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[BTC] New to Bitcoins? Start Here! - Printable Version

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New to Bitcoins? Start Here! - SIM-888979 - Nov 22, 2013

[img]http://i5.minus.com/jZCW6kwHsP64E.png[/img]

Bitcoin Newbie Guide

What is Bitcoin?

Bitcoin is the world's first decentralized currency. It is a digital currency based on strong cryptographic principles and uses peer-to-peer technology, so that no one is capable of controlling it. This means your account cannot be frozen by someone or the government as there is no central authority and all transactions are made securely!

How did Bitcoin started?

In November 2008, a paper was posted on the internet under the name Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System. This paper detailed methods of using a peer-to-peer network to generate what was described as "a system for electronic transactions without relying on trust". In January 2009, the Bitcoin network came into existence with the release of the first open source Bitcoin client and the issuance of the first bitcoins, with Satoshi Nakamoto mining the first block of bitcoins ever (known as the "genesis block"), which had a reward of 50 bitcoins.

More information regarding the History of Bitcoins can be found here.

What are some of the benfits of using Bitcoins?
  • Decentralized currency.
Unlike ordinary fiat currency given out by countries and banks, there is no person or government that is capable of controlling Bitcoin. This also means no one can freeze your account or seize your funds. Using peer-to-peer technology ensures Bitcoin's freedom and security.
  • Low amount of inflation.
As Bitcoins are scarce, inflation does not occur as much as regular fiat currency, but deflation occurs instead.
  • Irreversible.
Unlike payment processors such as PayPal, Bitcoins payments are COMPLETELY irreversible, so that means there will be no charge backs or anything that may deem the transaction invalid.
  • Usable in every country.
As Bitcoins are transferred from peer-to-peer, it means that Bitcoins can be used anywhere in the world (even in North Korea, if they had an internet connection).
  • Anonymity.
Bitcoins help provide anonymity as no data except the address is collected when sending or receiving a transaction! (However, it is not completely anonymous, read more about it - here)

How are Bitcoins generated?

Bitcoins are generated by "miners". Miners are basically people running special software that are specialized in solving math problems called a "bitcoin miner", and are provided with Bitcoins in exchange for solving those problems. Mining requires a certain amount of work for each block of coins, and the work is automatically adjusted by the network such that the Bitcoins generated are always predictable and limited.

Miners are important as they are the ones who confirms the transactions sent by other users on the Bitcoin network. So next time you send a transaction, ALWAYS PUT IN A FEE! Think of the miners!



How do I get Bitcoins?

Getting bitcoins is one of the most commonly asked questions by new users. Although the process may seem confusing at first it is not as difficult as it might appear initially.

There are several ways of obtaining Bitcoins such as:
  • Mining
As the topic of bitcoin mining is rather large, you should check out this website that teaches the basic of bitcoin mining!
  • Exchanging Currency
Exchanging fiat money to Bitcoins is one of the most common way of getting Bitcoins. Bitcoins Exchanger can be found through out the website. Here are some examples of a bitcoin exchanger:
    • Bitstamp.net

    Bitstamp is one of the largest bitcoin exchanges in the world. Similar to Mt.Gox, you are able to exchange your fiat money into bitcoins by depositing money via Bank Transfer, BTC or Ripple.
    • BTC-E.com

    BTC-E is a platform for buying and selling Bitcoin. Unlike Mt.Gox and Bitstamp, you are able to trade other crypto-currencies there as well, such as Litecoins.
    • Hack Forums' Currency Exchange Subforum

