Should You Buy Bitcoin?

The big question how to get bitcoins.

Once you have a basic understanding of what Bitcoin is and how the wallet really works, you may want to step into the world of digital currency and grab some Bitcoin for yourself. So the big question arises in your mind: How to get Bitcoins?

It’s getting hard.

Once you understand the origin of every single bitcoin that is based on a mining process, you will believe that the best way to get them is by joining that mining process. The thing is, this has become very difficult as the popularity of cryptocurrency is growing rapidly.

Sell ​​products or services.

Every single bitcoin comes as a result of a previous transaction. Thus, the way to get them when you don’t have any is by getting a transaction from someone else when you buy them with cash or also by mining new bitcoins.

When you know a person who uses bitcoins, you can ask them to take bitcoins. In case you don’t know anyone who owns them, you can get bitcoins by offering another type of transaction only with another bitcoin user, as a result of which you get paid in bitcoins. The alternative is to mine them yourself.

Mine.

In case you cannot buy bitcoins from someone else, you can get them by mining. The term mining here means: solving a complex mathematical problem, the intention of which is to confirm the transactions of other persons. In return you get bitcoins. Receiving bitcoins is sometimes free, but a fee may be involved for sending them, depending on the online platform you use. Before you start mining bitcoins, you should understand that this is not an easy way to get bitcoins, it requires some technical knowledge which may not be practical for you.

Buys.

In case you don’t know anyone who owns bitcoins, you have nothing to sell to exchange for bitcoins, there is a way to buy bitcoins. There are several online platforms that sell bitcoins through a process called trading/exchange. Here I list some ways you can buy Bitcoins:

Buy bitcoins from a person.

There are online marketplaces where you can buy bitcoins in a person-to-person scheme. You can pay these individuals in cash or otherwise. The good thing is that you and the seller can arrange the payment method: cash in person, cash by deposit, bank transfer, PayPal, etc. The key element here is finding someone you can trust. A good tip is to use an online escrow service, this way you can protect yourself from any kind of fraud. The good thing about these online escrow platforms is that everyone has to upload their scanned ID, which ensures security during transactions.

Buy bitcoins from exchange and merchant.

Bitcoin exchanges or trading outlets are basically online services that facilitate buyers and sellers to conduct Bitcoin transactions. To become a part of one of these, all you need is to create an account and get your identity verified before you can buy or sell bitcoins.

Buy bitcoins through an ATM.

Some cities around the world offer physical Bitcoin ATMs. You just get your bitcoins through them using local fiat currency. Governments regulate the use of these ATMs for security purposes. Sometimes finding a Bitcoin ATM near your location can be difficult because even where they are installed is regulated.

What is Bitcoin?

Bitcoin is a decentralized, peer-to-peer, digital currency system designed to enable online users to process transactions through a digital unit of exchange known as bitcoins. In other words, it is a virtual currency.

The Bitcoin system was created in 2009 by an undisclosed programmer(s). Since then, Bitcoin has attracted enormous attention as well as controversy as an alternative to the US dollar, the euro and commodity currencies such as gold and silver.

Rise to popularity

Bitcoin had not attracted much attention in the world of business and finance before 2009. It rose to prominence in 2011-2012 when it gained over 300%. Bitcoin has seen a 400% increase in value since last August. As a result, venture capital firms and investors around the world continue to place importance on cryptocurrency.

In the first half of 2014, venture capital firms invested $57 million in bitcoin in the first quarter, followed by another $73 million in the second quarter, for a total of $130 million, up 50% from the total of $88 million for last year. This is a stark contrast to the scenario in 2012, when Bitcoin firms amassed a relatively modest sum of $2.2 million.

These statistics prove without a doubt that Bitcoin is worth your investment, which begs the question, how can you buy and invest in Bitcoin?

Guidelines for Beginner Bitcoin Investors

The easiest and least complicated method to invest in Bitcoins is by buying Bitcoins. There are many established firms, mainly in the US as well as abroad, that are involved in the business of buying and selling Bitcoins, abbreviated as BTC.

Coinbase

If you live in the US, then Coinbase is the place to be. Coinbase provides its customers with BTC at an estimated 1% premium over the existing market price. United States residents have the option to sync their Coinbase wallets with their bank accounts. As a result, future payment transfers are seamless. This company also gives you the opportunity to automatically buy bitcoins from time to time. For example, if you are interested in buying $50 in Bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.

