What is Bitcoin? Bitcoin Explained Simply for Dummies

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros — they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. It enables users to exchange online credits for goods and services. Bitcoins are used for a wide range of transactions from buying burgers to buying cars. You can use it to pay friends with the click of a button or store them safely in your digital wallet. Here are some simple steps on how you can get started with bitcoin today!

1. How to get started with Bitcoin?

Bitcoin is an online currency. You can use it to pay for things, and it’s gaining in popularity. To get started, you need to set up a digital wallet to store your bitcoins. Coinbase is the most trusted and easiest to use. They’ll give you a wallet for free, and you can buy and sell bitcoins directly from your wallet. If you already have a wallet address, you just need to add your email address to the app. Once you do, you can send and receive bitcoin! Your email address isn’t visible to others, and the only way others can see your bitcoin wallet is if you need to send some funds to someone else. Then, they can show your address to other people.
Now you’ve set up your wallet, it’s easy to buy and sell bitcoins. Here’s how to buy and sell using Coinbase.
How to get started with Coinbase:
Once you have set up a bitcoin wallet, you can buy and sell.
Step 1: Log in to your Coinbase app. Go to Settings > Account. Click or tap Add a Wallet Account.
Step 2: Enter your email address, and then click or tap Next.
Step 3: Select the type of wallet you would like to create in the Your Account section. If you use a credit card or PayPal, you can choose “online wallet” under the link in Step 3.
Step 4: Choose the bitcoin wallet you wish to use from the list, and then click or tap Next.
Step 5: Select which type of account you would like to create.
Step 6: Fill out your API key, and then click or tap Next.
Step 7: Verify your identity and provide an email address.
Step 8: Choose payment methods if you prefer PayPal or Venmo, and then click or tap Next.
Step 9: Enter a description, choose a secure password, and then hit or tap Next.
Step 10: Specify a payment scheduled time and submit.

2. How do you store bitcoins?

There are several ways to store your bitcoins. You can use a paper wallet, which involves you printing out your public and private keys on a piece of paper. You can also use a hardware wallet, which is a small device that stores your public and private keys and connects via a USB port.
The most popular wallet is called the Bitcoin wallet, which allows you to view your balance and create and send transactions. This is where your “public key” — your ID — is stored. Private keys — like “money” in your bank account — are used to access your balance, and to spend your bitcoin. The public key is usually something you know, like your social security number (SSN) or your passport number. The private key is less known (you may call them a “private key”), but also harder to find. A vulnerability in the Bitcoin software allows a hacker to use a “private key” to access your bitcoin. This allows more value to be stored on the same computer where the wallet files are stored. These files are referred to as “wallets.” Your bitcoin is “stored” in these files, and accessed as you request, much like checking your checking account statement.
Before you begin, you must decide how much bitcoin you want to store. Currently, the maximum is 21 million, or about 6 billion dollars. If you need more, you must purchase more bitcoin (meaning it has increased in value). For each bitcoin you want, you must purchase one bitcoin. This process of purchasing bitcoin can be manual or automated. If you prefer to have your bitcoin held manually, you will have to write down a private key for each item you want to purchase. When someone asks you for a wallet, they will also ask for your private key, which you must provide.
There are several places where you can purchase or deposit bitcoin. An online exchange is an online place you can buy and sell bitcoin for other currencies, like USD or CAD.

3. What are the different ways to buy and sell bitcoins?

There are five main ways to buy and sell bitcoins: 1) LocalBitcoins.com - This is a marketplace for trading bitcoins locally to cash or online payments of your choice. It's great for meeting people in person and exchanging cash for bitcoins.2) Libra, a platform founded in Italy, allows purchasing and selling of bitcoins to anyone anywhere in the world. To buy, swipe your Libra card on the app and then input your debit or credit card details. 3) Via an exchange (which we mention in detail below) - Buying and selling via an exchange involves you sending the sellers a transaction request via their application on your phone, and agreeing to meet in person on the spot where the exchange is physically located. Some exchanges can also allow cash deposits and withdrawals. You can find an exchange near you here. Some exchanges charge a transaction fee. You can find exchange details here (a free trial is available while stocks last). 4) Over-the-counter (OTC) - Buy and sell bitcoin over the counter at any retailer, like a post office, supermarket, gas station, or hardware store. 5) Over the internet (e-wallet) - This is where you securely send and receive bitcoin without physically meeting in person. You can buy and sell via this system, too. You can log in to an exchange website you’ve registered for by going to their website configuration page and updating your details or by logging into your account at a bitcoin wallet. For more information on Bitcoin Exchange, click here.

The first step is to download the app and set up a username and password. The app will ask you for your name and local area code. Then, you can start shopping for bitcoins! We recommend using LocalBitcoins.com for this, as it’s a popular marketplace.

Here’s how to buy bitcoins for cash:

You can buy and sell locally and worldwide with no commission! If someone asks you to buy or sell them some currency, ask them for cash first.

4. What is mining and how does it work?

Mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions. This ledger of past transactions is called the blockchain as it is a chain of blocks. The blockchain serves to confirm transactions to the rest of the network as having taken place. There is no limit on the number of blocks Bitcoin can have.

To participate in mining, anyone can run a machine that runs the software that solves math problems issued by the network, also called a mining rig. That kind of machine sells for about $1200 to $5,000.

As the supply of new coins is limited, those who have more are displaying their wealth by paying higher and higher prices. Some of them have speculated that they will be running into further challenges before they can print more. So we can expect to see some discounts on mining machines as time passes.

In 2019, people around the world started using what is now called a cloud mining rig. Models vary according to the amount of mining power they offer and whether they are on-premise or in the cloud. The average price for an on-premise rig is around $2,200 while cloud mining costs are a couple of dollars per hour.

The advantage of a cloud mining rig is that the value of the coin is removed the moment the hardware starts working. Cloud mining rigs calculate the return on investment for you and mine for you on your behalf.

Mining Williams has two business models, one for individuals and one for business. Williams distributes mining rigs and mining software. They sell either individual miner licenses or multiple concurrent versions of the same license. Individual miner licenses cost $90 per year or $290 for six months. For companies, they sell multiple licenses for different use cases. The base price of a single miner license is $270 per year or $750 for a six-month period.

Individual miner licenses are great if you want to start a business selling mining services.