The best way to learn about bitcoin, is to jump in and get a
few in your "pocket" to get a feel for how they work.
Despite the hype about how difficult and dangerous it can
be, getting bitcoins is a lot easier and safer than you might think. In a lot
of ways, it is probably easier than opening an account at a traditional bank.
And, given what has been happening in the banking system, it is probably safer
too.
There are a few things to learn: getting and using a
software wallet, learning how to send and receive money, learning how to buy
bitcoin from a person or an exchange.
Preparation
Before getting started, you will need to get yourself a
wallet. You can do this easily enough by registering with one of the exchanges
which will host wallet for you. And, although I think you are going to want to
have one or more exchange wallets eventually, you should start with one on your
own computer both to get a better feel for bitcoin and because the exchanges
are still experimental themselves. When we get to that stage of the discussion,
I will be advising that you get in the habit of moving your money and coins off
the exchanges or diversifying across exchanges to keep your money safe.
What is a wallet?
It is a way to store your bitcoins. Specifically, it is
software that has been designed to store bitcoin. It can be run on your desktop
computer, laptop, mobile device (except, as yet, Apple) and can also be made to
store bitcoins on things like thumb drives. If you are concerned about being
hacked, then that is a good option. Even the Winklevoss* twins, who have
millions invested in bitcoin, put their investment on hard drives which they
then put into a safety deposit box.
*The Winklevoss twins are the ones who originally had the
idea for a social networking site that became Facebook. They hired Mark
Zuckerberg who took their idea as his own and became immensely rich.
What do you need to know about having a bitcoin wallet on
your computer?
Below you can download the original bitcoin wallet, or
client, in Windows or Mac format. These are not just wallets, but are in fact
part of the bitcoin network. They will receive, store, and send your bitcoins.
You can create one or more addresses with a click (an address is a number that
looks like this: 1LyFcQatbg4BvT9gGTz6VdqqHKpPn5QBuk). You will see a field
where you can copy and paste a number like this from a person you want to send
money to and off it will go directly into that person's wallet. You can even
create a QR code which will let someone take a picture with an app on their
phone and send you some bitcoin. It is perfectly safe to give these out - the
address and QR code are both for my donations page. Feel free to donate!
NOTE: This type of wallet acts both as a wallet for you and
as part of the bitcoin system. The reason bitcoin works is that every
transaction is broadcast and recorded as a number across the entire system
(meaning that every transaction is confirmed and made irreversible by the
network itself). Any computer with the right software can be part of that
system, checking and supporting the network. This wallet serves as your
personal wallet and also as a support for that system. Therefore, be aware that
it will take up 8-9 gigabytes of your computer's memory. After you install the
wallet, it will take as much as a day for the wallet to sync with the network.
This is normal, does not harm your computer, and makes the system as a whole
more secure, so it's a good idea.
BitcoinQt
The original wallet.
This is a full-featured wallet: create multiple addresses to
receive bitcoins, send bitcoins easily, track transactions, and back up your
wallet.
Outside of the time it takes to sync, this is a very easy to
use option.
Search for BitcoinQt wallet download to find their site.
Armory
Runs on top of BitcoiQt, so it has all of the same syncing
requirements.
Armory allows you to back up, encrypt, and the ability to
store your bitcoins off line.
Search for BitcoinArmory Wallet to find their site.
If you don't want to have that much memory used or don't
want to wait for your wallet to sync, there are good wallets that do not make
you sync the entire history of bitcocin:
Multibit
A lightweight wallet that syncs quickly. This is very good
for new users.
Search for BitcoinMultibit Wallet to find their site.
Electum
In addition to being quick and light, this wallet allows you
to recover lost data using a passcode.
Search for BitcoinElectum Wallet to find their site.
After you get the wallet set up, take a few minutes clicking
around. Things to look for:
o There will be a page that shows you how many bitcoins are
currently in your wallet. Keep in mind that bitcoins can be broken up into
smaller pieces, so you may see a decimal with a lot of zeros after it.
(Interesting note, 0.00000001 is one Satoshi, named after the pseudonymous creator
of bitcoin).
o There will be an area showing what your recent
transactions are.
o There will be an area where you can create an address and
a QR code (like the one I have above). You don't need the QR code if you don't
want it, but if you run a business and you want to accept bitcoin, then all
you'll need to do to accept payment is to show someone the QR code, let them
take a picture of it, and they will be able to send you some money. You will
also be able to create as many addresses as you like, so if you want to track
where the money is coming from, you could have a separately labeled address
from each one of your payees.
o There will be an area with a box for you to paste a code
when you want to send money to someone or to yourself on an exchange or
different wallet.
There will be other options and features, but to start out
with, these are the items that you should know about. Visit https://www.bitcoin-cloudmining.com/
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