The Bitcoin (crypto) Beginner's Guide

Discussion of all things crypto and blockchain.
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SilverDoge
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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Sun Sep 24, 2017

Risk Tolerance and objectives.

Part of this post is copied from my post in a different thread, but it is relevant here:

Before getting into crypto you need to decide what you are trying to do. It seems like an easy question but it really isn't. Some people want to maximize their profits (in dollars, gold, or bitcoin) and exit positions when they deem they gained the most value. Other people want to profit, but also support the crypto community. Others like profits but more so want to release the bankster and government grip on finance and see crypto as the means of doing it. And still others are working on a single project and devote their energy to that one thing and hope it is a success, and they will profit in wealth and happiness after that success. Finally others could see the price of bitcoin crash to $10 for whatever reason (outlawed by all governments simultaneously and the top 3 major exchanges all hacked on same day) and they still wouldn't sell no matter what, on principle.

I find that at times, I am all of these people. But each persona has different goals and different trading strategies that conflict with one another. So unless you are fully in one camp (which may shift over time), I find that it helps to have percentages of funds set aside for your differing strategies/persona. This will allow you to hold a coin like Qtum which has been negatively effected by the China restrictions, without panic selling or stressing out because other coins have appreciated during that same time span. But it also allows you to swing trade coins too (if desired) because you aren't just married to one position or project.

What you don't want to do is stress over your positions while watching other coins moon and feel like you missed out. There are nearly 1,000 different coins. One is going to spike seemingly every day, so you could feel bad about your 20% gain when that other coin went up 200%. Don't fall into that trap. One needs a strong mental game to keep a level head in this space. Stick to your strategy and objectives without letting the markets dictate an emotional trade. And it probably doesn't need to be said (perhaps?) but when the market has a strong dip, that isn't the time to panic if you are bullish on crypto - that is the time to buy!

Here is a sample list of coins based on level of risk tolerance one needs in order to have a position in them (and tolerance in crypto is much higher than average tolerance):

Tolerance : Coin
low : Bitcoin
fairly low : Ethereum
low-ish : NEM, Monero, LTC, Dash
Moderate : NEO, PIVX, EDG, QRL, Stratis, KMD, BAT
high-ish : ARK, Qtum, Waves, WGR, XTZ, EOS
fairly high : HYP
High AF : ICOs

I stole this snapshot from a guy on the DBET slack who posted it as a crypto portfolio breakdown. It is pretty solid. He bases it on market cap size instead of risk, and I can get on board with that as well.
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SilverDoge
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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Sun Sep 24, 2017

Terminology explained.

We often use the terms smart contracts or APIs when talking about crypto or different crypto projects or interfaces. But what is a smart contract and what is a real life application of such a contract? And how do APIs work? These two videos break it down:



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Re: The Bitcoin (crypto) Beginner's Guide

Postby Bucketeer » Mon Oct 02, 2017

Coindesk: Nobody understands Bitcoin, that's ok.

https://www.coindesk.com/nobody-understands-bitcoin-thats-ok/
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SilverDoge
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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Wed Oct 04, 2017

Bucketeer wrote:Coindesk: Nobody understands Bitcoin, that's ok.

https://www.coindesk.com/nobody-understands-bitcoin-thats-ok/


Nice link. There is an even better one for beginners that is embedded within that article:

https://lopp.net/bitcoin.html

The amount of information out there for those who want to truly go down the rabbit hole is staggering.
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Re: The Bitcoin (crypto) Beginner's Guide

Postby Bucketeer » Thu Oct 05, 2017

Udemy is an online source of knowledge and training for very reasonable prices ($10-25 per course). This is the link to the courses they offer in Bitcoin and Crypto-currency trading.

https://www.udemy.com/courses/search/?q=bitcoin%20trading&src=sac&kw=bitcoin

Coinigy offers a very professional technical analysis platform for $15 per month. Smart traders use TA for entry and exit points for a position, in addition to fundamental macro analysis.

https://www.coinigy.com/features/
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Re: The Bitcoin (crypto) Beginner's Guide

Postby CaptainW » Fri Oct 06, 2017

Great thread Travis!

