Bitcoin Basics

Bitcoin is a virtual currency. It doesn’t have the kind of physical form that the currency and coin that we used to have. These are electrons – not molecules.

But think about how much you personally manage. You get a salary that you take to the bank – or it is autodeposited without you seeing the paper without printing it. Then you use a debit card (or checkbook, if you’re old school) to access the funds. At best, you will see 10% of it in a cash form in your pocket or in your pocketbook. So, it turns out that 90% of the funds you manage are virtual – electrons in a spreadsheet or database.

But wait – those are US funds (or whatever country you’re from), bank safe and guaranteed in full faith by the FDIC up to about $250K per account, right? Well, not exactly. Your financial institution may only be required to keep 10% of its deposits on deposit. In some cases, it is less. It lends the rest of your money to other people for up to 30 years. It charges them for the loan, and pays you for the privilege of lending to them.

How is money made?

Your bank makes money by lending it.

Say you deposit $1,000 in your bank. Then they loaned $900 to it. Suddenly you have $1000 and someone else has $900. Amazingly, there’s $1900 floating around where once it was just a grand.

Now say your bank lends 900 of your dollars to another bank. That bank in turn lends $810 to another bank, which then lends $720 to a customer. Poof! $3,430 in a flash – almost $2500 made from nothing – as long as the bank follows your government’s central bank rules.

Creating Bitcoin is different from creating bank funds because money comes from electrons. It is not controlled by the central government bank, but by the consensus of its users and nodes. It is not created in a limited mint in a building, but through distributed open source software and computing. And it takes some kind of actual work for creation. More on that soon.

Who invented BitCoin?

The first BitCoins were in a block of 50 (the “Genesis Block”) created by Satoshi Nakomoto in January 2009. It had absolutely no value at first. It was just a cryptographer’s game based on a paper published two months earlier by Nakomoto. Nakotmoto is an apparently fictional name – no one knows who he or they are.

Who keeps track of all this?

When the Genesis Block was created, BitCoins were created by doing the work of tracking all transactions for all BitCoins as a kind of public ledger. Nodes / computers that perform ledger calculations are rewarded for doing so. For each set of successful calculations, the node is rewarded with a certain amount of BitCoin (“BTC”), newly created in the BitCoin ecosystem. Hence the term, “BitCoin Miner” – because the process creates new BTC. As the supply of BTC increases, and as transactions increase, the work required to update the public ledger becomes harder and more complex. As a result, the number of new BTC in the system is designed to be about 50 BTC (one block) every 10 minutes, worldwide.

Although the computing power for BitCoin mining (and for updating the public ledger) is currently increasing, so is the complexity of the mathematical problem (which, in fact, also requires a certain guess amount), or “proof” required for mining. BitCoin and settle transactional books at any time. So the system still only generates one 50 BTC block every 10 minutes, or 2106 blocks every 2 weeks.

So, in a sense, everyone is tracking it – that is, all the nodes in the network are tracking the history of every single BitCoin.

How many are there and where are they?

There is a maximum number of BitCoin that can be created, and that number is 21 million. According to Khan Academy, the number is expected to peak around the year 2140.

As of this morning there were 12.1 million BTC in circulation

Your own BitCoin is kept in a file (your BitCoin wallet) in your own storage – your computer. The file itself is proof of the amount of BTC you have, and it can move with you on a mobile device.

If that file containing the cryptographic key to your wallet is lost, so is your supply of BitCoin funds. And you can’t take it back.

How much is it worth?

The amount varies based on how much people think it’s worth – like exchanging “real money.” But since there is no central authority trying to keep the value at a certain level, it can vary very dynamically. The first BTC was basically worthless at the time, but that BTC is still there. As of 11AM on December 11, 2013, the public value is $906.00 US per BitCoin. When I finished writing this sentence, it was $900.00. At the beginning of 2013, the cost was about $20.00 US. On November 27, 2013 it was worth more than $1,000.00 US per BTC. So it’s a bit volatile at the moment, but it’s expected to settle.

The total value of all BitCoin – at the time of the end of this sentence – is about 11 billion US dollars.

How can I get me?

First, you need to have a BitCoin wallet. This article has links to get one.

Then one way is to buy some from another private party, like these guys at Bloomberg TV. One way is to buy some on an exchange, such as Mt. Gox.

And finally, one way is to dedicate a lot of computer power and electricity to the process and become a BitCoin miner. That is outside the scope of this article. But if you have a few thousand extra dollars lying around, you can get a rig.

How can I spend?

There are hundreds of merchants of all sizes that take BitCoin as payment, from cafes to car dealerships. There is even a BitCoin ATM in Vancouver, British Columbia for converting your BTC to cash in Vancouver, BC.

Then?

Money has a long history – millennia long. A recent legend tells us that Manhattan Island was bought for wampum – shells and such. In the early years of the United States, different banks printed their own money. On a recent visit to Salt Spring Island in British Columbia, I spent money that was just fine on the beautiful island. The common theme among these is a trust agreement among its users that a particular currency has value. Sometimes that value is tied directly to something durable and physical, like gold. In 1900 the US tied its currency directly to gold (the “Gold Standard”) and in 1971, that tie ended.

Today money is traded like any other commodity, although the value of money in a particular country can be increased or decreased by the actions of their central bank. BitCoin is an alternative currency that is also sold and its value, like other commodities, is determined by trade, but is not restricted or reduced by the action of any bank, but directly by the actions of its users. Its supply is limited and known however, and (unlike physical money) so is the history of each BitCoin. Its perceived value, like all other currencies, is based on its utility and trust.

