Topic: Question regarding buying and storing Crypto (Read 285 times)

I read somewhere that if you get your proxy Port on TOR and enter that as a proxy on electrum it could help solve this issue and allow you use electrum over TOR, not sure if it still works or if it would on your preferred VPNs.

Correct. Each wallet address has an xpub or Master public key in addition to the private key. The Xpub generates all the public addresses and transactions made to the different addresses are difficult to track, so it is best practice to avoid reusing addresses.

Do you mean generating a new master private key and public key? An electrum wallet can hold a large number of different addresses; on mobile ther is a NEW icon when viewing all the unique addresses on the wallet, that is where you generate another.

What do you mean fixed amount? Electrum automatically changes your receiving address after it has been used in a transaction to another one under a single Xpub, so the amount they hold is not fixed.
• If address A was used in a transaction of 0.07BTC, it would be changed after that to address B; which can receive any amount of Bitcoin above or below that (0.07).
You can also keep reusing a particular receiving address  Not sure if this explanation matches your inquiry.

Coinomi or other mobile wallets like Mycelium don't have their own exchange services. They use third-party services like Simplex or Changelly to provide 'buy' functionality. When compared to Coinbase, buying bitcoin with third-party services like Simplex is much more expensive. They almost charge 10-20% more than regular exchange. So it's better to stick with Coinbase or other order-book based exchanges as I said earlier.

---

A person shouldn't use custodial wallet in any circumstances. I don't know why the concepts like custodial web wallets or exchange wallets even popular!  Basically you giving your funds to a third-party just like banks but without getting anything in return (no interest). Moreover, why should you take risk of losing money when you can maintain full control over funds by using non-custodial wallets. Furthermore, most of the custodial wallets won't let you freely choose your own fees. So in long run, you will lose more than what you are trying to save by not withdrawing bitcoins to a non-custodial wallet.

You should have both wallets cold wallet for storing btc and online wallets for spending btc.

If you have a plan in spending you btc then it might be a good idea to use wallets that are custodial so that anytime you can sell it that if you will not hold more btc just only enough and sound like you can afford to lose it. And then you can store btc too in electrum as what others had mention of about cold storage. This means that in storing bitcoin in cold storage means to transfer only btc when it is needed and of course that is keep safely.

Chipmixer is a good option. You can check out their offical service thread on the forum - https://bitcointalksearch.org/topic/m.19217054
Remember to bookmark sensitive links and only follow official sources.

What version of electrum are you using? This appears to be a past issue on certain operating systems.
I could find this issue on it for Ubuntu - https://github.com/spesmilo/electrum/issues/5193#issue-420161782

Correct! Electrum > Wallet name > address, then you copy. It's advisable not to reuse addresses to help maintain your pseudo anonymity.

P.S; Writing consecutive replies is against the forum rules. You can edit subsequent replies into the initial one.

It seems you can't be behind a VPN while using Electrum or maybe the VPN I am using. It just shows Disconnected until I turn off my VPN and then it connects to the server.
Last question for the night and I promise to stop bothering everyone

When I go to send BTC from an exchange. Do I just go into Electrum > Addresses and right click on any of the addresses and copy? I can then paste that into the Send address on the exchange, correct?

That is good advice as well. Since I am buying weekly, I will transfer to my Electrum wallet at the end of the month. Sounds like a decent plant. I will create some additional wallets just in case.
Is there any services you or anyone else can recommend for mixing/coin joining? I don't know of any.
I will look into Cold Storage devices. I know there were some listed on the pinned topic on this forum.

Yes, I did standard. Encrypted wallet. Just checking the software out now. I changed the setting so it shows BTC units instead of mBTC. Later tonight I am going to transfer my BTC over to this new wallet so pretty excited about getting off Coinbase.

I can only assume you want  to store your coins to a wallet you have a control like the private keys and at the same time you can buy BTC on it.

There are mobile wallets that are allowing your to do this. Coinomi wallet is just one which you can use your creditcard or bank transfer to do this. This isn't going to make you anon but it would work just as you need like storing it to a wallet with your keys.

Cool! But in any case you wondering what multi-sig wallet is, it is a type of wallet which requires multiple authentication to send the transaction.

It will create an address such that bitcoin received on that address can only be spent if multiple private keys sign the transaction together. For example, 2-of-3 multi-sig means at least 2 of the three authorised private keys are needed to spend the output.

Since you are only individual, you must go for standard wallet which I assume you went for.

