Silk Road forums

Discussion => Security => Topic started by: PurpleBalloons54 on June 04, 2013, 10:21 pm

Title: How safe is storing BTC @ SR long-term?
Post by: PurpleBalloons54 on June 04, 2013, 10:21 pm
Assuming passwords stay safe, how safe is it to just store them there?
Title: Re: How safe is storing BTC @ SR long-term?
Post by: offbeatadam on June 05, 2013, 01:28 am
Assuming passwords stay safe, how safe is it to just store them there?

Well, passwords themselves aren't as big of an issue as pin numbers. As long as your pin is safe, even if your account is compromised they can't withdraw or make purchases.

That being said, for the most part I would say its safe, though I would also suggest at least one issue. While we may hope (and thanks to the extremely wonderful efforts of the staff, we have an ability to hope) that SR won't go down, if it does, you won't have them. That, is all there is to it. It's safe to say that there would be a chance/likely possibility effort would be made to, at a minimum, get teh site back up no matter what. The possibility for an "end" is always real though.

In that worst-ever-possibility, the only true best place to store it is with yourself in a local wallet that is adequately protected.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: abitpeckish on June 05, 2013, 02:15 am
Just remember that the BTC you hold is beholden to the whims of the exchange rate. If you've mined the coins yourself, more power to you. If you've spent money on them, you might want to rethink your strategy.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: offbeatadam on June 05, 2013, 02:44 am
Just remember that the BTC you hold is beholden to the whims of the exchange rate. If you've mined the coins yourself, more power to you. If you've spent money on them, you might want to rethink your strategy.

In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will. There are rather major normal transactions, including companies based entirely on BTC itself now. The volatility now is mostly due to its basis on the fragile exchange philosophy as it exists today.

Stability will draw from regulation in the exchange landscape. This may seem scary, but it really only ends up being scary when surrounded by overall capital gains. This is inevitable, because really what you are doing is paying tax on the purchase of another currency. You do that already if you convert non-btc currency to other non-btc currency. The "value" will merely become a component of the other currency markets, and ultimately the value will eventually stabilize as both the quantity (which is finite) reaches 100% mined, and transactions become ubiquitous.

This does not have any effect on the nature of bitcoin, because ultimately our existence is no different than if we were strictly in the US and paying eachother in person with money from our wallets. Bitcoin serves a purpose in that, if you involve only bitcoin, the value of it is partially irrelevant. The stability of its eventual result, will ultimately help also, as it will reduce overall speculation and allow for a more solid price spectrum for product. Value, is not lost in that situation, merely the conversion of 1BTC -> ###USD will become easier for the layman to understand, and there will be less of a need for true hedging. This may alter the landscape in the opportunity to maintain a bitcoin storage versus simply exchanging it out, but I don't think so. As BTC becomes more ubiquitous, the available products in the global landscape will grow, and we will be able to survive more/less on our adoption of our currency, rather than totally being tied to our native currency.

So, in short, the danger is getting less and less in hedging BTC against the native dollar, but it is still volatile enough that you can risk devaluing your dollar if you buy a lot of bitcoins and tomorrow the value drops. This is, inherently true. But to adhere to this strictly, would ultimatley devalue the need to have BTC at all, and one would not want to invest in order to maintain its liquidity. If we do not believe in it, then it'll never be what it needs to be.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: PurpleBalloons54 on June 05, 2013, 03:26 pm
Just remember that the BTC you hold is beholden to the whims of the exchange rate. If you've mined the coins yourself, more power to you. If you've spent money on them, you might want to rethink your strategy.

Good point.  This makes holding onto BTC long-term a risk no matter what.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: abitpeckish on June 05, 2013, 03:51 pm
I agree with your assessment, offbeatadam. There will definitely have to be some regulatory precedents for BTC to stabilize. Also, there will need to be trusted 3rd parties and a handful of other concepts that the BTC zealots love to claim are 100% obsoleted. In the short term, it's still very risky to hold BTC that you have converted from a "standard" currency and I just wanted to make sure PurpleBalloons54 was aware of that fact.

Quote from: PurpleBalloon54
Good point.  This makes holding onto BTC long-term a risk no matter what.