Please read the terms and conditions before you start using this service. If you have subscribed to an automatic bitcoin service, then you will not be able to control the price at which BTC are bought each month. Note that Coinbase does not function as a Bitcoin exchange, ie. you buy and sell the coins directly from the company. Because the firm must source coins from other buyers, you may experience delays or disruptions when placing orders during rapid market movements.

BitStamp

BitStamp meets the requirements of a conventional Bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users rather than with the company itself. Liquidity is higher here and you always have a good chance of finding someone willing to trade with you. There is an initial fee of 0.5% which can be reduced to 0.2% if you trade $150,000 in a 30 day period.

Alternative Ways to Buy Bitcoins

Local Bitcoins

Exchange is not the only method of investing in bitcoins. Local Bitcoins are often used to buy BTC offline. The website is designed to connect potential buyers and sellers. Bitcoins are held by the seller in escrow and can only be provided to buyers.

Buying bitcoins offline is not always very reliable or safe. So it’s best to meet the sellers during the day and have a friend tag along with you in case things go south.

Bitcoin is not just a modern trend. Venture capital firms consider Bitcoin a decent substitute for conventional currency in the long run. There are countless ways to enter the realm of Bitcoin investing. As mentioned above, Coinbase, BitStamp and Local Bitcoins are the most popular channels for investing in Bitcoins in the United States. Do your homework and find out which avenue meets all your requirements.

Since it’s all the rage right now, I’d like to announce that I’m launching my own cryptocurrency next week.

Let’s call it “kingcoin”.

No, that’s too self-serving.

How about “muttcoin”? I’ve always had a soft spot for mixed breeds.

Yes, that’s perfect – everyone loves dogs.

It’s going to be the biggest thing since fidget spinners.

Congratulations! Everyone reading this will get one muttcoin when my new coin is released next week.

I will distribute 1 million muttcoins evenly. Feel free to spend them wherever you want (or wherever someone accepts them!).

What is this? The cashier at Target said they won’t accept our muttcoin?

Tell those who doubt that muttcoin has scarcity value – only 1 million muttcoins will ever exist. On top of that, it’s backed by the full faith and credit of my desktop’s 8GB of RAM.

Also, remind them that a decade ago a bitcoin couldn’t even buy you a pack of gum. Now one bitcoin can buy a lifetime supply.

And like Bitcoin, you can store muttcoin safely offline, away from hackers and thieves.

It is essentially an exact copy of Bitcoin’s properties. Muttcoin has a decentralized ledger with uncrackable cryptography and all transactions are immutable.

Still not convinced that our muttcoins will be worth billions in the future?

Well, it is understandable. The fact is that starting a new cryptocurrency is much more difficult than it seems, if not downright impossible.

This is why I believe Bitcoin has reached these heights despite everything. And because of its unique user network, it will continue to do so.

Of course, there were setbacks. But each of these setbacks ultimately led to higher prices. The recent 60% drop will be no different.

The Bitcoin Miracle

Bitcoin’s success is based on its ability to create a global network of users who are willing to transact with it now or store it for later. Future prices will be determined by the rate at which the network grows.

Even in the face of wild price fluctuations, Bitcoin adoption continues to grow at an exponential rate. There are now 23 million open wallets worldwide chasing 21 million bitcoins. In a few years, the number of wallets could grow to include the 5 billion people on the planet connected to the Internet.

Sometimes the motivation of the new cryptocurrencies was speculative; other times they sought a store of value away from their own local currency. Over the past year, new apps like Coinbase have made it even easier to onboard new users.

If you haven’t noticed, when people buy bitcoins, they talk about it. We all have that friend who bought bitcoin and then wouldn’t shut up about it. Yes, I’m guilty of it – and I’m sure quite a few readers are too.

Perhaps subconsciously, holders become crypto-evangelists, as persuading others to buy serves their self-interest in increasing the value of their holdings.

Bitcoin evangelism – spreading the good word – is what miraculously drove the price from $0.001 to a recent price of $10,000.

Who would have imagined that its pseudonymous creator, fed up with the global banking oligopoly, would launch an intangible digital resource that rivals the world’s largest currencies in value in less than a decade?

No religion, political movement or technology has witnessed these growth rates. On the other hand, humanity has never been so connected.

The idea of ​​money

Bitcoin started as an idea. To be clear, all money—whether fictitious money used by primitive islanders, gold bullion, or the US dollar—started as an idea. The idea is that a network of users values ​​it equally and would be willing to part with something of equal value for your form of money.

Money has no intrinsic value; its value is purely external – only what others think it is worth.

Look at the dollar in your pocket – it’s just a fancy piece of paper with a one-eyed pyramid, a portrait with dots and signatures of important people.

