You have learned what Bitcoin is and how it works. So, why not start using bitcoins? It’s incredibly easy to send and receive BTC, and this guide will show you how to set it up as a regular Bitcoin user or a Bitcoin merchant. Let us begin.
Your Bitcoin wallet
As with all forms of currency, you need a place to save your money. With the traditional currency (fiduciary), most people have a small amount of money in a wallet or purse while they keep the rest of their savings in the bank. Let’s see how to do something similar with bitcoins. While there are many different ways to store bitcoins, this guide will examine some of the easiest methods for new users.
In simpler terms, bitcoins are stored in digital wallets. A Bitcoin wallet is simply a piece of software that can store, send and receive BTC. However, there are many different portfolios to choose from, each with its own pros and cons. Regardless of what you choose, it is a good idea to have two wallets, one for expenses and one for your savings. Bitcoin does not depend on financial institutions like banks, and instead, users have full control over their money. While this may seem like a big responsibility, this guide aims to show how easy it is to be your own bank.
Your Bitcoin Ticket of Expense
Your first wallet will be used for daily transactions, similar to the physical wallet in your pocket or purse. This type of wallet is also known as a “hot wallet”, which means it is connected to the Internet. A very popular and easy-to-use attractive wallet is Blockchain.info, a wallet that can be easily accessed from anywhere in the world on any device, as long as it is connected to the Internet. To start using Blockchain, simply navigate to this page and create an account. In just a few simple steps, you will have your own Bitcoin wallet!
Look at the QR code on the left and the text on the side. This is your Bitcoin address. If someone wants to send you money, they send it to your unique address. If you want to send money to someone, go to the “Send money” tab and enter the address of that person and the amount of bitcoins you want to send. It is easy.
You may have noticed something interesting. We recommend that you share your Bitcoin address. It is not necessary for the Bitcoin address to remain private and protected as a credit card number does. In contrast, a Bitcoin address works similar to a postal address. Anyone can send you emails, but only you have the password to access the email in your mailbox. Similarly, anyone can send bitcoins to your address, but only you have access to the coins you receive.
Compare this with a credit card number or a debit card number. If you want to make a transaction, you must grant the merchant full access to your funds and trust that you will only withdraw the authorized amount. But with Bitcoin, you send the money instead of the merchant taking the money out of your wallet. As you will see, Bitcoin eliminates the need to trust third parties (although in some cases it may be convenient to trust one), and in many ways it is much safer than traditional money.
Speaking of third parties, is Blockchain safe? The short answer is yes. The Blockchain source code is available for anyone to examine, which means that users can be sure that the service is not doing anything suspicious behind the scenes. In addition, Blockchain does not have access to users’ private keys and is considered safe enough for the majority of the Bitcoin community. Of course, for the truly paranoid, you can download a desktop wallet client such as Bitcoin Core or Electrum. Since the software would be on its own computer instead of the Blockchain servers, it could be considered safer. However, the disadvantage would be that your wallet would only be accessible from your computer. Services like Blockchain provide comfort and reasonably good security, which is important for a daily wallet.
Your savings (cold) Bitcoin Wallet
Now, this is where you want to make the least possible commitment with regard to security. Your savings wallet will be similar to your savings account at the bank. As you will keep most of your bitcoins here, you will want to use the best possible security. One of the ways to achieve this is to make your savings wallet a “cold wallet,” which means it is not connected to the Internet. By staying offline, a cold wallet is much less vulnerable to hackers. A very easy to use cold storage solution is Coinbase Vault.
Without going into technical details, the way the vault works is that Coinbase stores its bitcoins offline in several secure locations around the world. Withdrawing coins from the Vault requires several layers of verification, and withdrawals have a delay of 48 hours, which means that the transaction can be canceled during that 48-hour period. Coinbase has been audited independently by trusted members of the community and is used by leading companies such as Dell, Expedia and DISH Network.
But, of course, as mentioned above, you do not need to trust a third party like Coinbase. It could just be more convenient, especially for newer users. To really be your own bank, you can generate a paper wallet or use a hardware wallet without a connection. But these are beyond the scope of this guide.
Using your Bitcoins
So you have your wallets ready. Now is the time to start using those bitcoins! If you do not have any BTC, you can buy some of a Bitcoin exchange. There are also some free ways to get bitcoins. But, of course, the most basic characteristic of money is that it can be used to buy things. So, where can you really spend bitcoins? The list might surprise you:
The Humble Bundle
– and many others.
In addition, services such as Gyft allow users to buy gift cards for various stores with Bitcoin. This essentially allows users to use bitcoins at Amazon, Target and other retailers that do not yet accept Bitcoin payments. As Bitcoin continues to gain traction, no doubt, more and more companies will start accepting Bitcoin payments as Bitcoin offers a secure and easy way to transmit money online.
How to accept bitcoins for merchants?
Maybe you have your own business and are interested in accepting Bitcoin payments? If that’s the case, services like Coinbase and BitPay make it incredibly easy for merchants to accept bitcoins. Depending on how popular your business is, you will see little or no cost for accepting bitcoins (and the rates will always be lower than those of the fiduciary payment processors like PayPal).
However, it is easy and advantageous to start using Bitcoin. Hopefully, this guide will help you set it up. And if you have any questions, feel free to leave it in the comments.
Disclaimer: Third-party services mentioned in this article, which include, among others, Coinbase, Blockchain, Gyft, etc., are used as examples only. The use of the aforementioned services should not be considered an endorsement of KRYPTONEWS. KRYPTONEWS can not guarantee the continued availability of these services, nor does KRYPTONEWS accept any responsibility for any loss, including financial loss, incurred as a result of using the aforementioned services. Although we trust in the legitimacy of these services, we urge you to do your own research.