Only if you purchased those BTC. Which is admittedly the most likely case. Cheers, mate.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: jase00 on June 05, 2013, 04:15 pm
why take the risk ?? I doubt the site would run off with your BTC but if they ever do have to shutdown real quick they might not even be able to do that emergency withdraw thingo you can setup.

I personally don't quite 100% trust those websites which generate btc addy's / priv keys.. but just use vanitygen and generate a random addy yourself... or start new btc wallet in the normal client.. export private key and encrypt it with GPG and store it in multiple places. Then of course make sure you also backup your GPG keys... :]
Title: Re: How safe is storing BTC @ SR long-term?
Post by: astor on June 05, 2013, 04:43 pm
The risk with keeping your coins on SR is unexpected downtime. It's happened a few times already that the market went down for several days. Sure, it may not happen in the next week or the next few months, but the one time it does happen, you will experience head aches. This is not a problem unique to SR, of course. Ask the people who were storing their coins on Instawallet, or on blockchain.info the times it went offline.

I'm only comfortable with storing my coins in my own client, with multiple backups.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: offbeatadam on June 06, 2013, 07:19 am
I'm only comfortable with storing my coins in my own client, with multiple backups.

Ok this is starting to seem really odd. Every time I see someone talking about "I can't send to mtgox anymore!" I cringe, and yet it seems like I see a ton of people that get it right.

Did everyone just have to make a mistake the first time, or was there some underhanded tutorial editing on bitcoin.it by mtgox and friends that drove people to believe using them as their wallet was smart?





The seemingly general logic befuddles me. Seriously, its a wallet. Treat it like a wallet. You don't give your friend your wallet with $1000 in it. Why the hell would you give your wallet to someone you don't even know, with more?
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 06, 2013, 05:48 pm
I'm only comfortable with storing my coins in my own client, with multiple backups.

^This, 100%!

Nobody should be storing their Bitcoin on any web-based wallet, including Silk Road. It's like keeping them in a bank, except the bank has no physical representation and can abscond with your Bitcoin at any time and the people running the bank are completely untraceable. I'm not saying that will happen here, of course, but why take a risk when such a risk is so easily negated?

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: frankmacca on June 06, 2013, 10:44 pm
Agree 100% Libertas

The most secure way I've found to manage my bitcoins is using Bitcoin Armory

It allows for 'offline wallets'. Basically, you approve and sign transactions on an offline machine that is never connected to the internet (or a dual booted one with an encrypted drive). The online computer monitors the blockchain and pushes through signed transactions.

Sounds harder than it is and worth piece of mind!
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Duckman on June 06, 2013, 10:51 pm
In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will.

Market confidence is high but there is some talk and it is only talk of governments actually outlawing bitcoins.

Right now Bitcoins are legal but a chance in law would obviously change that.

What they are saying is that right now governments arent really all that interested in bitcoins largely due to the fact that almost no one accepts them as currency, but if shops started using bitcoins more and more then governments would take more and more of an interest and there is a possibility that they might just outlaw them.  Time will tell.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 06, 2013, 10:52 pm
Agree 100% Libertas

The most secure way I've found to manage my bitcoins is using Bitcoin Armory

It allows for 'offline wallets'. Basically, you approve and sign transactions on an offline machine that is never connected to the internet (or a dual booted one with an encrypted drive). The online computer monitors the blockchain and pushes through signed transactions.

Sounds harder than it is and worth piece of mind!

Armory is an excellent client, kudos to you for taking your Bitcoin security seriously! :)

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 06, 2013, 10:57 pm
In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will.

Market confidence is high but there is some talk and it is only talk of governments actually outlawing bitcoins.

Right now Bitcoins are legal but a chance in law would obviously change that.

What they are saying is that right now governments arent really all that interested in bitcoins largely due to the fact that almost no one accepts them as currency, but if shops started using bitcoins more and more then governments would take more and more of an interest and there is a possibility that they might just outlaw them.  Time will tell.

Whether "outlawed" or not, government cannot kill Bitcoin so this is essentially a non-issue. They outlawed drugs as well - which are far easier to find and trace than Bitcoin when Bitcoin is used correctly - and that hasn't worked out too well for them. ;) They did the same with file-sharing of copyrighted files; Bitcoin can be better compared to that as it is a P2P currency that employs similar protocols. And they have completely failed in their attempts to regulate what we can and cannot access online.