To be useful, society must see it as a unit of account, and merchants must be willing to accept it as payment for goods and services.

Bitcoin has demonstrated an unusual ability to reach and connect a network of millions of users.

A bitcoin is only worth what the next person is willing to pay for it. But if the web continues to expand at an exponential rate, limited supply dictates that prices can only move in one direction… higher.

The bottom row

Bitcoin’s nine-year rally has been marked by huge bouts of volatility. There was an 85% correction in January 2015 and several others above 60%, including a whopping 93% drop in 2011.

Through each of these corrections, however, the network (as measured by the number of wallets) continued to expand at a rapid pace. As some speculators saw their value decline, new margin investors saw value and became buyers.

Abnormal levels of volatility are actually what helped the Bitcoin network grow to 23 million users.

Hey, maybe we just need some muttcoin price volatility to attract new users…

By now you’ve probably heard of Bitcoin – there are stories of people making thousands of dollars overnight with this and other cryptocurrencies.

Like any new speculative investment, there is an element of risk. That’s why starting with free $10 Bitcoin is a good way to try it out and start learning how it all works. I myself am still new to all this and came across this process during my research. It helped me so I thought I’d share it with you.

The first things you need to know about buying Bitcoin is that there are a few basic ways to buy it and it’s not that complicated to do.

The main two ways to buy bitcoins are through a broker or through an exchange. Check out the Coinbase exchange – they are one of the largest exchanges, have a clean and easy to understand interface, are accessible from apps on various mobile and desktop platforms, and offer you $10 in free bitcoins to get you started. There are other exchanges I’ve tried that work well – BTCMarkets and Coinspot to name a few that are good – but only Coinbase has a $10 starting bonus.

Additional benefits of Coinbase are that it works locally in multiple currencies – if you’re in Australia, for example, all your data will be displayed in Australian dollars, so you don’t have to be on the lookout for exchange rates and the like.

It’s also worth mentioning that Bitcoin isn’t the only cryptocurrency that Coinbase works with – you can also buy Etherium (ETH), Bitcoin Cash (BCH) or LiteCoin (LTC) – whatever currency you decide to use, yet you can get $10 of free bitcoins.

Without further ado, here it is – how you get your free $10 Bitcoins:

1) Sign up with Coinbase (the link at the bottom of this article will make you eligible for the $10 bonus)

2) Complete the account setup process, including verifying your email address, phone number and uploading proof of your identity (driver’s license, passport or other photo ID – this can be done by taking a photo with your phone)

3) Enter your credit card details and verify the card by reviewing the transactions that Coinbase will add to your internet banking statement (this is instant and you are not charged)

4) Place an order for $100 worth of Bitcoin, Ethereum – whatever – in your already activated account. If your local currency is not USD, you will need to ensure that you have ordered the equivalent of US$100

*** IMPORTANT TO NOTE: All Bitcoin purchases incur a fee and Coinbase is no different. At mostthe fee for your initial purchase of $100 should be around $4 ***

5) That’s it! In a few days, $10 worth of Bitcoins will show up in your Coinbase account – even when you deduct the purchase fee, you’ll still be ahead.

So if you’re curious about Bitcoin, want to dip your toes risk-free, and want to get some free cash (!) in the process, give this a try. The Bitcoin bonus will more than cover your fees for that first deposit and can help you learn what it’s all about.

Do they sound good?

Some final notes:

• This process will only work if you are a new Coinbase customer. If you already have an account, you will not receive the free credit

• You can get the free $10 only if you sign up using the link below.

• The above offer is limited in time – once you create your account via the link, you have 180 days where you can make a US$100 Bitcoin, Litecoin or Ethereum purchase and still get a $10 credit.

I hope you have a prosperous and happy future with Bitcoin and take advantage of the free $10. Free money doesn’t come along every day, and at the rate Bitcoin has been growing lately, $10 can multiply pretty quickly! My plan is to just sit at $110 dollars for a while, see what happens and feel the ups and downs of Bitcoin. Let’s see how we go.

As a popular form of currency, Bitcoins are gaining worldwide recognition nowadays, as a result of which many people have shown interest in purchasing them. Although many financial executives suggest that people should not indulge in this form of cryptocurrency due to its volatile value, it is still being adopted at a rapid pace. To buy bitcoins, you can register for free in the wallet system by filling in all the details online or download a mobile application and start investing in them. Once people have it, a simple bank payment method can be used to exchange it. However, since security is the main factor, it is necessary for these wallets to remain safe, and for this reason, one should be able to choose a Bitcoin service such as coin-based wallets that are of high standards and easy to use.

