Bitcoin complete guide
Everything you need to know about bitcoin
What is Bitcoin?
Bitcoin is the first decentralized digital currency. Bitcoins are digital coins you can send through the Internet. Compared to other alternatives, bitcoins have a number of advantages. Bitcoins are transferred directly from person to person via the net without going through a bank or clearinghouse. This means that the fees are much lower, you can use them in every country, your account cannot be frozen and there are no prerequisites or arbitrary limits. Let's look at how it works. Several currency exchanges exist where you can buy and sell bitcoins for dollars, euros and more. Your bitcoins are kept in your digital wallet on your computer or mobile device. Sending bitcoins is as simple as sending an email and you can purchase anything with Bitcoin. The Bitcoin network is secured by individuals called miners. Miners are rewarded with newly generated bitcoins for verifying transactions. After transactions are verified, they are recorded in a transparent public ledger. Bitcoin opens up a whole new platform for innovation. The software is completely open-source and anyone can review the code. Bitcoin is changing finance the same way the web changed publishing. When everyone has access to a global market, great ideas flourish! Bitcoins are a great way for businesses to minimize transaction fees. It doesn't cost anything to start accepting them and it's easy to set up. There are no chargebacks and you'll get additional business from the Bitcoin economy.
History of bitcoin
The domain name bitcoin.org was registered on 18 August 2008. On 31 October 2008, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as open-source code and released it in January 2009. Nakamoto's identity remains unknown.
On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block. Embedded in the Coinbase of this block was the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". This note references a headline published by The Times and has been interpreted as both a timestamp and a comment on the instability caused by fractional-reserve banking.
The receiver of the first bitcoin transaction was Hal Finney, who had created the first reusable proof-of-work system (RPoW) in 2004. Finney downloaded the bitcoin software on its release date, and on 12 January 2009 received ten bitcoins from Nakamoto. Other early cypherpunk supporters were creators of bitcoin predecessors: Wei Dai, creator of b-money, and Nick Szabo, creator of bit gold. In 2010, the first known commercial transaction using bitcoin occurred when programmer Laszlo Hanyecz bought two Papa John's pizzas for ₿10,000.
Blockchain analysts estimate that Nakamoto had mined about one million bitcoins before disappearing in 2010 when he handed the network alert key and control of the code repository over to Gavin Andresen. Andresen later became lead developer at the Bitcoin Foundation. Andresen then sought to decentralize control. This left opportunity for controversy to develop over the future development path of bitcoin, in contrast to the perceived authority of Nakamoto's contributions.
Why Use Bitcoin
Why should I use Bitcoin instead of my credit/debit card or cash? There are many answers to that question because Bitcoin has many different uses. Below we summarize the main benefits of using Bitcoin.
Fast payments globally: With Bitcoin, you can transfer money around the world in just a few seconds. Bitcoin is the first global currency.
Extremely low transaction fees: It costs almost nothing to transfer bitcoin. In addition, fees are voluntary in the network.
Bitcoin is a secure system: Bitcoin is impossible to counterfeit and is secure with the help of math and cryptography. The current financial system is secured by-laws which will always contain loopholes.
You don’t need to trust any third party: There is no intermediary that can deny your transaction or demand expensive fees. All payments are made person-to-person without having to rely on any company. You control your own money.
Bitcoin is anonymous but also transparent: It’s anonymous because you don’t need to identify yourself in the Bitcoin network. It’s transparent because the ledger of all transactions is public.
The Bitcoin network is decentralized: The digital currency is decentralized in the same way as the internet. Bitcoin is more fair because no single group can control or manipulate it.
Protect your money against inflation: Perhaps the biggest advantage of Bitcoin is that your money is protected against inflation. Bitcoin has a limited supply to preserve the value of your money.
How do I start with bitcoin?
It’s easier than many think with Bitcoin. But since it’s about your money it can feel safe with guidance. Here are four steps to start using Bitcoin today:
Step 1: Create a Bitcoin Wallet
Step 2: Get Your First Bitcoin
Step 3: Secure Your Bitcoins
Step 4: Send and Receive Bitcoin
As you can see, getting started with Bitcoin is easy! In the following sections, we will go through all the steps in detail. We end with important about safety along with some tips and advice.