As a form of money, BitCoin is not exactly a new thing in Creation, but it is certainly a new way to make money.

“Mommy, where did the Bitcoins come from?” Well, you see, when a shiny young Bitcoin catches the eyes of an ambitious miner, and because they love each other…

Wait, that’s obviously hard to solve here. Besides, my whole goal is to keep things simple. However, Bitcoins are created by solving complex mathematical problems. This is done by a powerful engine built to solve these mathematical problems. This process is called mining. The people who own these machines to make money mining Bitcoins are called miners. When a set of problems is solved it is known as a block. Blocks are verified by other users and once they are verified, they are added to the so-called block chain. This chain continues to grow with a new block added to it roughly every 10 minutes. This chain is just a master ledger that will continue to grow and never end.

Very powerful mining machines zap a lot of electricity and increase a miner’s monthly utility bill. The reason it takes so much power is the sophistication of the mathematics involved. This requires the mining machine to perform complex cryptographic algorithms. When a math problem is solved by the machine, a block of coins is generated. Every time 210,000 blocks are created, the miner’s reward is halved. It took 4 years to accomplish this. So it’s like a Bitcoin Olympics. Currently the block reward is 12 Bitcoins (on June 23, 2020 the reward is only 6 coins). Those coins go to the miner whose machine is the lucky winner of the lottery at that time. There will be a winner every 10 minutes. There are also many miners competing there as well. Said miner now has something of value. Mine enough coins and you’ll pay your electricity bill and then some.

There is another way for me. This is called cloud mining. With this type of mining you pay to use someone else’s network and that cuts your income significantly. The positives of this method are that it does not require using your electricity or even buying a machine.

Sounds good to me. I want to start mining now. Is this a good idea and can I generate passive income on a regular basis? Likely. Hold tight for now and you can make that call later.

Let’s try to break it down.

Returning to the original way of mining machine, you should start by buying a quality mining machine. That will set you back about $2,000. Here is a picture of a good machine (Antminer S9 from Bitmain) able to make a high hash rate of 14 TH/s. 1 TH/s is 1,000,000,000,000 hashes per second. This machine can do 14 times that. That’s a lot of hashing power. A hash is simply a long number that the machine generates each time the algorithm tries to solve it. Again, to use my lottery analogy, all these machines are out there hoping to be the next winner.

Then, your chances of winning are more difficult with more competition. What further complicates this matter is that every time a math problem is solved, the next problem becomes more difficult to solve. Bitcoin network difficulty changes roughly every two weeks or 2,016 blocks. The number of Bitcoins that can be generated is infinite. That number happens to be 21,000,000. Once we hit that number no more Bitcoin will be mined again. However, the block chain itself will continue to expand as it is used to verify each transaction or purchase.

Remember that pseudonymous Satoshi Nakamoto I wrote about too? Did you know that today’s math problems are more than 70,000 times more difficult for machines to solve than they were when he mined the 1st Bitcoin in 2009?! The estimate is that the last coin will be mined in 2140 because the system will be created every four years (210,000 blocks). There are already 16,400,000 coins mined (78%) and every coin from here on out will be mined at a slower rate. Yes, you read that right. Basically 80% is mined in the first 8 years and it takes more than 100 years to mine the last 20%. If any of my great, great, grandkids are reading this I hope you are sitting pretty with our family’s Bitcoins currently worth 220,000 per Bitcoin. We can all dream right!

Buying a machine for mining or buying a cloud mining contract is risky. While there are some great success stories out there, be sure to research them carefully before deciding whether mining is right for you. For every person who makes money, there are many people who lose money.

By the way, a great place to see all the cryptocurrencies out there and their total coins and market cap, Coin Market Cap is a great resource. You can find all 700 plus fly-by-night altcoins there. An altcoin is simply a way of saying any cryptocurrency coin that isn’t Bitcoin. By now you probably know that Bitcoin is like the Rose Bowl, the Granddaddy of them all! I really want to limit my focus and research to the top 10 for now. Not that there aren’t success stories from one of today’s almost nothing. It’s just that finding one is like picking the right penny stock. Sticking with established companies recognized by top analysts is a much safer play. The same goes for the exchange you use to buy, sell, and sell. That’s why I use Coinbase to make my trades because they are the most reliable, safe, and easy exchange. They also have the most thorough vetting process when it comes to adding altcoins.

Here is a recap of the key points from this article:

-Bitcoins are created from mining

-Mining is done by powerful machines that can solve complex mathematical problems. You can also buy contracts called cloud mining if you don’t want to buy a machine.

-The problems get harder as the coins are mined and the production rate slows down

-In May 2017, there were only 72 Bitcoins mined per hour (12 every 10 minutes)

-On June 23, 2020, it will be reduced again to only 6 performed every 10 minutes

-Almost 80% of Bitcoin’s finite number of 21,000,000 coins have already been mined

-Competition among miners and more complex mathematical problems make it difficult to perform a profitable mining

-The last coin is estimated to be mined in 2140

Future of crypto currencies

When you look at the cryptography-based currency market, it appears exciting, worrying and mysterious at the same time. The pioneer, Bitcoin, has gained huge popularity in the last few years. The currency has undoubtedly fallen a lot, but has regained its position. In addition, ICOs for new cryptography-based currencies are emerging at a rapid pace.

