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Learn the basics

Get a simple introduction to Bitcoin and why it matters

How do I receive bitcoin?

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How do I receive bitcoin?

To receive bitcoin, simply provide the sender with your address. You just need to make sure you’re providing the right one.

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Get your first bitcoin

Bitcoin is the first and most widely recognized cryptocurrency. It enables peer-to-peer exchange of value in the digital realm through the use of a decentralized protocol, cryptography, and a mechanism to achieve global consensus on the state of a periodically updated public transaction ledger called a ‘blockchain.’

Practically speaking, Bitcoin is a form of digital money that (1) exists independently of any government, state, or financial institution, (2) can be transferred globally without the need for a centralized intermediary, and (3) has a known monetary policy that arguably cannot be altered.

At a deeper level, Bitcoin can be described as a political, philosophical, and economic system. This is thanks to the combination of the technical features it integrates, the wide array of participants and stakeholders, and the process for making changes to the protocol.

Bitcoin can refer to the Bitcoin software protocol as well as to the monetary unit, which goes by the ticker symbol BTC.

Launched anonymously in January 2009 to a niche group of technologists, Bitcoin is now a globally traded financial asset with daily settled volume measured in the tens of billions of dollars. Although its regulatory status varies by region and continues to evolve, Bitcoin is most commonly regulated as either a currency or a commodity, and is legal to use (with varying levels of restrictions) in all major economies.

Bitcoin’s origin, early growth, and evolution
What is Bitcoin used for?
BitcoinвЂ™s basic features
Bitcoin’s economic features
Who decides what Bitcoin is?

Bitcoin’s origin, early growth, and evolution

Bitcoin is based on the ideas laid out in a 2008 whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System.

The paper detailed methods for «allowing any two willing parties to transact directly with each other without the need for a trusted third party.» The technologies deployed solved the ‘double spend’ problem, enabling scarcity in the digital environment for the first time.

The listed author of the paper is Satoshi Nakamoto, a presumed pseudonym for a person or group whose true identity remains a mystery. Nakamoto released the first open-source Bitcoin software client on January 9th, 2009, and anyone who installed the client could begin using Bitcoin.

Initial growth of the Bitcoin network was driven primarily by its utility as a novel method for transacting value in the digital world. Early proponents were, by and large, ‘cypherpunks’ — individuals who advocated the use of strong cryptography and privacy-enhancing technologies as a route to social and political change. However, speculation as to the future value of Bitcoin soon became a significant driver of adoption.

The price of bitcoin and the number of Bitcoin users rose in waves over the following decade. As regulators in major economies provided clarity on the legality of Bitcoin and other cryptocurrencies, a large number of Bitcoin exchanges established banking connections, making it easy to convert local currency to and from bitcoin. Other businesses established robust custodial services, making it easier for institutional investors to gain exposure to the asset as a growing number of high-profile investors signaled their interest.

What is Bitcoin used for?

At its most basic level, Bitcoin is useful for transacting value outside of the traditional financial system. People use Bitcoin to, for example, make international payments that are settled faster, more securely, and at lower transactional fees than through legacy settlement methods such as the SWIFT or ACH networks.

In the early years, when network adoption was sparse, Bitcoin could be used to settle even small-value transactions, and do so competitively with payment networks like Visa and Mastercard (which, in fact, settle transactions long after point of sale). However, as Bitcoin became more widely used, scaling issues made it less competitive as a medium of exchange for small-value items. In short, it became prohibitively expensive to settle small-value transactions due to limited throughput on the ledger and the lack of availability of second-layer solutions. This supported the narrative that Bitcoin’s primary value is less as a payment network and more as an alternative to gold, or ‘digital gold.’ Here, the argument is that Bitcoin derives value from a combination of the technological breakthroughs it integrates, its capped supply with ‘built-into-the-code’ monetary policy, and its powerful network effects. In this regard, the investment thesis is that Bitcoin could replace gold and potentially become a form of ‘pristine collateral’ for the global economy.

Another popular narrative is that Bitcoin supports economic freedom. It is said to do this by providing, on an opt-in basis, an alternative form of money that integrates strong protection against (1) monetary confiscation, (2) censorship, and (3) devaluation through uncapped inflation. Note that this narrative is not mutually exclusive from the ‘digital gold’ narrative.

