Cryptocurrency

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:

This may help to further understand the more detailed aspect of transaction validation and mining.

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 ?

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......

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

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...

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 https://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)

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?

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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 https://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.

The top 4 cryptocurrencies, Bitcoin, Ethereum, Ripple and Litecoin (based on Market Cap) have all been around for a few years.

However, trading volumes (and price) in these currencies have only just recently spiked, commencing around the March-May 2017 period.

Does anyone have an idea as to the reason behind this recent surge?

PS: This link displays all cryptocurrencies in one place

coinmarketcap.com/