So I've just received my Ledger Nano S. But I'm clueless as to how to use it. Has it been discussed somewhere on BS how to transfer from MEW to the Ledger? If not, do you have a good link for me to use as a guide. Can ICO's be downloaded to the Ledger? Or perhaps a better question is, what isn't compatible with the Ledger? Can tokens be put on Ledger from exchanges or just MEW?
A lot of questions as usual. Thanks in advance.

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Re: The Bitcoin (crypto) Beginner's Guide

Postby gramcracker » Fri Oct 06, 2017

CaptainW wrote:Great thread Travis!

So I've just received my Ledger Nano S. But I'm clueless as to how to use it. Has it been discussed somewhere on BS how to transfer from MEW to the Ledger? If not, do you have a good link for me to use as a guide. Can ICO's be downloaded to the Ledger? Or perhaps a better question is, what isn't compatible with the Ledger? Can tokens be put on Ledger from exchanges or just MEW?
A lot of questions as usual. Thanks in advance.


I hesitate to advise, being a tech dunce, but I did attempt this yesterday to secure EVX tokens on my ledger. Not successful since EVX ICO tokens were still not released. Other tokens supported on MEW can be stored on your ledger nano S. The trick is you need to enable browser support on your ledger. This tutorial helped me. https://www.youtube.com/watch?v=PwWr9RT0nN4 Start at the 9:19 mark.

You must disable browser support to use your ledger normally. While I disabled browser support once done with MEW connection I was only able to return to normal function by disconnecting USB, then reconnecting to use normal ledger apps.

There is additional info available via help/knowledge base on your ledger but I found the tutorial more helpful.
Ledger help article here: https://ledger.zendesk.com/hc/en-us/articles/115005161945

I did use the chrome browser to access my MEW as well. Good luck.
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Re: The Bitcoin (crypto) Beginner's Guide

Postby Silversummit » Fri Oct 06, 2017

CaptainW wrote:Great thread Travis!

So I've just received my Ledger Nano S. But I'm clueless as to how to use it. Has it been discussed somewhere on BS how to transfer from MEW to the Ledger? If not, do you have a good link for me to use as a guide. Can ICO's be downloaded to the Ledger? Or perhaps a better question is, what isn't compatible with the Ledger? Can tokens be put on Ledger from exchanges or just MEW?
A lot of questions as usual. Thanks in advance.


https://m.youtube.com/watch?v=PwWr9RT0nN4

I found this video pretty useful, hopefully it'll help you out.
Get $10 in bitcoin when you spend $100 with the link below.
https://www.coinbase.com/join/593f314703c4930098573eed

save 10% on all trade fee's for 6 months at gate exchange.
https://gate.io/signup/955279

binance
https://www.binance.com/?ref=13221361
thank you to any who use these links as I get referral bonuses also :thumbup:

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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Sun Oct 22, 2017

I often hear the question, what problem does crypto actually solve? Besides the obvious issue of bitcoin giving us a trustless, permissionless, decentralized, international, currency there are many other facets to crypto that are being overlooked by people only focusing on this one feature of blockchain technology. As Andreas likes to say, money is just the first application.

Here is a list of 30 different industries where blockchain technology can present a solution and potentially disrupt industries: https://www.cbinsights.com/research/industries-disrupted-blockchain/

Another question I used to hear was how much bitcoin should a person acquire to start out? I used to say start by getting 1 whole bitcoin (or 1,000 mBits). There will only ever be 21 million and some of that population is already lost forever. By having a whole bitcoin a person could be in a unique position that many around the world will not be able to ever achieve. Unfortunately that might be out of the realm of possible for many now that we are over $5k in USD terms. So my new advice is to try to get at least 100 mBits (0.1 BTC) to start as a goal. Perhaps in another 3 years, that advice will have to change to 10 mBits? ;)
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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Sat Nov 18, 2017

Sometimes I will hear the objection that a very small number of people control all the bitcoin. This argument is made because there are a large number of bitcoin wallet addresses with minimal bitcoin balances. But it isn't even a good argument in the first place. Bitcoin is a currency. Anyone can acquire it by offering 1) a good, service, or alternate currency in exchange for bitcoin by someone who has it, 2) trading fiat currency on an exchange, 3) mining it yourself. Can you think of a better way to have or distribute a free and voluntary currency?

