Bitcoin is the future of money. The cryptocurrency, and many aspects of it can be confusing to start with so here are a few tips on the basics of Bitcoin.
- What are bitcoins?
Bitcoins are decentralized, purely digital virtual coins exchanged directly between two parties online with no middle man. Unlike traditional money, Bitcoin, which has often been called “cash for the Internet,” is not controlled or backed by any bank or central government authority. Unlike credit card transactions, Bitcoin transactions, which take place internationally every day, are irreversible; they can only be refunded by the person receiving the funds.
- Are bitcoins anonymous and untraceable?
No, contrary to popular belief, they aren’t. While Bitcoin users don’t have to divulge certain pieces of identifying information, like their bank account and Social Security numbers or physical addresses, a traceable trail of each of transaction is left behind in a public log known as the blockchain. The public record prevents people from spending the same bitcoins more than once.
- How are bitcoins purchased?
Bitcoins are bought online using real analog money (U.S. dollars, Japanese yen, etc.) via Bitcoin exchanges and private sellers. Some of the more popular Bitcoin exchanges include Bitstamp, Coinmama and Coinbase, though there are dozens to choose from around the globe.
- How can I start using Bitcoin?
You don’t have to master the technical ins and outs of Bitcoin to start using it. First, you’ll need to install a Bitcoin wallet on your computer or smartphone. Or you can use a web wallet in the cloud such as Coinbase. Some desktop Bitcoin wallets (also sometimes called clients) include Bitcoin-Qt, Armory, Electrum, Hive, and MultiBit. If you use a desktop wallet provider, be sure to backup your computer regularly.
Mobile Bitcoin wallets, like Bitcoin Wallet for Android, let you use Bitcoin to pay for items in physical stores that accept them by scanning a QR code or using NFC “tap to pay.” Web wallets, such as Coinbase and Blockchain.info enable you to use Bitcoin from any browser or mobile device and often offer additional services, like current Bitcoin prices and news and the ability to buy, use and accept the cryptocurrency.
Once you’re signed up, your Bitcoin wallet provider should generate your first Bitcoin address and you can create more whenever you need one, according to The Bitcoin Foundation. You can share your addresses with friends and contacts so they can pay you and you can pay them in Bitcoin.
- Which companies accept Bitcoin payments?
Thousands of businesses throughout the world currently accept Bitcoin as a form of payment. While once notorious as payment for illegal goods online, thousands of reputable e-commerce businesses are starting to accept BTC as payment, including Wordpress, Amazon.com and Maramani.com where you can purchase complete sets of house plans. Larger brick and mortar retailers are beginning to accept Bitcoins in their stores, including Kmart, Sears, Home Depot and CVS.
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