Also, no. Bitcoins don’t look like that.
Before I jump into this – know that people spend days, months, even years studying cryptocurrency (digital currency), so don’t expect to receive knowledge beyond your wildest dreams after reading 1 article.
For a few years now, I’ve always read “bitcoin this” and “bitcoin that”, but each time I try to read up on it, I get extremely bored and lose interest really quick. The complicated words don’t help either.
Flash forward to 2017 and everything I’m reading now is bitcoin, bitcoin, bitcoin; so why not give another shot, eh?
Also, this is my longest article yet, so go get some food and a drink before you start, because you’re going to want to read it entirely.
Beginner’s Beginner Guide
Why beginner’s BEGINNER guide? Because I’m not going to ramble for hours on theories and predictions and the value of whatever and the exchange rate of other whatever’s. I just recently jumped into this (a few days ago, max), and since it took various sources to figure out what I was doing, I thought I’d make a nifty, compact little guide to help you take your first steps.
A little bit of history
So since the Internet is a mysterious place where you can do everything from watch hamsters playing the piano, to hiring hitmen, why not have a digital currency that’s exclusive to the online industry?
The main reason for this was to get rid of the whole idea of a “central monetary authority”. Start putting the seller in charge, getting rid of interest fees, middlemen; while also increasing privacy. “A decentralized system, where you could control your funds and know what was going on”.
Wait, what? Is bitcoin produced out of … thin air?
…And Bingo was his name-oh!
So technically there are only 21 million Bitcoins in existence, which is why they are worth more and more as time passes (or should, in theory). The value of our real word currency has NOTHING to do with the value of Bitcoins. It’s primarily affected by the simple demand and supply of it.
The process of creation (or mining) is extremely lengthy, expensive, not-profitable (or at least for a few years), and very boring; ergo I’ll help you out and .. skip all of that.
Okay… So a U.S. dollar = 1 bitcoin?
Haha, you naïve fool. We’ll get to that.
Here’s where it gets juicy.
Basically, since Bitcoin is exclusively an online currency, it’s impossible to physically own. Before I continue the Q&A session which will blow your mind, let’s get into the actual steps.
1. You need a wallet
Don’t you feel dumb right now? Like those awful riddles that go “you have x y and z items, and a match stick, what will you light first?” and you proceed to use all the logic in the world to figure out what you need to light first to survive, when the answer all along was “you have to light the match stick first”……
But yes. In real life, we have dollars lying around here and there, and get excited when we find $5 in pockets of some random pair of jeans that we haven’t worn in forever. In the case of Bitcoins, these “bit wallets” allow you to receive, store, and send Bitcoins to others. Of course, you’re right to assume that this is 100% done online.
Let’s make one thing clear, you have to have at least one wallet if you plan on doing anything related to Bitcoins. Now, choosing a good wallet isn’t easy since there’s way too many (just like real life, eh?).
Coinbase is a popular one. Bread Wallet (which is what I personally use, and only for iOS or Android) is pretty decent too. Also, yes. You can have more than one wallet, and store as many Bitcoins in either one as you’d like. A quick Google search can help you get set up with wallets!
2. Buying Bitcoins
This wasn’t really as hard as it was scary. Since everything is online, you have no control over how likely you are to get scammed.
Now, with a quick Google search, you can find many places to do this; either locally or online. In my case, I live in Florida. I have the option of accessing certain ATMs or gas stations near me where I can complete this transaction (much more safe, much more fast). I bet there’s places near you too, though of course, living in the US has its benefits.
There are many websites where you can buy online, but the one I’ll recommend is Paxful. Mainly because I used them this week for the first time and it was secure and fast. The link behind “Paxful” takes you to the page where you can get right to it; but if you want to read about it a bit, go to their homepage first and see the instructions and whatnot!
After signing up, you automatically create a wallet (which is where I started, initially, and then transferred all of that to the Bread Wallet app on my phone so I could have that on-the-go).
Now there are many ways to actually buy the Bitcoins. You can choose PayPal (which is what I did), Amazon gift cards (extremely popular), debit/credit cards, and much more. I won’t give you specific instructions because Paxful has a mini tour they put you through, but if you need help, definitely contact me through the contact form on this page.