Firstly, if you're sending from an exchange wallet to a personal wallet, it is good practice to use mixing or coin joining services, this way it would be impossible for anyone monitoring your transactions to build a connection between you and addresses you own.
How you move funds would depend largely on personal factors, I would suggest you own a variety of wallets to enhance privacy;

• Your purchasing address: this could be an exchange address and you would not want to hold funds here for too long. In my opinion you can safely bulk up funds monthly to avoid paying high fees weekly.
• You can also own a hot wallet, this is where you keep funds you may need to move often. This is only necessary if you have interest in selling your bitcoins at times when the needs arise. For this purpose a good custodial wallet like electrum can serve.
• Your cold wallet is where you move funds for storage, this should typically be a hardware wallet which is of course safely backed up.

For example;
You move 10% of your funds from Exchange wallet --> Hot wallet (If you are selling on an exchange you may not need to mix coins going back and forth between both addresses)
You move 90% from Exchange wallet --> Cold storage (it is highly imperative to mix transactions between these addresses).

Check this thread out on how to consolidate your small inputs if you plan on buying regularly so as to avoid high fees later on - https://bitcointalksearch.org/topic/m.29228128

*Just seeing your edit, I'll leave this comment up should you or anyone else need it later on...

I figured it out! Sorry. I wasn't sure of the wallet type but now everything is working out. Again, thanks.

Thank you for explaining. I verified the key for Electrum and will install it. Take a look around the program.
Now it is asking what type of wallet I want to make. MFA seems like a good option but I will read up on the site about this.

Correct! However, there are two things I was talking about. I will clear them so you don't confuse the two:

1. If you are using HD wallet: After downloading Electrum wallet, it will ask you to create a new wallet. When you proceed, it will show you seed phrase of 12 words. You have to write them down on a piece of paper. These 12 words will be used to create keys and addresses for you. The process is known as hierarchical deterministic (HD) process. This is a secure way to use bitcoin and since you are looking to regularly use bitcoin, this is the way I was recommending you in earlier post. By taking backup of seed, you have taken wallet into your custody. If you lose seed phrase, you will lose the access of your wallet.

2. If you are using cold storage (e.g. hardware wallets,paper wallet): In case of paper wallet, you will print hard copy of private key in the form of QR code and place it safely. So now there are no trace of private key on your computer. Then you will only import/sweep the private key in Electrum whenever you intend to spend/sell the coins. Whereas, hardware wallets work differently. You can sign transactions in a separate device without actually sweeping/importing private keys on your computer. Electrum is not a hardware wallet so you will have to purchase device like Trezor if you intend to use hardware wallet. Note: Hardware wallets are the securest among all and uses HD process to generate keys and addresses as well.

Where do you get this message?
If you're importing a private key which you've already generated, you're basically integrating it into the wallet software so you can access it there using your private keys.
Note that, wallets do not  hold bitcoins, they are basically on the public address, the wallet allows you spend them, after you generate an address or import one into its software

Sweeping an address means to move all the balance on an address you own to another generated address automatically

Personally, a hardware wallet (Ledger or Trezor) or Electrum if you want something for free. In the former case, you need to make sure you make the purchase at the merchant’s original site (or an authorised reseller), but even so, you need to be wary of what you receive (see Even if you buy a hardware device from an authorised reseller, you need to check). For the latter, you need to assure you are downloading from the proper site, and ideally verify the signature of the download (see GUIDE] How to Safely Download and Verify Electrum [Guide]).

Not if they are non-custodial, which is what you are looking for. Ledger does now let you buy from within Ledger Live, although you are really going through a partner of theirs, and it may not be the one you’d prefer to use.

Yes. You’d generally have to move them over to the Exchange to sell them, at the TX fees reigning at the time (you can play around with the fees as I’m sure someone will point out later on).

You can’t avoid the Network fees of moving your BTCs to and fro between the Exchange and whatever wallet you settle for. You’d have to choose the right time to do it to get lower TX fees. Coinbase Pro seemed to take care of withdrawal fees until recently, but not anymore (see https://www.cryptoryancy.com/the-complete-guide-to-coinbase-fees-and-how-to-avoid-them/).

I personally go for hardware wallets, and if I use Electrum, It’s through a linked hardware Ledger wallet. Hardware wallets still require you to be very careful where you store your 24 word mnemonic (i.e. not on the pc, backup not cloud), which becomes your weak point (hardware wallets do not exempt one from the responsibility to keep/backup/store the 24 word mnemonic safely). If you pretend to trade frequently, you may ponder leaving something on the exchange to save on fees, albeit a smallish amount (just in case something nasty should happen to the Exchange). All in all, remember that being your own bank is better on principle, but it comes with security responsabilities.

It’s not for mining really (not the version you’d use), but it does help the network and give you more privacy. You can check it out, but it’s certainly more cumbersome and technical than using a hardware wallet or electrum.

I downloaded Electrum but waiting on GPA to sync so I can verify the public key they have on their site.
I do have a question about "first have to either import or sweep the private key in a non-custodial wallet like Electrum. Then you can send the coins to the Crypto Exchange using current network fees" I now know non-custodial would be a wallet in Electrum compared to Coinbase where they have the keys etc.