BitcoinвЂ™s basic features

Decentralized: Nobody controls or owns the Bitcoin network, and there is no CEO. Instead, the network consists of willing participants who agree to the rules of a protocol (which takes the form of an open-source software client). Changes to the protocol must be made by the consensus of its users and there is a wide array of contributing voices including ‘nodes,’ end users, developers, ‘miners,’ and adjacent industry participants like exchanges, wallet providers, and custodians. This makes Bitcoin a quasi-political system. Of the thousands of cryptocurrencies in existence, Bitcoin is arguably the most decentralized, an attribute that is considered to strengthen its position as pristine collateral for the global economy.

Distributed: All Bitcoin transactions are recorded on a public ledger that has come to be known as the ‘blockchain.’ The network relies on people voluntarily storing copies of the ledger and running the Bitcoin protocol software. These ‘nodes’ contribute to the correct propagation of transactions across the network by following the rules of the protocol as defined by the software client. There are currently more than 80,000 nodes distributed globally, making it next to impossible for the network to suffer downtime or lost information.
Transparent: The addition of new transactions to the blockchain ledger and the state of the Bitcoin network at any given time (in other words, the ‘truth’ of who owns how much bitcoin) is arrived upon by consensus and in a transparent manner according to the rules of the protocol.
Peer-to-peer: Although nodes store and propagate the state of the network (the ‘truth’), payments effectively go directly from one person or business to another. This means thereвЂ™s no need for any вЂtrusted third partyвЂ™ to act as an intermediary.
Permissionless: Anyone can use Bitcoin, there are no gatekeepers, and there is no need to create a ‘Bitcoin account.’ Any and all transactions that follow the rules of the protocol will be confirmed by the network along the defined consensus mechanisms.
Pseudo-anonymous. Identity information isn’t inherently tied to Bitcoin transactions. Instead, transactions are tied to addresses that take the form of randomly generated alphanumeric strings.
Censorship resistant: Since all Bitcoin transactions that follow the rules of the protocol are valid, since transactions are pseudo-anonymous, and since users themselves possess the ‘key’ to their bitcoin holdings, it is difficult for authorities to ban individuals from using it or to seize their assets. This carries important implications for economic freedom, and may even act as a counteracting force to authoritarianism globally.
Public: All Bitcoin transactions are recorded and publicly available for anyone to see. While this virtually eliminates the possibility of fraudulent transactions, it also makes it possible to, in some cases, tie by deduction individual identities to specific Bitcoin addresses. A number of efforts to enhance Bitcoin’s privacy are underway, but their integration into the protocol is ultimately subject to Bitcoin’s quasi-political governance process.

Bitcoin’s economic features

Fixed supply: One of the key parameters in the Bitcoin protocol is that the supply will expand over time to a final tally of 21 million coins. This fixed and known total supply, it is argued, makes Bitcoin a ‘hard asset,’ one of several characteristics that has contributed to its perceived value from an investment perspective.
Disinflationary: The rate that new bitcoins are added to the circulating supply gradually decreases along a defined schedule that is built into the code. Starting at 50 bitcoins per block (a new block is added approximately every 10 minutes), the issuance rate is cut in half approximately every four years. In May 2020, the third halving reduced the issuance rate from 12.5 to 6.25 bitcoins per block. At that point 18,375,000 of the 21 million coins (87.5% of the total) had been ‘mined.’ The fourth halving, in 2024, will reduce the issuance to 3.125 BTC, and so on until approximately the year 2136, when the final halving will decrease the block reward to just 0.00000168 BTC.
Incentive driven: A core set of participants, known as miners, are driven by profit to contribute the resources needed to maintain and secure the network. Through a process known as Proof-of-Work (PoW), miners compete to add new blocks to the chain that constitutes the ledger (the blockchain). The hardware and energy costs associated with PoW mining contribute to the security of the network in a decentralized fashion along game-theory driven principles. The profit motive is considered important in this regard. Further, since miners tend to sell their earned bitcoin to cover their significant mining-related costs, the mining process is seen as a fair mechanism for widely distributing bitcoin.

Who decides what Bitcoin is?

Bitcoin is not a static protocol. It can and has integrated changes throughout its lifetime, and it will continue to evolve. While there are a number of formalized procedures for upgrading Bitcoin (see «How does Bitcoin governance work?»), governance of the protocol is ultimately based on deliberation, persuasion, and volition. In other words, people decide what Bitcoin is.

In several instances, there have been significant disagreements amongst the community as to the direction that Bitcoin should take. When such disagreements cannot be resolved through deliberation and persuasion, a portion of users may — of their own volition — choose to acknowledge a different version of Bitcoin.

The alternative version of Bitcoin with the greatest number of adherents has come to be known as Bitcoin Cash (BCH). It arose out of a proposal aiming to solve scaling problems that had resulted in rising transaction costs and increasing transaction confirmation times. This version of Bitcoin began on August 1st, 2017.

