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Dec. 12, 2013 - Clif High
43:05
20131212 – Clif High Audio #46
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Good morning everyone.
It's uh 5 48 AM on the 12th of the 12th.
December 12th here in the Pacific Northwest.
Bit chilly, it's in the low thirties.
Today's Wu Joe is about the subject of Bitcoin, not surprisingly, and we're going to concentrate today on some um cautions and uh techniques for uh Bitcoin for old farts.
Uh for people that are just don't quite get it, here's some uh thinking about it, I'm not gonna go into an intense technical description, but I am going to provide enough information for you so that you get a you can grasp how Bitcoin works and how you can work Bitcoin.
Um Bitcoin is uh a good invention, it's a unique invention.
Uh we've seen similar things, but uh it has elements that are uh different than those that have been offered to us in the past.
And for the old guys around us, uh Bitcoin is um uh discontinuity, it is not like money that we might have known in the past, where uh under circumstances you would trade physical objects, paper, uh gold rocks, um you know, pies, whatever, uh for other goods.
Uh in this case it's uh it's an electronic um trading, basically what's going on, electronic bartering, uh because the uh value, for instance, bitcoin is like a pie, alright.
Uh if I show up and I got a really good pie and you want my to get my pie, we make a trade, we set a high value on the pie, and I walk away with your horse or whatever, right?
And so we've done a really good trade, you get a really good pie out of the deal, and um it's effective, and this sort of thing.
But there's the intrinsic value of the pie is uh based on who's doing the dealing at the time.
If I've made a coconut cream pie and you hate coconut, well, you're not gonna give me a horse for that pie.
You you know, you may give me um you know a broken down old dodge or something, but uh you're not gonna give me any quality goods for a pie that you particularly don't have any real need for.
Uh now my pies, coconut cream or pumpkin or apple or whatever, they have a level of intrinsic value because even if you didn't like the taste, if you were starving and you needed the calories, you could consume the calories of the pie and you would benefit.
Uh gold is not like that in the sense that there's no intrinsic value for gold.
It's a rock.
It's a mineral, it's a metal.
Um we l we have it as money.
Uh basically is near as I can tell is because women like this stuff, and they'll go to bed with men who have it.
Um you know, even way back when they like the shinies and the shininess of it, and men could smash it out and make it uh, you know, into bracelets and stuff.
No, I'm joking, but um basically the there is no real intrinsic value in uh gold or silver.
Uh they're useful metals, they have a practical value, their practicality led them to become um uh raised up in terms of our uh emotional perception of them as humans.
And so we put them on a pedestal, so to speak, and called them money because they were very, very soft metals and one of the some of the uh earlier easier metals for us to work.
And in a sense, it's the same process, the same process led to gold being metals or being money, uh as led to cows being sacred in India.
Okay.
Uh the cows are sacred sacred in India because the uh Hindu population is always dependent upon uh the cheese and uh milk.
And uh the cows were a good thing, and so uh cows became uh lauded, and everybody says, hey, cows are cool, we like all the milk and stuff.
And so they elevated the cows up to a sacred place, as we've elevated the sacredness of gold and silver.
Inherently they're you know worth far less than a cow.
And um uh, you know, they just sit there and lie there.
But uh we've decided at some point that they were uh money, we monetized them and so on and so on.
So what humans do with um materials uh is based initially on their worth, um the metals were able to be um they were very malleable, and they were found in clumps, you know, silver would tend to associate with silver and copper, gold tended to associate with itself, so it was easy to locate once you found some of it, you'd find more of it, and you'd be able to, you know, make stuff out of gold.
Uh cows are uh specifically valuable at a calor caloric level and continue to be so, uh continue to be producers, and and we like those things that are inherently valuable at this core level.
Well, that's why we all like Bitcoin.
Bitcoin's inherently valuable for a number of reasons.
Not that it's merely a storehouse of value, uh, because that's something we place on things.
It's not something that's intrinsic to them themselves.
So for instance, the storehouse of value I place on my pie may be a great deal more than you do, but we both placed some level of value in the pie.
And if you if the pie just sits out there, it has no value in and of itself.
Same thing with the rock, same thing with the Bitcoin.
Bitcoin's a little bit different because Bitcoin is a process.
So it brings to it a level of value that the static elements uh don't have.
Bitcoin to a certain extent is smart programmable money, uh subject for another um another wujo.
But uh so Bitcoin has a level of uh value to it that um uh gold and the pie and the cow don't.
