Bitcoin

[Stephen]

I know there are a few of you to there doing Bitcoiny stuff. What is your experience? How'd you start into it? Have you used it to make actual purchases? Ups, downs? Use any of the alternatives (Litecoin, Peercoin)? How do they compare?

 

[Herzog]

I've mined BTC in the past (actually ran a mining pool), didn't get very far. The difficulty of mining BTC is incredible now. Have purchased some at low points. Working on an LTC mining op... Actually, it would be pretty cool to start up an RME mining server. hmmm.

If you are interested in purchasing, I've used coinbase.com with good results. If you purchase a lot, store it in an off-line wallet.
If you insist on using an online wallet - use http://blockchain.info/

For good charts: http://bitcoinwisdom.com/

 

[Herzog]

I also want to say that it's OK to diversify between the different types of coins. Competition between currency is actually very healthy and is an indicator of a healthy free market. Unlike the US dollar which is a monopolized fiat, competitive fiat is very good. If one falls, others will take it's place (instead of secretly falling and causing mass inflation)

Also, remember that bitcoin isn't flawless. Treat it like cash. If you buy something with cash and you get ripped off, you have no recourse. Cash is gone. BTC is the same way, which in my opinion is good. It will force people to research and understand what they are buying and who they are buying it from. Just be careful and smart.

Another thing to look into and get excited about are the other technologies and ideas that's built into the blockchain. From extremely secure voting to extremely secure message delivery. You will soon start seeing major contracts being signed and moved via the blockchain because of how secure it is. There's so much more to it than meets the eye.

 

[Kevin B.]

I though Bitcoin was entirely virtual, how do you store it offline? And with the hullabaloo over Silk Road, what's out there you can actually trade Bitcoin for?

 

[Herzog]

I though Bitcoin was entirely virtual, how do you store it offline? And with the hullabaloo over Silk Road, what's out there you can actually trade Bitcoin for?

Once created, your wallet public key becomes part of the blockchain. To spend/widthdraw/transfer coins from your wallet, you need the private key. Simply create a new public/private key on a throw away operating system, write or print it out, store in a safe

There are thousands of online companies that now accept bitcoin, including recently overstock.com.
http://coinmap.org/

 

[Kevin B.]

You must be a victim of mainstream media.

The whole thing has seemed very gimmicky to me from the start. I haven't paid much attention to it, to be honest.

 

[mesha]

Bitcoin might be a viable option with the on coming collapse of the dollar.

 

[sixstringsteve]

What's out there you can actually trade Bitcoin for?

Really cool uber-light camping gear:
http://www.zpacks.com/payment.shtml

 

[Stephen]

Once created, your wallet public key becomes part of the blockchain. To spend/widthdraw/transfer coins from your wallet, you need the private key. Simply create a new public/private key on a throw away operating system, write or print it out, store in a safe

Explain. Once you've done this, you wipe the OS? Why?

 

[Herzog]

Bitcoin might be a viable option with the on coming collapse of the dollar.

If bitcoin scares Bernanke, you know it's going to be good.

The beauty of bitcoin is that it is completely decentralized. In order to run a wallet or mine, you have to download the blockchain. The blockchain is the record-set of every coin that has been created and every transaction that has ever occurred. It cannot be tampered with because it is distributed across millions (or more) nodes and every transaction and/or new coin is then verified across hundreds of those nodes within 10 minutes, then across the whole the chain in a matter of hours. New coins cannot be created outside of the algorithm and there is a finite amount that can be created (no inflation).

 

[Herzog]

Explain. Once you've done this, you wipe the OS? Why?

Kinda. You just boot from a live OS. Run it from a USB stick. Something that won't store your private key after you write it down or print it.
I'm even weary of printing it because some printers keep a record of what's been printed over a certain period of time.

This is what the btc millionaires are doing anyways. I don't own nearly enough btc to be paranoid.

 

[Stephen]

Kinda. You just boot from a live OS. Run it from a USB stick. Something that won't store your private key after you write it down or print it.
I'm even weary of printing it because some printers keep a record of what's been printed over a certain period of time.

This is what the btc millionaires are doing anyways. I don't own nearly enough btc to be paranoid.

Interesting. Why is this?

 

[Herzog]

Interesting. Why is this?

It's just the safest way. There are already stories of people getting 100+ coins stolen from their wallets because of malware and other issues. Taking your wallet offline ensures that you won't fall victim. Only take what you want to horde offline as it makes it pretty difficult to spend. But there are ways to create multiple "wallets" with set amounts in them that you can trade for goods off-line. It's pretty interesting how far you can take it.

Honestly, it's not too different from storing a bunch of gold bricks in your house that somebody can see from the window. Somebody will break in and take it if the reward greatly outweighs the risk. Need to take away that initial incentive. Hide your wealth.

 

[Brad J]

What if the Hard Drive crashes & data access is not possible?

 

[Herzog]

What if the Hard Drive crashes & data access is not possible?

Then it's gone. Which is another good reason for off-line wallet or an encrypted backup.

 

[ozzy702]

I mined around 150 coins back in the day and had no idea it would ever get this big. I made good money and it payed for a bunch of cool hardware but man... every time I hear the word bitcoin I cringe at all the money I missed out on.

 

[skeptic]

They use it in the future in Almost Human, so it must be good!

 

[Herzog]

It's over 2 hours, but Andreas Antonopoulos is pretty much a genius on this topic. He breaks it down very well on this JRE podcast.
If you haven't listened to JRE before, sometimes the language can not be very work safe. Use headphones.

The first little bit are his podcast ads, just skip past it.

[video=vimeo;85214726]http://vimeo.com/85214726[/video]

 

[Caleb]

Nowadays you have to be very careful with bitcoin. There is a reason Overstock accepts it but doesn't own any as a company. You can take huge losses if you're not careful. As mentioned, even using super powerful a sic chips, your chances of mining a coin any more is almost impossible. Joining a pool is the only chance you have. Most reports now are you won't ever break even on the amount of power it takes to mine a coin. Ofcourse there's always those that get lucky, but as a general rule, you'll spend more to mine the coin than it's actually worth.

I'm 100% in favor of bitcoin, I think decentralizing money is going to be key to a stable financial market. The market is there for it, the other day, Tesla sold a Model S using bitcoin. Overstock made around $130K in sales the first day they started accepting it. It's pretty cool to see this happening.

 

[Herzog]

Absolutely, it's nearly impossible to mine btc right now, even being part of a pool your chances are extremely slim of actually making much like you said. LTC and a few other namecoins are still 'mine-able' by most average people. But even ltc is getting out of range in difficulty.

Overstock may not own any as a company, but I understand your CEO has a few million packed away in BTC. I think it's awesome and I love seeing more and more companies stepping up to accept it.