A few people have asked me about how to buy bitcoin and how to use bitcoin. So I thought I'd write a quick guide on how to buy bitcoin and how to send bitcoin. At the end I give some bonus information on what bitcoin is and how it works. Bitcoin is best demonstrated rather than explained and most people just want to jump right in and get some to see for themselves, so I'll start this guide with how to buy some and how to send people money with it. Plus most people reading this might only be interested in sending their league dues.
BUYING BITCOIN
There are a number of ways to purchase bitcoin all of them relatively easy. I will recommend two of the most popular ways to buy bitcoin.
Coinbase Coinbase is probably the most popular exchange in the world. Coinbase is very easy to use and is probably the cheapest place to buy bitcoins. This is my recommended way to purchase bitcoins. You will need to connect your account to a US checking account via the ACH system.
Circle circle allows you to purchase bitcoin using a credit card or debit card. I haven't purchased through them, but I believe they require ID verification so it may take some time to setup. not too sure.
Libertyx Libertx is a very simple way to purchase bitcoins. You go to a Libertyx location and tell the cashier you are purchasing a libertyx pin. you give the cashier the amount you want in cash and they give you a receipt with a pin number. Enter that pin number in your account on libertyx and bitcoin is deposited to your account.
Localbitcoins Localbitcoins is probably the fastest way to purchase bitcoins. You can go to the website and find someone in your area that is selling bitcoins for cash. If you find someone you want to buy from, you open a trade with that person and plan to meet in a public place like starbucks. This method doesn't require you to link a bank account. This method will be a little more expensive than purchasing through an exchange like coinbase.
Find a bitcoin ATM Bitcoin ATM's are popping up around the country. Each of them work a little differently and any exchange fees are set by the owner. So how expensive they are depends on the one you are using. To use an ATM you deposit cash and bitcoins are deposited into your bitcoin wallet.
SENDING AND RECEIVING BITCOINS
Bitcoin Wallets A bitcoin wallet is used to store your bitcoin, send bitcoin, and receive bitcoin. You can think of it like as an email account. If you are using coinbase, Libertyx, or localbitcoins then you are already given a bitcoin wallet with your account.
If you only plan to use bitcoin for the one purpose of sending your league dues, then this may be all you need and you won't need to bother having an additional app on your phone or computer (skip ahead to sending bitcoins). But, if you are interested in using bitcoins then you should look into what wallet applications are available.
Bitcoin.org has a great guide on what wallets are available. Look over which ones are available for each platform. Here are my personal recommendations for each platform. * Android:
Mycelium * iOS:
greenaddress * Windows:
greenaddress * Mac:
Electrum I haven't used android or mac, but have heard good things about mycelium and electrum. A note about some of these web wallets. Many of them will require users to protect their account with as much security as possible. This is because bitcoin is a lot like cash and you are responsible for keeping it safe. A strong password and other measures are important to keeping your bitcoins secure.
Send bitcoin Every wallet has a send feature. You should be able to find this feature by going to the "send bitcoin" tab someplace in your wallet. Sending bitcoin will always require two pieces of information: 1) Who are you sending it to? Every wallet has a bitcoin address that can be shared with other people to receive payments. If you are sending someone bitcoin you must ask for their bitcoin address to send to. For example my bitcoin address is: 3Epf4PDbu3yMQbJDNzbfQDwnFfzufovVvd . I can share this address with anyone in the world and they can send money to it. Since the address is very long and hard to type out, a QR code is usually associated with it so that smartphones can scan the code for easier input.
Here is the associated QR code with that address. This payment address is where you can send bitcoins as payment for the league dues.
2) How much are you sending? The amount in bitcoins you send depends on the exchange rate you are using.
If you are only using bitcoin to send your buy in price, then you just need to send the amount you just purchased. Many applications have built in conversion calculators. You can enter in the amount in dollars and it will convert it automatically to the amount in bitcoins you need to send. To see live conversion rates you can use a website to view various market rates. A couple popular ones are
bitcoinaverage and
tradeblock. Bitcoin average provides a volume weighted average price of bitcoin across multiple exchanges. Tradeblock gives live rates across multiple exchanges. You can see the prices of each online exchange changing in the top right corner of the page. For example: at the time of this writing bitcoin is trading at $282.14 per bitcoin on coinbase. If you were to send $20 using this exchange rate, you would send 0.071 bitcoins.
Receive bitcoin If you are only reading this to send your buy in fee then you don't need to read further. If you're interested in learning more about bitcoin then you can continue reading. Receiving bitcoin is easier than sending bitcoin. All you need to do is give someone your receiving address. Every wallet has a receiving address. You can see the example of mine above. you will be able to find this in your web wallet.
BONUS INFORMATION ON HOW BITCOIN WORKS, WHY IT'S SO POPULAR, AND HOW YOU CAN MAKE MONEY
What is bitcoin? Andreas Antonopoulos explains bitcoin the best in his book
Mastering Bitcoin.
Bitcoin is a collection of concepts and technologies that form the basis of a digital money ecosystem. Units of currency called bitcoins are used to store and transmit value among participants in the bitcoin network. Bitcoin users communicate with each other using the bitcoin protocol primarily via the Internet, although other transport networks can also be used. The bitcoin protocol stack, available as open source software, can be run on a wide range of computing devices, including laptops and smart phones, making the technology easily accessible.