A better question might be, if you were inventing a currency from scratch, how would you initially distribute it as fair as possible? If the answer is to simply give every citizen an equal amount, then that currency would fail - unless of course you are mandating its use by force (government). People need to value it by giving something up in order to get it. We know this is true from a human nature perspective, we value things we've earned with our time, money, intelligence, and work. So the large holders are the people who saw something that might have value one day if it garnered any sort of mainstream adoption. They took their goods, services, fiat currency, or computer mining power and put their "money where their mouth was" at a high risk and opportunity cost. By the way, gold works similarly here. I can go choose to personally mine it if I want too, but good luck with that.

All that being said, what is this "terrible" distribution of bitcoin that we hear about? See the link here, or the picture below: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
So what can we make of this? Over 50% of bitcoin is stored in wallet sizes between 1 - 1,000 BTC, with the largest group between 10-100 BTC at 26%. Now, is it possible that 10 rich guys are simply breaking up all their wallet addresses to be smaller sized? Sure. We can't know (which is good). The bitcoin haters always point to the number of addresses between 0 - .001 BTC. So what. You know what it costs to create a wallet and store zero bitcoin in it? Nothing. Anyone can do it. Somebody could create 10,000 wallet addresses, and it proves nothing. You need to look at where the actual coins exist, not at the addresses. And it is of note that almost 12% of bitcoin is held in wallets of 10 BTC or less. Considering how new bitcoin is, and how adoption is nowhere near fully mainstream, I would call that fairly decent. Especially if you were trying to compare it to the USD, where the distribution is probably more in the hands of the richest 1%. Just over 3 million BTC are held in wallets over 10,000 BTC in size. That is under 20%.

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Added on 16JAN18: Andreas recently tackled this subject as well:
Last edited by SilverDoge on Tue Jan 16, 2018, edited 1 time in total.
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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Sat Nov 25, 2017

We've already talked about hardware wallets, but let's also talk about security. Security is vastly more important in crypto than in traditional banking. If your credit card has a false charge, you can call Visa and get it charged back. If your bank funds are stolen, you can usually get that back as well (depending on how funds were stolen). If you forget your bank online password, you can recover it, or just walk into the bank branch. This system has left us lazy in regards to security of our wealth.

Crypto is different. If you reveal your password (private key), your money will be stolen. There is no "charge back" feature. It will be gone. If you inadvertently send money to a destination, you can't just "get it back". The system was designed this way on purpose. When vendors complete a bitcoin transaction, they do not need to worry that the other party will call a credit card company and claim fraud, or that a check will bounce, or that the fiat will be counterfeit. This saves the vendors money.

I would say the most important things in crypto security are use of 1) hardware wallets for the majority of your crypto stack, 2) two-factor authentication, 3) offline storage of your private keys, 4) not clicking on spam links to fake exchanges or fake wallets 5) don't put more crypto wealth in an online mobile hot wallet than you would put fiat cash in your physical wallet walking around day to day. Here is a helpful infographic created by twitter user Jennifer Leigh - there are females in crypto too :clap:
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Re: The Bitcoin (crypto) Beginner's Guide

Postby SilverDoge » Thu Nov 30, 2017

How would you advise a newcomer to bitcoin, now that the price has eclipsed $10,000?

Big John correctly questions: "While it can be a comfortable decision to play with your profits, stay long, ride the wave, what would you do if you were starting out today (30NOV17)? Buy? Wait? Bitcoin is catching major headlines with everyone and their grandmother getting on board?"

It is easier to give advice in the crypto space when a person is sitting on large crypto profits and isn't risking the immediate dollars that a newcomer is risking in crypto. A newcomer is paying today's price, and bitcoin has gone parabolic the last 3-4 months. I understand this concern; but also remember that just because Grandma is reading about bitcoin doesn't mean she is buying any. Google search results and headlines of bitcoin don't necessarily equate to people actually purchasing bitcoin. We are still in the early adopter stages. Therefore, for a new entrant, here would be my advice:

1) Only put in to crypto money that you are 100% comfortable completely losing.
2) While being okay with losing everything, commit yourself to leaving at least a portion of your profits inside the crypto space (bitcoin or alts) for the very long term - meaning you don't completely 100% cash out to fiat.