Uh in a sense, Bitcoin would be like um uh uh gold that would do some extra work for you, you know.
Uh your gold coin could also make you a cup of coffee in the morning, that sort of thing.
Or your um uh your pie would also sweep your floor, you know.
So you can not only eat the pie but it'd clean your house at the same time.
Uh these kind of things.
There's an intrinsic level of value within the um bitcoin just for storing uh your wealth uh independent of what form of money it's in, but then there's value in Bitcoin because of the uh network that is underlying the whole thing.
Uh so it's unlike r uh old older forms of money, old school money, which is static and just kind of sits there and we have to make up all these abstractions to make that money work and do stuff for us.
Here we have um Bitcoin, which is more of an active form of money and currency, and it's going to participate in our lives, it's going to be smart, it's going to do stuff with us and for us.
So, in that sense, Bitcoin is good.
And people coming along saying, oh no, Bitcoin bad, be scared, usually don't understand it.
However, some of those people saying that have an institutional bias against Bitcoin, and so they'll never accept it because it's not in the interest of their uh narrowly defined personal lives.
Now, okay, so um basically that's sort of an overview of of where Bitcoin slots into things.
Now this is the rest of the topic is uh basically for um older guys that just uh don't quite grasp how this whole Bitcoin thing works.
I'm gonna explain some of the elements to it, and then I'm gonna tell you uh basically how to use the Bitcoin.
And here's here's the deal.
Um because Bitcoin is not material because it's not physical, you can't take it from place uh A to place B in the form of a sheet of paper or uh, you know, pulling your cow, your pie or your lump of gold along.
Uh in this case, um you can move Bitcoin, but you have to tell it to go, and then it'll go for you.
It'll go scoot on over there.
So there's the issues of how do you acquire Bitcoin, there's the issues of what do you do with it once you've got it, and um uh the then tons and tons and tons of other questions about it all.
But let's assume that you've just bought a Bitcoin at Coinbase.
Uh this is a very specific uh uh discussion for some people that have just done this and don't really understand what's going on.
Coinbase is a um is an exchange and a wallet, okay?
So it's kind of like it's a place where you buy Bitcoin, but it's also an online place where you can store your Bitcoin.
Uh so Coinbase will provide you with um uh a wallet online and you buy some Bitcoin, they'll put it in that wallet for you.
They're just gonna let it sit there, okay?
It's up to you to do something with it once it's in your Coinbase wallet.
Now, my strategy is that I have a wallet uh at Coinbase.
Uh if and when I ever got to the point where I could buy a Bitcoin, I'd do it there.
And then um I have a wallet on my PC, and then I have a wallet on my new phone.
Now the wallet on my phone is so I can walk around and do um Bitcoin transactions uh with a uh small amount that I put onto the phone.
So you don't have to take it all with you.
Um the wallet at the um uh on my PC is my base uh repository uh for bitcoins.
And then I would have the wallet at Coinbase.
So what I would do is um I have multi-bit, uh, that's a brand name of, if you will, of a wallet.
There's all kinds of wallets, and we'll discuss uh thin wallets versus fat wallets in just a second here.
But um the um the wallet on the PC is used the way that we would traditionally think of using banks.
Okay, so my PC becomes my bank.
I don't have to trust the lying thieving um you know pedophilic uh bankster bastards.
I can just put it on my PC and safe.
I can back it up from my PC, I can put it on a little thumb drive.
If I use the appropriate software, I can even print out all of my codes uh printed out on archival paper if I wanted.
So it might last two thousand years.
Um anyway, though, uh so you see there's this separation.
So when people when the um Bitcoin community talks about wallets, they're not even talking about wallets the way we used to think of them, where you would you know carefully fold your your uh piece of folding money and stick in the wallet, um, and it doesn't do to you know try and shove your pie in the wallet, that just does not work, and your cow is not gonna get in there.
But um uh they're talking about wallets on the on the in the Bitcoin community in a slightly different way.
We can think of these as repositories, we can think of them as smart wallets or smart repositories as well.
So you've got a wallet over at Coinbase.
You've just bought yourself a Bitcoin.
They give you this uh they send you an email, hooray, hooray, you bought a Bitcoin.
And um they give you you go to your your Bitcoin address and there's this big damn long number, you know.
And it's like, okay, now what?
Uh well you can leave it there.
Uh I personally don't, uh, because uh online wallets are like um a commercial bank, somebody could come on in and rob them.
