Bitcoins/Litecoins/Virtual Currencies

Cross posing from the Investing thread:

Jysin said:

Cross posing from the Investing thread:

Coinbase admits users may lose crypto if exchange goes bankrupt

If the exchange goes down, it's taking investors with it.

fortune.com

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Get your coins off exchanges. Especially true for Bitcoin. They are rehypothecating your holdings, if your coins are on exchanges you are effectively in a short position due to contributing to supply inflation via paper BTC. If you're among the last to self custody, you're the paper BTC bagholder.

You're going to see a lot of blow ups soon if things keep going this way. Bitcoin will be fine, but a lot of these companies and alts are underwater. Your Bitcoin -won't- be fine if its on an exchange that goes under. It also won't be fine if the laws change and your government seizes assets. We're at the "loot the treasury" part of the collapse IMO, may be worth preparing accordingly.

EDIT: Word is that Wallstreet (Citadel, Blackrock) are going after these overleveraged alts. They crashed LUNA and may be going after TRON next. Its a very bad time to own alts. BTC dominance must rise before the market can move forward. Expect blood in the streets

Never forget the Quadriga lessons.

Furry said:

Now do tether.

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Tether is backed by treasuries. Not saying they can't be attacked or default, but its different

Flobee said:

Get your coins off exchanges. Especially true for Bitcoin. They are rehypothecating your holdings, if your coins are on exchanges you are effectively in a short position due to contributing to supply inflation via paper BTC. If you're among the last to self custody, you're the paper BTC bagholder.

You're going to see a lot of blow ups soon if things keep going this way. Bitcoin will be fine, but a lot of these companies and alts are underwater. Your Bitcoin -won't- be fine if its on an exchange that goes under. It also won't be fine if the laws change and your government seizes assets. We're at the "loot the treasury" part of the collapse IMO, may be worth preparing accordingly.

EDIT: Word is that Wallstreet (Citadel, Blackrock) are going after these overleveraged alts. They crashed LUNA and may be going after TRON next. Its a very bad time to own alts. BTC dominance must rise before the market can move forward. Expect blood in the streets

Spoiler: LUNA

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I've said it before and I'll say it again, taking my crypto into cold storage was the best move I've made.

Here's an interesting graphic. I haven't independently verified the numbers, but they seem at least approximately accurate:



Note these are the LOW'S each year since 2012. This should give perspective during the current bloodbath.

Now, interestingly, we went all the way down to $29,323 this morning. If this trend (outside of 2015) holds, we are very close to reaching the bottom. But if BTC drops below $28,700, we break the trend and have another year like 2015. If that happens, who knows how low it could go?

Ishad said:

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I said a long time ago in this thread that I rail against alts for this exact reason. Some percentage of them are outright scams, others are poorly structured and vulnerable to sabotage or mis-managment (because they CAN be managed!). Bitcoin is the only truly decentralized 'crypto' that exists. It is risky enough. I hope people are starting learning this lesson and none of you got wrecked on this. I feel bad for the people that got caught, learn from their mistake.

Essentially every other coin is a scheme to take your Bitcoin.

So as to somebody who's brand new into this, I literally purchased all my Bitcoin less than 2 weeks ago on coinbase. I planned on then not touching anything for 10 years, but everything you guys are saying is making me think that I need to put it in a wallet I guess? Is that right, anyone have handy guide on how to do that?

And just to be clear I'm not talking about pulling my money out and cashing out at a loss or anything, I guess I just assumed it would be fine sitting in coinbase for 10 years but if I need to do something with it to ensure it doesn't just disappear if coinbase goes under direction of what the appropriate steps to do that are?

Onoes said:

So as to somebody who's brand new into this, I literally purchased all my Bitcoin less than 2 weeks ago on coinbase. I planned on then not touching anything for 10 years, but everything you guys are saying is making me think that I need to put it in a wallet I guess? Is that right, anyone have handy guide on how to do that?

And just to be clear I'm not talking about pulling my money out and cashing out at a loss or anything, I guess I just assumed it would be fine sitting in coinbase for 10 years but if I need to do something with it to ensure it doesn't just disappear if coinbase goes under direction of what the appropriate steps to do that are?

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Yeah man, don't leave your btc on coinbase. Get it off ASAP. Lots of people use online wallets but I prefer cold storage like:


Crypto storage is kind of a subject in and of itself though. So I would recommend you do some independent research and figure out what works best for you.

Onoes said:

So as to somebody who's brand new into this, I literally purchased all my Bitcoin less than 2 weeks ago on coinbase. I planned on then not touching anything for 10 years, but everything you guys are saying is making me think that I need to put it in a wallet I guess? Is that right, anyone have handy guide on how to do that?

And just to be clear I'm not talking about pulling my money out and cashing out at a loss or anything, I guess I just assumed it would be fine sitting in coinbase for 10 years but if I need to do something with it to ensure it doesn't just disappear if coinbase goes under direction of what the appropriate steps to do that are?