In short, if the government were to make Bitcoin illegal tomorrow it would likely rise in value as the market supply reduces (all the exchanges are closed) while the demand remains. If they're trying to attack Bitcoin then that would be a terrible, terrible way for them to go about it! ;D

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Duckman on June 06, 2013, 11:01 pm
In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will.

Market confidence is high but there is some talk and it is only talk of governments actually outlawing bitcoins.

Right now Bitcoins are legal but a chance in law would obviously change that.

What they are saying is that right now governments arent really all that interested in bitcoins largely due to the fact that almost no one accepts them as currency, but if shops started using bitcoins more and more then governments would take more and more of an interest and there is a possibility that they might just outlaw them.  Time will tell.

Whether "outlawed" or not, government cannot kill Bitcoin so this is essentially a non-issue. They outlawed drugs as well - which are far easier to find and trace than Bitcoin when Bitcoin is used correctly - and that hasn't worked out too well for them. ;) They did the same with file-sharing of copyrighted files; Bitcoin can be better compared to that as it is a P2P currency that employs similar protocols. And they have completely failed in their attempts to regulate what we can and cannot access online.

In short, if the government were to make Bitcoin illegal tomorrow it would likely rise in value as the market supply reduces (all the exchanges are closed) while the demand remains. If they're trying to attack Bitcoin then that would be a terrible, terrible way for them to go about it! ;D

Libertas

If the government say that they will

a) throw you in jail
b) confiscate your funds

a lot of people will not use it.

Title: Re: How safe is storing BTC @ SR long-term?
Post by: offbeatadam on June 06, 2013, 11:05 pm
In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will.

Market confidence is high but there is some talk and it is only talk of governments actually outlawing bitcoins.

Right now Bitcoins are legal but a chance in law would obviously change that.

What they are saying is that right now governments arent really all that interested in bitcoins largely due to the fact that almost no one accepts them as currency, but if shops started using bitcoins more and more then governments would take more and more of an interest and there is a possibility that they might just outlaw them.  Time will tell.

Whether "outlawed" or not, government cannot kill Bitcoin so this is essentially a non-issue. They outlawed drugs as well - which are far easier to find and trace than Bitcoin when Bitcoin is used correctly - and that hasn't worked out too well for them. ;) They did the same with file-sharing of copyrighted files; Bitcoin can be better compared to that as it is a P2P currency that employs similar protocols. And they have completely failed in their attempts to regulate what we can and cannot access online.

In short, if the government were to make Bitcoin illegal tomorrow it would likely rise in value as the market supply reduces (all the exchanges are closed) while the demand remains. If they're trying to attack Bitcoin then that would be a terrible, terrible way for them to go about it! ;D

Libertas

If the government say that they will

a) throw you in jail
b) confiscate your funds

a lot of people will not use it.

It's illegal to deface US currency, but you can still get those pressed pennies at most educational activities.

They can make it illegal to use it to buy goods (ie, you wouldn't be able to use it at a grocery store), but they can't control its use in general.

Look at it this way:

Drugs are illegal. It is illegal to sell them, buy them, or carry them.

It is not illegal to take them. (i'm not going to cite anything on this, I don't really have any proof and I'm cooking so nyuh!)

As an aside: we don't use bitcoins to do most of the things that the US can say they're illegal for (and it's entirely too early to really tell whether they will do that, most of the "news" on this is just speculatory bullshit just like the "bitcoins are the devil!" crap), so why would we stop using them if they make it illegal to use it for those things?
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 06, 2013, 11:08 pm
In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will.

Market confidence is high but there is some talk and it is only talk of governments actually outlawing bitcoins.

Right now Bitcoins are legal but a chance in law would obviously change that.

What they are saying is that right now governments arent really all that interested in bitcoins largely due to the fact that almost no one accepts them as currency, but if shops started using bitcoins more and more then governments would take more and more of an interest and there is a possibility that they might just outlaw them.  Time will tell.

