Topic: Do I really need a Bitcoin wallet? - page 2. (Read 3793 times)

This. You can be creative as you want on how you preserve the private key. Treat it like the combination to your safe.

If you are long-term storing more coins with ANY service than you can afford to lose you are storing too much there. DeathAndTaxes above is right. A service may lose your coins not from dishonesty, but from something unforeseen.

That said people themselves also lose coins because it's still tricky to secure them. It takes time to learn/devise the best method for your personal use case, and the less tech savvy you are the more likely you'll make some mistake.

That being the case I recommend at the very least spreading your coins out. For example, services which seem to have decent record of holding coins responsibly are Mt.Gox, Blockchain.info, Coinbase.com and CampBX. One strategy you might use is spreading coins out among different reputable services, and storing some yourself. That way you should never lose the majority of your coins at once. As you become more confident in your own ability move more coins into your private storage method.

My friend, who's a noob like me, had his 5 BTC taken out of his Blockchain wallet a few days ago by some random address and he's worried to ever use bitcoin again even tho he still likes it. He's notified Blockchain about the situation but afaik hasn't heard back from them. Any likelihood that he'll get them back? I can't figure out how it happened but he said he bought like 1.7 BTC a day before the incident and then woke up the next day and his phone app (which is all he uses) showed a 0 balance. He uses 2-factor authentication, as do I, yet he still got sniped. I immediately checked my balance and was thankful to see everything was fine. Any insight?

1) Generate a key-pair
2) Put the private key and bitcoin address on paper (keep paper, delete the rest)
3) Mine to the address

Finally monitor your balance: http://blockchain.info/address/

Then you don't need a wallet until you want to spend.

There are several ways to do 1 & 2 in a secure way, here is one:
http://www.youtube.com/watch?v=milxhe-RoCI

If your coins are at MtGox (or anywhere you don't have the private key) then you don't have ANY Bitcoins.   MtGox has your Bitcoins and MtGox has given you an IOU which you can see on your account page.  If MtGox disapears, gets sued into oblivion, gets hacked, has their servers seized by the Japanese govt, etc then THEIR coins are gone and the IOU is worthless.

Now for some people this risk is acceptable only you can decide.  If having an IOU from a company you know almost nothing about on the other side of the planet where if they don't pay you have almost no recourse to recover your funds "good enough"?  If yes then sure you don't need a wallet.

At least use something like Blockchain.info where you could recover the coins in case they disappeared, had all funds seized, etc.

Exchanges really shouldn't be used for storage of coins. Fwiw, the bitcoin clients in the wild are pretty user-friendly. You might want to consider testing out a lite client like Electrum, which offers a good amount of security without needing the blockchain which is a huge PitA to download and maintain if you aren't a power-user (that said, Electrum does offer a fair number of power-user options, but you don't need to use them).

Just make sure you back up and encrypt your wallet, and you'll probably be fine. Ideally, if you have a substantial collection of coins, move everything BTC-related to an offline computer. Armory (and I'm sure others, by now) offers great options for offline wallets, though Armory does require DLing/maintaining the blockchain and a shit-load of RAM on your PC (8GB+ is essential - 6GB or less is risking it crashing unless you're using a very resource-lite OS without other programs running).

Multibit's a great compromise between a full and lite client because it well-utilizes a technology called SPV, but I'm not capable of explaining its differences well to you. You might want to check out the options available @ http://bitcoin.org/en/choose-your-wallet if someone else doesn't chime in with a more detailed explanation.

I'd very strongly recommend against keeping funds on Gox, though - whatever route you end up taking. You'd never want to hold a substantial number of coins there longer than absolutely necessary, and that goes for just about every exchange and web wallet you can't A) extract your private keys from - and B) verify doesn't have access to your coins

Been mining a few months with my PC's GPU and up to 8 coins now. My Jalapeno arrived today so I should be getting coins much quicker. Now that I'm actually starting to get some decent cash, I don't want to lose it.

I'm wondering what is best way to manage the coins. Now the coins I mine I simply have the mining pool send to my account at Mt.Gox. Is that a bad idea? I figure there is a much higher chance of me screwing something up on my end with a bitcoin wallet than Mt.Gox screwing something up.

Appreciate any advice on using a bitcoin wallet vs just keeping coins at an exchange place. Thanks!