Bitcoin Basics


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DATE: April 13, 2013, 12:44 p.m.

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  1. ###FAQ on BitCoins####
  2. Lots of people have asked me about Bitcoins, and I thought what better way to teach people I know or ask about Bitcoins, than to write a little post here, and earn some Bitcoins in the process.
  3. ##Note##
  4. Because I know my audience is not technical, I may gloss over some details, and such, but the basics are here nonetheless
  5. ##Basics about Bitcoins##
  6. Bitcoins are a virtual currency. But I know some of my audience is new to this, so I want to put it in simpler terms:
  7. Think back to 1980's when you would go to the arcade and bought tokens. Your parents might give you a couple of tokens as a gift, but if you really wanted to have fun, you had to buy tokens. And as you recall tokens only had value at the arcade, and you could buy them for cash.
  8. Now let's say you then went to school, and had some left over tokens. At school they were not accepted for lunch, but others that like arcade games and had a use for them wanted them. Now imagine there was a shortage of these tokens, but they were still people who wanted to play the games at the arcade. Imagine now that the machine to make Tokens took very long, and there was a limited number. You could probably sell you tokens, for a nice profit. Another option might be because it took so long for new tokens to be made, they settled to give our partial tokens that allowed you to play, but maybe not as long. That's essentially the Bitcoin market.
  9. Bitcoins were started by a someone(group or person) with the alias of Satoshi Nakamoto. Bitcoin are not managed by any government or central authority but are created automatically and given to servers or "bitcoin miners" that confirm bitcoin creation as they add codes to a decentralized and archived log approximately every 10 minutes. These coins are made from solving complex math problems. To do mining is very expensive from a computer resource manner. Currently, 25 new bitcoins are generated with every 10-minute block. This will be halved to 12.5 BTC during the year 2017 and halved continuously every 4 years after until a hard limit of 21 million bitcoins is reached during the year 2140.
  10. In all honesty I assume if you are reading this, though, you have already heard about Bitcoins. Your real question is now how you get involved.
  11. ##BitCoin Wallet##
  12. The first step to be involved in Bitcoins is having a wallet. The best Wallet for me is https://blockchain.info. The reason for this is they have an iphone/android app. They have two-factor authoriztion and they have a sync/backup with various systems like dropbox.
  13. The reality is a Bitcoin Wallet is like you real wallet. Lose it and you lose all your money. Give away the wrong information and you are screwed. Bye Bye money.
  14. Did I mention https://blockchain.info is free? So Just go and create a wallet.
  15. ##What Next? Bitcoin Address##
  16. Next you will get a Bitcoin address. You can create numerous Bitcoins address, but you will start with one.
  17. This address is similar to a bank account, but you can give it out to send/receive money. It starts with a 1 and a whole bunch of digits.
  18. ##Get Bitcoins##
  19. Now you can go earn Bitcoins. You will see there are lots of ways to earn free bitcoins to get a taste of things.
  20. One of the easy ones is http://coinreaper.com (http://cur.lv/mgfd)
  21. One way to earn free Bitcoins is to use BitBin instead of pastebin or other pasting sites, as you can actaully earn bitcoins for your posts. (this is the site you should be reading this on--if you are not reading it here, go there: http://cur.lv/mgfm)
  22. Another great way to earn Bitcoins is by using https://coinurl.com/index.php?ref=4f05534b026aedc450c718a117c7e5b5
  23. This is a great way not only to get traffic to your website as a webmaster, but to earn Bitcoins for the links your share. You might have seen this system in place before with other companies. Basically you see an ad before you see the content. They also work with published around the web, where you can place text or banner ads.
  24. You will find other ways to earn money out there as well, but the three above I have found the best.
  25. ##Buying Bitcoins##
  26. You can of couse buy bitcoins to use. It's too bad you didn't buy them sooner, as at one point they were really cheap. Thankfully 1 bitcoin can be divided into microcosmic units so you still have some buying power
  27. here is a full list of where to buy:
  28. https://en.bitcoin.it/wiki/Buying_bitcoins
  29. ##Speculation or Exchanges##
  30. Just like any currency there is an exchange you can check out here: https://mtgox.com/. They handle 80% of the trades.
  31. ##Final Thoughts##
  32. Bitcoin value can be wildly volatile, so I personally just use them for fun. I don't really see them as an investment opportunity. If you decided to speculate, do so at your own risk. There are chances for great gains and great losses.
  33. If you are still unsure about Bitcoins or want to learn more, I really suggest you read the Wikipedia article here: http://en.wikipedia.org/wiki/Bitcoin or this site: https://en.bitcoin.it/wiki/Main_Page
  34. If you found this useful please share this post

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