    Hack Forums has a Currency Exchange subforum where many exchanges are going on daily. You can find the sub forum here. Please be wary of scammers!
  • Faucet Websites
There are several websites on the Internet that gives a small amount of BTC for free. These websites are called faucets and a huge list of these faucets can be found here:
    • Coinbox.me - Not a faucet site in of itself, but rather a payment provider for a large network of faucets listed on their homepage.
    • Daily Bitcoins - One of the oldest faucet sites out there. It has "jackpots" where you can get more Bitcoins at specific times. Check under "Prizes" for times.
    • Bitcoiner - Faucet that gives you more if you ask for a payout to the same address every day. Prize value fluctuates hourly.
    • Bitvisitor - Rewards you with Bitcoins for visiting sponsored websites through it.
    • Bitcoins 4 Me - Just a faucet site.
    • Bitcoin Addict - A Bitcoin faucet with "jackpots", similar to Daily Bitcoins.
    • BitcoinFaucet.tk - Just a faucet site.
    • Bit Hits - Just a faucet site.
    • Redcoins - Yet another faucet site.
    • TRZN - Yet another faucet site.
    • BTC Flow - Yet another faucet site.
    • CoinTube - Bitcoins for watching sponsored videos.
    • BitcoinTree - Yet another faucet site.
    • Earn Free Bitcoins - A site similar to Bitvisitor
    • CAPTCHA Coin - Solve CAPTCHAs for Bitcoin. Usually empty.
    • # - Another jackpot faucet site.
    • AllCoinFaucet - A Bitcoin Faucet that gives you the option to be paid out in Litecoins.
    • Aurora's Bitcoin Faucet - A one-time Bitcoin Faucet created by Aurora.
List by Crypto™

How do I store my Bitcoins?

Bitcoins are stored by associating them with addresses called "wallets". Wallets can be stored on web services, on local hardware like PCs and mobile devices, or on paper print-outs. There are many kinds of bitcoin wallets out there on the Internet, ranging from wallets that are printed on paper to ones on stored in the clouds! Here are some examples of bitcoin wallets that you can use to store your very own bitcoins!
  • BitcoinQt
BitcoinQt is the first ever Bitcoin wallet created. It is stored on the computer. It is completely open source and can be downloaded from the official Bitcoin website.
  • MultiBit
Similar to BitcoinQt, MultiBit is a bitcoin wallet that is stored on the computer. MultiBit is is a secure, lightweight, international Bitcoin wallet, and it works for a 3 operating systems - Windows, Mac and Linux. It is also open source, and can be downloaded from their official website.
  • BlockChain.info - My Wallet
My Wallet is a free web-based wallet service provided by the website BlockChain.info. Like most Bitcoin wallets, BlockChain.info - My Wallet is open source as well. You can register for a BlockChain wallet here.

How do I secure my Bitcoin wallet?

Your Bitcoin wallet file is the most important file if you're a Bitcoin enthusiast like me. Losing it or having it stolen would mean a lot of problems.
  • Do not run random executable files
There are a lot of wallet.dat stealers out there right now, so running random executable files may lead to your wallet being stolen right out of your hands.
  • Anti-virus Software
Always use an Anti-virus Software that is up to date to prevent malicious attacks against your computer in an attempt to retrieve your wallet.dat file.
  • Paper Wallets
Paper wallets are a fairly simple way to store your bitcoins independent of a computer. When generated securely and stored on paper, or other offline storage media, a paper wallet decreases the chances of your bitcoins being stolen by hackers, or computer viruses.

One way you can create a paper wallet is by visiting the BitAddress.org or BitcoinPaperWallet.com websites. These websites feature a free client-side paper wallet generator written in JavaScript. The HTML for either of these generators can be downloaded from GitHub and used on an offline computer. Using either of these generators online by directly connecting to their websites is relatively safe for storing smaller amounts of bitcoin, but extra precautions should be taken to ensure that keys are not compromised by spyware that may be monitoring browser activity. Blockchain.info offers a tutorial on how to generate a paper wallet with an online component so you can check your balance easily.
  • Back Ups
Always keep an encrypted copy of your wallet.dat file if you are using a Bitcoin client on a USB stick in case of a computer failure. Computer failures may lead to deletion or overwriting of your old wallet.dat which would mean your Bitcoins would be lost forever. Keeping a backup can prevent that situation!
  • Encryption of Wallet.dat file
Although most of the Bitcoin clients these days comes with encryption of wallet.dat files, in the case where it isn't, you should use a program such as TrueCrypt to encrypt your wallet.dat file to prevent an unauthorized access as anyone who can access an unencrypted wallet can easily steal all of your coins.

How do I check the price of a Bitcoin?

