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How to Buy Bitcoin – Step One

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A great way to find out about bitcoin is to get involved and keep a few bitcoins inside the “pocket” to learn more about the way they function.

Despite all the talk about how risky and difficult it is, obtaining bitcoins is actually much simpler and safer than you believe. In many ways, it’s simpler then opening an account with an established bank. In addition, considering what has been going on in the banking industry this is likely to be safer as well.

There are several things to know about: purchasing and using a digital wallet and learning to transfer and receive money and how to purchase bitcoin from someone else or exchange.

Preparation

Before starting first, you’ll need to purchase an account. It’s easy enough by registering yourself with any of these exchanges that can host your wallet. While I am sure you’ll want to have a few exchange wallets it is best to start by creating one on your own PC to gain a better understanding of bitcoin as well as because exchanges are still in their early stages. Once we reach that phase of our discussion, I’ll be suggesting to get into the habit of taking your cash and coins off exchanges, or diversifying your exchanges to keep your cash secure.

How do you define a wallet?

It’s a way to store bitcoins. It is specifically software designed to keep bitcoin. It can installed on your desktop computer or laptop (except currently, Apple) and it can be used to store bitcoins in things such as thumb drives. If you’re concerned about hacking, it is a great alternative. The Winklevosstwins, who have millions of dollars invested in bitcoin, have put their money onto hard drives that they put in the safe deposit box.

*The Winklevoss twins were the first to came up with the idea of the social network site that eventually was later renamed Facebook. They employed Mark Zuckerberg who took their idea and turned it into his own and became incredibly wealthy.

How do you have to know about an bitcoin wallet in your PC?

Below, you can download the bitcoin original wallet, also known as a client, for Windows as well as Mac format. They aren’t only wallets, but actually members of the Bitcoin network. They are able to accept, store and transfer your bitcoins.

You’ll see a box that allows you to copy and paste a number similar to this from someone you wish to transfer money to. The money will be deposited directly into the person’s wallet. You can even make QR codes that allow someone to take a photo using the app that is on their smartphone and transfer bitcoin to you. It’s completely safe to share these The addresses and QR codes belong to my donation page. Don’t hesitate to give a donation!

Note: This kind of wallet works as a separate account for you, and also as component of the Bitcoin system. The reason that bitcoin functions is that each transaction is broadcasted and stored as a number throughout every system (meaning that each transaction is verified and is rendered irreversible by the network itself). Any computer that has the appropriate software could join the system, ensuring and helping to support the network. The wallet acts as your own personal wallet and is also a source of support for the system. So, you should be aware that it can take approximately 8-9 gigabytes of your memory on your computer. Once you have installed the application, it can take up to an entire day to be synchronized to the internet. This is normal and will not cause harm to your computer and it makes your system in general more secure, making it recommended.

Bitcoin Qt

  • It’s the original wallet.
  • It’s a wallet with all the features Create multiple addresses to receive bitcoins, transfer bitcoins quickly, monitor transactions, and backup your wallet.
  • Other than the time required to sync it is an extremely user-friendly option.
  • Look up Bitcoin Qt wallet downloads to discover their website.

Armory

  • It runs on top of Bitcoi Qt It comes with the same sync requirements.
  • Armory lets you back up, encode and keep your bitcoins off the internet.
  • Find Bitcoin Armory Wallet to find their website.

If you don’t wish to be using that much memory or do not need waiting for your account to be synced, there are a number of good wallets that don’t make it possible to sync all the history of Bitcocin:

Multibit

A slim wallet that is quick to sync. This is a great feature for those who are new to the technology.

Electum

  • Additionally, it is quick and lightweight, this wallet also allows you to recover deleted data by using the passcode.
  • Find Bitcoin Electum Wallet to find their website.

Once you have the wallet setup, spend the time to go through. Things to be looking for are:

You will see an account on the website that displays how many bitcoins you have in your account. Remember that bitcoins are broken into smaller pieces which is why you might be able to see a decimal number with lots of zeros after it. (Interesting note that 0.00000001 can be a single Satoshi that is named after the anonymous creator of bitcoin).

Then there will be an area that will show what your most recent transactions were.

There’s an area in which you can make an address and an QR code (like that one I’ve posted above). It’s not necessary to have the QR code even if you do not want to however if you own an enterprise and want to accept bitcoin payments, then all you have to do is show someone that QR code, and let them snap a picture of the code, and they’ll be able to transfer the cash. You’ll also be able to set up multiple addresses as you’d like in order to know where your money is coming from, you may want to create an address that is distinct from each of your payment recipients.

