How to buy Bitcins?
You will learn how to convert cash to bitcoins
What are Bitcoins?
Bitcoin is the world's first decentralized digital monetary system, and "bitcoins" are the currency unit used by this system. The system has existed since January 3rd, 2009 and is used in every country in the world. Bitcoins are created and controlled by advanced mathematics and cryptography, instead of by governments or banks (no government, bank, or corporation owns or controls Bitcoin). Bitcoins as a currency unit are created over time at a diminishing rate, and there will never be more than 21 million of them in existence (though they are highly divisible).
Bitcoin is different from systems like Paypal because:
It is decentralized (no group has monopoly control over it)
It is not tied to US dollars or other government fiat currencies
It is impossible to suffer chargebacks or frozen accounts
It is (relatively) anonymous
Fees are optional (you may pay to make your transactions process slightly faster)
Thus, anyone in the world, of any age, in any country, for any purpose, may start accepting and spending Bitcoins immediately. It is a purely free-market currency which every human on the planet has the option of using. It returns the power of money to "the people" and away from "the banks" and "the government." The supply of bitcoins is mathematically controlled at a pre-determined rate, and cannot be inflated beyond this rate. There is no sign-up or approval process. If you wanted, you could have a Bitcoin account less than three seconds from now. Click here and you will have a Bitcoin account, instantly.
Step 1: First, you need a Bitcoin wallet. This is where your bitcoins are stored.
Step 2: Second, you need to actually get bitcoins, and this can be done in a variety of ways.
Coinbase provides a means to rapidly transfer funds into, out of and between bitcoin exchanges far faster than the usual methods through automating the entire process. Traditionally, bitcoin exchanges handle deposits and withdrawals using several methods, some of which can be annoyingly slow with delays of up to a week before funds are available for use. During this waiting period, as with any currency, exchange rates can fluctuate and you may not get the same amount you would have been able to at the time you begun your deposit. If you cannot purchase any at this moment, you can start your journey into the bitcoin world by building up your collection of bitcoins gradually. A great place to start is at a "Faucet" (It drops slowly but gradually will fill up your wallet. Here is one such faucet at BitcoinAddict.com .
Step 3: Third, you now get to spend them, here are some of the most popular locations to purchase items with your newly acquired bitcoins.
What's a Bitcoin?
It's the state-of-the-art in money. It's a new form of electronic money . It's already become "the gold standard" of digital currency.
Ya know how email changed old-fashioned mail forever? Well, Bitcoin is changing money forever.
Based on some old technologies, and some new technologies. Bitcoin is the result of combining. the very state of the art in cryptographic security + the idea of a limited quantity commodity similar to gold and silver (where there's only so much of it) and using it as money + the idea of massive numbers of computers connected by the internet. forming a strong, resilient, indestructible peer-to-peer network. It's called a cryptocurrency.
Since the invention of Bitcoin. Money will never be the same.
Why would I use Bitcoin?
Bitcoin is the world's first completely decentralized currency . This means it has no issuing entity . therefore, no single point of failure . In many ways Bitcoin is more secure than your bank. If your bank were to fail, your money could be gone forever. The Bitcoin network is made up of millions of computers all over the world, connected via the internet. The entire Internet would have to go away, in order for the Bitcoin network to fail.
As easy as sending an email . Just one click. Bitcoin payments are sent with one click - just like email. And transactions are always as free and as fast as email.
Zero transaction fees . In the United States, merchants pay 45 billion dollars per year in credit card transaction fees. And for what? So that the transactions can be reversed as "chargebacks" up to six months later? That doesn't seem fair at all. Bitcoin transactions are free. Whereas credit cards and other online payment systems typically cost 3-5% or more per transaction, plus various other exorbitant fees. Bitcoin usage and transactions are always free. It doesn't matter if you send $0.01. or $1,000,000.00. the transaction cost is always the same: free *
No such thing as a chargeback . Payments are irreversable. No matter whether you accept Bitcoin payments for your business or otherwise, payments can not be reversed. There's no such thing as a "chargeback". No way to get a "bounced check". No "reversed transactions". Not with Bitcoin. Payments can only be "refunded" if and when the recipient, voluntarily, as a separate new transaction, decides to send the money back. This protects merchants from fraud. Credit cards and PayPal can, and often do, reverse transactions up to six months later.