Now, how would I enter today's market at around $10,000 per bitcoin? Let's say I had $2,000 that I wanted to throw at crypto that I am okay losing forever and that is my play money to roll the dice at this new technology. My move would be to take 50% ($1k), and put in an order with Coinbase/GDAX as soon as I could get verified with an account. This would at least start my initial position and get me started with crypto. Then I would take the other $1,000 and put limit buy orders at GDAX at varying levels below today's price. If the price today is $10k, I would put 3 x orders of $333 at levels in the $9,xxx, $8,xxx, and $7,xxx regions. This strategy allows me to both have immediate bitcoin exposure, while also giving me the opportunity to pick up cheaper bitcoin on dips of up to 30%.

Exiting positions. I understand that many people want to simply profit off bitcoin and reap the fiat rewards. I would advise that if you double your money, take the initial investment off the table and then let at least some portion of your profits ride in perpetuity. Come back in 10 years and thank me later that you didn't cash out your 0.1 bitcoin for $1,000 in 2017 or 2018.
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Re: The Bitcoin (crypto) Beginner's Guide

Postby Long John » Thu Nov 30, 2017

SilverDoge wrote:Exiting positions. I understand that many people want to simply profit off bitcoin and reap the fiat rewards. I would advise that if you double your money, take the initial investment off the table and then let at least some portion of your profits ride in perpetuity.

I'm glad you added that. More "long bulls" have done that than are willing to admit it, I bet, perhaps because they don't want anyone to know how much gain they missed. I don't know that I agree with the "perpetuity" part. I've heard of crypto pioneers who died with their coin locked up beyond anyone's reach. Even if you're the longest of long bulls, and don't want to ever benefit personally from your investment, arrangements should be made to prevent a total loss.

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Re: The Bitcoin (crypto) Beginner's Guide

Postby MaxGravy » Thu Nov 30, 2017

Long John wrote:Even if you're the longest of long bulls, and don't want to ever benefit personally from your investment, arrangements should be made to prevent a total loss.


Exactly. There should be an easy way to print out a piece of paper and stash it away in a safe deposit box.
I'm clearly not very bright.

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Re: The Bitcoin (crypto) Beginner's Guide

Postby Silversummit » Thu Nov 30, 2017

MaxGravy wrote:
Long John wrote:Even if you're the longest of long bulls, and don't want to ever benefit personally from your investment, arrangements should be made to prevent a total loss.


Exactly. There should be an easy way to print out a piece of paper and stash it away in a safe deposit box.




Really it is. Use the link below to generate and print a paper wallet. Send your bitcoin from whatever source to the paper wallet. Laminate it if you like then put the appear wallet in a sdb. The address generated by bitaddress is virtually unhackable and safe till you import the wallet into another wallet, at which point the private key gets used online creating a record of the private key that somehow a skilled hacker might be able to retrieve from the device it was entered into. To go a step further, you can actually view all transactions to a specific address on the Blockchain but this is beyond my skill and I have used paper wallets enough to trust them. You need to enter the correct address when sending to the paper wallet and there will be no problems.


https://www.bitaddress.org/bitaddress.o ... aa194.html



Edit: I wanted to add there is no transaction fee when importing a paper wallet. You are importing the address so the same address/private key is still used in the wallet you import to.
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Re: The Bitcoin (crypto) Beginner's Guide

Postby MaxGravy » Thu Nov 30, 2017

Silversummit wrote:
MaxGravy wrote:
Long John wrote:Even if you're the longest of long bulls, and don't want to ever benefit personally from your investment, arrangements should be made to prevent a total loss.


Exactly. There should be an easy way to print out a piece of paper and stash it away in a safe deposit box.




Really it is. Use the link below to generate and print a paper wallet. Send your bitcoin from whatever source to the paper wallet. Laminate it if you like then put the appear wallet in a sdb. The address generated by bitaddress is virtually unhackable and safe till you import the wallet into another wallet, at which point the private key gets used online creating a record of the private key that somehow a skilled hacker might be able to retrieve from the device it was entered into. To go a step further, you can actually view all transactions to a specific address on the Blockchain but this is beyond my skill and I have used paper wallets enough to trust them. You need to enter the correct address when sending to the paper wallet and there will be no problems.


https://www.bitaddress.org/bitaddress.o ... aa194.html


Who is bitaddress.org? Should I trust them with the keys to my SDB?

