How to get started with Bitcoin
Cryptocurrencies have increasingly gained popularity, with more and more people joining the crypto world. Bitcoin is the most widely used currency; taking up a large share of the digital currency market. Its value has skyrocketed since its inception, offering a great investment opportunity where many have reaped the benefits. However, Bitcoin is also volatile and has its risks.
Learn about Bitcoin
It’s never too late to get into the game. But before you invest, it’s essential to understand how it works. This Bitcoin guide will help you know everything you need to get started with Bitcoin, including -what are Bitcoins, and how do you get them? What to know about Bitcoin, how to Bitcoin, and how to start Bitcoin as an investment.
What are Bitcoins?
Bitcoin is a cryptocurrency that uses peer-to-peer technology by digitally exchanging encrypted hash codes. It’s not controlled or owned by any bank or central authority.
The Bitcoins in circulation are 17,841,113. The supply is controlled through algorithms system with only a small number being created every hour. The Bitcoins will continue to be created at a decreasing rate until a maximum of 21 million is reached. The process happens through Bitcoin mining. This is what makes it desirable to invest, in the notion that demand is expected to increase while supply remains constant.
Who Started Bitcoin?
Bitcoin was started by Satoshi Nakamoto in 2008. The idea behind its creation was to create an independent means of exchange that could be transferred electronically in a verifiable and secure way. The identity of Nakamoto remains unknown.
How does Bitcoin Work?
Bitcoin is based on a shared public ledger called blockchain. All transactions, referred to as blocks, are confirmed in the blockchain. When each block gets in the system, it’s broadcasted and validated in the peer-to-peer computer network of users. Every block stores a unique code known as a hash, which makes it distinguishable from every other block.
Getting into Bitcoin
Now that you understand about Bitcoin, the next step is to know how to join Bitcoin and how to set up a Bitcoin account.
Step 1: Create a Bitcoin Wallet
A wallet is where you receive, store and send Bitcoin. It contains information, keys, and addresses that allow you to access and use Bitcoin.
How do I get a Bitcoin address?
Once you sign up for a Bitcoin a wallet, you get a Bitcoin address that you can use to receive BTC. You will also receive a private key that is used to access your Bitcoin wallet. A private key is a sequence of letters and numbers that permits Bitcoin to be spent.
A Bitcoin address looks like this; 1BvBMSEYstWetqTFn5Au4m4GFg8xJaNVN2
Types of Wallets
- Software wallet
A software wallet is an application that you install on your computer hard drive. It gives you complete control over your Bitcoin and high security since the Bitcoins you hold are only accessible on your computer. To get a software wallet, research the various options available, then download and install.
You will need to sync your software wallet regularly to ensure you get the latest information about your account. It’s also important to back up your wallet so that you can have access to your Bitcoin in case anything happened to your computer.
- Web Wallet
Web wallets store private keys on a server. The wallets can be accessed on any device through different browsers. Some are hosted while some are not. They enable the user to have fast access to their Bitcoin from anywhere as long as the devices are connected to the internet. However, you don’t have total control of your Bitcoins since they can be hacked. Such wallets include Coinbase and Circle
- Hardware wallets
If you need a secure way to store your Bitcoins, a hardware wallet is best suited because they do not rely on any third party. Your private keys are saved in the devices which only you have access to, meaning you will not have to worry about hacking and theft. You have to plug the device into a computer to access your Bitcoin. There are many types of hardware wallets which vary in price and quality. It’s crucial to buy from reputable sellers to avoid compromised ones. Examples include Trezor and Keepkey.
- Paper wallets
A Paper wallet is a printed wallet that contains a public address and private keys which enable you to transferor spend Bitcoin. The private keys are printed in the form of QR codes for easy scanning in a software wallet when making transactions. A paper wallet is one of the most secure wallets since the keys are not stored digitally hence cannot be hacked. Paper wallets can be generated from websites such as Bitcoin paper wallet and wallet generator.
- Mobile wallets
Step 2: Put Some Bitcoin in Your Wallet
How to obtain Bitcoins
Once you have created a wallet, the next step is to know how to put money in the Bitcoin wallets. You may be asking yourself – I want to buy Bitcoins, how can I get Bitcoins? How do you purchase Bitcoins? Where to purchase? Well, we will answer all these questions. It’s easy to buy and use Bitcoin, and there are different ways you can make your first Bitcoin purchase and start using Bitcoin. You can buy any amount, even less than one Bitcoin.
Where to get Bitcoin
You can get Bitcoins through earning or buying.
Ways to earn Bitcoin
Gain Bitcoin through mining – In order to mine Bitcoin, you need to set up a computer to solve algorithms. However, today, mining is not one of the easiest ways to get Bitcoins. It’s quite costly hence not as profitable for individuals as in the early days of Bitcoin.
Earn Bitcoin by completing tasks – There are various websites that offer free Bitcoins through completing tasks such as watching ads and participating in surveys. The returns, however, are little compared to the time invested.
Fastest way to buy Bitcoin
To know how to get Bitcoins fast, here are some of the quickest ways to buy Bitcoins:
Find Bitcoin in an ATM – A Bitcoin ATM offers one of the fastest ways to get Bitcoins, whereby it allows you to exchange cash for Bitcoins. Bitcoin ATMs are being set up in major cities to offer a place where you can purchase Bitcoins fast and easily. All you have to do is insert money in the machine, and the ATM transfers your Bitcoins to an online wallet or prints out a paper wallet for you to retrieve. You can check an ATM near using Coin ATM Radar
Get paid in Bitcoin for a good or service – In case you own an online shop, you can include Bitcoins as a method of payment.