1. Get a Bitcoin Wallet
A Bitcoin wallet is needed to receive and send bitcoins. It’s easy to create a Bitcoin wallet, but there are many different types with various security.
With Bitcoin, you have a private and public key that you keep in a wallet. Simply explained, your public key acts as your email address and your private key as your password.
This means you need to protect your private key and not show it to anyone. That’s why you need a secure Bitcoin wallet.
If you want to buy Bitcoin for a smaller amount, you can use an online wallet. That is automatically created when you open an account at a Bitcoin exchange. We help you choose a secure Bitcoin exchange.
However, we strongly recommend buying a hardware wallet if you want to buy bitcoin on a regular basis or for a larger amount. That is the best type of Bitcoin wallet because it’s both easy to use and very secure.
If you create your own online wallet or software wallet, you should back up your private key and keep it offline. You don’t need to think about that with a hardware wallet because it protects your private keys for you.
2. Get Your First Bitcoin
You can get Bitcoin in three different ways. The most common and usually easiest is to buy Bitcoin on a marketplace. But you can also sell a product or service in exchange for Bitcoin.
The third way is to earn Bitcoin through Bitcoin Mining. Then you install software on your computer to verify transactions and get rewarded with Bitcoin. However, it’s hard to make money with mining, and it requires great knowledge and a lot of resources.
We recommend that you buy your first Bitcoin on a trustworthy exchange. There are many places to choose from, but not everyone is safe and reliable.
3. Secure Your Bitcoins
Have you bought Bitcoin? If the answer is no, scroll up! If the answer is yes, congratulations! Welcome to the future financial world where you can be your own bank.
The next step is to secure your Bitcoin by taking control of your private keys. Now you need a secure Bitcoin wallet that we helped you with in the first step.
When you buy Bitcoin on an exchange, the money (private key) is kept in your account at the exchange. This is risky as the company stores and controls your Bitcoin.
The whole purpose of Bitcoin is to control and protect your own money. If you keep your Bitcoin on an exchange, your account may be restricted or blocked. In the worst case, you lose your Bitcoin if the company goes bankrupt.
For your Bitcoin to be secure, you need to transfer them from the exchange to a secure Bitcoin wallet. Once you have bought Bitcoin on a marketplace, we strongly recommend that you transfer them to a secure hardware wallet.
4. Send and Receive Bitcoin
The easiest way to learn about Bitcoin is to use Bitcoin. Therefore, you should make at least one Bitcoin transaction. We recommend that you send Bitcoin between two of your own wallets to learn how to send and receive Bitcoin.
You will learn this if you buy Bitcoin at an exchange and transfer them to your private Bitcoin wallet. To receive Bitcoin, you only need to share your public Bitcoin address. It consists of a code between 27-34 letters and numbers. The address can look like this:
Your private key looks similar but is shorter. Be sure to never share your private key! Most wallets create QR codes of the keys, to make it easier to send and receive Bitcoin.
A Bitcoin can be divided into one-hundredth of a million (0.00000001), also called a Satoshi. When to transfer Bitcoin, the wallet usually recommends a transaction fee which varies depending on the market. The higher the fee, the faster the transaction is completed.
The number of stores and services that accept Bitcoin is growing every year. To pay or send Bitcoin is also simple but requires a few more steps:
Open your wallet and navigate to the “Send” page.
Fill in the recipient’s public Bitcoin address (or scan the QR code).
Enter amount (many wallets automatically convert the bitcoin price to normal currencies).
Make sure the address and amount are correct.
The transaction is usually done directly, but it may take a few minutes. If you’re transferring a large sum of money, you should wait for at least 6 confirmations to be 99.99% sure that the transaction is not canceled.
Is Bitcoin safe to buy?
Investors are more interested than ever in cryptocurrency. Criminals are too.
Reports of cryptocurrency crimes have increased 312% per year on average since 2016, according to a report from Crypto Head, a cryptocurrency news outlet that used Federal Trade Commission data to analyze cryptocurrency crime trends in recent years. These crimes can include everything from hackers stealing investors’ coins to people falling for scams related to crypto investing.