When we hear about uh Bitcoin thefts, that's usually what's going on is somebody has found an exploit or a hack or a crack for uh some commercial online software and they've exploited that.
So I might keep a if I were in the trading business and I was frequently selling bitcoins and buying them back, that kind of thing.
I might keep considerable amount in my Coinbase, but they would always be at some level of risk.
Um if I had lots and lots of coin uh bitcoins, I would haul them down to a number of different thumb drives, duplicate the backup over and over and over again, and then scatter them around the planet the way the um uh the Winkel Voss twins have with their 122,000 bitcoins.
Um but uh in between there, you need to use Bitcoin and make it practical.
And so that's what the discussion here is today.
The practical way to deal with Bitcoin is to have an online wallet where you do business with an exchange.
This could be Mt.
Gox, um, this could be uh BTCE, which is out of Europe, uh Bulgaria, uh I believe, could be Coinbase, could be any number of the exchanges.
Um you could even have an online wallet that you used with uh local coins, which is now another way to buy bitcoins is you buy them from somebody local.
Uh we'll get into that in a second here.
But um, okay, so you you buy your bitcoins, you have a an online wallet, and then uh you should have, in my estimation, a PC-based wallet.
Uh a wallet that is local to your uh computer and or phone.
If you've got it on a phone, you've got to figure a way to get it backed up.
Other than that, you're okay.
I mean you don't really have to have a PC.
Um but anyway, so uh all of my bitcoins would be resident on my PC, and I would back them up to thumb drives, and I would back them up to paper.
And then I may put a couple uh you know parts of a bitcoin onto a phone so I could walk around and do bitcoin business and purchase things with them.
And and sort of that's how it's uh so so the analogies are that you'd have um uh a bank, and that uh that would be your bank account, well that'd be your online purchases here through some kind of um uh online wallet system, and then you would have um you know maybe your cash at home,
which would in this case the analogy would be your PC, and then you would have your walking around two dollar bills, which uh you rub together and hope they grow, but in the meantime uh uh the analogy is that you'd have a couple of uh partial bits of a bitcoin on your phone.
That would be in you know your coffee money or whatever.
Okay, so here's the thing about wallets, especially about PCs.
It's gonna be really frustrating to you.
The reason it's gonna be really frustrating to you is because basically most people go into Bitcoin and they don't understand what has to occur on their local PC, and so they are absolutely freaked out when uh they load like multi-bit or um uh BTCQT, which is one of the original wallets, or any of the wallets that are what are called true or fat wallets, and it takes forever for the software to load.
Uh these days, uh uh depending on how fast your PC is and how much storage you have and how much cash is in your machine, it could literally take over 24 hours, sometimes as much as 48 hours, two whole days of your PC grinding away to load your wallet uh background.
Now it's not loading your your bitcoins in your wallet at that stage, okay?
It is basically synchronizing with the Bitcoin network and connecting in and doing all of the stuff that's necessary to support your bitcoins as they move in and out on the network, because bear in mind Bitcoin is more than just the coin, it's really the process and the network behind it that's of value to you.
And the coin is merely a um uh a token or um like a bus pass, right?
Uh the the bus pass has has no value to it whatsoever.
You get to go down and get a senior pass, and they give you maybe a token or a little card or something.
Well, you know, if that lot of good that's gonna do you can go to lift your ass up and move you over to the mall.
Uh so it's it's the that's the equivalent of the Bitcoin itself, uh, the currency, and the bus would be the network.
And so the Bitcoin is really only a value to you when you are using it and employing it on the network, which would be the bus.
And then the whole damn world is yours.
Right?
The whole world is opened up once you figured out how to use your bus pass.
And that's kind of like the same difference with Bitcoin.
So Bitcoin is a currency, but in and of a currency sitting around, it has very little value whatsoever.
It's only when in combined with the network itself that you get that uh both the good the intrinsic value of each, but also the commonoric value of both.
And we won't go into all of the benefits.
You can read about those, and I don't really want to take the time this morning to do that.
Our goal here is to get you set up and figured out how to use this to get some better understanding of what's going on here.
And so I'm gonna say things repeatedly in different ways uh to hopefully get the linguistics that will strike that little bit of your brain and says, aha, I grasp that.
Okay, so you've got your online wallet, that's kind of like the bank, banks can be robbed.
Um you've got your PC wallet, which you can stash at your house, you can make backups of.