Although an online wallet is a convenient method of buying bitcoins, there are several other options, such as choosing a bitcoin merchant. It is also important to choose the right one as there are traitors and you have to be careful with them. While there are numerous established exchanges that offer the wallet services to users, while looking for a Bitcoin wallet system, an individual should choose one that has multi-signature capability. Users can also use the bitcoin exchange search on their respective computers or mobile phones and by entering general information such as entering the name of their own country, a person can find a wide range of available exchanges around the world as well as check the current condition. Users can also use the liquid money they have as there are various options in the market such as local bitcoin services that help users exchange it for cash. Such areas allow users to visit the nearest bank branch to deposit the amount in cash and after some time receive the bitcoins.

Many people believe that Bitcoin represents a new era of digital currency and are often confused with it. However, since the Bitcoin chain system is fully computerized, it is quite simple and easy to buy and use them, especially they are hellishly cheap when it comes to international transactions. Since exchanges require different payment processes such as credit or debit cards, buyers can also buy online by opening an account based on the relevant geographic location. Once the exchanges receive the payments after verification, they will hold the bitcoins on behalf of the individuals and submit them to the respective wallets. For this they charge some fees. The whole process can take a long time. Many people learning how to buy bitcoins can also use the PayPal method for financial interactions.

Looking for a guide to buying bitcoins? Wondering where to start? People have many misconceptions about Bitcoin, the first widely known and accepted cryptocurrency in the entire world.

Many people think, for example, that only hackers and shady people use it. However, Bitcoin is actually going mainstream, with everyone from TigerDirect to Expedia.com to Dell and even Subway now accepting Bitcoin payments.

Why so popular?

Well, Bitcoin has many advantages over other currencies. For example, you can send bitcoins to someone as payment without having to go through the banking intermediary (and incur additional fees). It’s also much faster than sending money via bank transfer or wire transfer. You can send bitcoins to someone and they will receive the coins in seconds.

With all of this, it’s no surprise that many people are now trying to buy Bitcoin for the first time. However, it’s not as easy as going to your bank and withdrawing bitcoins – or going to a store and picking up some hard-earned bitcoins.

The system works a little differently than that. This Bitcoin Buying Guide will go over a few things you need to know before you buy – so you can buy safely and securely.

First, even though the price can be over $2000 per coin, you don’t have to buy an entire bitcoin. Most places will let you buy bits of bitcoin for as little as $20. So you can start small and go from there when you feel more comfortable with the way things work.

Second, this article is for general purposes only and should not be taken as financial advice. Bitcoin can be risky and before making any purchase you should consult your financial advisor to see if it is right for you.

Here are 3 easy steps to buy bitcoins:

#1 Get a Bitcoin wallet

The first thing you need to do before buying your coins is to get a virtual wallet to store your coins. This wallet is a string of text that people can use to send you bitcoins.

There are a number of different types of wallets, including ones you download to your phone or computer, online wallets, and even offline cold storage wallets.

Most people prefer to get a wallet on their phone or computer. Popular wallets include Blockchain, Armory, Bitgo MyCelium and Xapo.

This is usually as simple as downloading the wallet to your phone as an app or downloading the software to your computer from the main wallet website.

#2 Decide where to buy

There are several types of places to buy, and each one is a little different. There are online sellers who will sell you bitcoins directly for cash (either bank transfer or credit card).

There are exchanges where you can buy and sell bitcoins from others – much like the stock market. There are also local exchanges that connect you with sellers in your area who want to sell.

There are also ATMs where you go to shop in cash and get your coins delivered to your wallet within minutes.

Each Bitcoin seller has its advantages and disadvantages. For example, ATMs are great for privacy, but they will charge you up to 20% on the going rate, which is ridiculous. (At a BTC price of $2000, that $400! So you pay $2400 instead of $2000).

No matter where you decide to buy, be sure to do your research and go to a trusted seller with a good reputation and good customer service. First-time buyers will especially have questions and may need additional support to help them with their first transaction.

Take your time and research the different places to buy before you decide. Factors to consider include coin prices, additional fees, payment method and customer service.

#3 Buy Bitcoin and move it to your wallet

Once you’ve found a place to buy, prepare your funds (ie you can send a wire transfer or use your Visa to fund your account). Then wait for a good price. (Bitcoin prices always fluctuate 24/7). Then place your order when you’re ready.

Once your order is fulfilled and you have your coins, you will want to send them to your wallet. Just enter your bitcoin address and have the seller send you your bitcoins. You should see them appear in your wallet within minutes to an hour (depending on how quickly the seller ships them).