Each vendor has ratings, and instructions that you must follow to prove your ownership of the account/credit/debit card (this is to avoid scam, since it’s so common). Also, don’t select the first vendor you see, since some offer more bang for your buck (exchange rate wise).
3. That’s it.
You’re done. After investing in Bitcoins (through whatever website or local means you choose), you’re pretty much set. That’s all there is to it. But you must still have questions, so let’s move on with the Q&A.
Okay. Now can you tell me if 1 BTC = 1 USD?
So long story short, on January 1st, 2013, 1 BTC was equal to $13.36 USD. The cost of a pizza, basically. Except, if you had invested in one or more pizzas back then, you would be …kinda rich today. May 25th of this year saw an all time high of ~$2,786 dollars equalling to 1 Bitcoin.
However, it is pretty unstable. At the time I’m writing this article, 1 Bitcoin is worth $2,098 dollars. That was a big, big fall since only 2 days ago.
Think about it though, if you would have invested back then, you would be pretty well off right now.
So if I pay $5 or something to Paxful or any other place where I can get Bitcoins, I will have…?
As of RIGHT NOW, $5 is equal to 0.00243 Bitcoin.
Just in case you see the word “Satoshi” thrown around here and there, it’s the smallest unit of Bitcoin; a.k.a. 0.00000001 BTC (a.k.a. not even 1 cent).
Now, it’s not as easy as a 1:1 ratio. Depending on where you buy, you will be charge a fee. I recently invested a mere $5 on Paxful, but received $3.82 worth of Bitcoin. Of course, I was pretty excited when in 2 days from then, that went up to almost $4.50 (meaning, almost covering up my initial investment of $5).
However, as of right now, my initial $3.82 stands at $3.49, which might make it a reasonable time to buy Bitcoins now.
What can I do with Bitcoins?
Since it’s an online currency, there’s no such thing as “cashing out”. There is a list of online retailers that accept Bitcoin as a form of payment, but it’s up to you to decide if that is worth it.
What people generally do, or I know I will, is just sit on that money for a while (months – years). Bitcoin has been through ups and its way downs, and not many saw it crossing the $2,000 mark, but it did. So in my humble opinion, I don’t see the harm in chipping in a little bit of $$$mula$$$ and playing along to see where that takes you.
How do I send and receive Bitcoins though?
This one is important, and if you’re still reading, you deserve to know. Every time you get a wallet, you’re given a string of characters (numbers and letters). For someone to send Bitcoins to you, they will need those characters; but it’s safe, so don’t worry too much. And if you do, read up on wallets a bit so you can find the best one for you.
P.S. It’s 12:08 pm right now, and the price went from $2,098 to $2,128.
This is just the tip of the iceberg
As I mentioned in the beginning, people spend a lot of time studying this. I’ve just given you the intro, the Bitcoin 101 class. Ask, research, Google around a bit. There are ways to earn Bitcoin, make Bitcoin, and once you feel the Bitcoin value is high, you can even sell Bitcoin (which, ultimately, is the goal if you want to profit on your initial investment, right?).
I know. This might seem like a lot, but trust me, I re-read all of this and it’s as easy as it’s going to get.
- Get a wallet, or two, or three; and do NOT share any information that you don’t NEED to.
- Find local (gas stations, ATMs, or actual companies in your area) or online sources where you can invest.
- Carefully see your options and if you’re getting that extra bang for your buck.
- Make sure the vendor has good ratings on whatever platform you use to buy Bitcoins.
- Patience (is the name of the game).
- Sell when the price is right.
Or at least, that’s my plan. You’re on your own from here on out (or message me if you need anything, and I’ll do my best to help, a.k.a. you’re on your own).
Most important lesson out of all of this is, be safe. We know the Internet is a dangerous place, and we don’t want you falling prey to anyone out there. Good luck, and may the odds (literally) be forever in your favour.
Don’t forget to share if this helped you!
P.S. 1 BTC = $2,132 USD (as of 1:07 pm)!