a wallet contains many addresses, and each address is (somewhat) akin to a paper note like we have in our physical wallets. When you create your wallet all addresses in it will be empty.

Electrum has a snazzy feature where it randomly generates a 12 word "seed phrase". This seed then goes into determinalistically (spelling) generating a wallet and a few dozen addresses (all empty). Because it is generated determin... deterministically (!) you can regenerate the exact, same wallet again on any computer if you know the seed. This means all you need to store, effectively, is the 12 word seed!

So you create your wallet, offline of course, and you're ready to receive bitcoin. Make a note of the 'receiving address', or any of the addresses it has generated, you will send the btc you buy on the exchange to that address in the next step.

3. Buy bitcoin on an exchange, like CoinJar or CoinBase. Again the former sells at a higher price but the latter charges +4%. To setup an account with either takes 1-2 business days and requires you send them photo ID. I used my drivers license.

iPoli takes a day to transfer from your bank account to your exchange cash account. You can use CoinBase and transfer immediately for +4% (actually why aren't i buying form CoinBase?)

Then, using the 'receiving address' (starts with a 1) from you Electrum wallet you send the btc from your exchange wallet to the wallet on your computer.

Now the btc is in your wallet, and only you have the keys to it.

# Information both interesting and important

Addresses

Wallets are made up of addresses. These addresses are like paper notes with a value of btc in/on them. They contain "unspent coins". So, when you use them, just like cash, you send the recipient the entire value of the address. Read that last sentence again.

Any change gets sent back to another address in your wallet (I've yet to figure out how the change knows where to go btw, but it does). This is a security feature; makes it harder to trace funds moving around.

So, especially for paper wallets, when you transfer the btc in them to, say, your wallet, transfer all of the btc, so there's no change getting lost.

Keys

Each address has a private key. An address is basically a public key/address that you ask people to send btc to. The private key allows you to spend money from that address. I'll keep it that simple. You obviously never reveal your private keys to anyone.

4. Backups and cold-storage and paper wallets and such.

You can simply backup your Electrum wallet, as a file, to a usb. Or wherever. You are backing up the addresses and their private keys. You aren't actually backing up the balances of each address, they are stored in the blockchain.

Note that you should do this often if you are making lots of transaction, as when it runs out of addresses it auto-generates more for you, and those new ones might not be in your backup. (it makes heaps of addresses at first)

Electrum also lets you encrypt your wallet with a password, pretty standard.

That's probably enough to be honest. Note that you really only need your 12 word seed phrase to completely regenerate the wallet!

Paper wallets are pretty snazzy too. They have one or more addresses on them, containing the public and private keys (you fold it so the private key is hidden etc.). See bitcoinpaperwallet.com. You can use one of the addresses you created in Electrum if you want.

Basic rule is to do as much as possible offline. Preferably on a clean machine. (bitkey.io is pretty handy for this.)

Addendum: you can verify the hash/signatures of some of the tools above to make sure they haven't been tampered with. It depends on your paranoia and skill levels.

Good luck.

dmitri
VIC, 750 posts
Wednesday , 19 Jul 2017 1:03PM
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bene313 said..


Panda are you following ICOs? There's something like 20 new ones a month. Brave (BAT) raised $35m in 30 seconds! Truly amazing stuff.

A Perth company I've been following are releasing their ICO in a matter of days. tge.powerledger.io/ and powerledger.io/ - Great concept and it's being used in some Perth property developments. The Whitepaper is quite detailed. (I have no affiliation with this mob)




Just replace "Bardo" with "Power ledger" and see how this "Perth Company" with .io domain popped up from " Creating an ICO Scam in 5 simple steps" book
steemit.com/scam/@moonjelly/how-to-create-an-ico-scam-in-5-simple-steps

I bet their team of the "Blockchain specialists" and "Ethereum engineers" came strait from uifaces.com



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