Whether "outlawed" or not, government cannot kill Bitcoin so this is essentially a non-issue. They outlawed drugs as well - which are far easier to find and trace than Bitcoin when Bitcoin is used correctly - and that hasn't worked out too well for them. ;) They did the same with file-sharing of copyrighted files; Bitcoin can be better compared to that as it is a P2P currency that employs similar protocols. And they have completely failed in their attempts to regulate what we can and cannot access online.

In short, if the government were to make Bitcoin illegal tomorrow it would likely rise in value as the market supply reduces (all the exchanges are closed) while the demand remains. If they're trying to attack Bitcoin then that would be a terrible, terrible way for them to go about it! ;D

Libertas

If the government say that they will

a) throw you in jail
b) confiscate your funds

a lot of people will not use it.

As mentioned above, the same applies to drugs. Furthermore, Bitcoin cannot be confiscated so such a threat would be pointless!

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Duckman on June 06, 2013, 11:18 pm
In a long enough timeline, this is purely relative to whether or not BTC survives, which overall market confidence lately has been that it will.

Market confidence is high but there is some talk and it is only talk of governments actually outlawing bitcoins.

Right now Bitcoins are legal but a chance in law would obviously change that.

What they are saying is that right now governments arent really all that interested in bitcoins largely due to the fact that almost no one accepts them as currency, but if shops started using bitcoins more and more then governments would take more and more of an interest and there is a possibility that they might just outlaw them.  Time will tell.

Whether "outlawed" or not, government cannot kill Bitcoin so this is essentially a non-issue. They outlawed drugs as well - which are far easier to find and trace than Bitcoin when Bitcoin is used correctly - and that hasn't worked out too well for them. ;) They did the same with file-sharing of copyrighted files; Bitcoin can be better compared to that as it is a P2P currency that employs similar protocols. And they have completely failed in their attempts to regulate what we can and cannot access online.

In short, if the government were to make Bitcoin illegal tomorrow it would likely rise in value as the market supply reduces (all the exchanges are closed) while the demand remains. If they're trying to attack Bitcoin then that would be a terrible, terrible way for them to go about it! ;D

Libertas

If the government say that they will

a) throw you in jail
b) confiscate your funds

a lot of people will not use it.

As mentioned above, the same applies to drugs. Furthermore, Bitcoin cannot be confiscated so such a threat would be pointless!

Libertas

Look at whats happening in the world right now.  Countries are all getting together and making deals to remove peoples financial privacy.  Even Switzerland will hand over your details if anyone asks for them.  Where there is money, there is always a way.  If the governments of the world decide that bitcoins are somehow reducing their taxation revenue they will end them.  Its all very well saying it cant happen but people dont put large sums of money into illegal currencies because they have too much to loose.  Saying it could never happen is a little naive.  Who would have thought you could ring up a Swiss bank and ask for someones entire financial records?  A few years ago that would have been unimaginable now its a reality.  Where there is money there is a way!
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 06, 2013, 11:30 pm
Look at whats happening in the world right now.  Countries are all getting together and making deals to remove peoples financial privacy.  Even Switzerland will hand over your details if anyone asks for them.  Where there is money, there is always a way.  If the governments of the world decide that bitcoins are somehow reducing their taxation revenue they will end them.  Its all very well saying it cant happen but people dont put large sums of money into illegal currencies because they have too much to loose.  Saying it could never happen is a little naive.  Who would have thought you could ring up a Swiss bank and ask for someones entire financial records?  A few years ago that would have been unimaginable now its a reality.  Where there is money there is a way!

I'm not sure you fully understand how Bitcoin works.. If a government wants to shut down Bitcoin they would have to shut down the entire internet - something that is completely impossible as any person can set up a satellite internet "broadcast". As long as one single person in any country that has somehow managed to disable the entire internet in an attempt to "block" Bitcoin has internet access, the entire blockchain can be propagated to every person in that country and transactions can resume as normal.

The entire Bitcoin economy can function on one single Bitcoin due to its divisibility, so even if governments at some point in the future were to buy up all but one of the 21,000,000 bitcoins that will ever exist, as long as there is one person that retains possession of a single Bitcoin that refuses to sell, they can split that Bitcoin up (and it will now be worth billions / possibly trillions in a fiat-currency sense due to the government buying up every other Bitcoin) and the Bitcoin economy will continue functioning in milli-bitcoins (mBTC) or micro-bitcoins (μBTC).