Then you got your phone wallet, which is your walking around wallet like in your in your back pocket kind of thing where you keep your your coffee money.
Uh you coordinate uh where things are between all of these.
So you go to the trouble of setting up one of the online wallets.
And a lot of the online wallets are free, some of them have small transactions for moving um uh bitcoins in and out of them.
I like multi-bit for some uh very different reasons, but I use other wallets as well, including armory over the um original BTC wallet, uh, because it provides paper backup where multi-bit does not.
Um but so here's basically how all the wallets on your PC work.
Now, let's back up a second.
On the online thing, you go to Coinbase, it's a website, you go in in, you give it all your information, uh, they validate that you are who you are, and then they say, hooray, we'll allow you to buy a Bitcoin through here, and by the way, here's your account.
Well, your account is really your wallet on the uh on the Coinbase operation.
And so uh you buy a Bitcoin, they give you a number.
Well, you can send that number through Coinbase, they just drop it into the into the BTC blockchain and say, go to this address, and you can send that number anywhere you want.
You can send that bitcoin anywhere you want.
You can send it to other people, but you can also send it to yourself.
And that's what you do.
That's what I do.
Is I set up a wallet here on my PC, and I get that number from that wallet.
I say to that wallet in multi-bit, I would say, give me a receiving address.
And it'll give me a long damn number.
And um I take that long damn number and I cut and paste it very carefully, not picking up any extra characters off the end, you know, any white space or anything.
But I take that number and I cut and paste it and I take it over to Coinbase.
Then I tell Coinbase, hey, I just bought, you know, a thousandth of a bitcoin.
I just spent 79 cents and I was able to get a thousandth of a bitcoin.
And so I'm going to send that thousandth of a bitcoin over to myself at this other address.
And Coinbase says, sure, what's the other address?
And I plop that address in.
These are all done in dialogue boxes, of course.
And I plop the address in and then tell it go, and it'll say, now you sure you want to send this.
Once it's gone, you can't ever retrieve it.
Better make damn sure your address is right.
And if you cut and paste it and so on, you know, it shouldn't be an issue.
But make sure the address on that you're gonna send it to matches the one that your wallet gave you.
And then um, you know, it's a long damn number, and you get used to having your eyes scan these and make sure that they're the same key number.
Anyway, and then you tell Coinbase, sure, send it along.
And so Coinbase sends it.
Now it's not instantaneous.
It is in one sense, but it's got to be confirmed and seen by peers and that kind of thing.
There's network traffic, it depends on how uh active your PC is.
So don't necessarily look for an instant notification from your wallet that you have received that bitcoin from these online services.
Uh it is different when you're dealing in a person-to-person thing.
It is instantaneous.
Okay, if you go to buy a uh Bitcoin locally and you take your phone with you and you have a wallet on your phone, and you aim your phone at the other guy, and the other guy sends you uh bitcoins either uh through Wi-Fi or across the um uh phone system, it can be very nearly instantaneous.
You know, they push a button on on their phone and it your your phone starts saying, Hey, hey, I got a bitcoin showing up.
Uh but on the larger online exchanges, be prepared for the wait.
It can take 10, 12, 15 hours for them to process through what they're doing to drop that bitcoin onto the um blockchain before it actually ends up uh showing up in your wallet.
So I wouldn't be freaked out or disturbed.
Getting used to Bitcoin takes uh a bit of effort.
You have to get over that hurdle of loading your wallet on your PC.
A lot of people just give up at that stage because they cannot imagine these days software taking 15 hours to load, let alone 36 or 48.
The reason it does this is because it basically loads the whole damn blockchain on your PC that first time.
Doesn't have to do that thereafter unless it gets way out of sync.
Like if you don't log on um to the don't use your wallet for a few months, it'll go through another grinding process where it has to load everything just to uh keep current with the rest of the network.
But but short of that, it doesn't really have to do that each and every day.
So the more frequently you use it, the more current it is, and it only has to load little bits each time it it uh logs on, and so it's a fairly fast process.
But the less you use it, the slower it will be each and every time you use it, so be advised.
You know, this grinding um load time is usual, necessary, required.
Uh so you basically you gotta go through at some point.
I'm rather dreading it because I got an old PC that has like um I think it's got two one thousandths of a bitcoin on it uh that I've got to get off, and I haven't loaded that wallet on that PC in probably seven or ten months, because it was one of those I was uh messing around with.
And uh when I load it, it's gonna take days because I PC is really old.
