What is Bitcoin and why should I use it?
Bitcoin is simply a method of allocation of a scarce resource, just
like cash, just like the title deeds on your land. Is it a currency or an asset? Officially, authorities are mostly
viewing it as an asset, but the difference is semantic. Cash is an asset too, but is treated differently by your country's
It is the influence of local reserve banks, or lack of it, that
makes bitcoin unique. Ownership of a bitcoin can be transferred across borders without restriction. The cost of transferring these
bitcoins is near zero and certainly a lot less than the typical 2% take of credit card providers, or the $25 + intermediary
bank fee + shaded exchange rate of a cross border bank transfer.
Using an asymmetric (public/private key) encryption system,
ownership of a bitcoin can only be established by someone with the
right private key. If you loose that private key (or someone steals it),
ownership of that bitcoin is lost. Keep your private key safe!
OK, that's great, HOW do I use it?
There are a few options. Running a full bitcoin client is expensive
and slow as you are downloading all transactions, since the
beginning. Usually you'll need to use the services of someone else, whether
that is in the form of a client/server system (like electrum), or simply using the services of your local bitcoin exchange. Have a
look at https://bitcoin.org/en/choose-your-wallet
and make your choice if you want a local wallet.
A note for the really paranoid.
Your bitcoin client, running on your machine, should be treated the
same as if it has access to all your bank accounts too. This
machine needs to be secure. Here is some advice from bank(s).
That's great. How do I get bitcoins then?
Here is a list of current and past exchanges, sorted by currency.
You can buy bitcoin with your credit card
but of course you pay for it, as they are risking a chargeback.
If you are prepared to do a local bank transfer to the exchange's
account, the fees are low.
Why should I use it again?
. All transactions can be traced to an address, but that
address cannot be traced back to a private key, and it certainly cannot be traced back to you (unless the NSA has installed malware
on your machine).
. Banks are tightening up on overseas transactions. Some banks
(like Chase) are so hard to get charges through that people just
give up. This annoys the customer, annoys our service staff (`cos they can't
help) and loses us sales.
Isn't bitcoin really dodgy and/or illegal?
No. Like cash, it can be used for illegal purposes, but like cash,
it isn't to blame or inherently illegal. Reserve banks will hate it
as they can't control it. It is their job to control inflation by
controlling the net wealth in their jurisdiction. Tax authorities
hate it as bitcoin to bitcoin transactions are anonymous, they can't attribute payment
or expenses by looking in your bank account. With these 2 powerful organisations badmouthing bitcoin, is it any
wonder that there is such negative press? Ignore them.
What is the simplest way to buy here using Bitcoin?1.
Register with an exchange, you'll need to become "authenticated", or whatever they decide to call it, in order to be able to actually trade.2.
Place an order here, choosing bitcoin as the payment method. You
will receive an address that is unique for the order you've placed. You should also receive an email with the details, but as email is unreliable these days, you better take a copy the details on your screen too. These details are also available on your members page until they expire.3.
Log back into the exchange, buy the needed amount of bitcoin.4.
"Withdraw" your bitcoin by sending exactly the right amount to the bitcoin address corresponding to your above order.
That's it. No wallets to set up or anything. Our server will periodically check the address to see if it has enough bitcoin to pay for the order. When this happens your order will be sent. If your order has expired, bitcoin will be added as credit to your account. You'll need to place your order again.