There you go, you are now a Bitcoin owner. You can now send coins to pay for other goods and services, or keep them for a rainy day.

One last thing to remember: Bitcoin is still in its infancy. There are huge price swings and the currency can be risky. Never buy more bitcoins than you can afford to lose.

If you’ve been following the news at all over the past month or so, you’ve undoubtedly seen a story or two about Bitcoin. For years, this cryptocurrency has been a favorite among fans of Magic The Gathering and those who want to deal with their chemical addiction without being caught by the authorities.

Bitcoins are finding their way into mainstream markets with each passing day and are poised to become a true alternative to government issued money. On top of that, there’s an ever-growing Bitcoin “stock exchange” that makes savvy day traders a fortune. Could you be one of these day traders? Will Your Favorite Online Store Ever Accept Bitcoins? Let’s take a look below to better understand why you should buy Bitcoins now.

Exchange rates are favorable for now

Most people who choose to buy bitcoins do so because of the value of the investment. A little over a year ago, bitcoins were worth about $40 each. Last month, the currency reached an all-time high of around $206 and is currently holding steady in the $100 range. The fortune is made by buying bitcoins and selling them at the right time.

Bitcoin’s mini-bubble burst last month, and it scared off a few novice investors; but this is actually a consistent phenomenon. The important thing to realize is that every time the currency recovers, it jumps to an even higher value. It is volatile; but very profitable. Plus, with a limited number of bitcoins in existence, the value is expected to continue to rise for the foreseeable future.

New websites are taking bitcoins every day

But what is driving this growth? This is not just speculation, it would cause Bitcoin to collapse like many other cryptocurrencies of the past. Bitcoin survives and continues to grow because it is actually accepted online. This is currently limited to individual outlets. Online clothing stores, service providers (coding, design, etc.) and other “new” products make up the majority of Bitcoin adopters so far; but they are only the first wave.

PayPal is currently trying to find a way to accept Bitcoin in its current model, and that could mean partner eBay isn’t far behind. This will lead to an explosion of Bitcoin usage online. But it also has an offline presence, with the first Bitcoin ATM opening earlier this month. Content aggregation site Reddit had a post earlier this week depicting a convenience store that had its own “We Accept Bitcoins” sticker, the only thing holding them back is better implementation.

Bitcoin is still in the “ground floor” stage.

The biggest reason why you should buy Bitcoin is that this currency is still on the ground floor. All indicators point to the currency seeing huge jumps in value and adoption in the near future. Those who have already invested in Bitcoin and those who are getting involved in the near future will see a huge return on their investment.

Will you make the wise choice, or kick yourself for missing out on the next big thing?

As the current leader in the cryptocurrency market world, Bitcoin has made some serious headlines and some major swings over the past 6 months. Almost everyone has heard of them and almost everyone has an opinion. Some cannot fathom the idea that a currency of any value can be created out of thin air, while some love the idea that something without government control can be traded as a unit of value in its own right.

Where you stand on “Should I buy Bitcoin?” probably ultimately boils down to one question: Can I make money from Bitcoin?

Can you make money from bitcoin?

In the last 6 months alone, we have seen the price go from $20 per coin in February, to $260 per coin in April, back to $60 in March, and back to $130 in May. The price has now settled at around $100 per Bitcoin, but what happens next is anyone’s guess.

Bitcoin’s future ultimately depends on two main variables: its acceptance as a currency by a wide audience and the absence of prohibitive government interference.

The Bitcoin community is growing rapidly, interest in the cryptocurrency has spread dramatically online, and new services are increasingly accepting Bitcoin payments. Blogging giant, WordPress, accepts Bitcoin payments and Africa-based mobile app provider, Kipochi, have developed a Bitcoin wallet that will allow Bitcoin payments on mobile phones in developing countries.

We have already seen people making millions from the currency. We are seeing a growing number of people experimenting with living on Bitcoin alone for months on end while documenting the experience for documentary viewing.

You can buy takeout in Boston, coffee in London, and even a few cars on Craigslist using Bitcoin. Bitcoin demand increased sharply in 2013 with the April rally and subsequent fall in the price of Bitcoin. Last week, the first major acquisition of a Bitcoin company was made for SatoshiDice, an online gambling site, for 126,315 BTC (about $11.47 million) from an undisclosed buyer.

This rapid growth in awareness and adoption looks set to continue if confidence in the currency remains strong. Which leads to the second dependency. State regulation.