A lot of money is invested in the Bitcoin industry

We cannot ignore the fact that a huge amount of money is invested in the domain. But according to financial experts, the whole future seems a little doubtful. The future of crypto-currency is more based on predictions of technological trends and assumptions made. There are some pro crypto-currency advocates who think of a bright future, while others warn people about the future of crypto currency.

Changing national currencies in 2030

Some of the leading futurists believe that crypto currency will stay and rule the financial market. It is predicted that crypto-currencies will replace national currencies by almost 25% by the year 2030. Crypto based currencies are considered more efficient, especially because of the way they work. Therefore, changing national currencies is not a big deal.

In 2009, when Bitcoin was introduced, it showed a lot of potential and it was successful. Within a year, it flourished and its development continued, making it legal currency and an asset in many countries. In the past few years, many other crypto type currencies have emerged and their popularity has led to the legitimization of a new asset or currency other than the conventional currency that operates in the global financial economy.

We cannot deny the fact, that there is some money to be lost in the cryptography based currency economy. However, it is also believed to have a high probability of making a profit.

You can’t expect cryptography-based currencies to work like money

Crypto type currencies operate on blockchain technology and are not tied to any centralized authority unlike traditional currencies. This is often called the blockchain economy by some experts. The IRS considers crypto currency more like an asset than actual currency. It is not wrong to say that Bitcoin is more or less similar to selling real estate.

When you sell your Bitcoin, you are passing on smart digital information to someone else. There are several Visa companies that have already made the use of crypto-currencies easier for regular transactions. However, crypto-currency is still something that needs to hold a strong position in the mainstream economy.

We live in an impatient age, and when it comes to money we want more of it now, today, not tomorrow. Whether it’s a deposit for a mortgage or cleaning up credit cards that drain our energy long after we stop enjoying what we bought with them, the sooner the better. When it comes to investing, we want quick picks and quick returns. Hence the current mania for crypto-currencies. Why invest in nanotechnology or machine learning when Ethereum is locked in an endless upward spiral and Bitcoin is the gift that keeps on giving?

A century ago, the American writer George S Clason took a different approach. In The Richest Man in Babylon he gave the world wealth – literally – in financial principles based on things that seem old-fashioned today: caution, wisdom and prudence. Clason used the wise men of the ancient city of Babylon as spokesmen for his financial advice, but that advice is as relevant today as it was a century ago, when the Wall Street Crash and the Great Depression were looming.

Take for example, the five rules of gold. If you’re looking to put your personal finances on a good footing, no matter where you are in life, this is for you:

Law No1: Gold is happy and in increasing numbers to anyone who puts at least a tenth of their income to create land for their future and their family. In other words, save 10% of your income. Minimum. Save more than that if you can. And that 10% isn’t for next year’s holiday or a new car. This is for the long-term. Your 10% can include your pension contributions, ISA, premium bonds or any type of high interest/restricted access savings account. OK, interest rates for savers are at historic lows now, but who knows where they’ll be in five or ten years? And compound interest means your savings will grow faster than you think.

Law No2: Gold works diligently and contentedly for the wise owner who finds a profitable job for it. So, if you are looking to invest rather than save, do it wisely. No crypto-currencies or pyramid schemes. We focus on the words “profitable” and “employment”. Make your money work for you but remember the best you can hope for on this side of the rainbow is consistent returns over the long term, not lottery wins. In practice this probably means shares in established companies that offer a regular dividend and a steady increase in share price. You can invest directly, or through a fund manager in the form of unit trusts, but before parting with a penny, see Laws 3, 4 and 5…

Law No3: Gold clings to the protection of the prudent owner who invests in it under the advice of the wise to manage it. Before you do anything else, talk to a qualified, experienced financial advisor. If you don’t know, do some research. Check them out on the internet. What are their skills? What kind of clients? Read the reviews. Call them first and hear what they can offer you, then decide if a face-to-face meeting will work. Check out their commission arrangements. Are they independent or tied to a particular company, under contract to push the company’s financial products? A decent financial advisor will encourage you to get the basics in place: pension, life insurance, a place to live, before guiding you to invest in new markets and space travel. When you’re satisfied that you’ve found a counselor you can trust, listen to them. Trust their advice. But review your relationship with them at regular intervals, say annually, and if you’re not happy, look elsewhere. Chances are, if you make a good decision in the first place, you’ll stick with the same advisor for years to come.

Law No4: Gold will disappear from one who invests it in businesses or purposes that they are not familiar with or do not approve of those skilled in its storage. If you have deep knowledge of food marketing, by all means invest in a supermarket chain that increases market share. Likewise, if you work in a company with an employee share ownership scheme, it makes sense to take advantage of it, if you are sure that your company has good prospects. However, you should never invest in any market or financial product that you do not understand (remember the Crash!) or cannot fully research. If you are tempted to try your hand at currency dealing or options trading and you have a financial adviser, talk to them first. If they are not fast, ask them to refer you to someone who is. Above all, avoid anything you’re not sure about, no matter how big the potential return.

Law No5: Gold flees from one who seeks impossible earnings or who follows the tempting advice of frauds and deceivers or who relies on his own inexperience. Again, the fifth law follows on the heels of the fourth. If you start scouring the internet for financial advice and wealth building ideas, your inbox will soon be full of “swindlers and scammers” promising you the land if you invest £999 in their “system” for turning £1 into £1XXXXXX on the Chicago Mercantile Exchange. Remember, the only one who makes money in a gold rush is the one who sells shovels. Buy the wrong shovel and you can quickly dig yourself into debt. Not only are you paying through the nose for a system that has no proven value; by following it you will probably lose more than the price you paid for it. At the very least you should check for genuine product reviews. And never buy any system, investment vehicle or financial product from any company that is not registered with a national watchdog, such as the Financial Conduct Authority for the UK.