It's impossible to 'kill' Bitcoin without performing a 51% attack, which is currently impossible, and getting more and more future-proof as more ASICs come online.

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Duckman on June 06, 2013, 11:57 pm
All they have to do is to make it illegal for any shop to accept bitcoins and then to go after the bitcoin exchanges.  Its pretty hard to run a bitcoin exchange if its illegal for any banking service to do business with you.

You can have a billion bitcoins but if you cant convert them into anything you can spend and its illegal for any business to accept them directly, they become worthless.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 07, 2013, 12:15 am
All they have to do is to make it illegal for any shop to accept bitcoins and then to go after the bitcoin exchanges.

You can have a billion bitcoins but if you cant convert them into anything you can spend they become worthless.

Do that and the Bitcoin economy just goes completely into the black market; the fact of the matter is that bitcoins are currently worth what they are because we ascribe value to them, and they are rare and limited. Gold has no inherent value apart from its use in industry but that isn't what gives it its inflated price. It is valued that way because it is rare, limited and desirable. There aren't many shops that accept gold as a method of payment, but it has not become worthless. It is traded as a commodity. Bitcoin could well have a similar future if 'outlawed' due to its potential as a store of value, and the fact that you can transport all of your wealth around on a USB stick or in your head in a brain wallet. If it were 'outlawed' and used by 'outlaws', it would skyrocket in value due to the demand for it by the black market with people willing to buy and sell for fiat money to people who want to store their wealth in it / move their money worldwide. A global, untraceable underground economy would be created with Bitcoin at its core.

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: offbeatadam on June 07, 2013, 02:50 am
All they have to do is to make it illegal for any shop to accept bitcoins and then to go after the bitcoin exchanges.  Its pretty hard to run a bitcoin exchange if its illegal for any banking service to do business with you.

You can have a billion bitcoins but if you cant convert them into anything you can spend and its illegal for any business to accept them directly, they become worthless.

Currency in our neck of the woods doesn't require that it be tangible in terms of USD. That being said, you are being a tad ambiguous in your attempt at applying a very complicated system.

One of bitcoin's best assets is the systems that it royally trumps. There isn't a country in the world that can provide the transactional security at the speed and the efficiency of a bitcoin transaction. Even with some of the most powerful interlinks in the world, the fed can't come close. The network you are on, is largely funded and used by the CIA amongst the rest of us. Don't for a second ever think that the usefulness of a system that allows at least a modicum of anonymity and the ability to securely perform a transaction of value, in LARGE value, is not going to BE valued.

Look, even if we don't look at the clandestine capabilities of a crypto currency, lets examine the modern reality. Legal trades and assets have been transferred and hedged within the bitcoin economy. The bitcoin economy has provided for international trade already, and while we might not have proof of it, I've little doubt that at least one transaction in the entire history has been related to or directly influenced with treasury funds. Large corporate transactions and investment movements have happened over securities regulated bitcoin transactions.

Where are you developing this idea that the US may try to completely erase the value of bitcoin when it's providing no more success to the black market than the US dollar did 10 years ago? I mean, if the US bans it, we just base it on another equally high valued currency. We are already risking ourselves in the things we do, its not like we can't figure out the ways to manage it elsewhere.

And, that's just speculating on the possibility. I really don't think the CIA is going to let something like bitcoin go away. We may have ways for making it hard to track something, but it's also been proven how it could be done with the appropriate intelligence and capable software. You're fooling yourself if the clandestine agencies of the world aren't exploiting that. Not to mention, they don't want people knowing where they spend money, they don't want people knowing about the drug deals they make to fund their operations abroad.

I'm going to finish with the same argument about tor. Tor is a government funded operation. It was made with the knowledge that it would be used for what we do, because what we do improves their anonymity just as much as theirs improves ours. The service may be used by terrorists, but at the same time its also being used to draw them out. The CIA is not going to sacrifice the capability of TOR just because of the inevitable results from the very nature OF the anonymity. Bitcoin, fits as much into that picture, as we do.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: Libertas on June 07, 2013, 03:00 am
All they have to do is to make it illegal for any shop to accept bitcoins and then to go after the bitcoin exchanges.  Its pretty hard to run a bitcoin exchange if its illegal for any banking service to do business with you.