Although it was specifically designed to operate independently of government control, Bitcoin will inevitably be affected by governments in some way. This should be so for two reasons.

First, to achieve high levels of adoption, Bitcoin will need to be accessible to a large number of people, and that means spreading beyond the realms of hidden transactions to normal everyday transactions for individuals and businesses. Second, these Bitcoin transactions can become a traceable part of people’s taxable wealth, to be declared and regulated along with any other type of wealth.

The European Union has already declared that Bitcoin is not classified as fiat currency or money and as such will not be regulated per se. In the US, the 50-state system and the number of bureaucratic bodies involved inevitably make decisions more difficult, and no consensus has yet been reached. Bitcoin is not considered money as such, but it is believed to act like money.

The booming bitcoin market in the US has a more uncertain future for now, and any compelling legislation in the US could have a very positive or very negative effect on the future of bitcoin.

So, should you buy Bitcoin?

The answer depends mostly on how risk-averse you are. Bitcoin will certainly not be a smooth investment, but the potential of this currency is huge.

The best way to learn about bitcoin, is to jump in and get a few in your “pocket” to get a feel for how they work.

Despite the hype about how difficult and dangerous it can be, getting bitcoins is a lot easier and safer than you might think. In a lot of ways, it is probably easier than opening an account at a traditional bank. And, given what has been happening in the banking system, it is probably safer too.

There are a few things to learn: getting and using a software wallet, learning how to send and receive money, learning how to buy bitcoin from a person or an exchange.

Preparation

Before getting started, you will need to get yourself a wallet. You can do this easily enough by registering with one of the exchanges which will host wallet for you. And, although I think you are going to want to have one or more exchange wallets eventually, you should start with one on your own computer both to get a better feel for bitcoin and because the exchanges are still experimental themselves. When we get to that stage of the discussion, I will be advising that you get in the habit of moving your money and coins off the exchanges or diversifying across exchanges to keep your money safe.

What is a wallet?

It is a way to store your bitcoins. Specifically, it is software that has been designed to store bitcoin. It can be run on your desktop computer, laptop, mobile device (except, as yet, Apple) and can also be made to store bitcoins on things like thumb drives. If you are concerned about being hacked, then that is a good option. Even the Winklevoss* twins, who have millions invested in bitcoin, put their investment on hard drives which they then put into a safety deposit box.

*The Winklevoss twins are the ones who originally had the idea for a social networking site that became Facebook. They hired Mark Zuckerberg who took their idea as his own and became immensely rich.

What do you need to know about having a bitcoin wallet on your computer?

Below you can download the original bitcoin wallet, or client, in Windows or Mac format. These are not just wallets, but are in fact part of the bitcoin network. They will receive, store, and send your bitcoins. You can create one or more addresses with a click (an address is a number that looks like this: 1LyFcQatbg4BvT9gGTz6VdqqHKpPn5QBuk). You will see a field where you can copy and paste a number like this from a person you want to send money to and off it will go directly into that person’s wallet. You can even create a QR code which will let someone take a picture with an app on their phone and send you some bitcoin. It is perfectly safe to give these out – the address and QR code are both for my donations page. Feel free to donate!

NOTE: This type of wallet acts both as a wallet for you and as part of the bitcoin system. The reason bitcoin works is that every transaction is broadcast and recorded as a number across the entire system (meaning that every transaction is confirmed and made irreversible by the network itself). Any computer with the right software can be part of that system, checking and supporting the network. This wallet serves as your personal wallet and also as a support for that system. Therefore, be aware that it will take up 8-9 gigabytes of your computer’s memory. After you install the wallet, it will take as much as a day for the wallet to sync with the network. This is normal, does not harm your computer, and makes the system as a whole more secure, so it’s a good idea.

Bitcoin Qt

• The original wallet.
• This is a full-featured wallet: create multiple addresses to receive bitcoins, send bitcoins easily, track transactions, and back up your wallet.
• Outside of the time it takes to sync, this is a very easy to use option.
• Search for Bitcoin Qt wallet download to find their site.

Armory

• Runs on top of Bitcoi Qt, so it has all of the same syncing requirements.
• Armory allows you to back up, encrypt, and the ability to store your bitcoins off line.
• Search for Bitcoin Armory Wallet to find their site.

If you don’t want to have that much memory used or don’t want to wait for your wallet to sync, there are good wallets that do not make you sync the entire history of bitcocin:

Multibit

• A lightweight wallet that syncs quickly. This is very good for new users.
• Search for Bitcoin Multibit Wallet to find their site.