The best way to learn about bitcoin, is to jump in and get a few in your “pocket” to get a feel for how they work.

Despite the hype about how difficult and dangerous it can be, getting bitcoins is a lot easier and safer than you might think. In a lot of ways, it is probably easier than opening an account at a traditional bank. And, given what has been happening in the banking system, it is probably safer too.

There are a few things to learn: getting and using a software wallet, learning how to send and receive money, learning how to buy bitcoin from a person or an exchange.

Preparation

Before getting started, you will need to get yourself a wallet. You can do this easily enough by registering with one of the exchanges which will host wallet for you. And, although I think you are going to want to have one or more exchange wallets eventually, you should start with one on your own computer both to get a better feel for bitcoin and because the exchanges are still experimental themselves. When we get to that stage of the discussion, I will be advising that you get in the habit of moving your money and coins off the exchanges or diversifying across exchanges to keep your money safe.

What is a wallet?

It is a way to store your bitcoins. Specifically, it is software that has been designed to store bitcoin. It can be run on your desktop computer, laptop, mobile device (except, as yet, Apple) and can also be made to store bitcoins on things like thumb drives. If you are concerned about being hacked, then that is a good option. Even the Winklevoss* twins, who have millions invested in bitcoin, put their investment on hard drives which they then put into a safety deposit box.

*The Winklevoss twins are the ones who originally had the idea for a social networking site that became Facebook. They hired Mark Zuckerberg who took their idea as his own and became immensely rich.

What do you need to know about having a bitcoin wallet on your computer?

Below you can download the original bitcoin wallet, or client, in Windows or Mac format. These are not just wallets, but are in fact part of the bitcoin network. They will receive, store, and send your bitcoins. You can create one or more addresses with a click (an address is a number that looks like this: 1LyFcQatbg4BvT9gGTz6VdqqHKpPn5QBuk). You will see a field where you can copy and paste a number like this from a person you want to send money to and off it will go directly into that person’s wallet. You can even create a QR code which will let someone take a picture with an app on their phone and send you some bitcoin. It is perfectly safe to give these out – the address and QR code are both for my donations page. Feel free to donate!

NOTE: This type of wallet acts both as a wallet for you and as part of the bitcoin system. The reason bitcoin works is that every transaction is broadcast and recorded as a number across the entire system (meaning that every transaction is confirmed and made irreversible by the network itself). Any computer with the right software can be part of that system, checking and supporting the network. This wallet serves as your personal wallet and also as a support for that system. Therefore, be aware that it will take up 8-9 gigabytes of your computer’s memory. After you install the wallet, it will take as much as a day for the wallet to sync with the network. This is normal, does not harm your computer, and makes the system as a whole more secure, so it’s a good idea.

Bitcoin Qt

• The original wallet.
• This is a full-featured wallet: create multiple addresses to receive bitcoins, send bitcoins easily, track transactions, and back up your wallet.
• Outside of the time it takes to sync, this is a very easy to use option.
• Search for Bitcoin Qt wallet download to find their site.

Armory

• Runs on top of Bitcoi Qt, so it has all of the same syncing requirements.
• Armory allows you to back up, encrypt, and the ability to store your bitcoins off line.
• Search for Bitcoin Armory Wallet to find their site.

If you don’t want to have that much memory used or don’t want to wait for your wallet to sync, there are good wallets that do not make you sync the entire history of bitcocin:

Multibit

• A lightweight wallet that syncs quickly. This is very good for new users.
• Search for Bitcoin Multibit Wallet to find their site.

Electum

• In addition to being quick and light, this wallet allows you to recover lost data using a passcode.
• Search for Bitcoin Electum Wallet to find their site.

After you get the wallet set up, take a few minutes clicking around. Things to look for:

o There will be a page that shows you how many bitcoins are currently in your wallet. Keep in mind that bitcoins can be broken up into smaller pieces, so you may see a decimal with a lot of zeros after it. (Interesting note, 0.00000001 is one Satoshi, named after the pseudonymous creator of bitcoin).

o There will be an area showing what your recent transactions are.

o There will be an area where you can create an address and a QR code (like the one I have above). You don’t need the QR code if you don’t want it, but if you run a business and you want to accept bitcoin, then all you’ll need to do to accept payment is to show someone the QR code, let them take a picture of it, and they will be able to send you some money. You will also be able to create as many addresses as you like, so if you want to track where the money is coming from, you could have a separately labeled address from each one of your payees.

o There will be an area with a box for you to paste a code when you want to send money to someone or to yourself on an exchange or different wallet.

There will be other options and features, but to start out with, these are the items that you should know about.

Getting Your First Bitcoins

Now that you have a wallet, you will, of course, want to test them out.

The very first place to go is http://faucet.bitcoin.st/.

This is a website that gives out small amounts of bitcoin for the purpose of getting people used to using them. The original version of this was run by the lead developer of bitcoin, Gavin Andreson. That site has since closed and this site operates by sending out one or two advertisements a month. You agree to receive those messages by requesting the bitcoins. Copy and paste your new bitcoin address and enter a phone number to which you can receive an SMS. They send out an SMS to be sure that people are not continuously coming back for more since it costs nothing to create a bitcoin address. They will also send out once or twice a month advertisement to support their operation. The amount they send it trivial: 0.0015 BTC (or 1.5 mBTC). However, they process almost immediately and you can check to see that your address and wallet are working. It is also quite a feeling to get that portion of a bitcoin. (Non-disclaimer: I have no connection with this site and receive nothing if you use them. I simply think they are a good way to get your feet wet).

