Getting Started with Bitcoin

Bitcoin has undoubtedly changed the world. It’s a little over a decade but has been able to rival currencies that are hundreds of years old. Satoshi Nakamoto, the visionary behind Bitcoin’s creation, had designed it to be purely digital and secure, with limited supply and without any central authority. Today, Bitcoin is a virtual currency free from traditional banking, works without delays, and works as designed.

Traditional financial experts have been changing their opinion of Bitcoin and admit that it has a purpose. Still, the fact is that this technology and Bitcoin are here to stay. Bitcoin doesn’t follow the set rules; it has its own.

The same differences that set it apart from fiat also can be daunting for newcomers. But once you get the hang of it, Bitcoin is far easier to handle and use than money or banks. 

Let’s dive into the basics of how to use the cryptocurrency. The first step, logically, is how to get your hands on Bitcoin. 

Ways to Buy Bitcoin

Cryptocurrency exchanges allow its users to send money through bank transfers and credit cards. Then you can use that money to buy bitcoin. 

These are fully-fledged exchanges that are designed with crypto traders in mind. At times these exchanges will be overwhelming for new Bitcoin users.

Trading Exchanges

Cryptocurrency exchanges are regulation compliant and have a lengthy process for Know Your Customer (KYC) and Anti Money Laundering (AML) checks. 

1. Binance
2. Gemini
3. Kraken
4. Coinbase

Simple Buy/Sell Apps

If charts and graphs aren’t your cups of tea, you can always move to more straightforward options. The fees are higher than the exchanges, but it is so easy.

1. Cash App
2. Abra

P2P (Peer to Peer)

P2P exchanges can be a simple way to buy Bitcoins. These exchanges have simple listings of sellers. The sell ads show how much they are willing to sell, at what rate, and how they will accept money (banks, microfinance apps, etc.). You can select the most suitable trade and send the required money over to the seller. The main advantage of P2P is the lack of KYC/AML.

1. Bisq
2. HodlHodl
3. Paxful

ATMs

Bitcoin ATMs are quick and convenient. Unfortunately, that comes at a cost. Fees are always high, but some ATMs can have reasonable fees, and you get your bitcoins right away.

1. CoinATMRadar.com

Bitcoin Wallets

You carry your money around in a wallet, and similarly, Bitcoins need wallets. To send Bitcoins to another person, the receiver’s will supply a bitcoin address, which is used to identify the right wallet. 

Wallets are usually classified into two different types:

Hot Wallets

Names as such because they are connected to the network. Mobile wallets have become a more popular option due to the ease of accessing funds from anywhere. Mobile wallets can make things easier, especially for QR code scanning.

Desktop wallets

These are programs that are downloaded from the official wallet website and then installed.  

1. Electrum
2. Bitcoin Core
3. Exodus

Mobile Wallets

More popular, since everyone has a phone. Bitcoin wallet apps are easily installed through the App Store. Mobile wallets have advanced over the last 2 years and are the preferred method for beginners.

1. Green Wallet
2. Samourai Wallet
3. Blue Wallet
4. Mycelium
5. Coinomi

Cold Wallets

Cold wallets are also often referred to as Hardware Wallets. Hot wallets are always connected to the network and, therefore, are vulnerable to theft. All a malicious person needs are to get his or her hand on the private key. Cold wallets are a solution to this problem. Instead of a simple interface that connects an owner to the wallet on the network, cold wallets are physical devices that store Bitcoins inside them. The wallets need to be connected to an online source to access the funds inside, such as an internet-enabled PC, and then the right private key has to be entered. 

When the wallet has been used, the user can simply disconnect it from the computer, and the assets are safe inside the device. Even if the private key is compromised, the funds cannot be accessed if the wallet is not connected to the network. Trezor and Ledger are two famous hardware-based cold wallets.

1. Ledger Nano
2. Trezor Model T

How to Send and Receive Bitcoin

Now that you know how to buy Bitcoin and wallets, let’s get down to sending and receiving it.

To send Bitcoins from your wallet, you need to ask the receiver for their address or QR code. This is a long string of characters, intentionally kept that way since the keys are generated randomly. The large size means that there is a near to impossible chance it will be replicated by another wallet. Depending on the type of wallet you are using, you can go to the sending option and enter the receiving address. You have to enter two more options: the amount of bitcoin you want to be transferred and a transaction fee. The fee is what you are willing to pay for a miner to enter your transaction in the digital Ledger. Once you have entered the data, you can press the send button. Depending on the network congestion, it can take anywhere from a few minutes to an hour for the confirmation.

A word of caution here: Bitcoin is designed to be irreversible in nature. Once you press the send button, there is no going back. The transaction will be executed. If you end up entering the wrong address, amount, or transaction fee, it’s as good as gone.

In case you want to receive Bitcoins, simply give an address to the right person, and he or she can transfer Bitcoin to your wallet. Once the transactions are confirmed, you can view the balance in your wallet.