You can have a billion bitcoins but if you cant convert them into anything you can spend and its illegal for any business to accept them directly, they become worthless.

Currency in our neck of the woods doesn't require that it be tangible in terms of USD. That being said, you are being a tad ambiguous in your attempt at applying a very complicated system.

One of bitcoin's best assets is the systems that it royally trumps. There isn't a country in the world that can provide the transactional security at the speed and the efficiency of a bitcoin transaction. Even with some of the most powerful interlinks in the world, the fed can't come close. The network you are on, is largely funded and used by the CIA amongst the rest of us. Don't for a second ever think that the usefulness of a system that allows at least a modicum of anonymity and the ability to securely perform a transaction of value, in LARGE value, is not going to BE valued.

Look, even if we don't look at the clandestine capabilities of a crypto currency, lets examine the modern reality. Legal trades and assets have been transferred and hedged within the bitcoin economy. The bitcoin economy has provided for international trade already, and while we might not have proof of it, I've little doubt that at least one transaction in the entire history has been related to or directly influenced with treasury funds. Large corporate transactions and investment movements have happened over securities regulated bitcoin transactions.

Where are you developing this idea that the US may try to completely erase the value of bitcoin when it's providing no more success to the black market than the US dollar did 10 years ago? I mean, if the US bans it, we just base it on another equally high valued currency. We are already risking ourselves in the things we do, its not like we can't figure out the ways to manage it elsewhere.

And, that's just speculating on the possibility. I really don't think the CIA is going to let something like bitcoin go away. We may have ways for making it hard to track something, but it's also been proven how it could be done with the appropriate intelligence and capable software. You're fooling yourself if the clandestine agencies of the world aren't exploiting that. Not to mention, they don't want people knowing where they spend money, they don't want people knowing about the drug deals they make to fund their operations abroad.

I'm going to finish with the same argument about tor. Tor is a government funded operation. It was made with the knowledge that it would be used for what we do, because what we do improves their anonymity just as much as theirs improves ours. The service may be used by terrorists, but at the same time its also being used to draw them out. The CIA is not going to sacrifice the capability of TOR just because of the inevitable results from the very nature OF the anonymity. Bitcoin, fits as much into that picture, as we do.

Very well put, offbeatadam!

Libertas
Title: Re: How safe is storing BTC @ SR long-term?
Post by: The-Truth on June 07, 2013, 11:03 am
not a good idea, between DDoS attacks, LEO, phishers - get a better method for sure
Title: Re: How safe is storing BTC @ SR long-term?
Post by: abitpeckish on June 07, 2013, 06:54 pm
Bitcoin's use as a currency should be thought of as an emergent phenomenon borne of what Bitcoin actually IS. It's what the Bitcoin software (including the network) actually does, how it does it, and the mathematical principles it is based upon that make it suitable to be used as a currency. It's a strange thing to wrap your head around, but Bitcoin isn't "designed to be a currency" because currency isn't something that actually exists. Bitcoin is designed to automate extreme levels of trust, and it is *really* good at doing this[1].

One needs to understand that currency is just a common agreement to consider a thing generally acceptable in trade for any given product or service. The currency value of BTC is just a representation of how its users are generally willing to value it. Even if you take away 90% of its users, BTC will  likely retain more than enough users to sustain its utility as currency. Perhaps with a painful correction to better reflect the opinion of the new base, but that last 10% will simply become the new 100%.



-
[1] this is a feeble attempt at putting things in layman's terms. if you're interested, read the bitcoin paper and read up on anything in it that you don't at least roughly understand. Bitcoin is remarkably straightforward in terms of mathematical design.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: DrChong on June 09, 2013, 09:37 am
Agree 100% Libertas

The most secure way I've found to manage my bitcoins is using Bitcoin Armory

It allows for 'offline wallets'. Basically, you approve and sign transactions on an offline machine that is never connected to the internet (or a dual booted one with an encrypted drive). The online computer monitors the blockchain and pushes through signed transactions.

Sounds harder than it is and worth piece of mind!

