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   Strategies & Market TrendsBitcoin


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From: Elsewhere6/5/2021 9:05:47 PM
1 Recommendation   of 943
 
El Salvador May Become the First Country Adopt Bitcoin As Legal Tender
Jun 5, 2021
btctimes.com


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To: Elsewhere who wrote (901)6/23/2021 6:25:46 PM
From: Doren
   of 943
 
Founders of South African Bitcoin exchange disappear after $3.6 billion 'hack'

> Bitcoin provides the safest, hardest money ever invented by mankind.

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To: Doren who wrote (924)6/27/2021 10:05:31 AM
From: Elsewhere
   of 943
 
"Not your keys, not your Bitcoin."
Message 33294102

Reading these words and understanding them seems to be above your paygrade.

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To: Elsewhere who wrote (925)6/27/2021 10:23:57 AM
From: J.F. Sebastian
   of 943
 
Your cognitive dissonance is showing.

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To: J.F. Sebastian who wrote (926)6/27/2021 6:54:44 PM
From: Elsewhere
1 Recommendation   of 943
 
Time for a 101: the Bitcoin private key

Bitcoin is called a "crypto currency" because it uses cryptographic methods. A key feature of them is asymmetry - certain calculations can be performed easily in one direction but not in the reverse direction. A well-known example: Rivest–Shamir–Adleman (RSA) which was introduced in 1977. The easy calculation is the multiplication of two big numbers, the nearly impossible one is to find the two factors of the product of such a multiplication.

An application is the encryption system "Pretty Good Privacy", PGP. Each participant has two keys, a public and a private one. If somebody wants to send a secret message to the receiver he asks for his public key and uses it to encrypt the message. Once encrypted the only person who can retrieve the original text is the person who has control over the private key.

Bitcoin uses Elliptic Curve Digital Signature Algorithm (ECDSA) for encryption which functions similarly. The bitcoins acquired by a participant are controlled/can only be spent by the person who controls the private key. Without its knowledge it is impossible to "steal" bitcoins. This has been true ever since the inception of the Bitcoin network.

What has happened in South Africa is that customers/investors using this exchange passed on the control of their private keys to the exchange operator. This approach is frequently used by exchanges to facilitate rapid trading. The problem: although Bitcoin itself can't be hacked it happens often that exchange operators have vulnerable systems or malicious actors which enable attackers to get hold of the private keys. This is not the fault of Bitcoin but of investors abdicating their responsibility for their funds.

The most famous raid on Bitcoin funds occurred at Mt. Gox. For some time it handled ~70% of all Bitcoin transactions. In 2014 Mt. Gox lost control of 850,000 bitcoins (which nowadays corresponds to ~$30 billion). The company went bankrupt, the BTC price collapsed. The obvious lesson: "not your keys, not your Bitcoin". If you don't control your own private Bitcoin key it is in somebody else's control and can be abused.

Safe storage of private Bitcoin keys can be achieved via a number of methods. There are several popular hardware wallets, a safe one is Coldcard. It costs around $100.
Home page Coldcard wallet: coldcardwallet.com

This is recommended for, let's say, sums beyond $1K. (For smaller sums a software wallet on a device like a cell phone is sufficient.) For bigger sums, let's say >$100K, more elaborate key control mechanisms are available, especially multi-signature approaches. This enables geographically separated storage of keys which is a safety feature against physical attacks.

For better human readability a private Bitcoin key can be represented as a list of 24 words taken from this list:
github.com
Many people have successfully used a "brain wallet" when they flee from their home country (think Venezuela). One memorizes one's key via its 24 words. At the destination the Bitcoin funds can be restored.

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From: Elsewhere7/1/2021 2:54:47 PM
3 Recommendations   of 943
 
How secure it is to store Bitcoin on an exchange

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From: teevee7/2/2021 1:13:31 PM
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Soros has started to trade bitcoin. He is a notorious short seller, Will Soros be able to bust bitcoin like he broke the Bank of England?

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To: teevee who wrote (929)7/2/2021 3:53:57 PM
From: Elsewhere
   of 943
 
Rehypothecation is not an option with Bitcoin. The paper games going on in the precious metal market are not possible with Bitcoin.

Rather than busting Bitcoin Soros has a chance to bust a central bank again with the help of Bitcoin. Similar to what Michael Saylor is doing currently: borrowing at zero or minus percent subsidized interest rates (central banks are forced to keep rates low otherwise the whole debt bubble will burst) and going long Bitcoin, with >100% per year annual gains on average in the past decade. This will be a macro trend in the coming years, the so-called "speculative attack" predicted by Pierre Rochard seven years ago.
nakamotoinstitute.org

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To: Elsewhere who wrote (930)7/2/2021 4:06:48 PM
From: Savant
   of 943
 
As you mentioned, Soros is a short seller, but he also goes long...whether he can bust a central bank w/BTC, who knows, or whether he is long or short

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To: Elsewhere who wrote (927)7/3/2021 1:49:46 PM
From: J.F. Sebastian
   of 943
 
Thank you for the very thorough explanation. Didn't know much of that because I've never traded Bitcoin on an exchange, nor knew of the private key risks.

I never plan to, either, but I do find the whole crypto phenomenon fascinating.

Any predictions on what the price of Bitcoin will be by the end of 2021?

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