The Complete Guide to Using Bitcoins

Bitcoin is a kind of electronic currency (peer-to-peer money, to be exact), produced and distributed digitally. Human involvement is quite minor. Bitcoins are non-printed money, an approach opposite to the conventional principle of currency. They are generated by a considerable amount of people using networked computer systems all around the globe using software.

With Bitcoins you don’t need to worry about banks, credit cards or having you account frozen. Also, there hardly is a chance to have your identity stolen when you’re on Bitcoins. You might not earn any kind of interest, yet you always have got quick access to your cash and you always know accurately what amount you’ve. In case you want to give funds to another person, it works great.

You don’t need to fill out any forms or need to deal with account numbers that always confuse you. Bitoins users don’t even need to worry about any middleman, you simply pass over the funds and that is it. Nevertheless this guide shows how one can use it:

Garbing a Bitcoin wallet for you

Getting your hands on Bitcoin wallet is the initial step for you towards start using Bitcoins. As you keep your money in a wallet, similarly, a Bitcoin wallet is what you need to store your Bitcoins. Compared to the money you keep in bank accounts, Bitcoin funds are a lot more tangible! The files you create for Bitcoin are simply like all those documents you do create in your computer, these can easily be moved and stored onto various devices you want to. In case you want to keep multiple copies, you can duplicate your Bitcoin files – that obviously won’t duplicate the funds inside them.

A BitCoin wallet contains two elements: the wallet-file that tend to store BitCoins in it, and the wallet program (aka BitCoin client) that opens all those wallet files. Elaborating it further with an example we can say that it’s possible to save wallet file onto USB flash drive and then run (open) it on another computing device that has got the wallet file installed on it already. It’s going to be easy like having a piece of cake, as there’s a specific version of Bitcoin client for almost every single OS (operating system) that one can install – so the chances are you can use Bitcoin file literally anywhere you’re.

The official Bitcoin client can be downloaded from Bitcoin official website, there you’ll be able to pick right version according to your operating system. And of course, the introductionary getting started info being provided there is worth reading and appreciating.

In case you’re running Windows or OS X, take it as like having to install any other typical computer application on your platform. The wallet file is going to be generated and your very first Bitcoin receiving address will be assigned to you, as soon as you open up the Bitcoin client (after installing it, of course).

For the users on Ubuntu operating system, a .tar.gz format file is presented once they download Bitcoin client. The file contains four various versions including, the “windowless” server in both (32 bit and 64 bit) format flavours and of course, the main client. You can literally put the folder anywhere you want and then clicking on Bitcoin will start off the program for you.

If you don’t want to install the Bitcoin, there is another route you can take – that’s the use of a service online. One most used service we can tell you is Instawallet.org. What this site does is that it produces a wallet-file for you and then the file is tied to a particular URL that you bookmark. By doing this you’ll be able to access the Bitcoins you’ve, but the problem here is – would you like to trust any third-party for your Bitcoins? We, won’t recommend that!

Filling Bitcoin Wallet

If you’ve got a wallet, then the chances are you probably are going to keep money in it. We’re going to walk through the process of doing the same justice with Bitcoin wallet. There’re three core ways with which you can add the Bitcoins to your wallet file including, donations (and free Bitcoins), Bitcoin Trading (or becoming a merchant of Bitcoin) and currency exchange. All one of these explains itself quite well by name, but yet we’ll elaborate on it a bit further below.

How about introducing a new technology to you before that, fair enough? It actually is need of the time to throw some lights on it, first here. Well, the BitCoins actually are sent to one account (wallet) to another with the use of a receiving Bitcoin address that’s a lengthy string of the characters being generated randomly – which points toward your Bitcoin wallet file. You can think of the process as If a sender writes a cheque of a specific amount, but here in this case there’s no need that the cheque should be cashed manually.

It’s quite interesting that the only one receiving address isn’t you can have forever, you can create a brand new one for every single expected transaction. Although, many folks would prefer not to waste time on creating a new address for every transaction, but it’s recommended – as by doing so, you’ll be able to track all of the transactions in more systematic manner. And all of the previous addresses remain active and valid, so receiving addresses you generated in the past can be reused by you again & again if you want.

Free Bitcoins and Donations

As the name suggests, we’re going to talk about the free Bitcoins that one can get (either in donations or from other folks). These usually are not going to be of a decent amount, and in most of the cases, even lesser than a Bitcoin. But something is better than nothing, and in this case, these at least are going to give you an idea that how a Bitcoin transaction exactly works!

Https://freebitcoins.appspot.com, dubbed as Bitcoin Faucet is one of the best places where you can get your very first Bitcoin (or at least some percentage of it). The amount of Bitcoin give here to new users is 0.001BTC. You’ll need Google mail or G+ account with some description for it, and as a matter of fact any Google account will do. Multiple Google accounts can be used to sign up, but no surprise, there’re some countermeasures being implemented by the provider to make sure no one is abusing free money.