There’s an area that has a box that you can use to insert an address when you wish to transfer money to another person or to yourself through an exchange or with a different wallet.

There are additional options and features, however, to begin with these are the features to be aware of.

Getting Your First Bitcoins

Once you’ve got a wallet, you’ll surely be keen to try them.

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

This website offers tiny amounts of bitcoin with the goal of introducing people to the idea of using bitcoin. The initial model of the site was created by the chief creator of bitcoin, Gavin Andreson. The site has since been shut down and the site is now sending out a couple of ads per month. You consent to receive these messages by asking for bitcoins. Paste in your bitcoin address, and then add a number from which you’ll be sent an email. They will send an SMS to make sure that customers aren’t returning for more, as it’s free to set up an account on bitcoin. They also distribute at least once or twice per month advertisements to help fund their business. The amount they pay is small: 0.0015 BTC (or 1.5 million BTC). They process transactions fast and you are able to confirm that your wallet and address are operating. It’s also quite a sensation to earn that little bit of bitcoin. (Non-disclaimer that I am not affiliated with this site and I will get no compensation if you make use of the services. I think they’re an excellent method to try your hand at it).

Thank you! You have just joined the Bitcoin economy.

For a chance to get your feet bit wetter, search for gold. There are numerous websites and services that pay you bitcoin for things like visit specific websites, take survey online, and view videos sponsored by the company. They are not harmful, and you could earn a few bitcoins in this manner however it is crucial to be aware that these are companies that earn money for each time someone clicks on hyperlinks on their sites. They basically return some of what they receive to you. There’s nothing illegal or even illegal about this (you may like the look of it and decide to decide to buy it! ) however, they can be a bit extravagant and could not be easy to understand. The ones I’ve tried (particularly bitvisitor.com) were been paid as promised. It’s fun to play with these options, but considering the possible growth in the price of bitcoin, you will not be a millionaire from this. Therefore, unless you’re an addict to advertising I’d suggest you go elsewhere. If you’re interested in giving it a test it, just Google “free bitcoins” or similar terms and you’ll see a myriad of websites.

Buying Bitcoin Hand-to-Hand

In the end, this is what will be ultimate test for bitcoin. Are they able to easily exchange between them? If that’s not possible it won’t be a bitcoin economy since retailers will be unable to utilize the technology. If retail stores aren’t able to use it, what is it? It’s not an issue. iPhone is an issue, but the majority of smartphones have applications (mobile wallets) that can read QR codes, allowing users to transfer bitcoin to anyone you wish. You can also show the QR code of the address you have entered, and carry a card inside your wallet that has your QR code, allowing people to pay bitcoins to you. It all depends on the kind of wallet you’ve got it is possible to examine the wallet to determine if bitcoins have been accepted.

We have some points to consider:

  • After you have create your wallet, If you scroll around little, you’ll be able to pay fees to speed transactions. The money will be available to bitcoin miner when they process bitcoin data. Miners who are in charge in creating blocks of information ensure that the system is current and safe. The fee provides a reward for the miner to make certain to include your details in the next block of information and thus “verify” the information. In the short-term miners make the bulk of their income through the mining of the creation of new currencies (check for the article on what Are Bitcoins for more information regarding this). In the long run as it becomes harder to locate new coins and the economy grows and the cost of mining increases, fees will become an incentive to miners continue creating more blocks , and help keep the economy running. Your wallet is supposed to be set to pay zero fees as a default, however should you wish you to, you may set a fee that will make your transactions more efficient. You’re not required to pay any fee, and many companies that process numerous small transactions (like those that mine gold as described above) have sufficient fees that keep miners content.
  • If you go to your wallet, either on the page for transactions or related on specific transactions you’ll be able to see a note regarding confirmations. When you complete an exchange, the transaction information is transmitted to the network, and the network will then send back the confirmation that there’s no double entry in that bitcoin. It is advisable not to do this until you have numerous confirmations before you leave of someone that has already paid you. It’s not that difficult to swindle someone by hand such as this and isn’t expensive for the criminal however it is possible to get it accomplished.

Where can you purchase bitcoin similar to this?

