A Beginner’s Guide to Using Bitcoin
If you’re new to Bitcoin, you’re probably mystified by how all of it actually works. How would you go about getting a Bitcoin, keeping it or spending it? What follows is a high-level description of how the system works.
First, you need a Bitcoin wallet
A Bitcoin wallet is a software application that helps you buy, sell or view your bitcoin holdings. You need a wallet to manipulate your coin holdings just the way you need an email application to do things with email.
When you get a wallet, you get your own unique Bitcoin address. An address is a long string of numbers and letters unique to each user. When you need to send someone Bitcoins or receive Bitcoins from them, you exchange Bitcoin addresses. Going with the email analogy, a Bitcoin address performs a function similar to the one an email address does.
Once you have a wallet, you’re ready to start buying, selling and sending people Bitcoins. There are many ways in which you can buy a Bitcoin. A lot depends on how you would like to pay for it, and the Bitcoin exchange that you prefer. You can even buy a fraction of a Bitcoin if a whole coin is too expensive. In general, if you buy a Bitcoin (the trading symbol is BTC) with a credit card or with PayPal, methods that allow you to reverse your transactions, you pay a much larger fee on your purchase. Wire transfers and other methods that are irreversible allow you to buy more cheaply.
How do you use a Bitcoin?
More businesses than ever before allowing you to use Bitcoin to pay for their products and services. From Microsoft to Subway, there are plenty of physical stores that you can go to. You can even get your own Bitcoin debit card issued by a third-party company like Wirex, Bitpay or Cryptopay. You can use these debit cards at any store. There is usually a service fee involved. Anytime you swipe your card to make a purchase, the money is deducted from your Bitcoin balance.
You can invest your Bitcoin holdings to grow your money. There are a number of ways you can do this. Simply holding on to your Bitcoins would be the simplest investment method possible. As Bitcoin values trend upward your holdings rise in value. You can also trade your Bitcoins. It’s important to remember that most Bitcoin investments tend to come with a high level of risk. You need to learn about these risks before you actually do anything.
It’s possible to send Bitcoins to friends and family. Transfers occur from wallet to wallet. If the recipient has a wallet address, you can simply send Bitcoin value from your wallet to theirs. Whether you are settling a bet or lending someone money, you can use your Bitcoin wallet to send or receive funds.
Bitcoins are easy to use once you learn how. You only need to get a wallet to get started.