After logging in by using a Google account of yours, you’ll be provided with a captcha (which is a practice being made to confirm you’re a human being), after that you should enter your Bitcoin receiving address prior to clicking on “Get Some!”.

That’s all! You might not see the Bitcoin amount in your wallet immediately, as the sender (Bitcoin Faucet) tend to send the money in bulk – probably to reduce some load on their server. But nevertheless, the amount is going to appear in your account within 10 minutes or so – not more than that!

Now, the donations also work quite similarly to free Bitcoins. You can place your Bitcoin receiving address at anywhere you want, let it be Email signature, forums, FaceBook or even on a local (real life) place. This way, if someone would have some extra coins and want to say thanks to you for anything – that’s only going to be the matter where they send a Bitcoin your way to the receiving address.

Currency Exchange for Bitcoins

There’s no doubt that the free coins are awesome, but on the contrary, you’re not going to have a decent amount with it to work. The simplest way for you is to make use of Bitcoin currency exchange, where you’ll be exchanging your currency against Bitcoins you want. There’re a decent number of sites you can go with, but you need to make certain that the website you’re going to use for the purpose supports your currency. Or else, you’re going to end up paying all the transaction fees and exchanging money for twice.

Here, indeed, you need to be super-cautions and only go with the trusted sites. To make things easy and safe for you, Bitcoin wiki has got a page where a cool list of exchange sites have been listed. The page can be found here. Real time and fixed rate are two major forms of the currency exchange. Both are quite self-explanatory but below we’re going to go in detail for you.

In real time Bitcoin trading the buyer mentions maximum price he/she is going to be able to good to pay (for each of the BitCoin), while on the other hand seller puts the lowest price he/she is willing to sell out each of the BitCoin for. Trade happens instantly when these (buyer’s and seller’s) two prices being listed overlap. Such trades can earn you decent exchange rate, but patience is the key to success here.

On the contrary, you can take the fixed rate exchange more like the standard foreign-exchange transaction, where a party will offer a flat rate that’s going to be fixed for a particular time period, and will be willing to exchange any certain quantity of the currency against Bitcoins (of course, at a particular standard rate).

As a matter of fact, you’re not going to close that much cool deals when on fixed-rate exchange – compared to the real time trading. But it’s more reliable as well as safe option.

MtGox.com is the most popular site when it comes to Bitcoin exchange, as almost 75-80 percent of the Bitcoin transactions are done through it. The users tend to use real time model here.

Bitcoin Trading

Yet another good way of earning Bitcoins is to get them by offering services or selling goods online, and then, in return accepting the Bitcoins for payment. You can earn Bitcoins on anything you want, let it be professional things like website design and development or crazy stuff like ordering the pizza for somebody else.

In case you’ve physical objects to sell out, websites like bitcoinworldmarket.com that pays you of in BitCoins (and also in other currencies) are good to go with.

If you’ve an off item to sell or a service to provide, forgitcoin.com is the site you should head towards to. If you’ve heard about Fivver.com (freelancing website), you can think of it similar to that. As like Fiverr (which deals with USD, though), the site works by asking you what you’re up for and how much coins you’d want for the gig.

If you’ve an online business already, you can start accepting Bitcoins with ease. The process of getting started with it is very simple, what you need to do is to follow the guide available on BitCoin Wiki here – then you’ll need to post a link on Trade page (that’s to make sure people will be able to find your site).

Spending Bitcoins

It’s quite funny that spending bitcoins is something you can perform on the exact places you went on and earned Bitcoins for you. Bitcoin Wiki’s trade page probably is the best place where you can find major sites accepting Bitcoins for the services or goods.

As we stated above, all of the transactions that relate to Bitcoins need a receiving Bitcoin address. As like the case when you’re about to get coins, you send a receiving address to other party – while spending, you’re going to be provided with a Bitcoin receiving address so that you can send Bitcoins on their way. Simple!

Sending out BitCoins is as easy as having a piece of cake. Within Bitcoin client, you’re going to have a button dubbed as ‘send coins’ – you simply need to click it. After that, a new window of ‘Send Coins’ will appear, simply input the Receiving Bitcoin Address you need to send out the coins to, enter an amount (the amount of Bitcoins you want to send out from your wallet) and then click ‘Send’. That’s all!

Conclusion

BitCoins are simply great. It’s always cool to have your money stored on your personal computer. And of course, you get rid of the need of dealing with banks and all those middlemen while buying anything online. And on top of that, the anonymity you get by using Bitcoins is worth appreciating.

Now you know how to use Bitcoins and are good to go and start utilizing it. But, as you’re dealing with your money personally and there is not “built-in” backup system provided in case you run it a sudden disaster or your coins get stolen. So, it’s very important that you take needed steps at your own to make your wallet always backed up and secure. That’s a whole different topic and hence, we’ll be doing a separate post for it very soon. Stay tuned…

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