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How to Get Your FirstВ Bitcoin Loan

So your ready to take out a Bitcoin Loan! First, to set your expectations out on the right foot is the paradox of loans.

“Lenders only want to lend to people that don’t need to borrow”

So if you are in dire need of a loan and you need it now, please reconsider and evaluate on if taking out a loan now is a good idea. If you want a loan, but don’t necessarily need it below are the steps to get you your first Bitcoin loan at Btcpop.

A. Sign up and create an account:В Create a username (and write it down to remember) and a nice strong password. Please take care in picking your username, it will be your identity on Btcpop and will be how investors identify you and choose whether or not to invest in your loan. After you create your account using your email, you will login using your username not your email and the password you just created.В Here is a guide to help you set up a secure account.В

B. Get Verified at Btcpop:В Getting verified connects your identity to your username. Investors are people just like you, and would you invest in someone without a linked identity? I’m guessing no, so its important you link your identity. Go to your profile or the Apply tab on the left toolbar and find “Get Verified” button. From here I recommend you verify everything possible in order to gain the most confidence from investors.

General Identity and address verification:В Enter your Name, Birthday, and Address into the fields. Please note that you must use the address you are living at and the one that shows up on your drivers license, passport, or identity card.
- All users will need to do Address+ В Verification before continuing. Address+ is the sending of a physical letter in the mail with a activation code on.В Your letter will cost you around $3 in Btc and it will lookВ like this in the mail.
SMS Verification:В Enter your phone number and receive a text with a code to verify you own the number
Documents upload:** jpg, jpeg only** No edits, and no larger then 5Mb in size

пї® В В В Drivers License
пї® В В В Selfie: Picture of yourself with code
пї® В В В Passport
пї® В В В Income (must be with in 3 months)
пї® В В В Identity card
пї® В В В video
пї® В В В Address (utility bill within 3 months through postal system only)

Link Social Accounts:В You will be directed to login and Btcpop will access profiles

пї® В В В Google
пї® В В В Facebook
пї® В В В Twitter
пї® В В В Linkedin

C.В Build Reputation:В Btcpop is based off of online reputation and collateral. Reputation is not something that is gained quickly, easily, or cheaply. The sooner you start building your reputation the better. Below I am going to list some constructive methods for building a reputation. Please note that these methods do not guarantee you a loan. The market makes the end decision on whether a loan gets funded or not.

Buy and holdВ Collateral:

Collateral Types:

Shares:В Shares are exactly what they sound like. Users and companies can list or host their shares on Btcpop’s share platform where shares are securely held by Btcpop. Share issuers are easily able to pay dividends and communicate with their shareholders through the platform. Shareholders are free to buy and sell their shares on a market, and they can also use these shares as collateral. Each share will have a market price, and represents a stake in a company as listed in the share overview section. Btcpop shares are the most highly regarded of the 53 share types currently on the platform at the moment for collateral. For more information on shares check outВ this blog post on P2P Bitcoin shares.
Altcoins:В Btcpop hosts an altcoin exchange with 100+ altcoins that you can buy, sell, and hold. As Btcpop is still young, the exchange volumes are pretty low. But you can easily deposit different altcoins into the exchange buy going to the exchange and generating a deposit address by clicking “wallet functions next to the desired coin”.В Click here for more information on using altcoins at Btcpop.

Porting reputation over from other platforms:

While it is never a guarantee, porting over your reputation from other platforms (especially Bitcoin Loan platforms) helps your reputation significantly. If you have built a strong reputation online on places like Bitbond,В localbitcoins.com,В paxful,В btcjam,В bitcoinlendingclubВ and so on. Please share your account and provide proof in one way or another that you own that account. List links to those profiles on your loan listing and the more proof you can provide that it is your account the better. I personally recommend using google photo links or links to documents/screenshots from google drive.

Get a fellow user on one of those platforms to vouch for you:В The Bitcoin lending community is still quite small, so there is a good chance that you run into someone you have done business with or seen on another platform before. If you can get that person to vouch for you, it can go a long ways towards earning you reputation to get your loan funded. The effectiveness of this depends on the reputation of the user that is vouching for you.

