Was anyone else long on Bitcoin Cash before today?

I'm just dabbling in this but here is my understanding (which may be flawed and is almost certainly incomplete): Coinbase is the exchange that allows you to buy/sell/store Bitcoin (or other digital currencies) and your password gets you into that exchange to buy or sell from your account. The Bitcoin you own is identified by private keys, which are codes that authorize you to spend your Bitcoin. Coinbase manages the keys under your account so you don't see them and you can buy and sell through CoinBase with just your login and password. But Coinbase is just the exchange and storing your key(s) on Coinbase is not the most secure option, it is safer to record your key(s) in a very safe place offline. There are various types of wallets available for this purpose, some are a type of USB stick, that you can buy and use to store your keys in a private safe, instead of leaving your Bitcoin on the Coinbase exchange where it could potentially be vulnerable to hacking or theft. Look for Bitcoin wallets on Amazon for examples of what is available.

If you log in to CoinBase you can download your keys/Bitcoin to a wallet, and if you do that I think you then need to have the wallet handy to sell any Bitcoin (ie, insert the USB wallet on your PC, or type in a key you wrote down in a secure place). The keys are your proof - your ONLY proof - of ownership of Bitcoin and when using Coinbase and not a wallet you are trusting Coinbase to hold that info for you.

 

OK it wasn't me that said that, but that's how I feel about my investment as well so I don't see why that seems so unrealistic? I bought a certain amount in Bitcoin, an amount I was willing to lose, mostly just to learn more about it. For purpose of example let's say it was $1,000. The value increased fourfold in a short time so I sold $1,000 worth to recover my initial investment. The rest is sitting in the account and growing, and I periodically sell off some more. I recovered my initial investment, plus a bit more. If what I have on account continues to increase in value I have the opportunity to sell off even more. My incoming funds from selling it are below the IRS threshold. What's to lose? If it went to zero today I still made money. If it became illegal I'd stop participating.

 

Over/under on when we start hearing about the first in-person major kidnapping for ransom since the key claims ownership?

I seen a movie like that once... ended well for the guys...

 

Your point is well taken, for sure, but it doesn't seem much different to me than deciding whether to hide cash under your mattress or store it in a bank account. Neither feels very safe to me.

 

One of my all-time fav movies. So good...

 

Pretty good summary of how it works.

 

It's very different and can be done extremely securely.

Someone earlier claimed the ledger was compromised as well. That person is factually incorrect. It's not open for interpretation.

 

You could kidnap me but I don't have my hardware wallet with me so it doesn't matter if I give you my pin. Also, the key phrase is long and I do not remember it.

Furthermore, how do you know which wallet in the ledger is mine?

Which of my wallets is the one I keep most of my assets in?

How is this different than physical coercion to wire money from a bank or open a safe with gold?

 

Ah, I wasn't very clear, I only meant that if someone wants to kidnap you and extort you for wealth, Bitcoin would not be any worse than cash or gold. Someone could try to force you to give up any of those types of wealth, or perceived wealth.

 

Thanks for the explanation. That makes a lot more sense now. So what you're saying is that Coinbase is not really all that secure? That if you had a bunch of BTC just in your BTC wallet on coinbase, and your coinbase account got hacked you're pretty much screwed then? So the alternative is to store all the BTC off Coinbase in one of those more secure wallets you mentioned. Has that happened to a lot of people so far? Getting hacked I mean and having their bitcoins stolen.

That's exactly what I thought of when he said he can't lose. The people that have already sold at least as much as they put into it in USD, Euros, etc. and they still have Bitcoins have already won and at this point it's just a matter of how much will they win.

 

I have heard of concerns their system could be hacked, I think some people are worried because they are growing SO fast, and the value of the stored assets is growing so quickly, that it just seems that they would be a target and could be vulnerable. There is a trade off between security and convenience - keeping the exchange accessible and easy to use for reasonably quick transactions probably has some inherent security risks.

Personally my main source of info is Coinbase itself, which does warn users that an offline wallet is safer than storing on the exchange, and that accounts could be vulnerable to phone based attacks (they use 2 factor authentication so presumably just finding or guessing your login and password wouldn't be enough, you'd need the phone too).

And, since Coinbase can be linked to your bank account, I personally set up a separate account just for that with low funds so that if somehow someone accessed my Coinbase account they could not buy much. If you link only a credit card, the purchase limits are low per week so that is probably safer.

I don't know the Coinbase exchange is any riskier than online bank accounts; according to all the LifeLock commercials my regular bank accounts could get drained any minute.

 

From all the research I've done, Coinbase is as reputable and secure as exists. They are backed by several very reputable private equity firms. They also claim to store 98% of the bitcoin offline, keeping only enough online to settle transactions.

I have mine spread across 2 exchanges, both US based, air gapped storage and very reputable. Never say never, but for me I believe the risk of taking it offline, losing the key or having it physically destroyed is higher than losing on Coinbase or similar.

I use 2 factor authentication for all financial accounts that support it.

 

Dude, have more than one key for each wallet. Distribute storage of them.

 

Me too, honestly. Same goes for keeping cash or anything like gold in the house. I've had enough wildfires all around me in the last month to drive THAT point home thoroughly. Got evacuated, grabbed valuables from the safe and then... carried them around in the car and hotel rooms for days! Would hate to do that with anything REALLY valuable.

 

It is possible to have more than one Hardware wallet which is really a Hardware security module, to protect the same set of private keys. So, for instance you could store one in a safe or other protected location in your home, a second Hardware wallet at a trusted friends house in another protected location, and possibly a third at some other undisclosed location.

 

So you gonna answer questions about plus/minuses of differing cryptos and why picking one over another?

 

I know, i'm just fuckin around. Will be funny to read the headline though the first time just cause its different is all.

 

Pirate lands on deserted island. Follows map to where X marks the spot. Digs in the sand for hours until he finally unearths... a slip of paper with a 64 character hexadecimal number!

 

Is it just me or are the explanations just making the whole bitcoin thing more confusing? Software keys and hardware wallets and air gaps oh my... It might just be me though because the most exciting thing I have seen lately is the possible resurgence of 2 strokes...

 

Not just you. I don't understand a lick of it. Old buddy of mine tried to get me "in" about 4 years ago, talking about how it was the next big thing. I didn't understand it then, and I still don't. I should call him, haven't talked to him in a while. Wonder if he's a millionaire yet, or it he sold and got "out". I was going to toss 5k in the ring, but I just honestly didn't understand exactly where I was putting my money. It just seemed like nobody else I talked to really understood it either. Oh well. I missed the beanie baby craze too. Turns out I was destined to work like a sucker.