Unlike traditional currencies, bitcoins are entirely virtual. There are no physical coins, or even digital coins per se. The coins are implied in transactions that transfer value from sender to recipient. Users of bitcoin own keys that allow them to prove ownership of transactions in the bitcoin network, unlocking the value to spend it and transfer it to a new recipient. Those keys are often stored in a digital wallet on each user’s computer. Possession of the key that unlocks a transaction is the only prerequisite to spending bitcoins, putting the control entirely in the hands of each user.
Bitcoin is a distributed, peer-to-peer system. As such, there is no central server or point of control. Bitcoins are created through a process called “mining,” which involves looking for a solution to a difficult problem. Any participant in the bitcoin network (i.e., any device running the full bitcoin protocol stack) may operate as a miner, using their computer’s processing power to attempt to find solutions to this problem. Every 10 minutes on average, a new solution is found by someone who then is able to validate the transactions of the past 10 minutes and is rewarded with brand new bitcoins. Essentially, bitcoin mining decentralizes the currency-issuance and clearing functions of a central bank and replaces the need for any central bank with this global competition.
Why is it so popular? and Why does it have value? These can be hard questions to answer. Bitcoin has advantages over traditional currencies. First thing to understand is that bitcoin is not a currency it's merely a transfer of value written on a public ledger. Currency is just the first application of bitcoin. Bitcoin is like the internet of money, a network for propagating value and securing the ownership of digital assets via distributed computation. There is a lot more to bitcoin than first meets the eye. Here are a few important qualities that make bitcoin popular and gives it value to people:
- Anonymous- You can send someone money anywhere in the world and not know their name and they don't need your name.
- Protect yourself from identity theft- Websites are hacked almost every month now. Among the information that can be leaked is credit card numbers and names. If you've used a credit card on any website you are at risk of having your cc number stolen. Using bitcoin provides you a layer of protection. There is no credit card number to steal. They won't have any information to gain from you if you have paid with bitcoin.
- Payments can't be reversed- once your bitcoins are sent, you can't undo the payment. This is important for online merchants. Scammers can reverse credit card payments making sellers susceptible to scams. Payments made with bitcoins is just like cash, the payment can't be reversed.
- You can send any amount of money in the world very cheaply and quickly. To send money to other countries you traditionally need to pay high fees. Using bitcoin you can send thousands of dollars and only pay a few cents. Also, using bitcoin it only takes 10 minutes to confirm a transaction. Traditional methods may take 3 days.
- Bitcoin can't be shut down- visa and mastercard can control what you purchase. it is up to them on what you can purchase. With bitcoin, there is no control. You can purchase what you want and sell what you want.
- You own your own money- You are in control of your money. Bitcoin is sorta like cash under your mattress. It's not held and controlled inside a bank.
- Bitcoin can be used for more than just money- As I've mentioned bitcoin isn't just money, it's a transfer of value. Currently in development are other assets that can be traded digitally. For example: the New York Stock Exchange is researching blockchain technology as a way to transfer stocks between people. Imagine if you took a chunk of bitcoins and assigned a specific stock to a particular bitcoin. Say you took one specific bitcoin and assigned it to a share of microsoft. This bitcion is now tied to a share of microsoft stock. Anytime this particular bitcoin is traded it is always equal to that share of microsoft. This allows traders on the stock market to buy and sell shares much more quickly than the currently do. As of now, it takes up to three days to verify a stock transaction. This time would be cut down to 10 minutes. This technology isn't limited to just stocks, it can be coupons, concert tickets, contracts, etc.
How you can make money with bitcoin It's very easy to make money with bitcoin just by sitting at your computer doing nothing. I will list a few methods here:
1) Sell bitcoins on localbitcoins If you have cheap access to bitcoins on coinbase then you can sell bitcoins for cash at a profit. Simply create an advertisement to locally sell bitcoins on localbitcoins and set your price 5% above coinbase. When someone contacts you through the website, you buy their bitcoins on coinbase and then sell it to them for 5% higher than you just bought it for. This sounds ridiculous, but people are willing to pay 5% more to skip setting up a coinbase account and purchasing on localbitcoins.
If you are interested in doing this you can read my advertisement.
2) Sell bitcoins for amazon gift cards People are willing to pay a lot more money for the convenience of buying bitcoins with gift cards. You can sell your bitcoins online for amazon gift cards on paxful.com or localbitcoins.com. I have sold my bitcoins at up to 50% markup on paxful.com.
3) Save money using bitcoins to buy stuff on amazon and starbucks Yes! That's correct! you can actually use bitcoins to buy stuff on amazon and starbucks. The website
https://purse.io/ lets you purchase stuff on amazon using bitcoin. You create a wishlist on amazon, paste your wishlist on purse.io and send bitcoins to the wallet they give you. You can save up to 15-20% pretty easily using this method. If you want to buy starbucks at a 5% discount you can use
https://coffee.foldapp.com/.
4) Play the market You can also buy your bitcoins and hold on to them and try to sell them later at a higher price. The price of bitcoin can go up and down like a stock. You can also try to buy them on one exchange and sell them at another exchange at a higher price. This way of making money can be risky and not as profitable as the ones above.
5) Invest in startup companies
Bitlendingclub lists startup companies and bitcoin traders that are asking for loans in bitcoin. You can find a user on that site and invest in their company. It's up to you to find someone trustworthy and who you which users have the best chance at being successful.
6) Gambling! There are several online casinos and betting agencies that accept bitcoin.
cloudbet.com has an online casino and sports betting.
Nitrogensports is the go to for online sports betting.
This is all I have for now. This should be more than enough to get started with. If you are interested in learning more or have questions you can contact me.
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