Episode 224: Not Gold, But Bitcoin

by robbooker on January 29, 2014

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In Episode 224, Rob muses about what we should invest in, given that the world is coming to an end via economic collapse. This leads Rob to talk about the significance of water and water-cleansing technologies. Rob also discusses the value of farmland, as well as the growing importance of companies like Tesla Motors. Rob draws some parallels in the reasons for the relevance of all the above. Rob also discusses bitcoin, and how whatever we thought was going to happen with gold is actually going to happen with bitcoin! Bold claims and conspiracy theories abound in Episode 224 of The Traders Podcast. Give us a listen!

Links for this episode:

Twitter: @RobBooker

TFL365.com

The Traders Podcast on Twitter: @TradersPodcast

E-mail us! Producer@TradersPodcast.com

{ 3 comments… read them below or add one }

keith January 30, 2014 at 4:15 am

Hi Rob,

Just some info about Bitcoin. You say your waiting for a trustworthy broker to come forward before you go into the bitcoin trade? I had the same issue, i wanted to buy some to hold but i read about all these scams and online wallets being hacked and stolen. But after getting to grips with how it all works, i discovered you can safely buy some bitcoin and store it securely offline for free on a USB key(s). It takes about 10 minutes to create and offline wallet once you know what your doing. And they are stored forever, not tied to any broker. And best of all it’s free. I had to repeat he process a few times to get the steps in perfect order, but its done pretty fast. (faster than opening a bank account for sure, and far more secure).

I won’t bore you with the minute details, there several websites your or listeners can Google, but the high level gist of it is listed below:

1. You boot into a pristine, virus free, freshly installed computer operating system not plugged into the web, no wifi, no LAN etc so this computer never touches the internet. A tech geek could show a you how to do this in 5 minutes. Its straight forward, you simply boot up an OS like linux running off a USB disk. You may need to borrow a mates a PC/laptop, i never used a MAC…

2. While running this fresh linux install running off the USB, that has never touched he internet, you create your bitcoin wallet and addresses for sending bitcoin to.

3. You then encrypt the wallet with a super massive long complex password with letters numbers capitals and non-capitals, but a password that you can remember!!!! With no dictionary words. This is where you have to be creative about making something you could remember…..

4. Save the list of Bitcoin addresses for this wallet to a text file on a usb key and remove it to use later.

5. The bitcoin program will create a file called “wallet.dat”. This tiny file is all you will ever need to access your bitcoins from anywhere in the world. save this file too as many USB keys as you can, lets make it 5. remove all these USB keys from the computer. Pyu can now close down the computer.

6. So now you have 5 USB keys with the wallet.dat file on them. Give a couple to some friends to look after, keep one nearby in case you ever need to spend the bitcoin and maybe one in a safe or a securiity deposit box. If your freinds loose one, you loose one, or one gets stolen it doesn’t matter! Because they still need that super long secure password you created in order to steal or spend the bitcoin using the wallet file.

7. So now you goto a bitcoin exchange like coibase, in Australia i use Coinjar, and deposit your USD real money into their account. They convert your real money to bitcoin. If you stopped right there you would would be relying on the broker to store the bitcoin for you…. You log in and send the bitcoin to one of the addresses you created earlier for you offline wallet…. You can send bitcoin to this wallet from anywhere else to. You can give this address to anyone in the world and they can send bitcoin to it.

8. Your bitcoins are now securely stored, in an offline wallet that is controlled by you. Those bitcoins can only ever be retrieved by someone who has both the USB key, and the super complex password in your head. If your house burns down you grab one of the backups from your mate. If you mate gets drunk and wants to buy a car with your bitcoins she can’t with just the usb key, she also needs the password. Maybe post some of the USBs to an offfshore freind too for if the the reset comessss. Flyover and spend your millions…..

It does require the help of a geek friend at first if your unfamiliar with linux that runs from a USB but most people know 1 computer nerd they can turn to. I think the complexity of doing the steps above is what is holding most people back from buuying a few just in case. But once you do this a few times you can see that in 10 minutes you’ve basially started your own bank account.

You can also check your account balance from any browser from anywhere in the world…..like so:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

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Simon January 30, 2014 at 5:47 pm

Rob – to quote you on this great podcast “Forget about that one – lets go with this one”. Do you think that this may well happen with Bitcoin and focus shifts quickly to a different cryptocurrency (Litecoin? Ripple?) that addresses some of Bitcoins shortcomings? A brutal sudden shift that completly consigns Bitcoin to cyber history. What do you think? A new terrible type of counter party risk.

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robbooker January 30, 2014 at 6:15 pm

Simon, you are absolutely right – there is going to be competition in this space. But bitcoin, and in particular, the blockchain, is becoming a PLATFORM. This means that other stuff (that no one ever anticipated) can be built on top of this technology. So I think bitcoin is way out in front on this one, and it is going to be wild, just like the early days of options, or the early days of fx trading. But it’s probably going to remain the frontrunner. The only thing that can stop it is a mass wreckage of the blockchain, some kind of corruption of it all. But I wonder if it’s more likely that this will happen with normal bank accounts than with bitcoin. Thank you for listening!

– Rob

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