So one of these days I'll fire it up and say go.
Uh but it's a noisy bastard, and I've been kind of reluctant to uh uh have it go and do that just to recover those.
Anyway, though.
Um so there's the little summation.
You have your online wallet, that's sort of the bank, they're at risk because they can be cracked.
Your PC is harder for somebody to see as long as it's not uh turned on and actively broadcasting out to the network, nobody will know that you got your wallet on it.
Um even if it is, most wallets are really secure, they're very difficult to crack on a PC to PC basis.
Uh so you know, it's a in that sense your bitcoins are safer on your own PC, but if you lose your PC, like the guy who dumped his in the um in the tip in uh London or in England where he lost everything in the landfill, well, you know, you can lose it.
It can go away, just like if you put you know thousands of dollars or gold coins in an envelope and then you know through the envelope away, well, you'd lose it.
So it's not it's not a hundred percent recoverable that uh in that sense.
Now, okay, so um online wallet, PC wallet, and phone wallet.
So if you want to buy bitcoins local, uh one way to do it would be with a laptop that you can take with you, or your phone, or some kind of an of a pad computer.
Then you'd go to someplace like localcoins.
Um or local bitcoins dot dot org uh or comma.
I think it's an org.
Anyway, uh the links off on uh on our uh main page at half past human.
And uh so you'd make arrangements to purchase some bitcoins from somebody.
Usually it's a meetup, usually you'd go to um uh in some cases, uh some of the guys will sell to you over um in an online situation uh through various different means.
But a lot of them it's it's a meetup.
They show up with a phone, um, you know, they sit down every you know, you have your coffee, you meet at Starbucks or something, and uh, you know, you give them some cash and they give you a bitcoin.
And it's uh real straightforward.
And uh you then have that bitcoin on your phone.
Now, again, if I had all my bitcoins on my phone, I would send them over to my wallet on my PC just so I can back them up.
Plus, I don't think it's appropriate to put lots of bitcoins on a phone unless you intend to spend them, because that's the point of the phone, the walking around thing is that you know it's your spending cash, your coffee money, that kind of deal.
Uh so uh that's sort of the overview as to how this all works.
Now you bought your coin on Coinbase, and you think, aha, okay, so I go and I load multi-bit, and I get a wallet and I load it on my PC, and I tell multi-bit, okay, fire off.
And then you know, you go away and you have a vacation, you go make some pies, go talk to some cows, go dig for some gold, and you come back two days later, not two days with multi-bit, it'd probably be maybe depending on the age and condition of your PC, it could be forty forty-eight hours, but more likely it's around twenty-four.
And so you come back the next day and your um your wallet's loaded.
It's on the PC, but it's empty.
It shows you has zero zero zero uh bitcoins.
Then you go over to your place where you purchased them, your online wallet.
Again, like I was saying, you tell your local wallet to generate a receive address, take that long damn number over to the um uh website of the place you purchased the bitcoins, and then you tell that wallet, hey, send this to my other wallet.
And that's how you get your bitcoins moved around.
Um it's a good thing to do so, by the way, because it also aids the network, and there's all different other kinds of benefits that accrue both to you and to other people just by getting your uh bitcoins uh off on your PC, in the sense that traveling the bitcoins through the network uh confirms the block,
it ab to a certain extent it establishes ownership, and it's gonna get you familiar with how to um deal with bitcoin businesses, which basically are you're gonna be moving them off of your PC or your phone to the business and then taking goods in exchange.
Uh so um and that's kind of the overview of the of the situation.
There are of course tons of details.
Um, you know, but uh as per everything, uh as with everything and all things, uh this is difficult in the beginning.
But once you've gone through it, it's like, oh yeah, okay.
That was a pain in the ass, but now I understand, and you know, it'll be less uh emotionally vexing the next time if I had to do it.
Uh if I go through it.
So it a it pays to continue, to persevere, because this is the new way of the world, and uh it benefits you greatly to get out of um uh the clutches of the Federal Reserve, which a beautiful article uh on Zero Hedge,
by the way, about how the Federal Reserve has met none of the promises that were made in 1913, and in fact has done exactly the opposite of everything that they promised in 1913 when they forced um the Wilson to um sign the law that that created the Federal Reserve.
Uh and by the way, they're not going away.
They were given a hundred year charter, but they changed that in 1927, and it's uh perpetual.
Now they're gonna go away simply because they're their uh product, the dollar, nobody wants anymore.
