Sorry if I drifted off the topic, but the further questions and comments occurred to me as I as thinking about Cold Storage.

I'll be more diligent in future.

Thanks

Indeed, yes, I was confused.

The term "wallet" implied storage of some sort, like a wallet or purse that actually hold £, $, Euro notes etc.

It's beginning to dawn on me that, on one level, the wallet is really just a set of pointers to entries on the blockchain.

Yes, indeed, I was confused, hence the question.

Thanks for the link.

Thank you for that very clear explanation of how to send or spend with an offline wallet.

But how should the receive work?

So, when I buy some bitcoins, how and from which wallet do I generate the Receive transaction?

Point taken.
I'm planning to use an old laptop for cold storage.
If I need to change, I would destroy the disk, and the RAM DIMMs.
Then I'd recreate the wallet using the seed phrase.

That should be safe.

Just for my understanding...
If you follow the procedure here https://electrum.readthedocs.io/en/latest/coldstorage.html for signing transactions in the off line wallet and then return the signed transaction to the online wallet, does this expose my private key?

Thanks for the link, which I did read, but it did not explain how the online wallet provided a view of transactions, balances etc.

I guess, as a newbie with electrum, hence the questions.

But, if all you have is a paper wallet, how do you sign transactions on the online machine?

And, (again I'm only going by what I read), if the seed and the password are kept secret, anyone stealing the offline machine still can't steal the bitcoins.

Yes, I'm happy to share.

Fortunately, my loss was only 0.0045BTC.

Briefly, I often run bitcoin core on my PC even when I'm not transacting bitcoins.

I happened to see a message flash up saying that 0.0045BTC had been sent. WTF!!

I reported this on bitcoin.stackexchange, to try to get to the bottom of it.

One expert explained:

You do not explain why you believe your bitcoin core process sent the bitcoins. It is perfectly possible (from looking at your logs) that it was not sent from your bitcoin core, but from elsewhere on the bitcoin network. It may be possible to track down where the tx was sent from if enough nodes log the IP address of where the transaction was initiated, but there is nothing in your logs to suggest it was initiated from your node. In fact, your logs suggest that it was not initiated from your node.

Therefore, at some point the private keys for your bitcoin address were obtained. This could have been done if your computer contains malware, perhaps a key-logger, which was able to capture your wallet password, in combination with the wallet file.

The output that was spent was populated on 2018-12-28 19:12, but the private key associated with the address could have been created years earlier, as Bitcoin Core by default creates 100 addresses when it is first started, so the private key to this address could have been stored on a computer of yours for some time, perhaps even in an wallet with no password, if you initially didn't enable the password until later. So the time of intercept (of the private key) is theoretically any time between when you first ran Bitcoin Core and when the theft occurred.

My first use of bitcoin core was in 2013, my machine is regularly virus and malware checked, and I believe I never used bitcoin core unencrypted.
 
The full thread is here
https://bitcoin.stackexchange.com/questions/93568/my-bitcoin-core-sent-bitcoins-without-my-authorisation

It seems the recommendation for a cold storage electrum wallet is a newly installed operating system on machine that has never been on line.

I'm re-using a spare laptop.

I've formatted the disk on another computer and setup Windows 10, downloaded from Microsoft.

Following the Windows setup, I now have a question.

There are almost certainly Windows updates which are not in the installation I downloaded. Also, things like laptop display drivers could benefit from being updated. That said, the laptop, stand-alone, appears to work OK.

The question is, should I just use the machine as is, or should I go online for the updates, before installing electrum?

Ah, thanks. I think I get it.

The online machine is like the book-keepers in the accounts department.

They even have a cheque book, but only the boss (offline) can sign the cheques.

I think I understand the idea of the blockchain ledger.

However, perhaps I'm being thick...

An analogy is that my bank statements and my account balances are a filter into the all the entries in the bank's ledger.

With bitcoin core (my now empty wallet) I can see my balances and transactions.

With an offline electrum wallet, where do I see the balances and transactions?

I'm new to Electrum, so sorry if this has been asked before.

Following the loss (thankfully small amount) of bitcoin, I decided to set up a cold storage electrum wallet in a newly setup Windows 10 laptop that has never been online.

I read up how to transfer bitcoins from the cold storage to broadcast.

However, how do I put bitcoins that I buy into cold storage?

I hold bitcoins in my Bitcoin Core wallet.

Before the fork, my wallet held, say n bitcoins.

Since the Bitcoin Cash fork, I have spent x bitcoins, and now my wallet holds n-x bitcoins.

I have never claimed the Bitcoin Cash, so I assume that there are n Bitcoin Cash ready for me to collect.

What's the procedure to do that?

Apologies if this has been asked before.

You could make the same argument for any investable asset.

There are tens of thousands of stocks and bonds, and yet many investors pour large sums into them.

You could also say that if another online retailer starts up, then that somehow devalues Amazon.

I see the same thing with Bitcoin and other (forked) cryptos and alt coins.