Congratulations! You have just entered the bitcoin economy.

To get your feet a little wetter, you can go panning for gold. There are a number of services and websites out there that will pay you in bitcoin to do things like go to certain websites, fill out online surveys, or watch sponsored videos. These are harmless, and you can earn a few extra bitcoins this way, but it is important to remember that these are businesses that get paid when people click on the links on their sites. They are essentially kicking back a portion of what they get paid to you. There is nothing illegal, or even immoral about this (you might like what you see and make a purchase!), but they are frequently flashy and may not be completely straightforward. All the ones that I have tried (particularly bitvisitor.com) have paid out as advertised. It is interesting to experiment with these, but even with the likely rise in the value of bitcoin, you won’t become a millionaire doing this. So, unless you are an advertisement junkie, I would recommend you move on. If you would like to try, simply Google “free bitcoins” or something along those lines and you will find numerous sites.

Buying Bitcoin Hand-to-Hand

Finally, this is going to be the real test of bitcoin. Can people easily trade them back and forth? If this can’t happen, then there can’t really be a bitcoin economy because retailers won’t be able to use it. If retailers can’t use it, what earthly good is it? Fortunately, this is not really a problem. iPhone is a bit of a hold out, but many smartphones have apps (mobile wallets) that will read QR codes and allow you to send bitcoin to whomever you want. You can also display a QR code of your address, or even carry a card in your wallet with your QR code to let people send bitcoin to you. Depending on what kind of wallet you have, you can then check to see if the bitcoins have been received.

A couple of things to note:

• When you set up your wallet, if you click around a bit, you will see an option to pay a fee to speed transactions. This money becomes available to a bitcoin miner as he/she/they process bitcoin information. The miners doing the work of creating blocks of information keeps the system up to date and secure. The fee is an incentive to the miner to be sure to include your information in the next information block and therefore “verify” it. In the short term, miners are making most of their money by mining new coins (check the section on What Are Bitcoins for more information about this). In the long term, as it gets harder to find new coins, and as the economy increases, the fees will be an incentive for miners to keep creating more blocks and keep the economy going. Your wallet should be set to pay 0 fees as a default, but if you want, you can add a fee to prioritize your transactions. You are under no obligation to pay a fee, and many organizations that process many small transactions (like the ones that pan for gold described above) produce enough fees to keep the miners happy.
• In clicking around your wallet, on the transactions page or linked to specific transactions, you will see a note about confirmations. When you make a transaction, that information is sent out into the network and the network will send back a confirmation that there is no double entry for that bitcoin. It is smart to wait until you get several confirmations before walking away from someone who has paid you. It is actually not very easy to scam someone hand-to-hand like this, and it is not very cost-effective for the criminal, but it can be done.

Where can you buy bitcoin like this?

• You may have a bitcoin Meetup in your area.
• You can check out localbitcoins.com to find people near you who are interested in buying or selling.
• Some are trying to start up local street exchanges across the world. These are called Buttonwoods after the first street exchange established on Wall Street in 1792 under a buttonwood tree. See if there is one, or start one, in your area.
• See if you have any friends who would like to try bitcoins out. Actually, the more people who start using bitcoin, the larger and more successful it will be come. So please tell two friends!

Some people ask if it is possible to buy physical bitcoins. The answer to this is both a yes and a no. Bitcoin, by its very nature, is a digital currency and has no physical form. However, there are a couple of ways that you can practically hold a bitcoin in your hands:

• Cascascius Coins: These are the brainchild of Mike Caldwell. He mints physical coins and then embeds the private keys for the bitcoins inside them. You can get the private key by peeling a hologram from the coin which will then clearly show that the coin has been tampered with. Mike has gone out of his way to ensure that he can be trusted. These are a good investment strategy as in the years to come it may be that these coins are huge collector’s items.
• Paper Wallets: A paper wallet just means that rather than keeping the information for your bitcoin stored in a digital wallet, you print the key information off along with a private key and keep it safe in a safe, in a drawer, or in your mattress (if you like). This is highly recommended and cost effective system for keeping your bitcoin safe. Keep in mind, though, that someone could steal them or if your house burns, they will go with the house and there will be no way to get them back. Really, no different than cash. Also, as with Casascius Coins, they will not really be good for spending until you put them back into the computer.

* There is software to make printing your paper wallets easier. bitcoinpaperwallet.com is one of the best and includes a good tutorial about how to use them.

* The bitcoins are not actually in the wallet, they are still on the web. In fact, the outside of the wallet will have a QR code that will allow you ship coins to the wallet any time you like.

* The sealed part of the wallet will have the private key without which you cannot access the coins. Therefore, only put as many coins on the wallet as you want to be inaccessible. You will not be able to whip this thing out and take out a few coins to buy a cup of coffee. Rather, think of it as a piggy bank. To get the money, you have to smash it. It is possible to take out smaller amounts, but at this point the security of the wallet is compromised and it would be easier for someone to steal the coins. Better to have them all in or out.

* People who use paper wallets are usually security conscious, and there are a number of ways for the nefarious in the world to hack your computer. Bitcoinpaperwallet.com gives a lot of good advice about how to print your wallets securely.