Electum

• In addition to being quick and light, this wallet allows you to recover lost data using a passcode.
• Search for Bitcoin Electum Wallet to find their site.

After you get the wallet set up, take a few minutes clicking around. Things to look for:

o There will be a page that shows you how many bitcoins are currently in your wallet. Keep in mind that bitcoins can be broken up into smaller pieces, so you may see a decimal with a lot of zeros after it. (Interesting note, 0.00000001 is one Satoshi, named after the pseudonymous creator of bitcoin).

o There will be an area showing what your recent transactions are.

o There will be an area where you can create an address and a QR code (like the one I have above). You don’t need the QR code if you don’t want it, but if you run a business and you want to accept bitcoin, then all you’ll need to do to accept payment is to show someone the QR code, let them take a picture of it, and they will be able to send you some money. You will also be able to create as many addresses as you like, so if you want to track where the money is coming from, you could have a separately labeled address from each one of your payees.

o There will be an area with a box for you to paste a code when you want to send money to someone or to yourself on an exchange or different wallet.

There will be other options and features, but to start out with, these are the items that you should know about.

Getting Your First Bitcoins

Now that you have a wallet, you will, of course, want to test them out.

The very first place to go is http://faucet.bitcoin.st/.

This is a website that gives out small amounts of bitcoin for the purpose of getting people used to using them. The original version of this was run by the lead developer of bitcoin, Gavin Andreson. That site has since closed and this site operates by sending out one or two advertisements a month. You agree to receive those messages by requesting the bitcoins. Copy and paste your new bitcoin address and enter a phone number to which you can receive an SMS. They send out an SMS to be sure that people are not continuously coming back for more since it costs nothing to create a bitcoin address. They will also send out once or twice a month advertisement to support their operation. The amount they send it trivial: 0.0015 BTC (or 1.5 mBTC). However, they process almost immediately and you can check to see that your address and wallet are working. It is also quite a feeling to get that portion of a bitcoin. (Non-disclaimer: I have no connection with this site and receive nothing if you use them. I simply think they are a good way to get your feet wet).

Congratulations! You have just entered the bitcoin economy.

To get your feet a little wetter, you can go panning for gold. There are a number of services and websites out there that will pay you in bitcoin to do things like go to certain websites, fill out online surveys, or watch sponsored videos. These are harmless, and you can earn a few extra bitcoins this way, but it is important to remember that these are businesses that get paid when people click on the links on their sites. They are essentially kicking back a portion of what they get paid to you. There is nothing illegal, or even immoral about this (you might like what you see and make a purchase!), but they are frequently flashy and may not be completely straightforward. All the ones that I have tried (particularly bitvisitor.com) have paid out as advertised. It is interesting to experiment with these, but even with the likely rise in the value of bitcoin, you won’t become a millionaire doing this. So, unless you are an advertisement junkie, I would recommend you move on. If you would like to try, simply Google “free bitcoins” or something along those lines and you will find numerous sites.

Buying Bitcoin Hand-to-Hand

Finally, this is going to be the real test of bitcoin. Can people easily trade them back and forth? If this can’t happen, then there can’t really be a bitcoin economy because retailers won’t be able to use it. If retailers can’t use it, what earthly good is it? Fortunately, this is not really a problem. iPhone is a bit of a hold out, but many smartphones have apps (mobile wallets) that will read QR codes and allow you to send bitcoin to whomever you want. You can also display a QR code of your address, or even carry a card in your wallet with your QR code to let people send bitcoin to you. Depending on what kind of wallet you have, you can then check to see if the bitcoins have been received.

A couple of things to note:

• When you set up your wallet, if you click around a bit, you will see an option to pay a fee to speed transactions. This money becomes available to a bitcoin miner as he/she/they process bitcoin information. The miners doing the work of creating blocks of information keeps the system up to date and secure. The fee is an incentive to the miner to be sure to include your information in the next information block and therefore “verify” it. In the short term, miners are making most of their money by mining new coins (check the section on What Are Bitcoins for more information about this). In the long term, as it gets harder to find new coins, and as the economy increases, the fees will be an incentive for miners to keep creating more blocks and keep the economy going. Your wallet should be set to pay 0 fees as a default, but if you want, you can add a fee to prioritize your transactions. You are under no obligation to pay a fee, and many organizations that process many small transactions (like the ones that pan for gold described above) produce enough fees to keep the miners happy.
• In clicking around your wallet, on the transactions page or linked to specific transactions, you will see a note about confirmations. When you make a transaction, that information is sent out into the network and the network will send back a confirmation that there is no double entry for that bitcoin. It is smart to wait until you get several confirmations before walking away from someone who has paid you. It is actually not very easy to scam someone hand-to-hand like this, and it is not very cost-effective for the criminal, but it can be done.