I have to run and pick up my kid but I will be back....with more questions. I really appreciate the info everyone. Thank you.

Electrum is one of the best light weight wallet available for bitcoin and yes you can use it to store bitcoin for very long term with no issues but you should download the wallet from official website and verify the signatures before deposit any money to it. If you have device to run bitcoincore then go for it but if you are a beginner then I will suggest you to learn completely about core wallet before installing it.

If you are looking to run a wallet on the computer then the best choice is 'Electrum'.



Nope! You can only purchase bitcoins on centralized exchange services like Coinbase or P2P platforms like LocalBitcoins. Since you are using Coinbase from long time, it is advisable that you continue doing so. But as soon as you purchase bitcoins on Coinbase, withdraw those to your Electrum wallet.



Yes, you still need Crypto Exchange to sell your coins. If you are using cold storage then you first have to either import or sweep the private key in a non-custodial wallet like Electrum. Then you can send the coins to the Crypto Exchange using current network fees. Wallets like Electrum will show you 'recommended' network fees which will get your transaction confirmed within next few blocks. However, if you aren't in hurry, you can manually set lower fees and still get your transaction confirmed in few hours.



Currently there are high number of pending transactions in mempool so network fees is soaring. That's why Coinbase is taking benefit of the situation and charging arbitrarily higher fees. Using non-custodial wallets like Electrum, you have full control over keys and coins. You can sign and send transaction using your own preferred fees. 



If you are going for Electrum then make sure to backup mnemonic seed. I would suggest you to write seed on a physical paper than saving it on hard drive or a cloud storage.



The full size of BTC blockchain is 307 GB. I would only suggest you to run full node if you are intending to use it for an application purpose (in production).  The wallet you are talking about is Bitcoin Core. However, it would be more appropriate if you use Electrum instead of Bitcoin Core since Electrum is more-friendly for new users.

Ideally, you should use a non custodial wallet to store your cryptocurrency. This type of wallets gives you alone access to your funds as you alone can access your private keys, as opposed to custodial services like coinbase which can lock your funds.
You can run Bitcoin core on your computer and generate your own address.

Custodial wallets are only for storage and transactions but does not allow one to buy or sell bitcoins.

You can trade OTC or directly with a dealer, there are some of them in the currency exchange board on the forum (be careful to check their trust score and previous trade history).
For more liquidity, you can also use an exchange to trade, but ensure you do not store fund there.

I use electrum and have not had any issues whatsoever.
Cold storage is not really that much work, and even if it were, it is worth the extra stress to keep your funds safe, especially if you are holding much larger amounts.

Is Electrum a decent Bitcoin Wallet? Does anyone use it?
I am also considering cold storage but it seems like a lot of work just to keep bitcoin secure.
I was also reading about bitcoin core. I have a spare 500GB SATA SSD I could use to store the node on there.

EDIT
I am using the latest version of Electrum 4.0.4. I have TunnelBear VPN and ExpressVPN. Both give the same result.
Thanks for confirming the address question. It seems the best practice will be to use a mixer service and spread the BTC around the different addresses shown in Electrum.
I don't see a way to generate new addresses. Does each wallet just get a fixed amount?

I read through the pinned discussion regarding wallets but I have some questions. Really, I am looking for advice. It would be appreciated.
When I first started buying BTC I used Coinbase. I don't remember how I came about the site, probably from a google search. I have been using it for years. I have it setup so every Friday I purchase a certain amount of bitcoin.

After doing a little reading and talked to an old friend, I was told I should not use Coinbase especially to store my crypto since I don't have control over the keys.

I am just looking for clarification and recommendations on the following.
1) What would you recommend I use to store my BTC? I was thinking of looking for a program I can just run on my computer to store my crypto.
2) Do these wallet programs allow you to buy and sell BTC?
3) If I use a hardware wallet, cold wallet etc, how do I go about cashing out crypto? Do I have to use an Crypto Exchange? Are the fee's going to be similar no matter what I use?

I am just looking for a better place to park my BTC. Coinbase fees for sending to another wallet are crazy high. I am hoping to avoid this if possible along with having a wallet that I control the keys to.

I know this is probably asked a lot and I apologize. I just wanted to see what you may use and if you would recommend any specific setup?
I have the ability to backup anything on my PC to external hard drives and to cloud storage.

I don't think I need anything overly complicated. Just something I have control over and if it has features to buy/sell crypto.

Lastly, I was thinking of downloading the current BTC blockchain to an external drive. I had read that you get a wallet. I may be wrong. I am not certain how that all works. Any benefit of doing this other than mining?


Regards