Some people have also asked about buying bitcoins on eBay. Yes, it is possible, but they will be far overpriced. So, selling on eBay might seem to be a better option given the extreme markup over market value you might see. But, as with anything that is too good to be true, this is too good to be true. As I will explain in the next section, selling bitcoin this way is just way too risky.

How Not to Buy Bitcoin

In the next section, I am going to explain a couple of key points about buying from Bitcoin Exchanges. Before I do, let me give you a warning.

A short history lesson: When people first started setting up actual business based on bitcoin, they used all of the tools available to any merchant. They sold by credit card and PayPal. The problem with this business model was quickly spotted: bitcoin transactions are not reversible by anyone except the recipient of the money. Credit cards and PayPal have strong buyer protection policies that make it relatively easy for people to request a chargeback. So, nefarious individuals realized this and began making purchases of bitcoin and then sooner or later requesting a chargeback. And, since bitcoin is a non-physical product, sent by new and poorly understood technological means, the sellers were not able to contest this. Because of this, sellers stopped accepting credit cards and PayPal.

This was a big problem for the currency: How to move money between buyers and seller? Some business emerged that would credit you with bitcoin if you wired them money. Very often these businesses would give addresses in Albania, Poland, or Russia. The fact is that many of these did work and there are a lot of stories on the forums of people who bought bitcoins this way. But it took a lot of time and in the meantime the buyer just had to bite his or her fingernails wondering if they would get their bitcoins or kiss their investment goodbye.

I expect that as bitcoin becomes more acceptable and valuable, we are going to see a version of the Nigerian Prince scam. So the warning is this: we now have exchanges and other businesses that allow for moving money easily onto and off of exchanges. Never wire money for bitcoin. It was a short-lived, and well-forgotten, moment in the history of bitcoin.

Next, I will be talking about how to buy from a bitcoin exchange and give a review of the some of the best known exchanges.

A Quick Comparison Between Crypto Currency, Gold, and Bitcoin

In some areas, gold seems to have a more important place in the financial world. On the other hand, some people are starting to see Bitcoin as a valid way to hold our savings.

This allows us to shop and perform other daily transactions. For the average consumer, Bitcoin and other crypto-currencies seem to provide a suitable alternative. Perhaps this is a good time to make a comparison between gold and Bitcoin and Ethereum (another crypto-currency)..

People have been using gold as a form of money since millennia ago; while Bitcoin has only been around for over a decade. Although the concept has gone through some maturation process, gold has a widespread influence on the market. Bitcoin promises continuous improvement in convenience, security and functionality. Experts compare the current state of Bitcoin to the Internet in the early and mid-1990s. Bitcoin proponents argue that almost all developments related to gold have already occurred as seen by the general public. of any physical gold bullion products since a millennium ago. In fact, some of the company’s acquisitions are conducted using gold as currency. They just don’t trust that the government will not go to hyper inflation.

The idea of ​​gold versus Bitcoin is an important argument worth keeping. Instead of choosing one of them; many of us like to use a combination of these to take advantage of the better qualities of each. In fact, we see a co-existence between Bitcoin and gold, in the form of “Coins of Casascius. This is the first time that Bitcoin and gold have come together and it will not be the last.

Ethereum another crypto currency is at $1,549.00. It is usually best mined with Raedon graphics card x 5 or 6 placed in racks for better organization. Lan cables allow it to mine at high speed to save power usage.

Paper money is our solution to improve circulation and gold is our ancestors’ solution to preserve the value of money. Metal is less affected by inflation, because it is more expensive than paper or other cheap metals. And, crypto currency is the new technological tool to provide reliability during transactions, with the timelessness and precision of a Swiss watch.

Regardless of the criticism, Bitcoin and other crypto currencies will continue to appeal to many people because of their distinct advantages, especially compared to conventional currencies such as paper money which are inflated and often lost, spent, or stolen.

It is based on instant, direct P2P (peer-to-peer) transactions to completely avoid cumbersome and expensive electronic payment systems. Over time, investors will find that Bitcoin delivers a better store of value than any serially-printed flat currencies.

The Bitcoin protocol places a limit on the number of bitcoins that can be used at one time. There are always 21 million bitcoins and the system seems to be more honest than the US dollar sometimes. With Bitcoin and other crypto-currencies, consumers can gain more financial privacy; although there are concerns that the government will quietly tap into the system with constant financial monitoring.

It is reported that Bitcoin is operating on forbidden grounds because it has created a series of controversies among the “high” society and smart digital investors. These digital marketers are trying to get their share of the billion-dollar-a-day digital pie while corporate society seeks to prevent the spiral hike in value in what appears to be a “monetary menace”. Others who try to exploit the poor and vulnerable are not having it as they try to inoculate the masses in an attempt to defeat this growing “digital monster.”

These seeming corporate crooks continue to put a choke-hold on how the poor will spend their money as they try to build financial cartels around the world but thanks to digital technology, Bitcoins changes money control on the 21st!

Cons

Despite the development of digital currencies like Bitcoins, I will not reveal the cons of these virtual currencies. Due to the fact that their digital footprints are encrypted, they cannot be tracked online. Although one enjoys privacy and security when doing business, it provides another gateway to hide and conduct illegal transactions.

If this happens, drug dealers, terrorists and other suspected criminals, will continue to conduct their illicit trade undetected when using Bitcoins.

The Pros

However, amidst the financial chaos, Bitcoins offer anyone great investment opportunities and growth potential. No one controls the virtual currency because it is publicly accessible in cyberspace and the value continues to appreciate as society stumbles through the debris of inflation.

