#-What is Bitcoin?**
To those who don’t know what Bitcoin is, Bitcoin is a Peer-2-Peer technology that doesn’t have a central authority or bank. To manage transactions and issuing of Bitcoin is up to the people of the community, like you and me. Its open source which means that no one controls it and everyone can contribute to helping it or partaking in it.
**#-Wallets.****
For you to be able to use Bitcoin you have to have what is called a wallet. It tracks all the Bitcoin transactions and tacks where it goes. Using this reasoning Bitcoin is NOT anonymous but more on that later. To send or receive Bitcoins you need to make a “wallet address,” that would basically be a home address to be able to receive letters in the mail. To make a Bitcoin address you need to go to File->Receiving Addresses->New->Then label that address. It will then generate a useable address under that label. (It is best to have a different address for each transaction because it will be able to see where your Bitcoins are coming from.)
There are many different types of wallets depending on if you want to use it on Windows, Mac, Linux, Android, BlackBerry, or IOS. After choosing which wallet is best for you download it and install it. After you boot it up the first time it will make the necessary files and then sync with the Bitcoin Network. This will take a very long time to do but after that you can send and receive Bitcoin.
**#-Bitcoin’s Price****
Bitcoin’s price varies. This means that when you buy Bitcoin it may be worth a different amount when you sell it or donate it. The rise and fall of what Bitcoin is worth kind of works like the stock market with the way it goes up in price and falls down in price (I do not know the exact working of why this happens). One day the Bitcoin community wishes that it won’t fluctuate at all but until that day comes it is NOT recommended that you save very many funds in your wallets and only buy when you need them.
**#-Getting Bitcoin****
To be able to get Bitcoin you have to buy it with real money, gifted it, or earned it buy mining it (Mining Bitcoin will not get you very many Bitcoins anymore without high-end equipment. Mining Bitcoin, at its most basic form, is renting out your hardware to do lengthy equations to determine transactions and other things that I won’t be going over in this guide.) Easiest way to get Bitcoin is buy it from an “exchange” that will exchange Bitcoin for actual money. There are many exchanges that you can go through to get Bitcoin but that is a topic for another day. They are relatively straight forward so I have confidence that all you Voats can figure out how to do that on your own. If not I may be able to help some on how to go about using some exchanges.
**#-Sending Bitcoin****
This is Voat.co’s Bitcoin address: “1PhBpbED6uEnrvy5s9F9axBZbK8fWAezdc” (without the quotation marks.) If you copy and paste that while sending bitcoin to it then the funds (after a couple of hours) will be send to Voat’s admins and be able to put towards running the server and hopefully one day it’s staff. To be able to send Bitcoin, to say Voat, you will go under the “send” tab then enter the address that you wish to send Bitcoin too, enter the amount, and then hit send. Sending Bitcoin is irreversible and will take a fee. If you accidentally send Bitcoin to a wrong Bitcoin address then you are out of luck because you cannot get any of those Bitcoins back.
If I have anything (more than likely) wrong here please tell me and I can edit the post :)
dodgesbullets ago
Okay. Sorry if this is out of place. Is it possible to invest a few hundred USD into a variety of crypto currencies and keep them undisturbed for a decade or so? Like buying gold or silver and putting them into a safe.
compaioncube ago
Yes very much so. You can invest into multiple different coins and hope that their prices go up.
go1dfish ago
Not all wallets require downloading the bitcoin blockchain.
Electrum is my preferred bitcoin only client that works this way, Exodus.io is another that supports multiple coins.
Curious to hear what your experience with Circle is, do they allow you to easily send bitcoin?
go1dfish ago
I recommend http://exodus.io as a good starting wallet that supports multiple cryptos.
Electrum is great if you only care about bitcoin.
The fee debacle with bitcoin seems like it may be subsiding, and everything companion cube said is accurate.
Exodus will let you store/trade/transfer between multiple different cryptos but you will have to buy crypto from an exchange.
EngelbertHumperdinck ago
Nice intro. Thanks for posting. The only thing I would point out is the part about the fluctuations in price. Bitcoin price will never not fluctuate. All prices do, all the time. That is just market forces at work. We are just so used to pricing things in dollars, that we don't see it. But everything is valued in terms of something else. How much is $1 worth? It depends on the base commodity with which you're comparing it. If I'm a bean farmer, I might price things in terms of beans. How many dollars (or eggs, or bitcoin, etc.) can I get for a pound of beans? Prices will always change from day to day as people's wants and needs change.
compaioncube ago
Very true. In my half drunken state this morning I misread some information about why it fluctuates and put it in. I will add a note on the bottom. Thank you for checking to make sure I'm giving accurate information.
go1dfish ago
Also not all wallets have to sync/download the whole blockchain. Most new users will be fine with electrum or another light wallet that works pretty instantly.
