Topic: Wrong conception (Read 315 times)

I think the reason why they use thd word wallet is because it's what we use to manage our crypto funds and those who just know about cryptocurrency will think that wallet contains the bitcoin which the truth is that the bitcoin is stored in blockchain and therefore the wallet contains the keys which is used to manage your crypto funds.

You are right but I think that's not the point. Whether it was novel-like post or a one liner, you will read from start to end if you are really eager to learn. Yeah! I agree that OP's post is a little bit long (maybe that's how he convey ideas) but doing so means tolerating newbies' laziness somehow. If they can't read a few paragraphs then it's not our loss anymore. Persistence is an important part of learning .

No, I think it's the same. Hardware wallets does not contain your bitcoin but your private key. It keeps your private key away from any form of hacking so that you can open your address nice and smooth. (correct me if I'm wrong hehe)

I think this is a misconception because there are many types of wallets to keep BTC safe if it is protected offline without leaving it online there will be no fear of it being stolen. The risk is higher if you use someone else's wallet to keep your BTC better newcomers may have this problem because they provide their personal information in both cases without verifying anything, but stealing until you know the wallet's password is a very wrong idea.

Do cold wallets count? They are offline and you can store your bitcoin there. I think the problem is not newbies, the system is problem here, if there are people who abuse this loophole and no one is making a damn about it then , there will newbies that will get their funds stolen. To all newbies, be careful, consult your crypto friends or this forum, they are going to help you.

I also have a misconception about how receiving bitcoin in the latest btc address will affect if I receive it in the previous address. I was thinking that my btc will be lost at that time.

While the word itself is probably not the best choice to represent what it actually is, I think if new users spent some 15 mins to read a bit about the whole concept, they will at least understand that wallet is not a pure "wallet".

Like it or not, they have to learn more about new techs before they are familiar with it. Just like when 2FA is a new thing and some people still give it away when people pretend to be a technician from X company trying to solve the problem of their accounts.

Cryptocurrency is new to us especially the newbie. Old school tricks of scamming still going to work with an upgraded version using the technology. With vast audience or number of users of cryptocurrency then high chances with the numbers that there will be few that will became a victim in scamming. Some scammer using fake phishing sites or malware that can disclose details of the accounts of individuals especially in digital wallets of cryptocurrency.

I get your point since most newbies don't really know the importance of keeping private as they think it's just something you can skip until they got robbed by some scammers lurking all around the internet. Just like the MasterCard and other alike of it, when they know the necessary information even they don't have the card with them, they can use all the money inside the card and spent in as if there is no tomorrow.

Guys do they -newbies- really need to know too much technicality before knowing some -information- are private?
As when I was brand new to bitcoin I had the senses that these information -private key, password- are important and private.
They use mobile banking, automatic teller machine -Lets leave crytocurrency- the privacy instinct on those forms should make them at least cautious with this informations.

I think the general idea here is how newbies can easily be fooled by giving away not only their private keys but also the passwords and emails they have on phishing websites and applications. Yes there is a big misconception about wallets and private keys with newbies but what I don't get is why are there still newbies getting fooled by phising websites. These kinds of traps in the internet existed long before cryptocurrencies became popular so I still wonder why people are getting scammed by these. Maybe people are just too gullible when it comes to “easy money” stuff they see in the internet.

I prefer the concept of keychain that Andreas Antonopoulos used to explain what a wallet is:
See: https://www.case-podcast.org/16-bitcoin/transcript

One can envision that, if someone gets hold of your keychain, or you hand out the (private) keys, they can duplicate your keys or steal whatever they give access to. As an analogy, that may work. The problem is though how to lay it out in layman’s terms to a complete neophyte. I mean, as one gets to know the ropes a bit, he can understand that there are TXs that need to be signed and so forth, but from a real beginners point of view, for somebody who is never going to get to know the technicalities well, neither a wallet not a keychain facilitate signing transactions in real life. Even hinting that Bitcoins are not really coins is too confusing for many to assimilate …

@OP, A few days ago, I've read some technical information about the topic from @mocacinno on a separate thread but I think it is related, I do hope it could enlighten us more about the topic at hand.

this. and your title is also not good at all. when choosing a title you should try to be concise and to the point. "wrong conception" is too broad and vague to interest anybody to click on it and check it out. it also is not possible to find it by searching. but a clear title that says what the topic is about like "keys are stored in wallet, coins on blockchain" is so much more comprehensible.

Exactly. People imagine with what they can link word wallet. Much better word would be an account. But even that is not good. Key to a ledger.

The miscommunication begins from the word wallet itself. It's not so obvious, many newbies would assume the same meaning for pocket wallet in actual to confer on the online wallet and see it to perform same function (holding storing your fiat currency and storing your Bitcoins/Altcoins) respectively, except that one comes with a key of some sort (private key or seed phrase) due to it's intangible nature. It's fair. Not far from it but, in the case of wallet as per Bitcoin/Altcoin/cryptocurrency and all, the wallet performs an entirely unique function and has a pattern of operation. I'll put it simple in three points.