An ordinary man in the street can buy, save, sell, invest and increase his chances of becoming financially successful without the interference of government restrictions, controls, and fiduciary regulations; so spiral inflation became things of the past.

Many believe that the number 1 problem in our society is the establishment of financial monopolies. When a corporation decides to control foreign exchange, gold, and fuel, it uses its power to dictate how the money is spent.

The regulations set by the big and rich multi-corporations are only aimed at adding more wealth and power to their portfolio rather than taking advantage of borrowers seeking financial assistance. Also, those at the top will try to drain the swamp so that others can trust them as they become richer but they cannot control the digital currency!

The Brighter Side of the Coin

It’s time to open the eyes of the world and that’s what Bitcoin is all about. Those who try to control the world are threatened by this Frankenstein but I doubt they can stop it or call the shots. Currently, 1 Bitcoin is worth $844099.07 Jamaican Dollar or $6895.80 US Dollar. The cost of 1 Bitcoin in 2009 was.05 USD!

In the first edition of CRYPTO TREND we introduced Crypto Currency (CC) and answered many questions about this new market space. There is a lot of NEWS in this market every day. Here are some highlights that give us a glimpse of how new and exciting this market area is:

The largest futures exchange in the world to create a futures contract for Bitcoin

Terry Duffy, president of the Chicago Mercantile Exchange (CME) said “I think sometime in the second week of December you will see our [bitcoin futures] contract for listing. Today you cannot short bitcoin, so there is only one way to do it. You can buy it or sell it to someone else. So you create a two-sided market, I think it’s always more efficient. “

CME intends to launch Bitcoin futures by the end of the year pending regulatory review. If successful, this will give investors a practical way to go “long” or “short” on Bitcoin. Some sellers of Exchange-Traded Funds have also filed for bitcoin ETFs that track bitcoin futures.

These developments have the potential to allow people to invest in the crypto currency space without directly owning CC, or using the services of a CC exchange. Bitcoin futures will make the digital asset more profitable by allowing users and intermediaries to hedge their foreign exchange risks. That could increase adoption of the cryptocurrency by merchants who want to accept bitcoin payments but are wary of its volatile value. Institutional investors are also used to trading regulated futures, without being bothered by money laundering concerns.

CME’s move also suggests that bitcoin has become too big to ignore, as the exchange seems to have held back crypto futures in the recent past. Bitcoin is almost all that is mentioned by any of the brokerage and trading firms, which has suffered in the midst of rising but unusually calm markets. When futures are on an exchange, it is almost impossible for any other exchange, such as CME, to catch up, because scale and liquidity are important in derivatives markets.

“You can’t ignore the fact that this has become more of a story that won’t go away,” Duffy said in an interview with CNBC. There are “mainstream companies” that want access to bitcoin and there is “huge demand” from clients, he said. Duffy also thinks that bringing institutional traders into the market will make bitcoin less volatile.

Japanese village to use crypto currency to raise capital for municipal revitalization

The village of Nishiawakura in Japan is exploring the idea of ​​holding an Initial Coin Offering (ICO) to raise capital for the revitalization of the municipality. This is a new approach, and they can ask for the support of the national government or ask for private investment. Many ICOs have serious problems, and many investors are skeptical that any new token will have value, especially if the ICO turns out to be another joke or scam. Bitcoin is definitely no joke.

INITIAL COIN OFFERING – ( ICO )

We didn’t talk about ICO in the first edition of Crypto Trend, so let’s talk about it now. Unlike an Initial Public Offering (IPO), where a company has an actual product or service for sale and you want to buy shares in their company, an ICO can be held by anyone who wants to start one. new Blockchain project with the aim of creating. a new landmark in their chain. ICOs are unregulated and several have turned out to be total shams. A legitimate ICO can instead raise a lot of money to fund a new Blockchain project and network. It is common for an ICO to generate a high token price near the start and then sink into reality soon after. Because an ICO is easy to hold if you know the technology and have some money, there are many, and now we have about 800 tokens in play. All these tokens have a name, they are all crypto currencies, and except for the well-known tokens, such as Bitcoin, Ethereum, and Litecoin, they are called alt-coins. At this time Crypto Trend does not recommend participating in an ICO, because the risks are extremely high.

As we said in Issue 1, this market is the “wild west” right now, and we recommend caution. Some investors and early adopters have made huge profits in this market space; however, there are many who have lost much, or all. Governments consider regulations, because they want to know about every transaction to tax them all. They are all heavily in debt and strapped for cash.

Currently, the crypto currency market avoids many government and conventional bank finance problems and pitfalls, and Blockchain technology has the potential to solve many problems.

A good feature of Bitcoin is that the sources choose a limited number of coins that can be created – 21 million – thus ensuring that this crypto coin will never be inflated. Governments can print as much money (fiat currency) as they want and inflate their money to death.

Future articles will examine specific recommendations, however, make no mistake, the early investment in this sector is only for your most speculative capital, money that you can lose.

CRYPTO TREND is your guide if and when you are ready to invest in this market space.

Stay Tuned!

It is now the eve of 2018 and bitcoin is at the top of the mountain. The bad days seem to be over, and although a bitcoin bubble could happen at any time, there is no disputing that the cryptocurrency is here to stay. The sooner you get involved in making money from bitcoin, the better ground you will have in 5 years when it becomes an established currency around the world.

And if the Bubble scares you, investing in bitcoin is just one of the options, but not the only one. Bubble or not you can still make tons of money from bitcoin. And bubble or not, the value will increase in the future because people are just interfering with it.

