How to start with bitcoin

How to start with bitcoin

Are you new to Bitcoin and cryptocurrencies in general? Scroll down for some simple guides and resources designed to get you started.

What is Bitcoin?

Bitcoin is a new type of digital money and, just like with all money, you can store it, exchange it, and make payments with it. The key to what makes Bitcoin different from national currencies like the US Dollar, the Euro or the Japanese Yen lies in its decentralized structure and opt-in model. What does that mean? With centralized ‘fiat money’ (literally money by decree), currency is issued by central banks, and citizens are forced to use the money of their nation. With the exception of cash (which is becoming increasingly rare), transactions are made through intermediaries like banks and payment gateways. Bitcoin, by contrast, is an opt-in currency that is controlled by the ‘consensus’ or the will of its users. It consists of a growing network of people who voluntarily agree to the rules of the Bitcoin protocol. They use decentralized infrastructure to make transactions on a peer-to-peer basis and to store value independently of any government, company, or financial institution. There’s no need to ask for permission to use Bitcoin, and there’s no risk of being cut off from the system. Importantly, the system itself is headless and distributed globally, making it both resistant to corruption and extremely durable.

What gives Bitcoin value?

Bitcoin has value for two key reasons:

1. Thanks to its features, some people find it useful as a way to store and exchange value.
2. Because a group of people agree it has value.

Historically, people have used everything from seashells to bottle caps as money, but arguably the most enduring form of money is gold. Why?

People settled on gold thanks to its rarity, its durability, and its divisibility. These features made gold useful as a method for storing and exchanging value.

Bitcoin is often compared to gold because it has similar characteristics. Namely:

1. It has a limited supply. There will only ever be 21 million bitcoins.
2. It’s easily divisible. You can divide one bitcoin into 100 million pieces.
3. It’s durable. A huge globally distributed network of independently operated computers tracks Bitcoin ownership. This ensures that no bitcoin is lost.

Beyond this, Bitcoin has a few other important features which allow it to bring gold’s monetary properties to the modern digital era. These are:

1. It’s easy to send bitcoin. Sending any amount of bitcoin to anyone in the world can be done in minutes and with a 100% guarantee of security. It’s almost like sending an encrypted email.
2. It’s easy to verify the authenticity of bitcoin. Actually, it’s effectively impossible to transact with fake bitcoin.

Thanks to the utility of gold, the gold ‘network’ — to use a modern term — grew over time until gold became almost universally accepted as having value. Although Bitcoin, which started in 2009, is much newer than gold, Bitcoin’s network efforts benefit from the scale and speed of the modern Internet. The number of people who place value in Bitcoin has grown at an exponential pace since inception to the point that Bitcoin’s value is now closing in on gold’s — and that may be just the beginning.

How do I create a Bitcoin wallet?

A Bitcoin wallet is a tool for interacting with the Bitcoin network. Use it to buy, sell, send, receive, and trade bitcoin. Making a Bitcoin wallet is as easy as downloading an app.

How to buy and sell bitcoin?

• Apps like the Bitcoin.com Wallet.
• Websites like Buy Bitcoin.
• Exchanges like the Bitcoin.com Exchange.
• Peer-to-peer services like Bitcoin.com Local (BCH only).

How to send bitcoin?

Sending bitcoin is as easy as choosing the amount and deciding where it goes.

How to receive bitcoin?

Receiving bitcoin is a simple matter of providing the sender with your Bitcoin address.

How does a bitcoin exchange work?

Bitcoin exchange is the process of trading bitcoin for local currencies, goods or services, or other cryptocurrencies. Your options range from peer-to-peer exchange to giant centralized exchange services that resemble a stock trading account.

Bitcoin debit cards

Bitcoin debit cards are a convenient way to spend your bitcoin.

What are the tax implications of using Bitcoin?

Whether you’re investing in Bitcoin, getting paid in bitcoin, or just using bitcoin to pay for goods and services, you need to be aware of the relevant tax laws in your country. In some regions, you may be exempt from taxation altogether. In others, onerous tax laws require you to track every transaction. Luckily there’s a growing variety of tools that help you comply with the tax laws in your country. We recommend TokenTax, which is a crypto tax software platform and crypto tax calculator that vastly simplifies the process. It helps you connect to exchanges, track your trades, and automatically generate crypto tax reports regardless of your country of residence. Read more:

What is Bitcoin mining?

Bitcoin mining, which is the process of ‘minting’ (creating) new bitcoins, is an essential component of the network’s system for arriving at consensus (agreeing to the ‘truth’) without relying on a centralized authority. Mining is also critical for ensuring the security of the network.

What’s a non-custodial Bitcoin wallet?

Bitcoin wallets can be divided into two categories:

• Custodial. This means the wallet provider has access to your bitcoin.
• Non-custodial. This means the wallet provider doesn’t have access to your bitcoin.

Whether the wallet provider has access to your bitcoin or not has a number of important implications. We recommend you always keep your digital assets in a non-custodial wallet like the Bitcoin.com Wallet.

Read more: Understand the pros and cons of custodial vs. non-custodial Bitcoin wallets.

How does Bitcoin governance work?

Bitcoin is not a static protocol; it can and does evolve over time as needed and in response to its environment. The process for making improvements to Bitcoin, which is known as ‘Bitcoin governance,’ includes both formalized procedures and a form of decision making, known as ‘rough consensus,’ that derives from open-source software development cultures. However, it’s important to keep in mind that Bitcoin is a headless organization. It is ‘owned’ — if we can use the term — by the sum total of all its users. What Bitcoin is and how it evolves, then, is an open question, the answer to which is ultimately determined by a wide array of voices, from miners and nodes, to exchanges, wallet providers, and — most importantly — the people who hold and use bitcoin.