1. You need to understand the concept that, your Bitcoin/Altcoin is stored on the block chain, not your wallet.
2. Your wallet is just an address that allows for the transfer of your Bitcoin/Altcoin and
3. Your private key or seed phrase enables you to access your Bitcoin/Altcoin.

Point three(3) is what makes your private keys or seed phrase more important as it is your first level of security as regards protecting your funds in the cryptosphere.

Pretty easy for us(who has been in this space for years) to say. But the fact that some people could barely even grasp the non-custodial nature of bitcoin and why intangible magic internet money is worth something, we could easily assume that explaining stuff like this is easier said than done.

I'm quite sure it skipped your notice that your article comes without a heading. By that I'm implying, it shouldn't just end with a topic sentence in the topic section for such a lengthy post.
You can do something to effect that and the article will be more appreciated.
If the private keys and seed phrase is understood, I guess a lot of newbies or users would know better than to forward their private keys to any user or organization. A huge difference exists between your public wallet address and your private key or seed phrase as clearly seen in it's names. One says private, the other days public. Note them.

Big? The post does not look big at all to me, just three paragraphs, with none more than five lines is concise.
There is nothing technical about this that will be a problem for the 'bitcoin layman' to understand, telling them to protect their keys is good enough, but adding why it's important and where their coins are stored as opposed to where they think is better for deeper understanding. For someone who is going to be their own bank, they should know this.
That's it exactly. But another thing is that the fiat system is quite old and people already know how it works, what they should and should not do with the cc and pin, but Bitcoin can be called a 'new asset', that is why I think new users should be reminded of this more often.

Yeap, people doing proper coin control is definitely heavily recommended, but this is one of the things that I think it's really unrealistic to expect that most people will be doing. I really don't expect the masses to be using Electrum/Wasabi-ish wallets instead of the far-more-convenient Blockchain.com-ish wallet.

Imo, it depends on how important those specifics are, and if they can affect the user's security and privacy. Take dust attack as an example; for one to understand how it could affect their pseudo anonymity, they would need to understand what inputs and outputs are in a transaction and then learn how to protect themselves. Such useful information should be learnt by anyone who wants to hold bitcoins.
However, there are lots of pretty complicated information about Bitcoin, or it would seem so to a newbie, getting through it all would take a lot of time and effort. If the user simply wants to buy and safely hodl bitcoins, they could only focus on the security details.

You can explain it pretty easy when it comes to the private keys or seed phrase by using the CC analogy.
Compare the private keys to your credit card number, someone can spend the money on our credit card even if it doesn't have your physical card as long as he has your information, also, just like a private key that once known is accessible by anyone and nobody can do a thing about it, so is credit card information till it gets closed down by the bank.

The same stands for the security, just as you shouldn't tell anybody your cc details, keep your PRIVATE keys , well...private!

In short, bitcoins are stored in bitcoin blockchain, not in a wallet as they are just some numbers and records are kept in the blockchain. Private key allows user to spend the fund.
Many users including a lot of old buddies still have this misconception.

It's definitely a common misconception, and I've pointed out a few such wrong statements too in the past. Recently though, I've been thinking about things like this and the "layman" side of Bitcoin— do the masses really need specifically need to know things as specific as this one? Or might it be a bit unnecessary and what's important is just that people secure their wallet's keys?

Now I'm not saying that pointing out stuff like these out are unnecessary, but just something to think about.

Can you put a tl:Dr of a summary or the quote at the top?

The post looks quite big and I'm not sure newbies will stick around until the end.

There is a mistaken belief (misconception) amongst many Bitcoin users, and that's that their coins/funds are stored in their wallets. I know it's a pretty easy term to understand that it's not, but with how many people share their seed phrases on public platforms, write them down on pieces of paper left unattended to on the table or even post them in open forums when seeking assistance, I beg to differ that many people don't understand this. Scammers do also ask for private keys and seed phrases on different kind of giveaways and other patterns they use to steal people's funds.

So i have been thinking that one cause of this could be that newbies think their funds are in the wallet in their possession and if you do not get their PC, phones or their hardware device, then you can't steal/spend their funds. Imo it'll be better for a lot of people to understand this (mis)concept(ion), I think it will help, because it could be confusing for some, notwithstanding the warning the wallet comes with. "How can someone steal my coins with my seed or private keys when I have my wallet on me"? Sounds pretty easy for us to understand how, but it may not be for others, and hell when I started using BTC newly, it wasn't easy for me.

I'll update newbies here that their funds/coins are not stored in their wallet, but on the Bitcoin network, and with your private keys or your seed phrase, a scammer can import your funds (you feel is in your possession/wallet) in another interoperable wallet and spend your funds, what that means in another form is that your private keys/seed phrase is your wallet, and any other person other than yourself who has it, is at liberty to spend the funds in it. I'll finish this off with a quote from 'mastering Bitcoin':