There are benefits to running a full node for both the operator and the network as a whole, but it's unnecessary for most people to do so.
Sour ago
FYI monero is an anonymous alternative to bitcoin.
StateOfMind ago
A great post. Thank you so much for writing this. One question (from a complete newbie), if it is completely peer-to-peer without any central authority, how come Coinbase shut down Voat's merchant account? That seems very similar to what the credit card processing company did where there is still some managing entities that can shut one down. What am I missing?
go1dfish ago
The US Government is the central authority of the Dollar, but PayPal still shuts down people's PayPal accounts.
Coinbase is like PayPal for bitcoin. They can't do shit to the bitcoin Voat actually holds, only shut down the account on their site.
Also Coinbase didn't actually shut down Voat's merchant account. Or rather they shut down all of them for everyone. They don't offer that particular service anymore (being a direct gateway for payment receipts)
ScottRockview ago
Are there any versions of crypto currency that don't have fees associated with them? It just seems like a slap in the face to go out in the real world, earn money, pay tax on it, then convert that after tax money into something that fluctuates AND have to pay a fee to do so, and another fee to gift money to someone. I am able to find ways to convert currency without any overages and just pay what the market rate is that day, and I can give that real currency to whoever I want to without a fee.
go1dfish ago
IOTA is a cryptocurrency that doesn't have fees and it takes a different approach from other cryptos but I'm not all that familiar with it myself TBH.
The fees in crypto are distributed among miners and are seen as a necessary evil to incentivize the miners to mine (i.e. make the network work)
Without fees, nobody has incentive to secure the network.
Unlike taxes, the fees are not directed or controlled by a central authority, they are distributed to those who contribute to the health of the network in proportion to their contribution to that health.
Typically the transfer fees are incredibly low relative to Fiat transfer fees, but bitcoin has recently been a victim of its own success and its scaling issues have led to high fees more recently.
EngelbertHumperdinck ago
Part of the function of crypto miners is to verify transactions. The fees are there to pay for that service. The only reason bitcoin fees are so high at the moment is because there is a conspiracy to keep the block size restricted at 1MB. The block size limits how many transactions can fit into a block. Because the user base is growing and blocks haven't been allowed to scale, only transactions with higher fees are making it into blocks. This may all be resolved in the future with a change to the protocol. Other cryptocurrencies do not have this problem, and thus, their fees are lower.
Also, the price of everything fluctuates, even government fiat. Everything on earth is valued in terms of something else. If you value dollars in terms of some commodity, then you'll see the dollar fluctuating as well.
Dibgick ago
Looks like a (((scam))).
EngelbertHumperdinck ago
Fiat currency continuously issued by central banks is the (((scam))).
compaioncube ago
You're more than welcome.
compaioncube ago
For any cryptocurrency you will need a wallet. You can safely download a wallet from https://bitco.in/en/choose-your-wallet and you can also download the one that I use for this how to from this wedsite. The fee is very small, from what I'm seeing it is .00002461 of a Bitcoin which is about $.06 cents. The transaction fee goes to the miner who mines the block that includes your transaction. When I say block I mean a block of equations that your transaction is in. Litecoin all has the same basic concepts that Bitcoin does but isn't as widely used yet and one "coin" doesn't cost as much.
ScottRockview ago
Is there a way one could do their own mining? That is to say, block others from mining the transaction so your computer does it and then you save the fee?
go1dfish ago
Let me clarify that a bit, what you could do is if you were a solo miner miner you could queue up transactions and choose to include them in preference to other transactions in blocks that you end up mining even though they don't include fees.
The block reward (that is the financial incentive for mining, and a success) is 12 bitcoin, or roughly $32,400 right now.
That doesn't include any transaction fees that happen to be in the block. So yes, when that happens you can include your transactions for free but you probably don't care too much because you're making serious bank anyway.