Where can you buy bitcoin like this?

• You may have a bitcoin Meetup in your area.
• You can check out localbitcoins.com to find people near you who are interested in buying or selling.
• Some are trying to start up local street exchanges across the world. These are called Buttonwoods after the first street exchange established on Wall Street in 1792 under a buttonwood tree. See if there is one, or start one, in your area.
• See if you have any friends who would like to try bitcoins out. Actually, the more people who start using bitcoin, the larger and more successful it will be come. So please tell two friends!

Some people ask if it is possible to buy physical bitcoins. The answer to this is both a yes and a no. Bitcoin, by its very nature, is a digital currency and has no physical form. However, there are a couple of ways that you can practically hold a bitcoin in your hands:

• Cascascius Coins: These are the brainchild of Mike Caldwell. He mints physical coins and then embeds the private keys for the bitcoins inside them. You can get the private key by peeling a hologram from the coin which will then clearly show that the coin has been tampered with. Mike has gone out of his way to ensure that he can be trusted. These are a good investment strategy as in the years to come it may be that these coins are huge collector’s items.
• Paper Wallets: A paper wallet just means that rather than keeping the information for your bitcoin stored in a digital wallet, you print the key information off along with a private key and keep it safe in a safe, in a drawer, or in your mattress (if you like). This is highly recommended and cost effective system for keeping your bitcoin safe. Keep in mind, though, that someone could steal them or if your house burns, they will go with the house and there will be no way to get them back. Really, no different than cash. Also, as with Casascius Coins, they will not really be good for spending until you put them back into the computer.

* There is software to make printing your paper wallets easier. bitcoinpaperwallet.com is one of the best and includes a good tutorial about how to use them.

* The bitcoins are not actually in the wallet, they are still on the web. In fact, the outside of the wallet will have a QR code that will allow you ship coins to the wallet any time you like.

* The sealed part of the wallet will have the private key without which you cannot access the coins. Therefore, only put as many coins on the wallet as you want to be inaccessible. You will not be able to whip this thing out and take out a few coins to buy a cup of coffee. Rather, think of it as a piggy bank. To get the money, you have to smash it. It is possible to take out smaller amounts, but at this point the security of the wallet is compromised and it would be easier for someone to steal the coins. Better to have them all in or out.

* People who use paper wallets are usually security conscious, and there are a number of ways for the nefarious in the world to hack your computer. Bitcoinpaperwallet.com gives a lot of good advice about how to print your wallets securely.

Some people have also asked about buying bitcoins on eBay. Yes, it is possible, but they will be far overpriced. So, selling on eBay might seem to be a better option given the extreme markup over market value you might see. But, as with anything that is too good to be true, this is too good to be true. As I will explain in the next section, selling bitcoin this way is just way too risky.

How Not to Buy Bitcoin

In the next section, I am going to explain a couple of key points about buying from Bitcoin Exchanges. Before I do, let me give you a warning.

A short history lesson: When people first started setting up actual business based on bitcoin, they used all of the tools available to any merchant. They sold by credit card and PayPal. The problem with this business model was quickly spotted: bitcoin transactions are not reversible by anyone except the recipient of the money. Credit cards and PayPal have strong buyer protection policies that make it relatively easy for people to request a chargeback. So, nefarious individuals realized this and began making purchases of bitcoin and then sooner or later requesting a chargeback. And, since bitcoin is a non-physical product, sent by new and poorly understood technological means, the sellers were not able to contest this. Because of this, sellers stopped accepting credit cards and PayPal.

This was a big problem for the currency: How to move money between buyers and seller? Some business emerged that would credit you with bitcoin if you wired them money. Very often these businesses would give addresses in Albania, Poland, or Russia. The fact is that many of these did work and there are a lot of stories on the forums of people who bought bitcoins this way. But it took a lot of time and in the meantime the buyer just had to bite his or her fingernails wondering if they would get their bitcoins or kiss their investment goodbye.

I expect that as bitcoin becomes more acceptable and valuable, we are going to see a version of the Nigerian Prince scam. So the warning is this: we now have exchanges and other businesses that allow for moving money easily onto and off of exchanges. Never wire money for bitcoin. It was a short-lived, and well-forgotten, moment in the history of bitcoin.

Next, I will be talking about how to buy from a bitcoin exchange and give a review of the some of the best known exchanges.