Start using Bitcoin

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Bitcoin Explained

Start using Bitcoin today

Start using Bitcoin:
(in a nutshell)

  1. Get a Bitcoin wallet.
  2. Buy bitcoin, or earn bitcoin.
  3. Spend bitcoin, or invest bitcoin.

In more detail:

Get started with Bitcoin

Bitcoin is a cryptographic currency ideal for the internet. Bitcoin is not backed by any government, but exists as a peer to peer protocol to store value. With Bitcoin, transfers of value can take place almost instantly, anonymously, and securely while lowering transaction costs to near zero.

Bitcoin’s strength comes from total transparency in some aspects and powerful encryption in others. While any transaction can take place anonymously*, all transactions are publicly recorded and checkable.

Bitcoin transactions are processed and added to the blockchain by bitcoin miners. Miners provide the computing power needed to support the network and are rewarded with new bitcoin as certain milestones are reached. Mining has become a competitive industry as the processing power required has expanded greatly.

There is no cost to get started with Bitcoin. All you need is to create a Bitcoin wallet. You can do this with software or use a web application. Hardware wallets are currently in production that would provide the best security. While web-based wallets may be useful sometimes, there is no substitute for a software wallet on your own computer or mobile device. You can have as many wallets as you wish, so this is not an either/or decision.

Software Bitcoin Wallets

There are a couple of options to set up your first bitcoin wallet for free. The wallet gives you the means to send, receive, and store bitcoin.

  1. MultiBit – This is very light, easy to use software to create a wallet. It is open source, multi-platform (Windows, Mac, and Linux), and offers fast synchronization with the network (5-10 seconds). We recommend MultiBit, especially for those who want to get started with Bitcoin quickly. You can create multiple wallets within the program, and multiple addresses within each wallet.
  2. Mycelium Wallet – A wallet app for Android. This not only provides portability, it is also features secure cold storage functionality and an integrated QR-code scanner. It offers a really easy way to buy and sell things with Bitcoin in person.
  3. BitcoinQt – the full, original Bitcoin client. This client must download the entire blockchain before its first synchronization with the network (this can take a day or more, because the file is huge, about 12GB). Being the original, it is in some ways the ‘best’ wallet. Using a wallet that does not download the whole blockchain requires you to outsource some trust. Decide for yourself if it is worth the extra trouble.

Web Bitcoin Wallets

There are many web-based bitcoin wallet services and applications. These generally provide value-added services or functionality. This added value is normally supported by fees somewhere. Just remember that using Bitcoin is free, so if you are not getting any extra value from a service, there is no reason to pay. I recommend these for use in addition to your software wallet, though some people use one service or another exclusively.

  1. Coinbase – A popular web wallet focusing on simplicity for Bitcoin newbies, especially for small business owners. They offer services such as mobile apps, integration with currency exchange, and enhanced payment systems for merchants. There is no fee for your first $1 million in transactions with Coinbase. You will need to link a bank account to purchase bitcoins. This is the easiest option for US users to buy Bitcoin.
  2. Blockchain.info – A popular wallet, and for good reason. Funding your wallet is easier with Coinbase. Blockchain.info is an entirely Bitcoin-funded company and operates without a bank account.

Once you have a wallet, you need some bitcoin. It’s easy to buy some through the wallets above, but it can still take some time. In the meantime, you can get free bitcoins here.

(*It’s important to remember that complete anonymity is rarely possible in anything. Bitcoin allows a huge degree of privacy, nearly anonymous, similar to using cash.)

Resources

This section will be added to as time goes on. This is a list of valuable Bitcoin community resources.

Bitcoin Talk – Forum for all things Bitcoin (and some things altcoin)

Let’s Talk Bitcoin – This podcast has a new episode twice a week, and is typically packed with interviews with Bitcoin movers and shakers. Find out about new applications, discussions of the protocol and possible changes or weaknesses, and interesting news and events about Bitcoin.

The Free Bitcoin Book – a totally free e-book with everything you need to understand and start using bitcoin.

Mine with CoinKing!

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