It's uh uh it was used to support uh evil for too long, and none of us want to have anything to do with this death and destruction culture that the um elites have made, and I won't support their primary product that supports the death and destruction culture.
So I'm getting out of the dollar business, guys.
And I and for all you uh fellows that like reading our reports and stuff sometime in 2014, we won't accept the dollar for the reports anymore.
It is just uh an evil thing, and I cannot participate with it any longer.
Plus, it's a it's a negative.
You get a dollar, it's depreciating right away.
It's a you know worth less than the second you have it than in than this the second before you've got it.
So what's the point?
You know, and like I say, it's uh the whole value of that exchange goes towards the Federal Reserve and the evil elites who are out there uh kidnapping and killing children, you know, thinking about uh causing nuclear wars and destroying the planet, and they you know routinely kill millions of people in uh an average year.
So, you know, uh they're evil fuckers, and I just don't like their dollar and their their paper and their structure, and I'm not gonna participate with it anymore.
And now I have a really effective alternative.
Even as an old guy, none of the squatters that created Bitcoin are are gonna be pissed at me for using it.
So I'm gonna go join those fellows.
You know, much more congenial, you know.
I'm gonna drop into the great unwashed and say fuck the elite and their dollar, and it's um the horror that is brought to this planet.
So uh Bitcoin for old farts, pay attention, that truly is the um upcoming new wave that um uh we're gonna go to.
Uh it likely, in my way of thinking, Bitcoin will be one of the winners in the crypto digital currencies.
I'm not getting distracted with any of the others because there's too much education that needs to be done about Bitcoin, too many people that meet need to be moved over, and it would be a little bit distracting to go into the other cryptocurrencies, but basically they all work the same way.
However, you've got to really read the code and understand there are some pump and up scams going on within uh some of the minor cryptocurrencies, people are trying to take advantage of other individuals, it happens all the time.
Um in this case, it's like, well, guys, um Bitcoin is solid because I think as the first one, it was so publicly exposed, and so many people um contributed to it that uh it's it's in a way because Bitcoin exists,
some of these pump and dumper guys can get away with some of these other mock coins, because there won't be a lot of people that would be um analytical enough to go and look and see how they were actually structured and see how the mock coin actually functioned and see if it was really as is advertised.
And um I think that's really about it.
I don't want to take a lot of your time.
The point was for old farts to understand the practicality of using Bitcoin basically requires that you purchase it in one place, move it to your PC, and then if you're gonna go use it, either use it off of your PC buying stuff online, or put some of it on a telephone uh or laptop and lug it around with you to do a purchase.
It's a lot easier with the telephones, let me tell you.
My laptop is a heavy bastard.
Probably um 15 years old.
Anyway, uh so um that's basically the core of it all.
I'm gonna keep doing these um uh talks focused on Bitcoin because there's a huge need for education out there, and a lot of that education is not aimed at the um old fart uh demographic, you know, it's aimed uh for basically the kids who do have a technical understanding.
But us old farts, we've got to use this shit too.
You know, we're gonna be able to pay for our coffee, and pretty soon the dollar won't be worth uh using, so you're gonna have to have some other method, and it'll help to have a you know a phone and an understanding of Bitcoin and and how the whole thing works.
I'm gonna go into the um technical nature of Bitcoin, the underlying blockchain, uh what the miners do, and um uh how Bitcoin is a programmable currency, uh much more oriented towards the technical um technically literate and uh programmer community.
Uh but nonetheless you may find some of it interesting.
If it is an old fart, you you stop back, you may think, oh yeah, hey, I can find somebody to do that for me.
I I like that idea.
So in any event, um uh Bitcoin's really cool, it's more than just a currency, it's a smart currency, it's more than the paper dollars or the the uh cow or the pie for doing barter, but it essentially it's uh or gold even it's at that same level.
Okay, its intrinsic value is decided upon by our use of it as a network, but also by common agreement that um this is a valuable thing for the exchange of goods between us.
Now, how will this work in the future as fiat currencies race themselves to the bottom?
We're seeing it arise now where many places are allowing you to use Bitcoin to buy silver, or vice versa.
And so you would be able to use uh Bitcoin as a transcontinental uh transnational trans sovereign settlement method, and then buy and uh convert the wealth to precious metals or something else in your local environment.
So basically it's kind of like a way of sending a digital cow.