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So this subject can be very technical if you go deep into the weeds. I'll try to keep it as simple as possible though.

You get two main choices when it comes to self-custody:

Software wallets
Hardware wallets

First lets define wallet. In this space the term wallet is a misnomer. What the device/software really does is sign for transactions. Think of it as a key to your coins because thats exactly what it is. It is the private key to your UTXOs (unspent transactions). It gets called a wallet because its a bit easier for people to think about it as a device that actually holds the coins, but thats not how it really works.

Right now, Coinbase holds your keys. Until you withdrawal your coins from the exchange (create the UTXO that you will hold the private key for) you don't actually own the coins. Not legally, and not in any effective way.

Now on to specifics, please note that I won't really speak to non-Bitcoin coins as I don't mess with them.

Software Wallet:

Pros:
Easy to set up
Free
Can install on computer or mobile phone

Cons:
'hot' wallet - which is to say it is always online (unless you setup a dedicated offline PC) and available thus reachable by attackers
Private key is held on your phone/PC which you are presumably going to be using thus higher loss/steal risk

I would suggest something like BlueWallet - Bitcoin wallet and Lightning wallet for iOS and Android or Sparrow Bitcoin Wallet if you're setting up on a PC

Hardware wallet:

Pros:
As secure as you make it. You can air-gap, validate with your own node, bury it and scatter your seed words around the planet, etc.
Device is required to sign for any transactions and is offline. Makes it very difficult for your funds to be compromised outside physically taking it or coercing you
Devices generally come with security features like a panic wipe pin number if you're under duress (Coldcard moreso than the others)
PIN is required in addition to physically holding the device to authenticate transactions

Cons:
$$$ Investment up front
Generally easy to visually identify as a HW wallet to those that know

Since I believe you said you hold ETH I would suggest Trezor Hardware Wallet | The original & most secure bitcoin wallet. over the Ledger suggested earlier. Personal preference but I don't like how Ledger does some things and while Trezor isn't perfect they're at least open source. I would also suggest using COLDCARD – The Most Trusted and Secure Signing Device (aka. Hardware Wallet) over both as it is vastly superior from a functionality standpoint , but it is BTC only.


Both types of wallets function in a very similar fashion. You will create a new wallet from the private key stored on the device/software and will be given a seed recovery phrase. Generally 12 or 24 words. -VERY IMPORTANT- this seed phase in a sense IS your wallet. Anyone with this list of words can recover your wallet and funds without access to your physical device. DO NOT store this on a digital device. Physically only. Paper is fine, or there are products that you can etch the phrase into steel if you really want. You can also just memorize it and thus be able to carry your coins anywhere in the world without the possibility of having them confiscated. You can leave your hardware wallet on the coffee table if you want (don't do this) but you cannot leave your seed phrase sitting out for anyone to see.

I'll drop some resources below for you to read more if you want. While I am very adamant that all crypto holders should control their own keys, I would suggest caution as you're learning how this all works. There are mistakes you can make that will cause you to lose everything. There is no customer support, your exchange can't reverse the transaction, if you screw up its up to you to fix it if its possible, or take responsibility for losing your funds. Freedom is like that though. From my perspective we've gotten far too used to daddy government protecting us from ourselves while he loots us.

EDIT: Adding Bullbitcoin link as they do provide a full self-custody support process. As I understand it they'll go through the whole thing with you via phone if you want. Bull Bitcoin

Bitcoin near $28k.

Jysin said:

Bitcoin near $28k.

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About to break a trend that has held up for the last 7 years.

Edit: Trend broken, bitcoin apocalypse is nigh

Well, whoever stole my BTC joke's on them.

Arden said:

About to break a trend that has held up for the last 7 years.

Edit: Trend broken, bitcoin apocalypse is nigh

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We were never getting out of this without a high volume capitulation wick. I'm actually glad its happening sooner than later. Assuming that's what we get I would argue its the end of the bear market. Mind you we may be at these levels for months yet but this is how it works. Alts needed to be absolutely crushed before we could recover. They are a blight on Bitcoin and siphon so much capital. They're the distraction and everyone getting pwned right now will hopefully learn that.

There is only one

Flobee said:

We were never getting out of this without a high volume capitulation wick. I'm actually glad its happening sooner than later. Assuming that's what we get I would argue its the end of the bear market. Mind you we may be at these levels for months yet but this is how it works. Alts needed to be absolutely crushed before we could recover. They are a blight on Bitcoin and siphon so much capital. They're the distraction and everyone getting pwned right now will hopefully learn that.

There is only one

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Yeah I agree- not about the crazy Highlander stuff, but about the current pain being necessary. The entire market has been overheated and that was doubly true for the crypto market.

I honestly won't even sweat it unless BTC falls below 15k. I wouldn't be surprised if we settled in the low 20's. When you look at the long-term picture, if you exclude the huge hype bubble that started in late 2020, low 20ks seems like it would have been a reasonable progression to this point.

Thanks for all the advice Arden and Flobee, I'll look into all of that and figure it out in the next couple of days. Much appreciated!