Participate in the community:В Btcpop is still a tight knit community so users know and recognize each other. Investors are much more likely to invest in a user that has been positively participating in the community. There are a couple ways you can do this:

First Set your Profile picture:В Humans are much better at remembering faces (or profile pictures) than they are at remembering usernames. Go to your profile and set a original picture. Also fill out a bio describing what your goals are at btcpop or purpose for being on the site. you would be surprised how many people look at this.
Invest in loans:В No matter how small of amount, invest in some loans. You will learn a lot about the process by doing it. Once you invest even 1 satoshi, you will be enrolled in email alerts for comments. Here you can learn a lot about the do’s and don’ts of loan requests. To learn more about successfully investing in P2P loans.
Participate in loan comment, chat box, and forum discussions: The community is happy to help good users, but don’t just ask dumb questions right away do your research and explore the site. If there is an interesting conversation going on somewhere don’t be afraid to join in. By participating in these conversation investors will start to remember your profile and if your participation is positive you will gain some reputation. **Please note that negative or annoying participation hurts your reputation so take care to ask good questions and keep on topic in the chatbox

D.В Taking out your first Bitcoin loan:В I would recommend waiting a week or a little longer (unless you have collateral) to learn the site, participate in loans, and build reputation before asking for a loan. Below I am going to list some methods for getting your first loan, these again are just guides and I cannot guarantee these work, the market will always choose.

The first step is to pick your loan type.

Instant and Instant Collateral Bitcoin Loans:В If your a little shy and don’t want to create an investor funded loan yet you can use Btcpop’s instant Bitcoin loans to build some reputation. Your instant loan amount will start very small and increase as you pay them back. And build reputation. You can increase your limit by adding collateral and taking out a “Instant Collateral Loan“. If you have collateral I recommend using it as your limit will be higher and the interest payments will be less. And of course always pay instant loans back on time or earlier to build positive reputation.
- **Please Note: Instant loans are the most expensive way to build reputation. It is a good tool to use, and definitely builds your reputation, but it doesn’t guarantee investors will invest in you when you list a custom loan. So don’t go broke taking out instant loans.
- Fun Fact: You do not have to be verified to get a instant Bitcoin Loan!
Custom Bitcoin loans:В As mentioned earlier collateral is the #1 tool to use when building reputation, if you have it use it. To create your first loan go to “Apply” in the left hand toolbar and select “Get a Custom Personal Loan”.В Below are some pointers to creating an effective first loan request using collateral.
- Title:В Create a short descriptive Title for what you are trying to do. If you are just trying to build rep try a title like “First loan to test out Btcpop”.
- Loan reason:В select personal or business (if you select business you will need to enter business information)
- Loan Amount:В Loan amount depends on your collateral situation and overall reputation. Below are some general guidlines I created (but remember the market decides not me)
  - Collateral Loan:В I recommend listing your first loan with 100%+ collateral. So if you have 1 Btc of collateral I would not ask for more than a 1 Btc loan. Also it matters what your collateral is made of. If your collateral is something silly like Titcoin, I recommend having 150%+
  - Carried Reputation Loan:В If you are porting over reputation from another platform I would say ask for at most 1/10 your reputation at another platform. So if you have aВ previous Btcjam account where you were able to easily borrow 10 Btc, I would start with 1 Btc or less at Btcpop unless you have fellow supporters already at Btcpop who you think will fund.
  - No Collateral Rep Loan:В I don’t recommend asking for more than .02 Btc to start out or 20% of what you have already paid back in instant loans. So if you have taken out and paid 1 Btc in instant loans .2 Btc would be the absolute max to try loan with aВ custom. You can raise it from there, but start out small and make your payments on time.
- Tied to:В At Btcpop you can tie your loans to many fiat currencies. I recommend you tie your first loans to Bitcoin. Investors at Btcpop mostly prefer Bitcoin denominated loans and I would В say 95% of all loans are denominated in Bitcoin at the present time.
- Loan length:В For your first loan its up to you, but I recommend a shorter length such as 1 month. 7 day loans are ok for rep only very small loans.
- Payments Every:В Select 1 week if possible. Investors have a preferance for smaller more frequent payments.
- Interest Rate:В Interest in the bitcoin P2P lending environment is still high relative to fiat loans (unless you have enough collateral). This is because it is a young industry, and due to Bitcoin’s characteristics there is a much higher risk that borrowers will not pay back. Below are some general guidelines for interest rates on various first loans. *Please note as you build reputationВ on the site these rates change
  - High Collateral First Loans: If you have collateral 200% or moreВ of amount borrowing
    - 10-15% APR
  - Medium Collateral First Loans: If you have collateral at or around 100% of amount borrowing
    - 15-25% APR
  - В Low collateral First Loans: If you have collateral 25%-75%
    - 20-45% APR
  - В No Collateral First Loans: Depends on your reputation
    - 50%+ APR
- Days to List for:В This is how long your loan offer will stay in the funding phase before it is funded or cancelled. I recommend 1 week
- Use Shares and Altcoins as Collateral button:В Select this button if you have collateral and want to use it as collateral for your loan.
- Lock Funds in Btcpop: You will not be able to invest, trade, or withdraw when enabled button:В Locking Funds in Btcpop is the next best thing to collateral. This locks your funds so you can only use them in Btcpop to pay off existing debts. Investors like this function and will be much more likely to invest when they see it. But remember, once you lock your funds in Btcpop, you cannot use them. So this is good for reputation loans, but not necessarily loans you are trying to accomplish anything.
- Do not insure my listing button:В Btcpop offers insurance for loan offerings. Investors prefer insurance to no insurance. When you start, insurance will not cover much of your listing and it cost 1% in fees, but over time your insurance coverage will grow. I recommend leaving this button unchecked, or going and buying the 1% of your loan in INST1В sharesВ for collateral. (INST1 is a safe low volatility collateral representing funds in the risk free instant account)
- Description:В Naturally the description of your loan is one of if not the important part of your loan. Investors will always read the description and it has a big impact on if your loan gets funded. Below are some recommendations to writing a description that will get your loan funded.
  - Introduce yourself:В your name, what you do for a living, your involvement in Btc ect….
  - Reason for the loan:В State the exact reason you are taking the loan and allocate where the loaned bitcoin is going. So if 50% is going to groceries for the week and the other 50% is going to be invested back in Btcpop say so. (Please note if you say you are going to do something do it. Btcpop users are good and will find out if you don’t user your funds as described if they can)
  - Tell how you are going to be able to pay off the loan:В If you are using the loan for investment share the investments past returns. Also share backup plans. For example here is a good example listing where borrower tells how he is going to pay back
    - “In the past I have made 5%/month borrowing DOGE on poloniex, However, if that doesn’t work this loan is backed by my Coinbase wallet with .5Btc in it, my exchange wallet on Polo with 1.5 Btc in it, my salary, and if necessary my personal possessions like my 1969 camaro which I own free and clear worth at least $20k”
  - References to your reputation elsewhere on the web:В For example share yourВ localbitcoins.comВ profile if you have a good reputation there.В Ebay,В Paxful,В Btcjam,В BitcoinLendingClub,В BitbondВ or a host of other sites with reputation related to Bitcoin loans.
  - Add a video or other media if possible:В You can upload video directly. Otherwise use links such as google docs and google photos.
Managing your listed loan request:В Once you list your loan give investors a chance to view it before you start panicking or making adjustments. Encourage investors to ask questions, and answer those questions promptly.
- Don’t Cancel your listing:В If the market didn’t quite acceptВ your loan, let it expire and then list a new more favourable one.
- Promptly answer investors questions in the comments:В Prompt intelligent answers to questions in the comment section of your loan can inspire confidence in investors and they could increase investment in your loan.
- Thank your investors:В Before your listing cancels for not getting funded, thank your current investors in the comments and share with them your plans for your next loan offering.