Bitcoin has the most crime reports of any cryptocurrency, which makes sense since it’s also the oldest and most widely held crypto. Beyond digital crimes, Bitcoin’s safety as an investment is often questioned thanks to the frequency and scale of its value fluctuations.
Despite an increase in fraud and theft, many experts tout the safety of Bitcoin investments — at least in terms of cybersecurity if not investment stability — thanks to secure blockchain technology. So, is investing in Bitcoin safe? Here’s what you need to know about Bitcoin’s safety as an asset and keeping your cryptocurrency secure if you invest.
What to Consider Before Buying Bitcoin
First things first: The money you put into Bitcoin is not safe from value fluctuations.
Bitcoin is a volatile investment. If you’re looking for a “safe” investment with guaranteed returns, then don’t invest in Bitcoin — or any cryptocurrencies for that matter. Just over the past few months, the price of one Bitcoin has fluctuated between $30,000 and $60,000. Bitcoin isn’t the only volatile cryptocurrency, and other, smaller coins may be even riskier.
“Understand that these are very volatile investments, so if big fluctuations cause you to lose sleep, this isn’t the space for you,” says Dan Herron, a CFP with Elemental Wealth Advisors in San Luis Obispo, California.
Experts recommend keeping any cryptocurrency investments to less than 5% of your portfolio for exactly that reason — and to make sure you’ve got a solid conventional retirement investment plan in the first place. It’s also recommended you have an emergency fund and pay down any high-interest debts before you put any money into Bitcoin or any other cryptocurrency.
What Are the Risks Associated with Bitcoin?
The biggest security concern for many people when it comes to Bitcoin investing — like any other digital activity — is the risk of hacking and fraud. Cryptocurrency crimes are on the rise, according to data from the Federal Trade Commission, and resulted in a median loss of $1,900 per report between October 2020 and March 2021.
Often, reported crypto crimes to involve scammers requesting payment in cryptocurrency, or sending unsolicited offers to help you make money or increase your holdings, according to the FTC. “One sure sign of a scam is anyone who says you have to pay by cryptocurrency,” You should also avoid any unsolicited offers related to crypto; do your own research and buy your coins yourself using a reputable crypto exchange.
Other types of scams to look out for
Initial coin offerings (ICOs) for fake cryptocurrencies
When a cryptocurrency is offered to investors before it’s launched to the market, it’s called an ICO (similar to a new stock’s IPO). But sometimes these new coin offerings can be fabricated, leading investors to put their money in a cryptocurrency that doesn’t actually exist.
Always research any cryptocurrency before you invest. If it looks too good to be true, it probably is. Read the project’s white paper and check out the founders as part of your research. For most investors — and especially beginners — it’s smart to stick to established, popular coins like Bitcoin or Ethereum.
How to Keep Your Bitcoin Safe
Hackers can gain access to individuals’ crypto wallets or breach entire cryptocurrency exchanges to steal their holdings. That’s why it’s essential to store your crypto in a safe place, and practice good digital security habits.
Cryptocurrency exchanges and third parties offer storage for your coins through hot wallets, which are secure, but still online (and therefore still susceptible to hacking). Crypto held on an exchange or in a wallet is not FDIC-insured like money in the bank. Make sure you trade and hold your crypto on a platform that offers robust security measures — including keeping a significant number of holdings in its own cold storage and two-factor authentication for users. Some exchanges may even have private insurance policies in case of theft or hacking.
For the best protection against online fraud, many experts recommend cold storage through an offline device not connected to the internet, similar to a USB drive. But even cold storage comes with risks, like the possibility of losing access to your investment completely if you forget your password.
The 7 Best Bitcoin Apps
The bitcoin craze isn’t ending any time soon, with prices expected to rise to $18,600 over the weekend. Although there are many critics of the cryptocurrency, it has reached a record value of more than $1 billion. Currently, there are an estimated 4 million active bitcoin wallet users across the world, and analysts anticipate the number to reach 200 million by 2024. now we’re breaking down the top 7 best free mobile apps for bitcoin enthusiasts and investors.