They're hiding behind a proxy:

REGISTRANT CONTACT
Name:Registration Private
Organization:Domains By Proxy, LLC
Street:DomainsByProxy.com
14455 N. Hayden Road
City:Scottsdale
State:Arizona
Postal Code:85260
Country:US
Phone:+1.4806242599
Fax:+1.4806242598
Email:email@domainsbyproxy.com
I'm clearly not very bright.

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Re: The Bitcoin (crypto) Beginner's Guide

Postby Silversummit » Thu Nov 30, 2017

For the super cautious bitaddress.org's wallet generator is free to download and put on a flash drive so you can plug the flash drive into a computer not connected to any internet source and generate addresses. Something I've seen Andreas Antanapolis say he has done and still holds virgin(unsplit) bitcoin currently. All I can say is I have used bitaddress.org along with liteaddress.org and myetherwallet to generate paper wallets to store, receive payment, or gift someone some coins and have never had problem. Search paper wallets on you tube to get more info. This is what I did before using one . My first use of each was a trail with small amounts to build my confidence. Now I print a wallet and use it no worries. I uunderstand your concern, this isn't new to most of us. I'm just letting you know I have used these services for the last year numerous times with no problems yet.

Address to download wallet generator

https://github.com/pointbiz/bitaddress.org
Get $10 in bitcoin when you spend $100 with the link below.
https://www.coinbase.com/join/593f314703c4930098573eed

save 10% on all trade fee's for 6 months at gate exchange.
https://gate.io/signup/955279

binance
https://www.binance.com/?ref=13221361
thank you to any who use these links as I get referral bonuses also :thumbup:

Silversummit
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Re: The Bitcoin (crypto) Beginner's Guide

Postby Silversummit » Thu Nov 30, 2017

Silversummit wrote:For the super cautious bitaddress.org's wallet generator is free to download and put on a flash drive so you can plug the flash drive into a computer not connected to any internet source and generate addresses. Something I've seen Andreas Antanapolis say he has done and still holds virgin(unsplit) bitcoin currently. All I can say is I have used bitaddress.org along with liteaddress.org and myetherwallet to generate paper wallets to store, receive payment, or gift someone some coins and have never had problem. Search paper wallets on you tube to get more info. This is what I did before using one . My first use of each was a trail with small amounts to build my confidence. Now I print a wallet and use it no worries. I uunderstand your concern, this isn't new to most of us. I'm just letting you know I have used these services for the last year numerous times with no problems yet.

Address to download wallet generator

https://github.com/pointbiz/bitaddress.org




Also when generating a address offline do not use a printer connected to the internet or wifi. Plug into your computer for the best security.
Get $10 in bitcoin when you spend $100 with the link below.
https://www.coinbase.com/join/593f314703c4930098573eed

save 10% on all trade fee's for 6 months at gate exchange.
https://gate.io/signup/955279

binance
https://www.binance.com/?ref=13221361
thank you to any who use these links as I get referral bonuses also :thumbup:

Silversummit
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Re: The Bitcoin (crypto) Beginner's Guide

Postby Silversummit » Thu Nov 30, 2017

Here is great tutorial on safely and securely downloading bitaddress and printing a paper wallet.


https://m.youtube.com/watch?v=1Vnt1NwQfxc
Get $10 in bitcoin when you spend $100 with the link below.
https://www.coinbase.com/join/593f314703c4930098573eed

save 10% on all trade fee's for 6 months at gate exchange.
https://gate.io/signup/955279

binance
https://www.binance.com/?ref=13221361
thank you to any who use these links as I get referral bonuses also :thumbup:

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Re: The Bitcoin (crypto) Beginner's Guide

Postby MaxGravy » Thu Nov 30, 2017

Silversummit wrote:Here is great tutorial on safely and securely downloading bitaddress and printing a paper wallet.


https://m.youtube.com/watch?v=1Vnt1NwQfxc


Thank you. I plan to stash away .1BTC so in ten years I can thank Silverdoge.

:pop:
I'm clearly not very bright.


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