E.В Paying back your Bitcoin loans:В Once your loan has funded make sure you keep track of when the payments are due. Late payments are very harmful to your reputation. Your loan is accessible via “Payments Out” tab under Account in the left hand tool bar.

Have funds ready to go 2-3 Days in advance:В Currently the Bitcoin Blockchain can become backlogged with transactions due to the 1Mb block limit. I recommend having the funds in your Btcpop wallet 2-3 days in advance. Better yet make your payment early. This is good for reputation.
Late paymentsВ are expensive and harmful:В There is a late payment fee if you are late and it is very harmful to reputation and will stick to your profile forever.
Communicate with investors if there is going to be a delay:В Communication is key and can save you a lot of trouble. If something comes up share right away on the loan comments as well as your plan to resolve.
Make partial payments if trouble comes up:В Always always pay whatever you have. Even a 10% partial payment can go a long ways towards keeping investors trust if issues come up.

This guide is meant to be a resource to help new users take out their first Bitcoin loan. Nothing stated is guaranteed to work. If you have any further questions please comment on this blog post so we can edit the guide and address them.

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Get your first bitcoin

Get your first bitcoin

New to Bitcoin?

Learn the basics

Learn the basics

How do I receive bitcoin?

How do I receive bitcoin?

How do I buy bitcoin?

How do I buy bitcoin?

Other popular articles

Start investing safely with the Bitcoin.com Wallet

Bitcoin.com in your inbox

Get your first bitcoin

Table of Contents

Bitcoin’s origin, early growth, and evolution

What is Bitcoin used for?

BitcoinвЂ™s basic features

Bitcoin’s economic features

Who decides what Bitcoin is?

How to Get Your FirstВ Bitcoin Loan