Bitcoin: Wallets

The main thing you need to get started with Bitcoin is a wallet to hold your coins. There are a few different kinds of wallet available, I’ll run through them in order of security, starting from the weakest. As with most things there is a trade off to be made, as the less secure wallets are more convenient to use.

Online wallets are the easiest to use as they are online and can be accessed from many devices such as smartphones and web browsers. The downside of this convenience is that you don’t own the wallet, it lives on someone else’s server and you could lose your money – as happened to Mt.Gox customers. These wallets are often part of an other service like such as exchanges such as Coinbase or LocalBitcoins or faucets (free bitcoin sites), like freebitcoin. Some others that do not come with a service are Blockchain.info and Green Address.

Desktop wallets are installed on a computer and keep your Bitcoins there. This is safer than using an online service – you are in control of your wallet, but also responsible for backing it up and ensuring your system is secure. To make desktop wallets more secure you can use some of them in an “offline” state, if you have an old computer not connected to the internet. You can usually only access the wallet from the machine it is installed on, so they are less useful when it comes to spending Bitcoins out and about, although you can get “desktop wallets” on your smartphone. The official Bitcoin Core client is a desktop wallet, albeit one that requires downloading a large section of the blockchain – so make sure you have a lot of free space on our machine! Other examples are ArmoryElectrum and Copay, which is also available on iOS.

Paper wallets are simply a print out of the data needed for a Bitcoin wallet, usually in the form of a QR code. They don’t have to be printed on paper, they could be printed on something more durable, such as metal. As they are not held on a computer they are secure, but not so user friendly and have largely been replaced by hardware wallets.

Hardware wallets are small devices designed to hold cryptocurrency securely, offline. This can mean that they are possibly too secure – as the founder of Wired magazine found out! Trezor and Ledger Nano S are examples of hardware wallets.

Wallets are usually referred to as “hot” or “cold” with “hot wallets” usually being online wallets, containing a small amount of Bitcoin for servicing transactions. “Cold wallets” are offline wallets, such as hardware or paper wallets for long term storage, much like a savings account.

Based on my research, I have set up an account with Coinbase, so I am using their wallet as my hot wallet. I noticed that the service struggled with the number of users caused by Bitcoin reaching $10,000, then $11,000 on the same day, so that is something to keep an eye on. I have also set up a desktop wallet with Copay, which rather niftily can be duplicated on my iPhone. I also plan to set up a paper wallet, but that is a project for another day/post.

Some of the links I’ve posted are referral/affiliate links, but in general with Bitcoin/crypto currency you need to be wary of the links you are clicking, as some of them may be scams. At the time of publishing this post, all links appeared to be genuine.

Bitcoin: Introduction

I’m no expert in Bitcoin, or any crypto currency, just a regular guy with a bit of background knowledge. I’m starting to experiment with Bitcoin partly to diversify my investments, but mostly out of curiosity – I am a geek and this sort of thing interests me! I thought I’d blog about my Bitcoin journey in case anyone else is looking into it, but also to serve as a notebook for myself.

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

– Coindesk: 20th March 2015

In the UK we have already started to change how we use money, even five years ago the major banks had a monopoly, but now fintech startups and even the big players such as Apple/Google are trying to replace the old banks. I was an early adopter of Apple Pay, registering and using iron the first day it was available in the UK. Bitcoin is certainly a part of the changing landscape for our money – I especially like that it is decentralised and not run by a company whose main motivation is do get more data about us. I spend a lot of time online, both for work and leisure, and Bitcoin has been in my peripheral vision for years – I’m not going to think about how lucrative it could have been to have bought some Bitcoin when I first heard about it! The value has already doubled since I put “Research Bitcoin” into my todo list three months ago! I am not interested in learning about the mining side of things, it seems like I have already missed the boat on that. Mining now seems to be the domain of large “mining pools”, plus my old iMac doesn’t need anything else to slow it down!

