How to start Using bitcoin
Since the birth of money, people have always tried to invest their savings safely and while protecting themselves and funds from risks at the same time. However, there were no 100% reliable financial standards as gold can be stolen, real estate can be destroyed and national currencies are too dependent on geopolitics and the economic state of particular countries. In 2009, an unknown programmer or group of programmers called Satoshi Nakamoto created something completely. It is very hard to steal, completely decentralized, not governed by any state or authority and is not made of physical material, which means it is indestructible. One could go as far as to say that the said currency was a monetary revolution on its own right. Thus, we at BitcoinBestBuy will help you understand the money of the future called bitcoin.
It doesn’t matter whether you are an experienced tech guru or a newcomer — you should see for yourself what all the hype is about:
What Is Bitcoin?
Bitcoin is a peer-to-peer paying system with the same-name unit of account. It was the first cryptocurrency operating independently and the owners of the virtual money are confident that some national bank or large institution with unknown motives does not control their funds. The open-source code that underlies the BTC software spreads the control to all parties and does not allow anyone to interfere secretly in the monetary movement.
Putting it simply, bitcoin is digital information existing and functioning in virtual space, with which you can buy goods and services, make savings, and exchange it for fiat currencies or other material values. The minimum unit that can be transferred is 0.00000001 BTC, which is called a Satoshi.
How Does Bitcoin Work?
Digital coin exists as records in the publicly distributed database that is open to everyone, called a blockchain. It operates without central management and contains the data of all transactions and addresses of senders & receivers but without personal information about the owners or the number of coins, they have currently. The transactions are irreversible after both receiver and sender have approved it. As soon as they are registered in the system, they are broadcasted to each member of the chain.
E-money is based on mathematics, generated with the help of complex formulas by members of BTC community. Anyone can join and take part in the process. Bitcoins are then traded with traditional currencies at various online exchanges, where non-miners can purchase virtual money. The virtual money is stored in digital wallets, without which it is impossible to operate with electronic currency.
Each user gets the receiving and sending addresses, which functions similar to emails but is much more complicated and represents a line of up to 34 random letters and digits.
How To Buy Bitcoins?
How do you start using bitcoins when you have a digital wallet and want to buy your first virtual unit? There are many ways to do so and all have their advantages, disadvantages, and different payment methods:
- ATMs that very much resemble cash machines but convert traditional money into BTC. In some countries, kiosks and shops sell vouchers and gift cards for cash as well. These two ways are quick but come with high fees;
- commercial exchanges and brokers accept credit cards and bank transfers, which are convenient. They have a fixed price and, in substance, resell BTC to customers. Some of them provide clients with e-wallets to store and spend coins;
- peer-to-peer markets have the software to enable direct trading between buyers and sellers. The prices are comparatively lower and all payment methods are accepted;
- regular and bulk purchasers and traders choose the exchange platforms, as these offer the highest level of security of both virtual and fiat money. Fees are low but there is no opportunity to use cash and the procedure of account registration is rather complex;
- there are also specialized sites like VirWoxwhere people can buy and sell bitcoins using PayPal via products for virtual dimes.
The USA is the largest market of the BTC and offers the widest list of sources to buy them. The platforms within P2P-markets are LocalBitcoins, Wall of Coins, Paxful, and BitQuick, while exchanges are Changelly, Coinmama, BitQuick, and Coinbase. Direct vendors are represented by LibertyX, and ATMs listed on Coin ATM Radar are just some of the ways to purchase BTC in the US.
Is It Legal to Purchase BTC?
Another factor that you have to consider is the place of your residence and local laws. Operations with virtual monetary units are legal in most countries but the regulations differ from one country to another. In some countries, bitcoin is accepted as a legal monetary unit, example being Japan, where BTC is considered as legal tender. In other places, for example in China, its use is allowed between individuals but forbidden in bank operations. In the USA, bitcoins are acknowledged as virtual money and all transfers and transactions are regulated in the same way as fiat currencies.
Can I Buy Bitcoins Anonymously?
