Quote from: lovethepirk on February 25, 2014, 08:40:31 AM

I don't understand why an exchange is a risk. Let me explain my confusion in a real world example and then slap me with a dead fish and save my confusion please.

1) So, I want to buy my first bitcoins. Cool

2) I find an exchange I like and wire them 1,000USD and let's say I get 2 bitcoins in return.
3) From my reading, I get a private key that I write down and stick in my favorite hiding place.
4) The exchange I bought the bitcoins from goes bankrupt and no longer exists.
5) I still have my bitcoin b/c I have the private key identifying my coin from all others

The only risk I see is during the 10 minutes or so of me wiring money and me getting my bitcoin key. After I get the key, I thought I am basically my own bank and the only protector in the world of that bitcoin.

Where am I off base?

Thanks.

#1-#2 great, welcome
#3 nope, you need to create a wallet first which has a private key, which can potientially be written down. See paperwallet https://en.bitcoin.it/wiki/Paper_wallet

Usually you have a normal wallet (a programm) where you can send and receive your bitcoins.

#4 you can care less if you allready got your BTC from them
#5 yes
#6 10 minutes? You wish!
#6.1 authenticate to the exchange (took me 1-2 weeks, I had to get some papers, so it might go faster if you have everything the exchange requires.)
#6.2 sending the money will take at least 2-3 days, if you wire internationally even longer
#6.3 receiving your btc will only take 1 to a few hours, so thats the fastest part
#6.4 now only you controll those 2 (probably more) BTC

Quote from: Ritual on February 25, 2014, 09:24:18 AM

I'm no expert, so this could be inaccurate, but I think you'd have one of two scenarios:

1) After you bought your bitcoins, you transfer them out to your own wallet. These are completely safe even if the exchange goes wallop.

2) You store them on the exchange, in which case you are screwed.

So assuming that you are talking about immediately withdrawing to your own wallet after you've purchased, then yes, you are safe

Rit.

#1 Your own wallet is only as safe as your own PC, so for most people not very safe. But yes, the exchange can go bankrupt if you have your BTC and you can care less.... well maybe they sell your private data or something, but thats about it Wink

#2 only do that if you want to trade on a regular basis.