As anonymous as you want it to be . Just like with cash, transactions can be totally anonymous. Transactions are only identified by your Bitcoin address, and you can have as many Bitcoin addresses as you want. You create another new Bitcoin address with one click any time you want to. Bitcoin transactions can be made to be: anonymous ***
Financial privacy . Gone are the days of "Identity theft". In the old days, credit cards required merchants to have proof positive of your identity in order to shop there. Because a Bitcoin address can only be used to receive money, and it cannot be used to extract money. with Bitcoin, the merchant only needs to know two things: Did you pay? and, Where do you want your stuff sent to? Isn't that the way it should be? Does your banker really need to know what you buy online?
Your account cannot be frozen . No one can freeze your account and keep your money. (as long as you keep control of your bitcoins yourself and don't keep your bitcoins in an online bank or wallet service. See the Security tab for recommendations)
No big brother . Third parties can’t prevent or control your transactions. Transfer money easily through the internet, without having to trust middlemen; no central bank, nor central authority.
No censorship of who you're allowed to send money to . No more blocking who you can make payments or donations to. just because someone doesn't agree.
It's not a bank. It's not a paypal . What may be the best feature of all? "Bye bye, PayPal." "Bye bye, Bank."
Bitcoin 101 - How To Buy/Get Your First Bitcoins
More secure than online banking existing in the world today. Traditional banks use encryption when you log on to your online banking. The cryptography technology used in Bitcoin is even more secure. In other words, if it were to ever become possible to hack in to it. Then ALL the world's banking would be compromised. With today's known technology, experts all agree. It is absolutely un-hackable and un-breakable: secure Ŧ
Bitcoin is transparent and verified . Bitcoin is a free open source software (FOSS) project, which means it has total transparency. Millions of programmers all over the world see every bit of the program's source code. They constantly monitor it, study it, and report on it. to verify that there are no flaws or irregularities.
Send payments to anyone worldwide . Bitcoin has no artificial national boudaries or limitations on where money can be sent, or on how much, or how little, can be sent. You can now use Bitcoin to shop online for millions of items, or make a donation to a charity or organization, and you can even make purchases at physical stores. shops, and restaurants that now accept Bitcoin. using a free app or any device with a web browser.
No central bank . No privately-owned Federal Reserve central bank can print more money for themselves. not Bitcoin anyway. The value of each Bitcoin does not go down when the privately owned corporation known as "The Fed" decides to print more dollars. In fact, it might even go up in value. as it triggers more people to seek out alternatives to storing their money in the world's fiat currencies.
There will never be more than 21 million Bitcoins . The number of Bitcoins is limited by the design of the network. This number can never be increased. Also.
Bitcoins are virtually infinitely divisible . Currently, Bitcoins are divisible up to 8 decimal places. For example, you can send someone 0.00000001 of a Bitcoin. In the future, as the value of Bitcoin goes up, you might be sending your favorite coffee shop 0.00000003 Bitcoin for that cafe latte. Also, in the future, Bitcoin could become even more divisible, if needed. as the value of one Bitcoin becomes larger and larger.
How much is a Bitcoin worth?
The value of a Bitcoin (as measured in US Dollars or any other currency) is determined by the automated online markets. These markets operate 24 hours a day, 7 days a week, 365 days a year. They match buyers and their "bid prices". with sellers and their "asking prices". automatically.
Normally, what we call the "value of a Bitcoin" is simply the last amount a Bitcoin sold for on one of the major markets (or an average of several).
See the Value tab for links to web sites that give real-time value information.
I Bought a Bitcoin: How I Joined a Virtual Currency Megabubble
Yesterday, I did something entirely irrational – something both my common sense and my work as a business writer should have prevented me from even considering. I decided to buy a Bitcoin.