In some jurisdictions, the law compels you to identify your personal information. Anti-money laundering (AML) laws are in place on most platforms that help users to exchange bitcoins. The rules that regulate information at the know-your-customer (KYC) level can be different. Nonexistence of the KYC policy means that you do not have to identify yourself or verify your phone number or bankcard. This system functions in ATMs, P2P trading, and vouchers. Buying and selling BTC anonymously is more expensive but your information stays private. A fully implemented KYC policy would demand scanned copy of your ID, bills, and bank account information and is usually required at big exchanges with larger trading volumes.
What Is Mining?
Bitcoins are not produced by any centralized entity. The volume of BTC prior to its release is already known and there is a limit of 21 million coins to be generated by 2140.
When people send electronic funds from one to another, they create a transaction. All transactions made in a particular period of time are gathered in a block. This is the work that is assigned to ‘miners’, who create new blocks, record them into the general chain and constantly verify them. New bitcoins are discharged as an addition to the sum of the commissions for the transactions in the new block. The miner who created it gets the reward. It is a good motivation for miners to keep the blockchain free of errors, unalterable, and up-to-date. Today, new computers are very powerful and miners have to compete with each other as this process became more and more complex. Only those who have the newest and most efficient equipment can reap the rewards. The amount of the rewarded bitcoins halves with every 210,000 blocks successfully created, approximately every 4 years. In June 2016, it became 12.5 coins.
How to Start Using BTC?
The question of how to use bitcoins is of the same relevance as for how to use money. For digital currency, there has to be a digital wallet. Four types of wallets are available to you:
- web-clients, which function from a browser and keep the funds in online environment only– you can have your own at Coinbase;
- software apps for computers and mobile devices that can work with the local copy of a shared ledger and support individual clients;
- hardware units storeand keep all data offline, which makes them the most secure wallets in the industry;
- printouts on paper or metal (very safe but not convenient).
Once you have funds in your wallet you can use them to buy goods and services online or send them to your friends and relatives (they have to give you their address codes) You can also make investments with the crypto funds, such as to buy mining equipment. You can also save them and wait until their value increases. Virtual coins can be used in online retail centers as a convenient payment method.
Which Companies Accept Bitcoin Payments?
Paying with BTC is becoming more and more popular and there is a huge number of merchants from all over the world that accept them. You might be surprised that names like Tesla Motors, Microsoft, Dell, Wikipedia, Bloomberg online, Amazon, Overstock, Subway, WordPress, Kmart and Home Depot accept bitcoins as legitimate payment method. Apart from giants, numerous online retailers, supermarkets, food companies, internet dating sites, entertainment resources, travel agencies (Expedia being an example), hotel chains, cafes, and restaurants are also in the list of those who accept the money of the future.
There is also an option to obtain a bitcoin credit card , which would enable you to purchase anything with BTC.
How to Protect My Bitcoins?
What do we have to do to secure our money? Keep it in different places; never put everything you have in one wallet. You would always choose the best, most reliable and safe banks with insurance as places where you can deposit your money. Since Cryptocurrency is money as well, nothing would change. If you have a strong password for your wallets, mobile device, and computer, along with the anti-virus and anti-spyware programs being updated regularly, your electronic money will remain safe. Never store big amounts in your everyday wallet but rather have an offline hardware device to reserve most of the funds and securely stash them. For now, USB storage devices are the best way to protect BTC from theft. Ensure that you use all security features your e-wallets support. All this may take a little bit of your time but it will prevent big issues.
ScreenHardware WalletCrypto CurrenciesPrice
Ledger BlueBTC, XRP, ETH, ETC, LTC, DOGE, DASH, ZEC, STRAT€277.09 + €23 shipping to the USA More Details
Ledger Nano SBTC, XRP, ETH, ETC, LTC, DOGE, DASH, ZEC, STRATMore Details
KeepKeyBTC, ETH, LTC, DOGE, DASH, NMC$129 + $15 shipping More Details
TrezorBTC, ETH, LTC, DASH, ZEC€89 + €26 shipping to the USA More Details
The main benefit of bitcoins is that they are completely free from governments and banks. No one can influence its rates since it is beyond anyone’s control and manipulation. Due to the transparency, all users can see what happens with their money and there is no way for secret operations or speculation to occur. When making international transactions, no one needs to bother with exchange fees, regulations, etc. Another good thing about bitcoins is that all transactions are final and no one can recall the payment.
Money of the future. This is the best name for new but already irreplaceable invention within the financial world