Okay, you're in India, you own a cow, you sell the cow to get money to your girlfriend who's over in Africa who needs a cow over there, you've got to send her a cow via email, basically, and what you do is you're sell your cow in India and you convert it to Bitcoin, you send the Bitcoin over to Africa, the girlfriend gets the Bitcoin and she buys a cow local.
And so, in essence, you've digitally sent a cow.
Now the cows haven't actually moved, all that has moved is the abstraction of ownership.
But nonetheless, this is what mainly humans do anyways the abstraction of ownership.
So under the circumstances, Bitcoin will be used that way and more uh globally, but also even locally.
Uh you'll be able to do Bitcoin business online, you'll be able to do Bitcoin business locally with uh walking around.
Uh at some point here we'll have the really smart networks where you'll be able to take your phone and go on over and you know tap it on a on a uh uh donut vending machine and it'll spit a donut out you out at you and you know take a partial uh Satoshi.
So uh those kind of things are headed this way.
Uh they won't do it with dollars.
Uh dollars in fiat currency, they've had their day.
Uh boy, they've been around way too long.
And at the moment, all the currencies are in the process of debasing themselves in a in a run to the bottom.
This will not end well.
So, in my way of thinking, now's the time to get us old farts educated about Bitcoin and get into it, okay.
Uh we're not stupid, guys.
Uh a lot of us haven't had to learn anything technical for a long time.
Once we mastered the PC a few years ago, we sort of slid coasted.
But Bitcoin in a in a way is no more complicated than email.
Uh it's no more complicated than shopping online.
Uh, it's just a different kind of complication.
And it has that one really nasty annoying thing, which is that it takes fucking forever for your your Bitcoin wallet to load on your PC that very first time as it loads the blockchain.
And we'll leave the discussion there for uh for today.
I've got a work with my vegetable today on the boat, we're cutting in the door and regularizing the door in the pod and building our um uh the the plug mold for the door itself.
And then I've got a bunch of stuff to do out in uh bitter cold.
Uh but there are a number of people that have had issues, old farts specifically, where they purchased uh stuff at um some of the exchanges, and it's kind of like a now what?
Now what do I do with it?
You know, and here's the thing if you're gonna use it, get it over to your phone.
If you're gonna uh use it as a storehouse of value, then you need to back it up.
And so I'm thinking um that you need to put it onto some kind of thumb drives.
Now, after you've got multi-bit on your on your PC, if you wanted to do a paper backup of your um of your Bitcoin holdings, you can also load the other wallets on the same PC and transfer from one wallet to another within a PC.
Uh you actually go across the Bitcoin network, so that takes a little bit of time because you have to be connected and you send it from one wallet to another, even though they're both on the same PC, it doesn't cross the PC, it actually goes out to the network and then comes back to you.
Anyway, and then you can um take these other wallets and you can use them to do printouts and do a uh a paper printout.
The paper printout is useful because if everything got destroyed and you still had the paper, you could sit down and retype in all these long numbers and recreate your wallet.
And so that in essence would be like um one way to get sort of a level of surety about this.
Another way to do it would be to have multiple thumb drives stored in different locations.
You know, take them down to a bank, take them over to a storage box somewhere, that kind of thing.
Anyway, though, the issue of the uh backup on the same PC can get quite tedious again.
And here's how I do it.
I've got multi-bit, which is my like day to day wallet.
It's easy to use, it's convenient.
Once loaded, it's very fast.
Now I also run uh the original Bitcoin wallet called BTC, and it's a it's a actually a BTC QT.
It's a um it's a core wallet.
It works fine, it's great, but it doesn't have a lot of features, and it's slow, very, very, very slow, much slower than multi-bit.
Um but on top of that wallet, you can run this thing called Armory.
Now, if you go on out and look at Armory, um it's also a freeware, you can download it.
They're making all kinds of improvements to it.
Uh got a uh reporter um du jour, a citizen reporter at the Vegas conference on Bitcoin, and um they've been in discussions with the guy who's uh from Armory and uh were impressed.
And I like Armory, it's a really good wallet, but it is not you really super user friendly.
I didn't find it too difficult, I'm very technically oriented, but I can see how some people would have a little bit of difficulty with it.
But basically, here's a a quick concept as to how it works.
You got multi-bit, it's uh took day to load, you've got your bitcoins off of Coinbase, and you put them on your PC in multi-bit or some other wallet, and then you um go and get a uh uh download the original wallet and you download Armory, you install the original wallet, and it takes two days to load after that and get synced with a network, and it has zero bitcoins in it at that point, and then you pop up Armory, and then you send yourself your bitcoins from one wallet to the other.
