Silk Road forums

Discussion => Security => Topic started by: ThePhoenix on November 24, 2012, 12:55 am

Title: confused on bitcoins movement - a brief question
Post by: ThePhoenix on November 24, 2012, 12:55 am
ok...I am on https://www.bitinstant.com

so if I use the option "moneygram" to send to "bitcoin to email"...do I send it to my new tormail account? and then when its in my tormail account, how do I send just part of it to a vendor? do I need to forward from my tormail account to a bit wallet? then from the bitcoin wallet, I can send to vendor?

am I getting that correctly? if so,  WHATS THE BEST bitcoin wallet?

I swear this is making me feel dumb
any help would be appriciated
Title: Re: confused on bitcoins movement - a brief question
Post by: woahmang on November 24, 2012, 02:05 am
Quickest and easiest way:

1. Go to instawallet.com then bookmark the page.
2. On bitinstant choose Moneygram -> Bitcoin wallet, then in the bitcoin address field use the "your bitcoin address" from instawallet
3. Go to http://blockchain.info/address/YOUR_WALLET_ADDRESS and wait for 6 confirmations. This will take about an hour.
4. After an hour or so, go back to your instawallet page and send the funds to your SR address.
5. An hour later you can make your purchase, it should be there after 6 confirmations. (watch http://blockchain.info/address/YOUR_SR_ADDRESS)
6. Delete that instawallet bookmark and never use it again.

In this case you need to trust six parties: your bank, moneygram, instawallet, bitinstant, silk road and your silk road vendor. If you're transferring a lot of funds then you should use the desktop application from bitcoin.org rather than instawallet, it's unlikely that instawallet will get hacked in the exact hour that you're trusting it for but that's a risk you can avoid by using the desktop app.

If you're hardcore and don't want to leave a paper trail you should buy bitcoins for cash in the post from a trusted local vendor in #bitcoin-otc, with the btc going to your own secure wallet and sent from the desktop app. This way you only need to trust bitcoin-otc, your own computer, silk road and the vendor. The less people you have to trust the better!
Title: Re: confused on bitcoins movement - a brief question
Post by: ThePhoenix on November 24, 2012, 02:17 am
Thank you! Very detailed
why 6 confirmations? 

I will try this tomorrow by going to a zipzap place. That cuts out one middleman.
zipzap/bitinstant/installwallet ....then I contact the SR vendor

do I contact him directly because SR vendor site is down? is that safe?
Title: Re: confused on bitcoins movement - a brief question
Post by: quinone on November 24, 2012, 02:47 am
Thank you! Very detailed
why 6 confirmations? 

I will try this tomorrow by going to a zipzap place. That cuts out one middleman.
zipzap/bitinstant/installwallet ....then I contact the SR vendor

do I contact him directly because SR vendor site is down? is that safe?

You want to withdraw the BTC from your instawallet to your SR address (not to a vendor directly). 

To see what your SR address is log into your SR account, click Account, and part way down the screen it will say 'to deposit bitcoins, send them to this address:"

Copy the bolded bitcoin address in your SR account and go back to the instawallet page and paste that address into the 'Send Payment" Bitcoin Address field and enter the amount of BTC you're sending to your SR account.

Wait for 6 comf's and SR to do it's internal BTC tumbling thing (like an hour), and when you go back to your SR account the BTC will be in your Silk Road Account.

When you go to place an order with a vendor navigate to the vendor's listing you want and click "Add to cart".

This will bring you to your shopping cart and the item you're purchasing will be listed there, change the quantity if you want more then 1 of the item, and choose a postage option and click 'go'.

Then just put your address (GPG encrypted HIGHLY RECOMMENDED) in the text box near the bottom of the page and put your pin below it and click "Place Order".

Then if you go to the top of your SR account where it says Orders and click it it will load  page showing the order you just placed and the status of it (in transit mean's the vendor has shipped it).

In other words, you never send your BTC from your instawallet address directly to a vendor, you send it to your SR account.  You then place orders from your account via the instructions I gave above (which I hope make sense :P).  The BTCs you OWN are in your SR account, they only go into escrow when you place an order with a vendor.  Hope that clears it up a bit for you.
Title: Re: confused on bitcoins movement - a brief question
Post by: goochihuh on November 24, 2012, 02:55 am
I didn;t wait for 6 confirmations from intrawallet to SR does that matter?
Title: Re: confused on bitcoins movement - a brief question
Post by: woahmang on November 24, 2012, 03:28 am
why 6 confirmations?
Bitcoin's ledger is a tree of "blocks" of data, each block contains transactions and each block creates some new bitcoins, people play the lottery over and over trying to create a valid block until someone "wins" and takes the new coins and transaction fees from each transfer. On average there's a winner every 10 minutes, there are around 40,000 people playing millions of times a second converting electricity into the chance to win some bitcoins. Because there is no central authority, the ledger is more like a tree than a chain, it can branch out at any point and the longest chain is the official one. So someone could theoretically turn back the clock and cheat people by spending the same money twice, if they could create a longer chain starting in the past and reverse everyone's transactions.

Because blocks are tied together and each block represents 10 minutes of the most powerful supercomputer on earth trying to win the lottery, the security of a transaction being undone is proportional to its depth. The default is 6 blocks which is around an hour, so to undo one transaction an attacker would need to invest about $20M in hardware and spend about a fifth of a power plant's energy for a couple of hours. So we're safe for now!

do I contact him directly because SR vendor site is down? is that safe?
No. Silk Road has an escrow system for disputes, you are not protected if you send funds outside this system. Send to your silk road account and then buy through the site. Make sure the vendor/dealer you use has a good rating and do not finalize the transaction early.
Title: Re: confused on bitcoins movement - a brief question
Post by: woahmang on November 24, 2012, 03:30 am
I didn;t wait for 6 confirmations from intrawallet to SR does that matter?
Not sure, it will work itself out in the end but you'll probably end up waiting for the full two hours.
Title: Re: confused on bitcoins movement - a brief question
Post by: ThePhoenix on November 24, 2012, 05:08 pm
I think my brain is slowly wrapping around this bitcoin thing. I am a mac user...used to not having to fiddle with things.

is my SR account different than this account? I guess it would be....I dont see any account place to deposit coins...so I need to log on...I just got in!!!!!!!!

thanks for explaining this guys

Title: Re: confused on bitcoins movement - a brief question
Post by: ThePhoenix on November 24, 2012, 06:31 pm
Ok..I went to walmart...grabbed a moneygram form...and was stuck

went to walmart..got a money gram sheet...showed them page with the ID quotes and such...it really wasnt a deposit sheet but

they had NO IDEA what to do
they said I needed a four digit company/business pin to send money to bitinstant

what?!?!?
Title: Re: confused on bitcoins movement - a brief question
Post by: ThePhoenix on November 24, 2012, 07:59 pm
OK UPDATE

I found that on bitinstant, I didnt click thru far enough..after the first CAPTCHA and second CAPTCHA, I saw an screen with a bunch of info..but didnt notice the Cash Deposit button in the middle...thus taking me to the page which you print with the receive code...


so its bitinstant / cash deposit (walmart) to bit address / hit submit....then hit Cash Deposit "go"...fill out that info and then there will be a place on that becomes active that says "create payment slip"

thats what I missed

so now I wait for the money to go in