A block reward happens roughly every 10 minutes and it pretty random which miner gets it, solo mining is not viable for bitcoin anymore and that's why people use pools.
go1dfish ago
No, mining is similar to a lottery entered with computing power and it would require enormous nation-state level resources to ensure you were the miner that mined any given transaction.
Wholewit ago
It's not anonymous but pseudo-anonymous. Every Bitcoin transaction sent is recorded on a public ledger so you can see what address sent how much to another. You don't know who owns what addresses though unless person A sends money to person B. Person A will then know the address belongs to person B. This is why you should never reuse wallet addresses. Most wallets creates a new address every time one is used and hides the old one so as not to be reused for this reason.
MadWorld ago
So by never reusing wallet addresses, you can achieve a good level of anonymity without been tracked to your real identity? What about the step where you buy the bitcoins with real money, such as credit cards and bank accounts? Can you also suggest what is the reasonable exchange fee for the currency conversion?
Thanks you!
go1dfish ago
That does help yes, and is recommended security practice because addresses are free to create.
But it's still relatively easy to trace blockchain transactions. Coins like Monero try to focus more on privacy.
EngelbertHumperdinck ago
Governments want to be able to track all your financial transactions, so they enact things like KYC (Know Your Customer) laws. These laws require exchanges to collect tons of information about you before their allowed to do business with you. If you were to buy bitcoin in person, for cash or trade, it would be basically impossible to trace unless you were under surveillance.
MadWorld ago
Correct me if I am wrong. The identity of a bitcoin account is only exposed when the exchange of "gov't issued" currency and cryptocurrency takes place. Once that currency exchange is completed, can you anonymize your account by transferring the bitcoins to another account through non-reused disposable wallet addresses?
Also, I didn't know you could buy bitcoins in person. Where do you find such persons to make the exchange and maintain anonymity?
EngelbertHumperdinck ago
If you were to generate a new wallet offline and then transfer the coins into it, there would be no way for anyone to prove you are still in control of the coins. However, let's say later on, you want to purchase something online using those coins and have it delivered to your house, it would be pretty obvious that you just transferred the coins to yourself.
There are also coin mixing services which claim to break (or at least obfuscate) the chain of custody of your coins, for a fee, of course.
If you don't know anyone personally who is willing to trade their bitcoin for your cash, you may find someone here: https://localbitcoins.com. People usually charge more for in-person trades, though. I haven't used localbitcoins yet, myself.
MadWorld ago
It appears localbitcoins.com does have a few local in-person buying option. But it doesn't show the exchange rates.
Since transactions are of public record, are those disposable bitcoin addresses tied to your wallet in publicly identifiable manner? Furthermore, let's say you have WalletA and WalletB, with each one having a collection of sending and receiving addresses. WalletA is used to buy coins relatively anonymously through in-person cash exchange. Then this relatively anonymous WalletA transfers some amount of coins through multiple sender addresses to WalletB's receiver addresses. WalletB is then used to pay purchases, and identity is only exposed when the items are sent to a physical address. If WalletB were to send items to a fake physical address that has nothing to do with your true identity, the owner of WalletB remains hidden. Am I understanding this correctly?
And finally, even if the person of WalletB is exposed to purchases, I think there is a plausible deniability of identity that this person also owns WalletA, where it could be a simple donation to WalletB. WalletB can also claim someone anonymous sent the gifts to said address. No matter how obvious it is, you still need the hard proof.
EngelbertHumperdinck ago
Yes. To the best of my knowledge, everything you have described here is accurate. But please don't take my word for it. I'm far from an expert. I would definitely defer to the mods of this sub.
Ribena580 ago
Any bitcoin kit, so that I can create my own version of bitcoin, then after I mined more than 50% of available amount, I open it for everyone to mine, and I will push for everyone to using my version of bitcoin?
go1dfish ago
That was the hard way to scam people a few years back with Coinye and the like.
But these days the cool kids spin up a ERC20 token on Ethereum:
https://www.ethereum.org/token
EngelbertHumperdinck ago
What you're talking about is referred to as a "pre-mine", and is generally frowned upon. However, if I recall correctly, Dash, which is one of the more popular coins out there, had a massive pre-mine when it first launched under the name Darkcoin.
3dk ago
That goes way beyond a basic intro to bitcoin. Just search for "how to create your own cryptocurrency". There might be a few books on the subject too.
compaioncube ago
I'm sorry but I don't quite understand what you are asking. What do you mean a kit? Are you talking about mining in a pool with other people?