bitcoin

Two weeks ago somebody said "Post your bitcoin address and i can send you a tip for your videos." So I tried to do that. I ended up at this page and thought "this is more complicated than I thought it would be".

The window is still up on my desktop. And each time I look at it, my thought in the first few seconds is that it would be cool. And then seven seconds into it my brain says "oh yeah, you gotta figure this all out first. Looks like hours. Set it aside for another day."

Maybe somebody knows all about bitcoin and can advise me on a simple path?

I looked into this a while back. Went with coinbase (a cloud based wallet). Easy to use, secure (with 2-step authentication) and best of all not device dependent.
I think they made the technology easy to use.

I see something there about how I need to give them access to my bank account. That seems a bit odd. I kinda thought that the idea of bitcoin was to be something that is not a bank thing.

Correct Bitcoin is not a bank thing.

However in the bitcoin world Coinbase is analogous to paypal.

Ryan Barrett wrote:Correct Bitcoin is not a bank thing.

However in the bitcoin world Coinbase is analogous to paypal.

So you might find some bitcoin stuff that has nothing to do with banks. And that stuff might be a little less rock-solid than coinbase - not because of the bank thing, but just because that's the way things ended up.

Right now, coinbase is the most rock solid bitcoin thing and they happen to be a bit bank friendly.

Sound about right?

Exactly; it's an easy way to make it into "real" money.

The founder of coinbase has a great interview on Foundation.bz (how it was founded, security, etc. but it's about 40 minutes long):

If I have the coinbase wallet, can people with non coinbase wallets give me or receive bitcoin?

Yes,

Give them your "bitcoin address" e.g. 19WS6RfeLqsZHEMp5APTTyztaiykLfbH25 or they can scan the QR code on your phone's coinbase app.


If you were sending bitcoins, you would get their bitcoin address from whatever service they use and input it into the "To" under "Send money".

So, they take 1% when you move funds between coinbase and the bank. But when you give or receive bitcoin, they don't take anything. Is that right?

Had to look it up... Yes(+15cents).

https://support.coinbase.com/customer/portal/articles/585625-what-is-coinbase-and-how-much-does-it-cost-to-use- (complete with pictures. )

https://support.coinbase.com/ has their most FAQs.

I think I set up an account - but I have not yet set up bank stuff. It looks like it would work.

I set up my email as paul at richsoil.com

Can you send me some teeny tiny amount of bitcoin?

My bitcoin thing-a-ma-bob is 177pNU2a9iCpUXQwXX9EbtA2UwZpgeqcMT

I just sent you about $5 of btc, should be there in the next hour or two.

So what is the aim of 'playing' with bitcoin?

For paul wheaton or permies.com I can't answer that, but maybe he can.

For me and many others, because its a currency system that screams liberty, and that is something that is dwindling in America and not an attribute of the existing currency paradigm.

I now have three bits of bitcoin!

I looked at the balance page about an hour ago and one of the bits said "pending" I refreshed for a while and it seems like it took about an hour until it was complete.

I always thought that bitcoin stuff was really instant. Kinda like paypal stuff. ??

Sean, I think yours is probably this most recent one. 0.0141 BTC. Oh yeah - I found a note attached to it! Cool! Nice note! Thanks!

The other two are 0.00005055 BTC and 0.05682 BTC. The bigger one has a note from Michael (thanks Michael). The smaller one says nothing - I don't even know who it is from.


Sue,

I'm not sure what the point is. Other than to learn a bit about it. I think the biggest point is to say that american money is based purely in our faith in the people that print that money. And bitcoin is sorta playing that same game. Only one bitcoin is currently worth about $400. So, I suppose there are some lessons about trust and money. Another way of looking at it is a bit like a stock: people who bought $1000 worth of bitcoin four years ago would now have 2 million bucks.

There is software being worked on for permies to tie some features into paypal. But some people hate paypal, or cannot use paypal in their area. Plus, some people love bitcoin. So, maybe it would be helpful to offer bitcoin too.

So, now I have some bitcoin. I'm not sure what I will do with it.

@paulwheaton As far as transfer speed, this is my understanding and if I knew better I would still say it this way to keep it brief. Hashing type algorithms are executed amongst distributed nodes in order to verify transaction integrity for each transaction. This is of course a resource intensive thing once you start getting into the transaction load that is commonly taking place with Bitcoin today. Its like community acceptance of a transaction, one or two nodes could be fooled by a fraudulent transaction but after more than a few nodes are consulted eventually one will spot the evil happening. Realistically the first node is going to call it out but were talking about people's money here so it has to be pretty bullet proof. Along with that comes some prioritization of transactions. Its a free-markety kind of thing, faster processing costs more. I'm sure there are additional variables but these are the ones I am aware of.