1. Bitcoin Ticker:
The Bitcoin Ticker app helps you keep track of the Bitcoin price at all times. It displays the current price in the currency of your choosing, and you can even customize the refresh rate.
Spare allows bitcoin holders to quickly and conveniently turn their bitcoin into cash, without using an ATM. Users request cash and then receive a barcode, which they take to a store. The cashier scans the code and gives the Spare user cash in exchange.
This Android app is one of the most highly recommended apps for taking care of your bitcoin wallet. The wallet is what allows you to not only buy and sell digital currency, but also has features to help you to best manage your cryptocurrency.
4. Spector Coin:
The Spector Coin mobile bitcoin wallet allows you to easily trade and receive bitcoin. Another perk—99% of Spector Coin's digital currency is stored in protected offline storage.
5. Coin tracking:
Coin tracking is for serious traders who are looking for a user-friendly experience. This app creates pie charts of your portfolio and allows you to calculate metrics like realized and unrealized gains and reports for, ahem, tax declaration.
6. Block folio:
For a bitcoin aficionado who is looking for a financial app that will allow you to keep a close eye on your investments. This app will send notifications when bitcoin has reached a particular threshold, and keep you up to date with bitcoin news. However, it’s not ideal for day traders, as you have to enter your cryptocurrency holdings manually.
Xapo enables users to store cryptocurrency and also acts as a Bitcoin debit card. It integrates convenience with security, which makes transferring currency to others quick and easy.
Best Places to Buy Bitcoin
Bitcoin is a type of virtual currency that you can use for digital purchases or you can trade like stocks or bonds. To buy and sell cryptocurrency including Bitcoin, you need to use a bitcoin exchange.
A bitcoin exchange will allow you to buy Bitcoin in exchange for other assets, including traditional currency or other digital currencies. The best cryptocurrency exchanges are secure, cost-effective, quick to set up, easy to use, and accept a variety of funding sources. Here are our picks for the best places to buy bitcoin.
Coinbase is a large cryptocurrency wallet provider and exchange based in San Francisco. It boasts over 68 million users in over 100 countries, making it a popular choice for cryptocurrency enthusiasts, investors, and traders. Coinbase claims it holds over $180 billion in assets and facilitates more than $462 billion in trade volume each quarter.
You can trade dozens of currencies, including Bitcoin at Coinbase.
Coinbase charges several fees, which it discloses upfront when entering a transaction. These include a flat per-transaction fee and maker taker fees of up to 0.50% each. Funding fees vary based on the method. Serious users may want to upgrade to Coinbase Pro, which uses its own pricing model.
Coinbase offers strong security through Coinbase Vaults, two-factor authentication, and its use of offline storage for the vast majority of client assets.
If you’re looking for a simple and focused platform that allows you to buy bitcoin while learning more about the cryptocurrency ecosystem, eToro could be right for you. Those new to bitcoin will appreciate the simple and straightforward platform and Copy Trader system that allows you to mimic trades from others on the platform.
You can test the waters with a $100,000 virtual account with no risk to your actual money when you sign up. Once you're comfortable, you can enter a live trade with real dollars. Just take note of the 0.75% spread price for bitcoin and higher fees for other currencies.
When you pay fees of 0.5% or more to buy and sell, you’re giving up a big portion of your potential bitcoin gains right off the top. Robinhood is best known as a commission-free stockbroker, but you can buy and sell bitcoin with no commissions as well. If you already have some experience with stock market investing, buying cryptocurrencies with Robinhood will likely feel familiar, a bonus for those new to bitcoin.
Robinhood Crypto is technically a separate account that you use alongside your Robinhood stock investment account. It supports a fairly short list of currencies, but that could be fine for many bitcoin buyers.
4. Coin Mama
If you want to own bitcoin as quickly as possible and already have a bitcoin wallet, Coin mama may be your best choice. Coin mama features fast account setup and verification. Once you’re logged in, you can buy bitcoin instantly using several payment methods, though there may be a fairly high price tag for those instant purchase privileges.