Buy Bitcoin easily through service providers –There are service providers such as local Bitcoin that match buyers and verified sellers. You can buy one Bitcoin or any other amount that you need. However, it’s important to exercise caution when buying through these platforms to avoid any mistake.
Add money to Bitcoin through a cryptocurrency exchange – There are various exchanges you where you can buy Bitcoin.
So, what is a Bitcoin exchange?
A Bitcoin exchange is a digital platform that allows traders to buy and sell Bitcoins. The exchanges charge a fee on every transaction. To start trading on a Bitcoin exchange, you need to open an account.
How to open a Bitcoin account
A Bitcoin account is where you receive, send, or store Bitcoin. It’s an online platform that allows you to buy and trade BTC.
How to set up Bitcoin account
The process of a Bitcoin account set up is quite easy and straightforward. Here is how to get a Bitcoin account
- Identify an exchange to open a Bitcoin account – There many exchanges where you can make a Bitcoin account. It’s crucial to perform your diligence before selecting an exchange. Cryptoradar offers a platform where you can compare the exchanges in terms of fees, prices, and features.
- Open the exchange website and click on “register”, “create account”, or “sign up” to create an account.
- Enter your username, email address, password and any other information required
- Click “submit”
- Verify your email by copying and pasting the link on the browser or clicking the verification link.
- Login to the exchange with your username/email and password. Depending on the exchange you may be required to submit documents and verify bank account or phone number
- Buy or add Bitcoins to your Bitcoin exchange account
Bitcoin bank account
It’s possible to connect and withdraw Bitcoins to your bank account. Since Bitcoins are being adopted as a means of payment for business owner, it has become easy to receive these funds in your bank account. Platforms offering this service include Kraken, Bitstamp, and Cex.io
Step 3: Start Using Bitcoin
Why use Bitcoins
There are many reasons for using Bitcoins. Here are some of them.
- Lower transaction fees– The transaction fees for using Bitcoin are lower than debit and credit card payments.
- No third party involvement– When using Bitcoins, your identity is kept anonymous and cannot be linked to any individual. No one can claim or freeze your coins.
- Fast and secure– Unlike physical currencies, BTC cannot be counterfeited. You also don’t have to go through vigorous processes to send BTC, making it fast and convenient.
- No risk of inflation– Inflation occurs when the value of a currency decreases, especially due to increased supply. Bitcoin is not subject to inflation as the total number that can be produced is set to 21 million.
Where to use Bitcoins
There are various places where you can use Bitcoins. You can find online stores that accept Bitcoins through Coinmap. You can eat at Bitcoin restaurants, book a flight with CheapAir and pay a hotel with Expedia.
How do you use Bitcoins?
What can you do with Bitcoins?
How is Bitcoin used? What is Bitcoin for? How do I use Bitcoins? What can I use Bitcoin for? What can I do with Bitcoin? These are some of the most common questions that we get from Bitcoin beginners. Well, here are various ways you can use Bitcoins.
- TradeBitcoins – Although it requires knowledge, trading is one of the ways to get money from Bitcoin
- Buy stuff -You can find merchants who accept Bitcoins as a means of payment through directories such as Airbitz and purse.io. Also, many online stores, such as overstock, accept Bitcoin as a means of payment.
- Donate to charities –Some charities accept donations in form of Bitcoins and other cryptos.
- Hold Bitcoin as an investment– Bitcoins and other cryptos are volatile. You can hold and wait for the value to increase hence make a profit.
- Buy gift cards with Bitcoins. –Gift cards from service providers such as gyft can be redeemed through Amazon and other retailers
How many people use Bitcoins?
The number of people who use Bitcoins has increased over time. According to research, there were over 40 million blockchain wallet users at the end of June 2019. A report from Chainalysis shows that about a third of Bitcoin owners are active users. This makes around 7.1 million active users. Interestingly, only about 1000 people, referred to as whales, own 40% of the Bitcoins in the market.
Step 4: Send and Receive Bitcoin
How to Send Bitcoins
- Log in to the wallet and click “send”
- Enter the public wallet of the recipient and the amount
- Click send
Make sure you confirm the address since Bitcoin transactions are irreversible and any mistake may lead to loss of your funds.
How to receive Bitcoins
- Log in to your wallet and click “receive” on the wallet interface
- The wallet will generate a public address and QR code that you send to the Bitcoin sender
Step 5: Processing Bitcoin Payments
What is a Bitcoin payment?
A Bitcoin payment is a way of paying for goods and services using Bitcoins. This is done by sending a certain amount of Bitcoins from your Bitcoin wallet to the vendor’s wallet.
How to buy things using Bitcoins
How to pay using Bitcoins
Once you have created your wallet and loaded some Bitcoin, you may want to buy stuff using the coins. But how do you pay using Bitcoin? Just copy the address from the invoice and paste it in your wallet and send the payment.
How to get paid in Bitcoin
To get paid in Bitcoin as a business owner:
Post a sign of “Bitcoin accepted here.” For an online business, you can incorporate a pay with Bitcoin button on your website. Also, there are platforms such as Coinpayments and CD pay that help business owners to create cryptocurrency invoices.
Decide how to receive the payment. You can request customers to transfer Bitcoin directly to your wallet. It’s easier to present your wallet as a QR code that customers can easily scan to pay. Also, there are apps that the merchant can install to ease payments.
What exactly can you buy with Bitcoin?
You can buy various goods as well as pay for services using Bitcoins. You can search for hundreds of online shops through platforms such as spendabit.
The use of Bitcoin as an alternative form of payment has significantly increased and its adoption is expected to continue rising. Now that you know how to get started, you can also begin using Bitcoin to make payments. Not only can you use it for payments but you can also use it as a store of value or trade on exchanges to get returns. However, before investing in Bitcoin or any other cryprocurrency, it’s important that you do thorough research.