If my above explanation is amiss someone, please correct me.

I like bitcoin because of the flexibility. I can send finds anywhere in the world instantly (yes, it takes a little while to confirm the transaction). I don't need to mail anyone a check. I don't need to give anyone my credit card number. I don't need any permission from a third party. It took me about 30 seconds to pull up the QR Code for Paul's public address, start my local bitcoin wallet, and send him some money. There is a chicken and egg problem right now in that it will be hard for Paul to find suppliers who will accept bitcoin as payment, so for the time being he can use an intermediary such as Coinbase to convert those funds to USD. But as more an more businesses start to accept bitcoin directly, that will be less of a problem. Right now you can buy gift cards to many places with bitcoin if you go to gyft.com. Or you can buy stuff directly from places like overstock.com.

Paul. you should have some more bits in your wallet to play with now!

Tom, I see a new bitcoin thing that is "pending" - thanks!

Good timing.

I just signed up for bit coin also, using coinbase.

However, I don't see any way to exchange any currency into bit coin or vice versa.

Also, when I click on the tab on the left which says Buy/Sell, The page is grayed out and says

"Buy / Sell Not Available
We're sorry, this feature is not available in Germany yet."

So….do I need a different bit coin wallet?

My wallet address is 1LGctK2pyjqfqHd9sn27PG6pGmB1RxMBvo if anyone wants to send me a test donation, I'm still trying to wrap my head around it all.

Chad, sent some your way.
It was something like 0.001414 bc.

I must say the conversion feels weird, but I could see if it were used as a local currency you could easily make a 1to1 value out of it.

1 permie coin equals 1 hour of work or one kilo of pork.

Thanks Ryan, I see the transaction. I'll send it back when it's finished, just so I can find out how to actually DO that.

Now as to the "does not work in Germany" problem….

so, I don't see a return address, either a wallet address or an email address I can send it back to. I also don't know how I could cash it out into an offline currency like dollars or euros.

If this is still Coinbase we are talking about, when you click on a transaction, there should be a To and a From line that should give you the public address of the wallet that sent you money. You can send it back to that address. As far as cashing out, you need to link your bank account to your Coinbase account if you want to do that. The reason you don't see an option to cash out your bitcoin is due to the fact that you are in Germany. Coinbase is a US company and they don't interface with European banks. Try https://www.bitcoin.de instead.

The only other strife I have with Coinbase is they only support Visa cards. I've just been limping along waiting for transfers from my bank but it sure would be nice to use my MC debit. We have a Discover and one credit card is too many for me. I don't need a Visa too. Wish they could get MC support.

So, my understanding is that as soon as someone has you chainblock, they can see all the transactions you have done. That is not really cool, how is one's privacy protected?

Adrien Lapointe wrote:So, my understanding is that as soon as someone has you chainblock, they can see all the transactions you have done. That is not really cool, how is one's privacy protected?

Bitcoin is psuedo-anonymous in that you can use as many different addresses as you want and you can create addresses without there being any identification tied to you. Then you can spend from those addresses anonymously. You do have to be careful to ensure that any money sent to the addresses you want to keep anonymous isn't also tied to you somehow.

But it really is simple. You can use an address generator (search for "bitcoin address generator" or "bitcoin paper wallet"), print out the address, find a bitcoin ATM (search for "bitcoin ATM) [I prefer ATMs produced by my friends at Lamassu, which don't require any ID], scan your address, insert currency, receive bitcoins. Now you have anonymous bitcoins that you can spend. [You do need to load them from the paper wallet into a digital wallet before you can spend them.]

A few people paid me in bitcoin for stuff.  And then bitcoin took off.  Neat!

So here it is, getting close to the end of the year and for the first time ever I am thinking "I should take that bitcoin and spend it.  If I don't spend it on business expenses, then I will have to pay taxes on it."

So, yesterday, I was going to move it to my bank account - cuz that's free.   Rather than routing numbers and stuff, they seem to want my login information to my bank account.  No way I'm doing that.  

Payment to paypal ....  a 2.5% fee ...  That's kinda heavy, but okay ....   they insist on a copy of my drivers license.   That's twisted.   I'm not comfortable with that either.   I have never had any online payment stuff ask for something like that before.  