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How to start with bitcoin

Are you new to bitcoin and cryptocurrencies? Read on for some simple guides and resources designed to get you started.

New to Bitcoin?

Browse the Bitcoin beginners’ guides below, and start your journey into the world of cryptocurrency. No matter your current level of knowledge, these guides can get you up to speed on the subjects that matter to you.

Learn the basics

Get a simple introduction to Bitcoin and why it matters

Learn the basics

Get a simple introduction to Bitcoin and why it matters

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.

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.

How do I buy bitcoin?

Learn how to get your first bitcoin in minutes

How do I buy bitcoin?

Learn how to get your first bitcoin in minutes

Other popular articles

What is Bitcoin?

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

How do I sell bitcoin?

Learn how to sell bitcoin into local currency safely

How do I send bitcoin?

Sending bitcoin is as easy as choosing the amount to send and deciding where it goes

How do I keep my bitcoin safe?

Make sure your digital assets are safe with these simple tips

How do I create a Bitcoin wallet?

Creating a Bitcoin wallet is as easy as installing software on your mobile device or computer

How do crypto wallets work?

Do you need a custodial wallet or non-custodial? How can you protect your funds?

How do crypto exchanges operate?

How safe is it to store your crypto on centralized exchanges?

How is bitcoin taxed?

Learn the basics of bitcoin and other cryptocurrencies taxation

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How to Start With Bitcoin at No Cost

Getting into the Bitcoin world is by default easy and it doesn’t have to cost you anything. All you need to do to get started is to install a cryptocurrency wallet and load it with some digital cash. The growing crypto community, always enthusiastic about accepting new members, has done a lot to make sure you can take these first steps at no expense.

Get a Free Crypto Wallet First

To start with Bitcoin you don’t need to be ultra tech savvy but having a basic idea of how cryptocurrency works and what it brings to the world is not a bad idea. There’s a ton of information out there and simple guides such as those prepared by Bitcoin.com will quickly convince you that no matter who you are, Bitcoin is for you. Learning how to buy and sell, send and receive, exchange and protect your cryptos takes little effort and is fun.

What you really need to begin your endeavor into discovering financial freedom is a digital wallet that supports your favorite cryptocurrency. Luckily, there are plenty of free clients available and as long as you find one with good reputation in terms of security, you are all set. For example, you can download and install the Bitcon.com wallet app free of charge and manage your bitcoin cash (BCH) and bitcoin core (BTC) holdings in one wallet. Almost 5 million Bitcoin.com wallets have been created so far.

There are different types of wallets you can use. In general, hardware devices such as Ledger and Keepkey provide safer storage for your digital coins. But the utility of software wallets can’t be denied and they are always a good choice for newbies. Software is usually created for more than one operating system. The Bitcoin.com wallet is available as a mobile application for both Android and iOS. And if you are looking for a desktop app, the Badger Wallet is a good option. You can add it to your browser if you are using Chrome or Firefox.

When setting up a bitcoin wallet, it’s important to follow the instructions of the client’s developers. During the installation process you’ll be asked to write down a mnemonic seed phrase that will help you to restore access to your funds in case something irreversible or irreparable happens to the device you installed it on initially. It’s also smart to set up a pin code to authorize any outgoing transactions. Make sure you record and keep that as well.

Load Your Wallet With Free Coins

Once you’ve installed your wallet you’ll have to load it to start transacting in cryptocurrency. And while there are many options to buy some, acquire it on an exchange or purchase it directly from other bitcoin holders, you can also get it for free. The Bitcoin.com faucet provides you with one such option. All you need to do to receive some bitcoin cash (BCH) is to take three easy steps. First, you have to download and install the Bitcoin.com or the Badger wallet. Then you need to log in with your Google account and finally enter your BCH address to claim your free electronic cash.

Another opportunity to receive some cryptocurrency is through a friendly gesture. Many in the crypto community are excited about spreading adoption and if you look around you’ll probably find a friend who will be happy to send you some satoshis just to get you started. Bitcoin.com Executive Chairman Roger Ver recently announced on Facebook he is giving away $5 worth of BCH to any of his friends in the social network who provides a bitcoin cash address.

If you want to hodl your coins, crypto history has shown that $5 of bitcoin can easily become $5,000 in the future. But there are also many things you could do with them right now. For instance, you can send some satoshis to a friend who wants to try crypto. Thanks to the low fees on the BCH network, often less than a U.S. cent per transaction, that will be easy and cheap even with a very small amount. You can also donate some of the bitcoin cash you got for a noble cause like the one supported by the eat BCH charity.

And as crypto commerce is growing once again this year, you can spend your electronic cash in a variety of other ways. The Bitcoin Cash Map app now lists almost 1,800 brick and mortar stores that will let you pay with BCH. Spending bitcoin with retailers that do not directly accept cryptocurrency is another option thanks to gift cards you can purchase with BCH and BTC. Getting a $5 Dunkin’ Donuts card takes just a few easy steps.

Have you tried crypto yet? How did you get into the Bitcoin world? Tell us in the comments section below.

Images courtesy of Shutterstock.

Enjoy the easiest way to buy bitcoin online with us. Download your free bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

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