Whilst I’m certainly no financial expert, I have researched stocks/shares/funds etc and how to invest in them efficiently over the last few years, both for myself and for my young son Owen. I came to the  conclusion that I prefer to take a hands off approach to investing, and that fees can eat into your profits so need to be minimised. Obviously the biggest risk is that the value of your investment can go down, as well as up. I got caught out by investing just before a big dip, but stuck it out, investing more when the prices were low and did OK when things bounced back. I’m going to take a similar approach to Bitcoin, finding a balance between returns, effort and fees, and to start with – not investing more than I can afford to lose!

This is going to be a series of posts, documenting what you need to get started with Bitcoin, how to get Bitcoins and hopefully how I become filthy rich – if only it was that easy!

Cannock Chase Ride

One of my goals for 2017 had been to “Ride the full Follow The Dog and Monkey Trail loops at Cannock Chase”. I’ve ridden them before, but skipped sections out and/or pushed my bike up the hills. Last Friday I managed to do the almost impossible – align my time off, Owen’s childcare, the weather and permission to escape for a day out on my bike. It was to be the day I tackled the full loop at Cannock Chase.

I almost fell at the first hurdle, I was feeling full of cold when I woke up and considered staying in bed. I was so glad I didn’t though, as it was a lovely autumnal day – perfect for mountain biking! Still unsure if I was going to do the full loop, I paced myself for the first few sections to see how my legs and lungs felt. Although I could have done with some more speed over the new rock garden, as once you stop it is difficult to get going again. Just over two kilometres into the ride is “Cardiac Hill” – my nemesis. I have managed to ride all the way up it a couple of times previously, but it was always really difficult, with a particularly cruel increase in gradient right at the top. This time I feel like I conquered it, my legs were still burning and I needed a rest at the top, but felt in much better shape than I had before – probably a combination of stronger legs from my midweek rides and having lost some weight! At this point I knew I was going to do the full loop!

Crossing the railway and road onto the Monkey Trail felt much more remote, and I had a few more breaks to take in the view, watch the wildlife and consider how lucky I was to be there on my bike. The best view was at the top of “Over The Rainbow”, where the photo at the top of this post is from. By now I felt like I was riding the best I have ever ridden and hadn’t even noticed that I’d missed lunchtime! I managed to stay on my bike down the “Tom, Dick and Harry” rockgardens, which was better than my attempt a few years ago, when I went over the bars. At the bottom of “Upper Cliff” I managed to take a wrong turn, which resulted in some unnecessary climbing, before having to descend again to join the trail for the “Insidious Incline”, which leads to “Lower Cliff” – regarded as the best piece of trail at Cannock Chase. I’d never actually ridden this trail before, as it had either been closed, or I’d been put off by the extra climb. I had been missing out – the climb wasn’t all that bad and the descent was amazing. It felt more exposed than other trails at Cannock, Chase as the trees have been felled in that area, and there was lots of loose gravel waiting to catch out an unwary rider, but that all added to the fun! I even caught up to an other rider during the descent, not something that has happened to me before.

Crossing the road and railway again, back onto the “Follow The Dog” trail, I was faced with a long climb up “Kitbag Hill”, another section I’d never ridden before, having just gone up the fireroad on previous visits. My legs were starting to tire by the top of the climb, but I knew I was on the home straight and took things easy. By the time I’d got to “Son of Chainslapper” my legs felt much better and I could attack the last few sections of trail. This is the part of Cannock Chase I’ve ridden the most, mainly on the Leisure Lakes Demo Days, which use these last few sections of “Follow The Dog” as the demo loop. I found myself whizzing past places I would usually have stopped for a breather, which was another indication that my fitness has improved significantly over the summer. The very last section of trail is closed for renovation, but knowing how my legs felt and that I’ve ridden that trail loads, it wouldn’t have posed a problem. So I’m claiming a full loop of “Follow The Dog” and “The Monkey Trail” and ticking it off my list of goals for 2017!

I was still buzzing when I rolled into the car park, not only had I achieved a personal goal, it had been the best day I’ve had on a bike. To celebrate, and because I’d missed lunch, I treated myself to a Burger King on the way home, still smiling to myself at how much fun I’d had on my bike.