Join the Internet Era, Start with Bitcoin
So you have come to the point in your life where physical money is proving to have too many limitations. Instead you hope to be part of a digital community focusing on opening new possibilities for expressing yourself across the internet. Perhaps it is time to explore Bitcoin and change the way you accumulate currency. In this post we will be walking you through the steps for starting your bitcoin collection.
Imagine that your digital currency needs a place to stay so you don’t lose track of where it is, much like your physical currency. You will need to secure a bitcoin-specific wallet to keep your bitcoin safe and within your control. Another way to view the wallet is like a kind of bank account, with different restrictions depending on the type of account you get.
Your preferences and security levels play a large role in what type of wallet you will want: some have more relaxed restrictions where you can spend and accumulate bitcoin without much hassle, while others possess military-grade protections. Here is a guide of bitcoin wallets to browse through. Make sure to read the descriptions in order to understand which wallet will be best for your needs.
The main options are:
- a software wallet stored on the hard drive of your computer
- an online, web-based service
- a vault service that keeps your bitcoins protected offline
Again, which one you choose will depend on how you wish to use your bitcoin.
Where to buy bitcoins
Once you have secured your wallet, it is time to start accumulating those bitcoins. Today there are more and more options for purchasing the digital currency from a variety of different sources, depending on your preferences.
Exchanges and Marketplaces
The most common way to buy bitcoins is from any country-specific exchange, or from other people via online marketplaces. Many wallets will provide you with easy access to purchasing bitcoins without much of the middle work, varying on payment methods. While this is usually the most straightforward method of purchasing bitcoin, depending on how you pay for the bitcoin, you may be linking to your wallet to personal information that you don’t want disclosed.
‘Over-the-counter’ (OTC) trades
If privacy is a major concern for you then the easiest way to acquire bitcoin is to make an OTC, or face-to-face, trade with a seller.
LocalBitcoins is one site for setting up trades and allows you to specify where the transactions will take place and the option of negotiating prices. LocalBitcoins provides an escrow service as an additional layer of protection for both buyer and seller.
There a number of precautions that need to be considered before embarking on one of these face-to-face trades, especially if the money exchanging hands is significantly large. Make sure the meet-up is in a public place that is busy with people and have a plan of what you would do if anything was to not go according to plan.
Make sure when conducting a face-to-face meeting, you have access to your bitcoin wallet, whether that is an internet-enabled smartphone or laptop, to confirm the transaction during the trade.
In terms of pricing, a face-to-face trade can have a premium of around 6-10%. This is the price you pay to have your information kept secret and have an easy method of trading bitcoins. A good strategy for avoiding any unnecessary conflict when meeting a seller is to have a price negotiated before you meet, if the meeting date is within the next 24hrs so there isn’t too much fluctuation in bitcoin price.
There are also safer options for trading bitcoins in person through a bitcoin meeting group, where many users come together to talk and trade bitcoin. You may be able to find one in your area on Meetup.com.
One of the most recent innovations in the bitcoin space is the arrival of Bitcoin ATMS. They are growing pretty fast across the United States, and even have people like Mike Tyson as a spokesperson. A few vendors that are currently available are Genesis Coin, BitAccess, CoinOutlet, and Robocoin.
How they work is relatively simple: all a user has to do is find a machine and insert their cash, after that the machine will allow you to scan the QR code using your mobile wallet or print out a paper receipt to load bitcoins onto your wallet once you have access to it.
You may be paying a premium of 2% to 8% on top of an exchange price for the convenience and privacy that a Bitcoin ATM offers.
How to use bitcoins
Now that you have a bitcoin wallet with some bitcoin currency, you may be wondering where you can spend some of that sweet digital currency. Only a couple of years ago it would have been incredibly difficult to find many options to purchase goods using your bitcoin currency, however with the high adoption rate, today there are numerous places you can spend your bitcoin on a variety of different products: computers, clothing, travel, jewelry, appliances and bitcoin sports betting.
There is a misconception that bitcoin is 100% anonymous, however, some steps are involved to protect your privacy. All bitcoin transactions are a part of the greater bitcoin network that is public, permanent and attached to your bitcoin address. While the actual identity of the user behind the address remains anonymous, certain information becomes available during things such as a purchase or any other time information is given that is connected to your address. To mitigate the risk, a user should only use their Bitcoin addresses once. Most wallets allow you to create unlimited addresses, so there is never any harm in creating a new address for each new transaction. Make sure you educate yourself on good practices to ensure you protect your privacy when using bitcoin.
Online web wallets have different degrees of security to fight against hackers, from multi-factor authentication to less reliable ID and password protection.
If you choose to store your bitcoins locally on your computer, ensure that you back up your wallet on a regular basis in the unlikely event that the drive becomes corrupted and you lose your record of ownership.
While bitcoin is not an official currency, most jurisdictions still require you to pay taxes on them. It is your responsibility to educate yourself about the current tax regulations of your government and local municipalities to ensure that you are following the applicable taxation rules.
Learn about bitcoin and begin your bitcoin betting journey. Check the different guides published on Nitrogen Sports Blog.