If you're like I am, you're paranoid as hell, so you probably send them in little tiny bits just to make sure the whole process works.
And then um you get them over into Armory, then they're there in Armory.
Armory has the ability though to do paper backup of that wallet, and you can tell it print out all my codes.
And it will do so.
Um but again, now bear in mind it's adding a couple of days of screwing around to this whole process because it takes that extra load time.
Now, true, you can actually use just the regular Bitcoin wallet and Armory.
You don't have to go through the intervening stage of multi-bit or task wallet or any of these other guys.
So um uh you can use those.
I just didn't find those wallets to be as convenient as some of the newer ones.
They I mean the old Armory or the old uh Bitcoin wallet was just not as convenient as some of the new um newer wallets.
Now I'm gonna end this here real quick, uh quick discussion about what's known as fat wallets versus thin wallets, okay.
So uh fat wallet is where everything is there.
The blockchain um which is your connection to the network has been loaded like on your PC, and then you have your bitcoins there.
So uh multi-bit is a fat wallet on your PC.
Uh BTCQT plus Armory is a fat wallet on your PC.
Um the uh services uh where you buy them, the exchanges, they are giant fat wallets, okay, because they have the blockchain there as well.
The wallets on your phone are not fat wallets, they're what's known as thin wallets.
They don't load the blockchain because your phone doesn't have the memory to load this big bugger, nor do you want to take two damn days of sitting there with your your phone trying to load this blockchain just to be able to use your wallet.
So all of the thin wallets work a different way.
They store the blockchain and stuff off on somebody else's server, and the thin wallet may store your bitcoins on that server as well.
Some of the thin wallets store the um bitcoins on your PC or on your on your smartphone, and merely connect to and use the service on a server to get into the blockchain and pass through.
But inherently, the wallets that are on phones, the thin wallets, have a limitation.
The limitation is one of two types.
Either your Bitcoin is stored with the bulk of the blockchain on somebody else's server, and therefore would be vulnerable to some kind of a crack attack, or the um uh vulnerability is not uh potential theft or loss, but rather is that the blockchain is resident on somebody else's machine, and so the transaction time can take a little little uh longer than if you had the whole blockchain and everything resonant right there.
So the the thin wallets on the phones you may find they're they're slightly different critter to work with.
I've actually gotten to the point once where I did a um uh I was involved with a payment and it took a while.
I actually saw a um uh phone payment sort of hang up simply because the blockchain was busy at that moment, and so it was not super fast and convenient.
It's only been that one case, this was way back when in the beginning, part of uh Bitcoin business, and it may have been a glitch local to our connection to our network, and that's another issue, too.
Is your phone has to be connected to its data source through the data network in order to be able to do um uh wallet business.
So your phone with a wallet on it might not work if there's no cell available or no Wi-Fi, that kind of thing.
You wouldn't be able to sh to ship out anything off of your phone.
But the same would be true if you had no connectivity to any other machine, then your Bitcoin is isolated on that machine.
Uh doesn't go away or anything, it's just isolated.
So uh basically that's the difference between thin wallets and and um fat wallets.
The fat wallet has the blockchain connection and the blockchain uh residence on the machine with the um uh storehouse of uh uh Bitcoin numbers, whereas the thin wallet only has the numbers if that some of them are merely a way to get at your numbers on the on the server, so just be advised of that.
I would never store all of my bitcoins in a single place no matter what.
And if I was doing a lot of business uh and had to put them on the phone, I would be advised that you know I would be aware that they would be potentially uh vulnerable on somebody's server uh if I was going through that route.
I hope that answered enough of the questions to get us through to the next stage.
Uh it's been almost 45 minutes, we'll knock this off now.
And uh we'll pick up some of the other interesting parts of Bitcoin in uh future discussions here.
I'll go into the actual way the blockchain works and the hashing and the nonce and all of this, and because I've been referencing it as prime numbers simply because old farts understand the concept of prime numbers and wouldn't necessarily grasp the idea of a hash.
Uh but we'll go into all of that technical stuff later uh for those who give a damn.
But right at the moment, your your issues is uh as a Bitcoin user are simply managing your wallets, and it's just a little tiny bit more complicated than uh old style money, the you know the old papery uh cow uh representing uh pie representing money, uh, but not that much more complicated and it's far less complicated really than you know doing business with uh online merchants.
So that's it for the day.
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