Moved BTC from a paper wallet for the first time - yikes!

in #btc3 years ago (edited)

Got a big shock moving BTC from my first paper wallet to an online wallet, made me lose my faith in BTC.

This is why Bitcoin is not going to become the cryptocoin used by the masses: the high transaction fees!

The network has gotten so busy, that the fees have crept way up. I hear the average is about $10 now per transaction. Sounds about right, read on...

I recently got my first paper wallets and decided to try them out. Not being familiar with the process, I started small and only bought $20 worth of BTC from an ATM machine. I got home, checked the blockchain and my coins were there - great!

Next step was getting my coins onto an exchange and/or online wallet so I could do some more playing around with them and learning.

I had thought the fee for such a thing would be very reasonable, it's Bitcoin after all. I've heard talk about the low fees for years, and how Bitcoin was going to bring freedom to people to exchange how they like, with almost no cost. Sign me up, sounds great!

Today, the reality is far different.

I moved about $20 of BTC from a paper wallet into my online wallet (which is not so important, they all have fees, as far as i know). It did not tell me how much it was going to cost, only how much BTC would be left once the transfer was done. Not great, as I'd have to visit several sites and do the calculations myself if I wanted to find out the actual cost - pretty ridiculous! So, I just went ahead with it. The cost? Over $4 to move $20! Never did I imagine it would be this high of a percentage, relative to the amount. Shocker!

That's not the end of it. It's going to cost almost as much to get it out again, to send to an exchange! Maybe there's a better way to do this, and if so, let me know. But for a user to be burned like this is going to leave a bad taste is the mouths of the general public when they start dipping their toes into the BTC waters in a bigger way. For this reason, I don't see how BTC is going to ever really catch on, at least in the way it's been promoted, as a new digital currency that will be used for most things. I just don't see it anymore.

Maybe I didn't do this transfer in the best way. One thing is for sure and that's the fees are out of hand for small amounts, and the wallet should have told me how much it was going to cost. So, a fail for the moving a small amount of BTC for a reasonable rate, and a fail for the wallet as for as I am concerned - I'll not be using it again unless it's vastly improved.

Now, I understand that the high transaction fee is not the fault of the wallet, but for the wallet not tell me what's going on, and what it's going to cost is not something I'm going to put up with. Nor will many people, especially those not as familiar with BTC as I am, and I'm no programmer of it, but I'm not a total noob, either.

The high fee for a BTC transfer is a flat fee, which varies, so it would be alright to move large amounts of BTC (as long as the fee didn't climb too high, and I've seen reports where it's gone very high). But I can't see how BTC is ever going to be used by the masses for small, everyday purchases with fees like this. The high fees are what have stopped BTC being accepted by some very large merchants, and now I can see why.

I wish it were different, as I like Bitcoin and it's come a long way in the world. But something else is going to be used for most purchases in the future, at least the small, daily ones.

And I liked the wallet too, but after this disappointment, I'm done with it for now. Maybe they can fix it, but I've also heard a lot of stories of people losing their funds in this wallet, so there's a serious security issue to consider. There are multiple warnings to stay away from it.

The use of cryptocoins has got to become a lot easier, and safer, for the masses to take them up. I'm no slouch with computers, but I've had a tough time figuring things out with BTC, and gotten some nasty surprises so far (thankfully, they were on a small level, but I've heard some real horror stories of people losing a lot of coins and money).

I see BTC now as something to be used for large purchases (but check your fees first!), and as a standard value by which other coins are pegged. There's money to be made trading BTC, but how it's ever going to be used to replace "regular" money I don't see it. Maybe some other coin will, or at least give regular currencies a run for their "money." It can happen, I do think, as these coins have been growing exponentially. but there's going to be a lot of ground to cover to make up for the loss of faith that's going to come with BTC once more people actually start using it and seeing how expensive and difficult it really is to move small amounts.

-Dave's Crypto -

This is not financial advice, just my opinion.


To add to my paper wallet experience, I have found a way to get your coins out of a "bad" wallet and into a new one, easily, with a low fee.

I didn't know the wallet I was using had some of the highest fees, and no real way to control them beyond settings like "high," "med," and "low." That didn't give much control, and I also didn't like how the wallet was not upfront with what I was paying. It left a lot to be desired. I was also getting slow updates as to the value of my BTC. So, it was time to let that wallet go!

To move your coins to a new wallet, in this case it's BTC, get your private key from the old wallet and then you can either Import it or Sweep it into the new wallet. I did this, into the Electrum wallet, and I was pleasantly surprised how easy it was, and that the fee was a lot lower!

This new wallet gives me fine control over fees, and the interface is much more detailed as well. Yah! Happy dance!

It's BTC only, but it's looking like a solid wallet so far. I'll be getting other wallets soon, including multi-coin ones.

Also, if you are buying BTC from an ATM, it's easier and cheaper to just use the address from your Electrum wallet and it'll go right in there. I did it this way, by taking a picture of the QR code my Electrum wallet provided and used that at the ATM, as the "send to" or receive address.

No need to use a paper wallet first, as then you have to pay for another transaction if you want to use your coins, as you'll need to get them from the paper wallet into something like the Electrum wallet (I'm not getting paid by Electrum, I just like the wallet).

If you are holding for the longer term, then keeping your BTC (or other coins) in a paper wallet is fine and is actually a good and very safe idea.

*Note: When I say "move" the coins, realize it's actually a case of switching to a different way to view the coins on the blockchain, where they are located, and they are not in any one wallet. The wallets are only a means to read and interface with the blockchain.

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