What is Bitcoin and Where to Get Bitcoins?

Bitcoin is the currency of the Internet. A distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without the need for any central authority whatsoever.

There is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank.

 

Where can I buy bitcoins?

You can buy or sell any amount of bitcoin (from as little as $1 worth) and there are several easy methods to purchase bitcoin with cash, credit card or bank account. You can buy bitcoin from local traders or online using a bitcoin exchange. There are bitcoin exchanges all around the world, and as bitcoin grows the exchange market is fluidly growing as well, with exchanges located in many countries. You can start by checking the list on where to buy bitcoins in the FAQ.

 

How much do bitcoins cost?

Note: Bitcoins are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year. Here are a couple useful sites [bitkoin.io, preev.com] that shows how much various denominations of bi

tcoin are worth in different currencies. Alternatively you can just Google “1 bitcoin in (your local currency)”.

 

Where can I buy bitcoin online?

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Bitcoin Units

One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:

UnitSymbolValueInfo
millibitcoinmBTC1,000 per bitcoinSI unit for milli i.e. millilitre (mL) or millimetre (mm)
microbitcoinμBTC1,000,000 per bitcoinSI unit for micro i.e microlitre (μL) or micrometre (μm)
bitbit1,000,000 per bitcoinColloquial “slang” term for microbitcoin
satoshisat100,000,000 per bitcoinSmallest unit in bitcoin, named after the inventor

For example, assuming an arbitrary exchange rate of $500 for one Bitcoin, a $10 meal would equal:

  • 0.02 BTC
  • 20 mBTC
  • 20,000 bits

If you want to use ‘bits’ exclusively, just remember that there are 100 satoshis in 1 bit, and 1 million bits in one bitcoin. For more information check out the Bitcoin units wiki.

 

Where can I spend bitcoins?

Here are a few places that you can spend your bitcoin, but there are more appearing all the time, so check online for the most up to date information, or tell us or add other significant ones that you find!

StoreProduct
MicrosoftXbox games, phone apps and software
Spendabit and The Bitcoin ShopSearch engines of online retailers accepting bitcoin with millions of results
Overstock andRakutenEverything under the sun
GyftGift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
NewEgg,TigerDirect andDellFor all your electronic needs
Expedia, Cheapair,Lot, Destinia,BTCTrip, Abitskyand 9flatsFor when you need to get away
BoltVM,Namecheap,Mullvad and PIAHandy web services
Foodler andTakeawayTakeout delivered to your door!
HumbleBundle,GreenmanGaming, and Coinplay.ioFor when you need to get your game on
Reddit GoldPremium membership which can be gifted to others
EcoyarnsOrganic and eco-friendly yarn and fibre

 

Can I mine bitcoin?

Mining bitcoins can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read more here.

If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node using this setup guide. You can view the global node distribution here.

 

Securing your bitcoins

With bitcoin you can “be your own bank” and personally secure your bitcoins OR you can use established companies such as Coinbase and Circle which have secured wallets where they hold the bitcoins for you and provide insurance.

If you prefer to “be your own bank” and have direct control over your coins without having to use a trusted third party, there are many options. If you would prefer easy and secure storage without having to learn computer security best practices then a hardware wallet such as the Trezor or other hardware wallets are recommended.

BitCoin Wallet security

Now we are getting to the meat of things.

There are a number of wallets available to store your hard earned bitcoins. If you have a decent amount of coins to store, you should look into software wallets – BitcoinQT, MultiBit, Armory or Electrum. They are among the best place to store your money safely (provided your computer is secure as well). Chose one you think best suits you, install it and encrypt your wallet file with your strong password. You should take your wallet file and back it up (location of the file is different for different clients, so you have to do some research as to where to find that file). Back it up on a CD, safe USB drive or the like. Keep them safe. If you lose that file, you will lose your money.

A quick word on deterministic wallets. Electrum and Armory allow you to create wallets from a seed. If you use the same seed later, you can recreate your wallet on other machines. With deterministic wallets, you only need to keep that seed secure to have access to your money.

In comparison, in BitcoinQT’s traditional wallet, every address you use is random, meaning that after you send 50-100 outgoing transactions your backups can be obsolete. Always keep an up-to-date backup of such wallet file if possible.

Okay, sometimes you need to have your Bitcoins with you when you leave your computer. In this case, you should look into either online or mobile wallets. A staple for both of those is Blockchain.info, but there are others to chose from.

A good rule of thumb with these is to not store more money in them than you can afford to lose. They are best used as a convenient way of accessing some money, not storing your savings. Online wallets are especially vulnerable to their servers getting hacked and people’s money getting stolen.

 

What to keep in mind while using online wallets:

  • Use a secure password (the more money you have in them the stronger the password should be)
  • Always keep a backup of your wallet in case you need to recover your money
  • Whenever possible, enable two factor authentication
  • Don’t use your online wallets from unsafe computers

Cold storage for Bitcoins

Sometimes you want to store your bitcoins for a long time in a safe place. This is called “cold storage”. There are a few ways one can do this.

First of all, paper wallets. They are nice for giving people small bitcoin gifts, but also for long-term storage if properly used. What you want to do is generate and print them offline. You can save the linked page for example and run that offline. If you are really paranoid, you can put it on read-only media and access that from a different computer. For really long term storage, use archival-grade paper.

Another approach to take is using a separate computer for storing your money that is offline 99+% of the time. You could set one up easily by buying an old laptop, reformatting it, installing Linux and a Bitcoin client. Generate an address on that machine and send money to it from your main wallet. Depending on how paranoid you are you can connect that computer to the Internet afterwards to synchronize data with the Bitcoin Network and then turn it off and put it away somewhere safe until it’s needed.

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