You can use a credit or debit card to buy one of 9 different currencies. When you place an order, the funds are instantly verified with your connected card by Coin mama, then the cryptocurrency you chose is deposited into your crypto wallet. Those in the UK and EU have additional instant funding options that are not available in the US.
Hopefully, they’ll add US-based ACH payments as a funding method, though the nature of electronic transfers in the U.S. wouldn’t allow for instant purchases with this funding method. But if you have a credit or debit card and don’t mind the fees, Coin mama allows you to buy coins with any bitcoin wallet instantly.
If you have a lot of cryptocurrencies and want to do more with it without selling, you should know about Block Fi. Block Fi enables you to earn interest when you deposit your bitcoin into an account. If you want to unlock your bitcoin without selling, you can also use existing bitcoin as collateral for a loan, but take note of the interest rates of 4.5% to 9.75% and the required 2% origination fee.3 You can also buy and sell bitcoin and other cryptocurrencies with no added trading fees. Instead, Block Fi is the opposite party in all your trades and they will sell to you at a small markup and buy from you at a slight discount.
Block Fi offers you the opportunity to earn interest on your crypto holdings. The current rate is as high as 9.5%, allowing those with large holdings to earn serious money.4 Block Fi also has a new rewards credit card that will pay you in bitcoin, which shows plenty of innovation to come from this unique crypto exchange.
For those drawn to the anonymity provided by bitcoin, Bisq may offer what you’re looking for. Bisq is a decentralized exchange that doesn’t require any signup or account. That means you can use Bisq to buy and sell with nearly complete privacy. The required Bisq desktop app is open source and free to use.
Bisq supports a wide range of payment methods, including bank transfers, Chase QuickPay, Pop money, Zelle, and Western Union. Trade fees range from 0.05% to 0.70%, depending on what you’re doing and how you pay. Bisq is best for those with at least a little crypto experience.
How to Convert Bitcoins to Dollars
Exchanging bitcoins to a useful currency.
Bitcoins seem to have been heralded by most as the currency of tomorrow, but there are only a handful of sites that agree to accept them. Luckily for us, transforming bitcoins to a workable currency like dollars is simple and plain. If you desire to be aware of just how much bitcoin is worth, run a simple net search. If you want to essentially convert bitcoin to dollars, transfer them in an internet market and sell them to an interested consumer. The online marketplace might promptly and easily convert your bitcoins to dollars and transmit them to a debit card, bank account, or digital wallet of your determination.
Selecting a Conversion Service.
1) Compare the rates made available by diverse conversion services and determine the top one.
Equally, when the general bitcoin conversion rate improves, several conversion services provide you with diverse conversion rates. For example, think one service gives to convert your bitcoins at a rate of 1 to $5000 USD and one other offer to turn 1 bitcoin into $5250 USD. All additional things getting equivalent, you should go along with the second service to acquire the most of your bitcoins.
2) Convert your bitcoin by adding a service with low fees.
Conversion services often ask for a fee. Usually, there is a flat fee if how highly you exchange, and often the conversion service charges a segment of the sum you exchange. Evaluate the costs associated with the numerous conversion services and choice one that offers you the ideal deal. Service fees modify over time, so make sure to verify the services terms and fee routinely.
3) Confirm that the service you're utilizing is safe.
Generally, there are a handful of ways to authenticate that a bitcoin conversion web page is harmless. One is to check review sites for testimonials. One other method is to ensure the website uses HTTPS (as opposed to the less comfy HTTP) in its URL. At last, implement a conversion service that permits two-factor identification, making certain that simply you will likely be able to confirm bitcoin conversions.
4) Choose a service that has a low transfer time period.
A few websites transfer bitcoins to your account just after 2 days, but quicker services may convert your bitcoins to dollars in 2 hours or even less.
The virtual currency is not yet universal but it is gaining market awareness and acceptance. A business may decide to try Bitcoin to save on credit card and bank fees, as a customer convenience, or to see if it helps or hinders sales and profitability.
Are you thinking about accepting Bitcoin? Do you already use it? Share your thoughts and experiences with us.
(Source: Wikipedia, cryptorunner.com, time.com, question. Com, thebalance.com, EzineArticles.com, Magazines, newspaper)