Armory is an excellent client, kudos to you for taking your Bitcoin security seriously! :)

Libertas
I'm still not quite sure what Armory does besides encrypt the wallets and allow for paper and offline wallets. Is it simply that another addition to the bitcoin qt that makes it that much harder for attackers to gain access to your coins, or...?
Title: Re: How safe is storing BTC @ SR long-term?
Post by: abitpeckish on June 09, 2013, 05:18 pm
I'm still not quite sure what Armory does besides encrypt the wallets and allow for paper and offline wallets. Is it simply that another addition to the bitcoin qt that makes it that much harder for attackers to gain access to your coins, or...?

From what I can tell, you are generating addresses and keeping their respective privkeys solely on an offline computer running Bitcoin (offline wallet). You then take those addresses and add them to an online computer running Bitcoin (online wallet), and you tell the Armory client that they belong to you. The catch here is that you haven't actually proven you own them by giving Armory the privkey (watch only), which means you can't actually complete transactions without involving the data in the offline wallet. In order to transact from addresses in your offline wallet, you must create an unsigned transaction in the online wallet, get that transaction data to the offline wallet for signing, and then take the resulting data back to the online wallet to be sent through the Bitcoin network.

This is the first time I've seen Armory, and I'm pretty fucking impressed without even downloading it yet. Up until this point, I've been keeping the bulk of my stuff in a deterministic wallet. This solves the data loss problem (I lost 3+ BTC to data loss the first time I ever played with Bitcoin), but it does not solve the "I got hacked" problem at all. Armory appears to do this quite well, at least design-wise. Looks like I have a new project on my plate...

Hope this helps, DrChong.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: preacherman444 on June 10, 2013, 05:41 pm
Subbing.
Title: Re: How safe is storing BTC @ SR long-term?
Post by: frankmacca on June 11, 2013, 02:56 am
The security added via Armory is simply the fact that money cannot be sent from your online wallet.

Transactions must be created offline and sent to the online client to be processed through the blockchain. As long as your 'offline computer' is fully quarantined and has never directly accessed the internet, it's impossible for your coins to be stolen.

Even standard local wallets running under bitcoin qt could possibly be swiped if somehow a hacker manged to install some kind of keylogger, etc.

For myself, I realize that I'm being WAAAY over-cautious. Being over-cautious is fun :P

Personally, I would never trust purely web-based wallets for long-term cold storage. They are strictly for 'play money'
Title: Re: How safe is storing BTC @ SR long-term?
Post by: offbeatadam on June 16, 2013, 03:52 am
The security added via Armory is simply the fact that money cannot be sent from your online wallet.

Transactions must be created offline and sent to the online client to be processed through the blockchain. As long as your 'offline computer' is fully quarantined and has never directly accessed the internet, it's impossible for your coins to be stolen.

Even standard local wallets running under bitcoin qt could possibly be swiped if somehow a hacker manged to install some kind of keylogger, etc.

For myself, I realize that I'm being WAAAY over-cautious. Being over-cautious is fun :P

Personally, I would never trust purely web-based wallets for long-term cold storage. They are strictly for 'play money'

I like the cautious route too. I choose to view things from a perspective that usually includes worst case scenarios as wellas best case scenarios. Chance favors the prepared, right?

Some see it as mindless paranoia but... I mean, by generally preparing, or at least making note of, a potential worst case scenario... I find myself being in better control of the overall situation, and intentionally reducing complexity of most situations in order to make dealing with it in the event of that scenario playing out that much easier.

A lot of my friends have observed that this typically gives me something of a more intense OCD... and I tend to be an asshole when one of those scenarios ends up happening to them and they're unprepared. LIke one recently, friend had to bring his laptop in. For years I've been telling him to separate the huge media files and his home directory, so he can just back up /home/user and keep the big junk on a separate external disk

Can't imagine its hard to guess what happened :P
Title: Re: How safe is storing BTC @ SR long-term?
Post by: frankmacca on June 17, 2013, 05:47 pm
Like your thinking Offbeatadam!

Like my dad always said,

"Always hope for the best and be prepared for the worst."

It's so easy so dismiss caution as paranoia and measured cynicism for negativity. Clearly they are very different in approach and application and merely look similar to the unprepared.

Life's a game I'm in to win....and I'm a hardcore gamer :D