Checking the current price of your Bitcoins is easy as pie. There are some websites dedicated to such a purpose. The most commonly used site is:

http://preev.com

[Image: 5pOnf.png]

Preev.com is a site that pulls the cost of a BTC from different bitcoin exchanges such as Bitstamp and Mt. Gox. You can configure the currency you like (eg. USD, CAD, XAU, etc.) and as well as the data sources (eg. BitStamp or Mt.Gox).

Who determines the value of Bitcoins?

The value of a Bitcoin is determined by the supply and demand for it, and the users itself. As long as there is a demand, the price will always be there. But as the amount of utility Bitcoins gains everyday, the demand for it increases, thus increasing the price of Bitcoins.

What can I do with my Bitcoins?

Bitcoins are one of the most useful currency right now. I'm sure by browsing on Internet, you would realize that Bitcoins are one of the most accepted currency on the Internet. Here are just SOME of the things you can do with Bitcoins:

  • Gold!
  • Silver!
  • Gift Cards!
  • This Bitcoin Award -> [img]http://x.hackforums.net/uploads/awards/bitcoin.png[/img]
  • Stuff on Hack Forums!
  • Video Games!
  • Hosting Services!
  • Domains!
  • Computers!
  • Sexual Services! (Don't Ask!)
  • Donate to Disaster Relief!
  • Websites!
  • Alpaca Socks!
  • Real Estate!
  • Subway Sandwiches!
  • Pretty much everything!



Sources: Wikipedia - BTC's Wikipedia - Bitcointalk.org

* - V For Vendetta. - Nov 22, 2013

Looks good! Don't forget betting as an option for spending BTC! :)

* - SIM-888979 - Nov 22, 2013

(Nov 22, 2013 04:55 AM)V For Vendetta. Wrote:  Looks good! Don't forget betting as an option for spending BTC! :)

I limit all gambling related discussion to a minimum due to the new rule. Don't wait to get misunderstood.

* - The Illusionist - Nov 22, 2013

Very nice layout :). Going to read this soon I hope it will help a lot of people that are new to BTC.

* - Decompilator - Nov 22, 2013

This should get stickied.

1 BTC IS 700+ -.- WOW!

Good thing I sold 15 of mine for 90 when silkroad got fucke.
Could of gotten 10k + now

* - TURKINATOR - Nov 22, 2013

Great guide! Aurora definitely knows what hes talking about , helped me out a few times :)

* - Isaak - Nov 22, 2013

Excellent guide! A lot of dedication and effort has been put in to this!

* - Crypto™ - Nov 22, 2013

Fantastic intro man! If this doesn't help someone get started with BTC, I don't know what will :)

* - optionstrading101 - Nov 22, 2013

Future reserve currency of the world... oh except theres like 1000 altcoins competing with btc and they all perform the same job.

* - EziNet - Nov 22, 2013

I'm sure this will help all newbies to Crypto Currency. deserve Sticky!

* - Crypto™ - Nov 22, 2013

(Nov 22, 2013 05:02 AM)optionstrading101 Wrote:  Future reserve currency of the world... oh except theres like 1000 altcoins competing with btc and they all perform the same job.

The problem is establishment. Bitcoin is much more established than almost every altcoin, with the possible exception of LTC. It's basically Bitcoin, Litecoin, then a race for third place.

* - luckysunny - Nov 22, 2013

good information .. thanks for helping newbies

* - SIM-888979 - Nov 22, 2013

(Nov 22, 2013 05:02 AM)optionstrading101 Wrote:  Future reserve currency of the world... oh except theres like 1000 altcoins competing with btc and they all perform the same job.

You're implying everyone accept those alternative crypto-currencies.

* - optionstrading101 - Nov 22, 2013

(Nov 22, 2013 05:09 AM)Crypto™ Wrote:  The problem is establishment. Bitcoin is much more established than almost every altcoin, with the possible exception of LTC. It's basically Bitcoin, Litecoin, then a race for third place.
Yea the network effect. Btc is popular.

So was myspace. But it fell to Facebook. And one day Facebook will fall to something else.

* - SIM-888979 - Nov 22, 2013

(Nov 22, 2013 06:20 AM)optionstrading101 Wrote:  Yea the network effect. Btc is popular.

So was myspace. But it fell to Facebook. And one day Facebook will fall to something else.

Until then, BTC is pretty much the best crypto-currency now.