Bitcoin is like Amazon or Apple and, until a better crypto appears, all the others are like Poundland.

While there is unlimited fiat money waiting to be invested, there will continue to be growing demand for Bitcoin,

I think it could force the price lower.

In the CME futures there is no possibility of actual bitcoin delivery. It's just a paper trade - the usual tail wagging the dog

Futures trading of Bitcoin by CME is planned to start soon - see this link https://www.coindesk.com/cme-group-plans-launch-bitcoin-futures-contract/

This potentially risks the same sort of manipulation that exists in the Gold/Silver market, where the price is heavily suppressed, and bullion banks play wash and rinse https://www.investopedia.com/terms/w/washtrading.asp. Although this is illegal, it's condoned by Central Banks, and executed with impunity in the precious metals arena, especially gold and silver.

Could the same happen with Bitcoin, where huge futures contracts might be used to force the price (down usually)? Can Central Banks use it as a weapon?

I think the risk is lower with Bitcoin, for one simple reason: gold (contracts and bullion) is only traded on 3 exchanges - Comex (US), LBMA (UK) and Shanghai (China). Only banks, hedge funds and corporates can trade on these exchanges because the minimum contract values are so high.

However, today there are 121 crypto exchanges https://cryptocoincharts.info/markets/info, with more coming on stream as Bitcoin popularity continues to grow. Plus, there are many other informal market places where buyers can meet sellers, for example eBay.

Anyone wanting to trade real Bitcoins can buy or sell any amount from 1 Satoshi to 1000 Bitcoin without reference to CME or other futures exchanges. Trading is perfectly possible, anywhere in the world, at the peer-to-peer level, without the need for centralised or other exchanges.

My hope is that the price of real Bitcoins will be a true price, determined by price discovery.

Perhaps other forum members, better informed than I am, can comment on whether my hypothesis is too optimistic.
 

I wonder if we will eventually end up with something resembling old money systems:

To explain my thinking, let's look at British coins circa 1900. You can probably see this in many other coinage systems throughout the ages. In Britain there was:-

Gold Pound Sterling/Sovereign (also a premium gold guinea worth 5% more because of higher purity)

Silver Crown = 4 to 1 pound sterling
Silver Half Crown = 8 to 1 pound sterling
Silver Florin = 10 to 1 pound sterling
Silver Shilling = 20 to 1 pound sterling
Silver Sixpence = 40 to 1 pound sterling

Copper Penny = 240 to 1 pound sterling
Copper Halfpenny = 480 to 1 pound sterling
Copper Farthing = 960 to 1 pound sterling

Clearly there was a hierarchy Gold > Silver > Copper

For many daily purchases, copper was good enough. A loaf of bread cost a few pennies.

For larger items, eg clothes, rent, etc silver was adequate

Gold was used for business trades, large asset purchases, houses etc.

In my mind's eye I consider Bitcoin as being "Gold", and Bitcoin Cash as "Silver"

Eventually, I see a third crypto-coin emerging, taking the role of "Copper"

While I think the Satoshi can cover the whole range of purchases, most people can't get their head around coffee at 0.00001 BTC (or whatever). But a "Copper" like coin  with a value (close to 1 US$) is much more sensible.

We would keep our Bitcoin at home, safe, offline, in cold storage, until we need to make a big purchase. We would keep "Bitcoin Silver" for medium purchases, and "Bitcoin Copper" on our mobiles for instant use.

The security and speed of the network might reflect this. Perhaps some sort of blockchain light, fast but maybe not eternal. Would you need to record all low value transactions forever?

Who knows...

Quite right, Tulip Mania was not Ponzi. I stand corrected.

Many online and mainstream media press comments refer to Cryptocurrencies as bubbles.

The most often quoted are the Dutch Tulip Mania and the Dot Com bubbles.

Tulip bulbs serve only 1 purpose - growing flowers. They have no use as money - ie store of wealth, medium of exchange etc. Tulip Mania was a true bubble driven by speculation. It was a Ponzi scheme, which collapsed. A few people made huge sums, but many people lost all their savings.

The Dot Com bubble was a different. Up to 90% of the Dot Com startups were cash burners, having no business model, and no value. Was it a Ponzi scheme? Probably not. Again, a few people made huge sums, but many people lost all their savings. But, a few Dot Coms had genuine prospects, and some of these have grown into tremeandously valuable FAANG companies.

Cryptocurrencies, and especially ICOs are very like Dot Com. 90% will fail. A few will grow into big players by providing innovative and valuable solutions.

Bitcoin is definitely not a bubble, because it is like money and is a store of wealth, medium of exchange etc. Also, it is already providing innovative and valuable solutions, like hedge against hyperinflation, and independence of Central Bank control.

Is BC overpriced? Maybe.

Is BC underpriced? Maybe.

Is BC's price rise currently speculation driven? Probably.

Will the price of BC decline, short term? Probably

Will its price drip to zero (like tulips)? Definitely not

Will it be here in 20 years? Definitely.

Will it still be valuable in 20 years? Absolutely