[geek_at]

If you just want to buy crypto currencies and check again in a few years, the procedure is much simpler:

1. Make a paper wallet, laminate it, put it in a safe location or maybe two

2. Use any exchange and send the coins to the wallet. Never leave any coins on the exchange

When you want to get them out again, this is the safest approach:

1. Boot Tails from USB

2. Enter your private key in Electrum (it's preinstalled in Tails)

3. Send to exchange and convert to fiat

If you want to do daytrading it's a whole other story

[danbruc]

This essentially boils down to not using Bitcoin. If Bitcoin ever wants to achieve its goal of becoming a usable currency, hiding pieces of paper in safes is not the way to go. But you can of course speculate that in a few years someone else is willing to pay more than you did to enjoy the fun of storing a piece of paper in a safe.

[tainted_blood]

Use a hardware-wallet like the Bitbox2 for your big stash. Use a lightning wallet like phoenix on your phone for smaller amounts which you could loose, like in a physical wallet.

[UweSchmidt]

Hard technical limitations prevent Bitcoin from becoming a usable currency.

[npoc]

At this stage bitcoin's main use case is storing large amounts of value for long periods of time.

Think of it as an alternative to investing in a house to let out to tenants, but without the inconvenience, risk and cost of buying/selling and owning it.

[danbruc]

That sounds potentially problematic in the long run. If Bitcoin is primarily used for long term storage, then you need some [at least] constant flux of people moving money in and out of long term storage, otherwise your stored Bitcoins will depreciate in value. Therefore this is a kind of bet that Bitcoin will remain popular as a long term store or that some other use case emerges and maintains the price.

Another factor is that with decreasing mining reward transaction fees are becoming more and more important for financing the entire system. But by its very nature using Bitcoin as a long term storage will lead to a small number of transaction and the relatively few transactions moving money into or out of long term storage will have to pay for the network resulting in high transaction fees or alternatively the hash rate will have to go down which could itself be problematic for the system.

One would have to run the numbers - how many people are storing how much money for how long - to see how problematic or unproblematic it would be to use Bitcoin primarily for long term storage. My gut feeling however is that without other usages like speculation or actually buying and selling stuff, it would be a rather expensive way to store money long term.

EDIT: Back-of-the-envelope estimate. Bitcoin market capitalization is currently 1000B $, electricity consumption is an estimated 138 TWh/y, 13.8B $/y at 0.10 $/kWh. So if it was all long term storage financed by transaction fees and with a stable price and hash rate, it would cost about 1.5 %/y to store your money in Bitcoin, assuming hardware, infrastructure, labor and so on adds another 10 % to the costs.

[npoc]

> you need some [at least] constant flux of people moving money in and out of long term storage

This isn't necessary to maintain value (think of a rare painting), but it is important to provide liquidity when you come to sell, so that you don't have to wait weeks for someone to buy your bitcoin. Bitcoin has plenty of liquidity - no shortage of buyer and sellers. Coinbase alone trades ~$1 billion of bitcoin per day.

You're correct that the hash-rate is related to block subsidy + fees, but it's only one of the variables. Cost of energy for miners is an equally import factor (continuously decreasing as miners tap into wasted energy around the earth, and without geographical constraints), along with efficiency of the mining HW.

Bitcoin averages around 2700 transactions per block which currently provides miners with total reward of 6.25 + 0.3 (tx fees) BTC = ~$334,050. If we suddenly went to fees-only today, that would be ~$123 per transaction. Considering that this fee is independent of transaction amount, it is actually very cheap for large values of money (e.g. >$1M) considering it covers the cost of moving the bearer asset around the world within ~30 minutes, and also covers the cost of protecting your value against debasement and theft for however long you had it stored for (often years).

I'm not sure how you came up with a % cost per year - the cost of storage is a one-off tx fee at purchase and sale (just like physical gold, but bitcoin transactions are generally cheaper and independent of the transaction size)

[danbruc]

So currently there are a quarter or half a million transactions per day for 100 $ each. If Bitcoin was primarily used for long term storage, that would probably no longer be true. The current market capitalization of 1T $ is a million people holding a million dollar, everyone would have to do one transaction every two, three days to maintain that transaction rate, something I would not call long term storage.

In the end the details don't really matter, currently running Bitcoin seems to cost about 1B $ per month and the users have to pay for that one way or another. Whether there are 1M users with 1M $ each paying 1k $ per month or 1B users with 1k $ and paying 1 $ in fees per month or no one paying any fees and the newly mined coins just diluting the value, that are all details.

[npoc]

Bitcoin fees are cheapest when used with large values (because the fee doesn't increase with transaction size) and for long periods (because there is no fee related to time held), but that doesn't mean it's only useful for that, and it's a wide spectrum on both scales.

It's extremely important to remember that when the fees make up the vast majority of the miner's income, there will be far more people using bitcoin. Ultimately, if bitcoin fulfils it's promise as the best store of value mankind has ever seen, everyone in the world will want some. In this situation, the demand for the 7 tn/sec will be enormous. As humans we're just not used to seeing hard limits on supply of a liquid asset, and it's easy to overlook it's effects. Just as the hard limit on the bitcoin supply issuance is fundamental to it holding its value against essentially anything else (even the gold supply doubles every 30-50 years) and will lead to enormous growth in demand against a falling supply, the fixed supply of transactions will lead to similar increases in the price of transactions due to fixed transaction supply and increasing overall demand.

Once hundred's of millions to billions of people are fighting over transaction space that can only service 150 million transactions a year, the supply/demand ratio will be plenty to support a high price. By that point people would _ideally_ be using it every day/week, and so the potential demand would be enormous, and the transaction price will increase until only their larger transactions are economical.

The real question is: how much hash-rate is really needed?

[andruby]

Let's say two years pass and I want to sell my crypto. Is Tails still safe? Is it still maintained? Has it been "acquired" by a malicious party.

Crypto unfortunately requires people to be a lot more careful and knowledgeable than traditional fiat currency. And I don't think that will meaningfully improve anytime soon.

[tlb]

You need some software to make a paper wallet. It’s pretty hard to write it yourself from scratch, so you ultimately still have to trust a software distribution. Scammy paper wallet generators could make semi-predictable private keys that the author could recover when they see the public key appear on the blockchain.

[y42]

1. Boot Tails from USB

and that's an attack vector/point of doubt that you bring in into the equation. You need a trustful source for Tails, the USB drive and the surrounding OS.

One can turn it as one wants: "cryptos" are not safe.

And I am saying this as someone who's holding a handful of values on different crypto currencies. And I know it is insane.

[tainted_blood]

forget tails and ledger and use the Bitbox2. Its not that hard.

[brendoelfrendo]

Ok, but why should I trust Bitbox2?

[tainted_blood]

You shouldn't and you don't need to, it's completely open source, even the hardware.

[FabHK]

Just download it from a trusted source verified by trusted (permissioned) PKI infrastructure.

[cmcaleer]

If you're daytrading you essentially need to be pricing that risk. If your strategy earns effectively 8% APY and you have to trust Sketchy Exchange Inc. it's probably not worth your time. If it's earning 600% APY then maybe it's worth keeping some amount with them.