If you're just catching up, Bitcoins are a virtual currency that is, right now, experiencing a flash of instant celebrity. Bitcoins have been around since 2009, but recently, they've become the financial media's favorite obsession. The price of a single Bitcoin has gone on an insane tear, from $34 to $140 in the span of month. Wall Street analysts are getting questions from their clients about Bitcoins, Bitcoin ATMs are being put up around the world, and the value of all Bitcoins in circulation now stands at $1.6 billion. That's not a tremendously large number for a global currency (the value of all U.S. dollars in circulation is roughly $1.1 trillion). But for a so-called "crypto-currency," it's pretty impressive.
A Bitcoin is a unit of virtual, encrypted currency. Right now, a single Bitcoin unit (abbreviated as BTC) is worth about $140, but that value has fluctuated wildly. A Bitcoin functions like a normal currency, with a few exceptions: First, Bitcoins aren't issued by a government or a central bank. They're produced by a complex computer processing scheme called "mining." You'd need a Ph.D. in computer science to understand exactly how Bitcoin mining works, but basically, it uses distributed computing power and complex math formulas to "find" a certain number of Bitcoins every day. Once I mine a Bitcoin, or buy a Bitcoin from someone else, it's held in my virtual "wallet." When I want to use it to pay for something, I simply type in the recipient's address — a randomized string of between 27 and 34 letters and numbers — and off it goes. The entire process is anonymous and untraceable, which is part of the appeal. (There's more in this FAQ and this Businessweek story. if you're interested.)
Several friends warned me about buying a Bitcoin now, since prices are at an all-time high, and most smart people are predicting that the bubble will pop eventually. But many people expect the price of Bitcoins to go higher than $140. Henry Blodget half-jokingly suggested that Bitcoins could reach $400, and there's no logical reason why they can't keep rising beyond that. The more publicity Bitcoins get, the more demand there is. And since supply is limited by design, and no central authority can step in and "print" more Bitcoins, it's theoretically possible that the price could keep rising for a while before a bubble burst happens.
So I decided to jump on the bandwagon and buy a Bitcoin. A single Bitcoin. Partly, I wanted it for novelty value. Partly, I thought it might make me a few easy dollars. And partly, I wanted to see how easy it is for a lay person — who has no coding or hacking experience, and who has never dealt with a virtual currency in his life — to get involved.
The first thing to know about buying a Bitcoin is that you can't just whip out your credit card. Because Bitcoin transactions are completely anonymous, none of the big exchanges accept credit cards, owing to the risk of fraudulent chargebacks.
The most popular method of paying for Bitcoins is to give your bank account information to an exchange and transfer money into a Bitcoin account. I was uneasy about giving up my bank information to a sketchy currency dealer, and given that my goal was only to buy a single Bitcoin, I nixed that idea off the bat.
Option No. 2 is a bit convoluted, but allows you to pay for a Bitcoin in cash. Basically, you use a cash-payments service like Moneygram to pay an intermediary at a designated deposit spot. The intermediary then takes the cash, converts it to credit, and deposits the credit into a Bitcoin exchange account for you.
The insanely fast scaling of the Bitcoin economy has led to some technical glitches with big Bitcoin sites. The largest Bitcoin exchange, Mt. Gox. is only taking new memberships by application owing to high demand, and my application stayed un-approved for three days before I decided to go with a smaller exchange. I picked Bitstamp. which had a nice, beginner-friendly interface, and which — seemed to be able to get Bitcoin transactions processed. (Some other Bitcoin sites, weighed down by too many people trying to buy, are either shut down completely or processing only select transactions.)
To deposit money into a Bitstamp account, I had a few options: I could hand over my bank information (nope!), I could use another virtual currency system called Ripple to convert dollars into BTC (too complicated), or I could use a service called BitInstant.
BitInstant is a Brooklyn-based payments processor used specifically for Bitcoins. The way it works is: You tell BitInstant how much you want to deposit in a Bitcoin exchange account, which exchange (Bitstamp, Mt. Gox, etc.) you want it to go to, and your account number. You go to a "cash deposit location" (in my case, a CVS several miles from my house) and use Moneygram to pay a cash-payments service like ZipZap, which then pays BitInstant, which then credits your Bitcoin account. If it sounds complicated, it's because it is.
No comments:
Post a Comment