So then I thought that I will check with some people that I will be sending money to in the next couple of months to see if they happen to have a bitcoin account ...    one person was open to experimenting with the idea.  So I was gonna send him one penny in bitcoin.   Apparently there is a $16 charge.   So I probably shouldn't send anybody any bitcoin unless I am sending a very large amount.  

So earlier this year I was sent $500 in bitcoin.   If I don't take it out, I will have to pay about $2000 in taxes on that.

I'm tempted to put on my tinfoil hat and suggest that this is a scam put on by the irs.

Bitcoin is going through some growing pains. It is having a difficult time scaling up, and the obvious solution has been denied. The unobvious solutions aren't ready yet. So because there is a market for processing transactions, and there's a bottleneck on transactions, the cost to send bitcoin has gotten out of control.

Look at it this way: You were given $500 and it has magically grown to much more than that. As long as the cost to convert it to dollars is far less than the amount it has grown then you are way ahead.

I did a transaction yesterday where I sent $900 and it cost me $13 to do it. But the $900 is only about a third of the original amount that cost me $50 at the time. So I've gained at least $2650 ($2700-$50) so paying a tiny portion of the profit just to cash out is no big deal.

But if you can find a way to make a deal without needing to convert to dollars then that is better. Otherwise, try to do only large transactions.

[I could go into much greater detail as well as throw in my opinions on all this, but most of y'all won't care.]

I think for tax purposes that Bitcoin is treated like a stock... You don't pay taxes on the increase/decrease in a stock price until you sell the stock and take cash.

I like using https://localbitcoins.com/
Seems safer to me than dealing with exchanges that are constantly getting hacked.

For the money I need to send out before the end of the year, so far this is nobody with a bitcoin account.  

What is with the paypal thing needing my drivers license?  What is the thing about getting my password for my bank account?

paul wheaton wrote:For the money I need to send out before the end of the year, so far this is nobody with a bitcoin account.  

What is with the paypal thing needing my drivers license?  What is the thing about getting my password for my bank account?

Where is your bitcoin? That is, what wallet or service are you using? It sounds like you are using a service like Coinbase.

Yup - coinbase.

paul wheaton wrote:Yup - coinbase.

OK then, what I can tell you is that due to government tomfoolery (i.e. KYC/AML) they want to make sure your tax info is all correct. Coinbase just got hit with a search because only a tiny handful of accounts there reported their income for tax purposes.

Services like Coinbase make things a lot easier, but they also have downsides like snitching.

The short version is that yes you will likely have to give up the info they seek to withdraw your money.

[FYI, a customer support person for Coinbase lives about 200 feet from me, and she is building a tiny house!]

Interesting thing.   If you are using electric heat in your house and you have an old computer, fire it up and direct your browser to this:

http://www.brominer.com/wallet/reg.php?4059

That computer will use 5 kwh of power and your electric heater will use 5kwh less power.   The computer mines for coin.   So, it uses $0 worth of power in the winter (assuming the electric heat thing) and might provide $100 per month in crypto coin.

I ran the web based miner all night.  I earned about 20 cents.  So it would end up at about 60 cents per full day which is about $20 per month.  Weak.

Who knows? That $20 could be worth $1000 or it could be worth $1 in a year. Thats part of the fun.

Hmm, interesting. I have an old computer and two old smart phones just sitting around. Might try getting those all running the site and potentially have my current smart phone run it while I'm at work. Could be worth it assuming I could set it up and walk away for a while.

I have never done anything with these types of currency. Did you have to setup a wallet for the currency before hand? What site did you use?

I spent some time playing around with cryptocurrency mining and ended up using a site called MinerGate. If anyone signs up for it please use this affiliate link MinerGate. That link won't cost you anything but if you get active with mining it will help me out a bit Just discovered that they had this option!

With this site you can install a mining program onto your computer and they also have an app for smart phones. I found that on the same device I was getting double the H/S rate using MinerGate than I got using the browser based one. The other advantage of using MinerGate is that it has a wallet built in to it. All in all this makes it really easy to quickly get started. Currently I'm running MinerGate on 4 devices - my current laptop, an old tablet, my current smartphone, and my old smartphone. I'm going to watch it and see how much I make by morning. All the devices feed into the same account and on the minergate site there is a dashboard that lets you see your total and link to an exchange site to exchange the currency to bitcoin or some other cryptocurrency.

I also setup an account on CoinBase and linked it to my PayPal account. Looks fairly easy to transfer any cryptocurrency I do get to USD through that site.

Thanks again for sharing Paul - anyone else doing this? Paul - if you try minergate would you mind sharing if your H/S rate went up compared to the other site?