Make your own Bitcoin Faucet

Potential income: $50 to $800 per month.

A bitcoin faucet is a project where you create a website or app for users to visit. You monetize the site with ads that pay in bitcoin. Ads pay a small amount of bitcoins per page view, click or conversion.

To encourage more visitors to continue navigating the site every day and every hour, you offer to share the income from ads with them, paying Satoshi which is basically bitcoin cents. To claim their winnings the user must earn a certain amount of Satoshi and payments are made every week.

Faucets pay between 100,000 to 400,000 satoshi per hour. Some offer premium payments for seniority or performance.

Faucets start to operate solving captchas, and nothing else. A very boring passive income task. New faucets are built in games where users kill aliens, feed critters or kill robots to earn satoshi, the more they advance in the game the more they earn. That’s why it’s a good idea for your own faucet.

The day when every video game player gets paid for playing is near.

Consider that bitcoin faucets tend to default due to lack of funding or liquidity. Faucet owners can’t get their bills to pay quickly with a rapidly growing user base. They also tend to be hot targets for hackers.

Make Passive Income from Your Bitcoin Blog

Since bitcoin is so new compared to other targeted content there is a lot of room for new bloggers and sites. New bitcoin-related businesses pop up every day; anything from bitcoin exchanges, trading, play money sites, faucets, online shops and mining are avid for your advertorial space.

Creating a bitcoin blog and monetizing it may be slow at first, but consistently publishing rich content will get some advertisers interested in less than 9 months.

You can join some affiliate programs or build your own bitcoin store. Bitcoin faucets, wallets and exchanges pay huge commissions per referral.

Small Profit from Bitcoin Faucets

My first piece of advice involves building your own faucet. If that seems a bit difficult, then try joining one and reap its benefits. Instead of earning $800 a month it will be more like $30 to $100 a month from a monotonous task, but it’s still money and a first step to start building your bank.

Note that bitcoin faucets tend to be faulty and disappear easily. So be sure to join some reputable ones like Robotcoin.com and BitcoinAlien.com. It’s also fun because you play while making money, my top recommendation is robotcoin.

Create a Bitcoin Product or Service Online Shop

Bitcoin is still hard to monetize in USD and other hard currencies. Not that it’s terribly difficult, but it does incur some fees and taxes in the process. Although it is still one of the cheapest ways to send money anywhere in the world.

Buying things with bitcoins is a great way to make something useful out of them and help to avoid fees and taxes on exchanges. Especially when you can resell the items and make hard cash.

There is a huge business opportunity to sell goods paid for in bitcoin at a low price or wholesale. All you need is a bitcoin merchant for your Shopify or WooCommerce shop like BitPay.com. Shopify now integrates with BitPay.

Bitcoin Cryptocurrency is buzzing around the world, whether you are on the internet or any media. This is one of the most exciting and craziest things that has happened in the past few years alone. Best of all, you can get an amazing return by trading bitcoins or you can keep it for long term.

You may hear about Stocks, Commodities, Forex, and now a new currency called Bitcoin trading that has a big impact on our lives. In this beginner’s guide to Bitcoin cryptocurrency, you will learn the ABC of Bitcoin.

About Bitcoin Cryptocurrency

The origin of Bitcoin is still unknown but a paper was published in October 2008 under the pseudonym Satoshi Nakamoto held from Japan. His identity is still unknown and is believed to have approximately one million bitcoins worth more than $6 billion USD as of September 2017.

Bitcoin is a digital currency known as cryptocurrency and is free of any geographical boundaries. It is not regulated by any government and all you need is an internet connection. As a newbie, Bitcoin technology may confuse you and it is quite difficult to know about it. However, I will help you dig into it and how you can also make your first Bitcoin trading easily.

Bitcoin Cryptocurrency works on blockchain technology which is a digital public ledger and is shared by anyone in the world. You can find your transactions here whenever you do any Bitcoin trading and anyone can use the ledger to verify it. The transaction made will be completely transparent and verified through the blockchain. Bitcoin and other cryptocurrencies are parts of the blockchain and a unique technology that runs only on the internet.

Main Terms Related To Bitcoin Cryptocurrency

Before you are ready to own your first Bitcoin, it is better to know the key terms related to bitcoins. It is also called BTC part of bitcoin and 1 bitcoin is equal to 1 Million bits. Along with the emergence of bitcoins, other alternative cryptocurrencies have also developed. They are called Altcoins and include Ethereum(ETH), Litecoin(LTC), Ripple(XRP), Monero(XMR) and others.

XBT and BTC are the same thing and are often abbreviated to bitcoin. Mining is another term that is used by many and it is actually a process done by computer hardware for Bitcoin networks.

Things You Can Do With Bitcoin

You can sell, transact, receive and store bitcoin. You can send it to your friends, request from a friend and keep it in your digital wallet. However, now you can top-up your mobile/DTH directly by paying through bitcoin.

Transaction costs are low compared to PayPal, Credit cards, and other online intermediaries. Moreover, it also protects your privacy which can be leaked on the internet while using credit cards. It is very strong and no one can seize or steal coins. Due to its transparency in the system, manipulation is also not possible due to the shared public ledger. You can verify the transaction from anywhere and anytime.

The demand is likely to increase because the total production of bitcoins should be limited to only 21 million. It has been legalized in Japan and other countries may follow soon and the price will increase.

I will discuss more about Bitcoins in detail in the coming days where you will learn many things in bitcoin trading. You can comment your views and ask anything related to bitcoins.

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