  • There may be an bitcoin Meetup in your region.
  • Check out localbitcoins.com to find local people around to you that are looking into purchasing or selling.
  • Some are working to set up local street exchanges around the globe. These exchanges are known as Buttonwoods in honor of their first exchange set up in Wall Street in 1792 under the shade of a buttonwood tree. Check if you have one or start one in your region.
  • Find out if you’ve got friends who are willing to give bitcoin a go. In reality the more people use bitcoins the greater and more prosperous it will become. Please tell your friends about bitcoin!

Many people inquire whether it is feasible to buy bitcoins physically. The answer is both a an no. Bitcoin by nature, can be described as a virtual currency, and does not have a physical form. But, there are two ways you could actually hold bitcoin with your fingers:

  • Cascascius Coins The concept by Mike Caldwell. He creates physical coins, and then encases the bitcoin’s private keys inside. You can access your private keys by breaking off a image from the coin that can be clearly seen to show the coins that have been modified. Mike has made every effort to make sure that he is able to be reliable. These are an excellent investment strategy because in the future it could be that these coins will be massive collector’s items.
  • Paper wallets: A paper wallet simply means that instead of keeping your information about your bitcoin in a digital wallet you print the essential details along with a private code and store it in a safe an drawer, or even in your bed (if you want). It is a highly recommended and is a cost-effective method of protecting your bitcoin. Be aware, however it is possible for someone to get them and steal them. If your home is destroyed by fire the bitcoins will be taken with the property and there’ll be no means of getting the money back. In reality, they’re no different from cash. In addition, like Casascius Coins, they will not be suitable for spending until you place them back in the computer.

There’s software available to help you print your paper wallets simpler.

* Bitcoins aren’t really in the wallet, they’re still online. The outside part of your wallet is going to be adorned with a an QR code that allows you to send bitcoins to your wallet at any time you wish.

* The sealed portion of the wallet is equipped with the private key, without which you are unable to access the coins. Therefore, only place as many coins into the wallet as you would like to remain inaccessible. It is not possible to open the wallet and pull out some coins to purchase coffee. Think about it like a piggybank. In order to get the money it is necessary to smash it. There is a way to withdraw smaller amounts however, after this point, the security of your wallet is compromised, and it will be much more difficult for someone to steal the money. It is better to keep them all either in or out.

* The people who use paper wallets are typically concerned about security and there are numerous ways for criminals in the world to infiltrate your computer. 

A few people have inquired about purchasing bitcoins through eBay. Yes, it’s possible, but they’ll be a lot more expensive. Selling on eBay could be an ideal option due to the huge markup above the market value you may notice. But, as with everything that seems too amazing for the money, this may be too promising to be real. In the next section selling bitcoin in this manner is risky enough.

How Not to Buy Bitcoin

In the next part I will discuss a few key aspects of purchasing through Bitcoin Exchanges. Before I begin I will give you some warnings.

A quick introduction to the history of bitcoin when people first began creating businesses based in bitcoin, they employed all the tools offered to any business. They made sales through credit card and PayPal. The issue with the business model was swiftly discovered Bitcoin transactions are not irreversible for anyone, not even the person who is the beneficiary of the cash. Credit cards as well as PayPal offer strict buyer protection policies which permit individuals to ask for an authorization to chargeback. Thus, some criminals spotted this and started making purchases with bitcoin, and in the future, making a request for an authorization to chargeback. Because bitcoin is not a physical product, it is transmitted using the newest and untested technological methods, sellers were not able challenge this. Due to this, sellers have stopped accepting credit cards as well as PayPal.

This was a huge issue for the currency: how to transfer money between sellers and buyers? There was a business that would issue you credit in bitcoins when you wired them money. Typically, these companies provided addresses that were in Albania, Poland, or Russia. However, a majority of them worked and there are a number of tales on the forums about people who purchased bitcoins in this manner. However, it took a lot of time, and during that time the buyer was forced to bite their fingernails and wonder if they will be able to get their bitcoins, or if they would let their investments go.

I believe that as bitcoin grows popular and more useful, we’ll begin to witness a re-creation that is similar to that Nigerian Prince fraud. This is why the cautionary tale is that we have exchanges and other companies which allow you to move money quickly and easily on exchanges and off. Do not wire money to bitcoin. It was a brief and long-forgotten moment in the history of bitcoin.

In the next post, I’ll be discussing how to buy bitcoins on a bitcoin exchange, and will also provide a critique of several of the most popular exchanges.

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