I am new to both StackExchange and to the new online currency called Bitcoin. I understand what Bitcoin is and how it works, but I was wondering: how do you actually get started with Bitcoin? I have read some articles about mining and the different things you can do to actually get some money in profit, but none of the articles actually go into depth with how to actually do all these things. I was wondering if anyone in the community could help me and make any suggestions to me and those who want to get started in the new currency.
Start with one of the tutorials such as trybtc.com– Greg HewgillFeb 28, 2014 at 2:57
Hi Joseph, Welcome to Bitcoin.SE. – I am sorry for making you the victim of my hijacking attempt, but I hope that you still find my answer useful. :) @all As mentioned in my answer, I would like to propose an attempt to make this a lightning rod for many of our "I am a beginner could you help me with ..."-questions.– Murch ♦Feb 28, 2014 at 20:48
Thanks to everyone that contributed to my question all of it helped a bunch!– PowerofMerlinMar 1, 2014 at 6:11
We get a lot of questions revolving around the questions and problems faced by new users of Bitcoin. While some of this is beyond your question, this answer might work as a potential lightning rod for some of the questions that get asked anew here almost daily. In the following you find a few hand-picked questions that are likely of interest for new users.
What is Bitcoin?
- What is a good way to concisely explain Bitcoin?
- What are some good resources for understanding Bitcoin?
- What's the difference between a wallet and an address?
- The Bitcoin.it wiki says addresses do not carry balances...but all info suggests otherwise
Where to get a wallet?
In order to receive and send Bitcoin you need a wallet.
- What is a good resource to help newbies choose their first wallet/s?
- How many addresses does my wallet.dat contain? Do I need to make a new backup every time I make a transaction?
How do I get Bitcoin?
- How do you obtain bitcoins?
- What's a good resource explaining the best ways to buy Bitcoin (noob friendly)?
What gives Bitcoins value?
- Where do bitcoins come from and what gives them their value?
- How is the exchange rate for Bitcoin established?
Where can I spend Bitcoin?
What skills are necessary to use Bitcoin?
What is mining? How does it work?
- What exactly is Mining?
- What is the rationale behind Bitcoin mining?
- Can someone explain how the Bitcoin Blockchain works?
Is Mining profitable? How can I get started?
- How much Bitcoin will I mine right now with hardware X?
- How can I start mining Bitcoin?
- Why does mining profitability tend towards zero?
- In the ASIC-age, is it worth starting mining Bitcoin at home?
How do I get started with Bitcoin.Stackexchange?
- Check out our Tour for a quick overview.
- Some pointers on asking questions: How to Ask
- More helpful info can be found in the Help Center
- If you are looking for some interesting reads, check out the most frequently asked questions
- Swing by our chat: Bitcoin Lounge
Not sure if this is a proper question for this site. But in case it doesn't get deleted:
Stay away from scams. Imagine Nigerian princes everywhere but with internet money instead of email. Assume anything except Bitcoin is a scam (and convince yourself of even that fact before investing) until you know enough to judge for yourself or 2 years have passed (whichever takes longer).
And then even within Bitcoin: assume everything is a scam. Get proper software or the fake wallets will steal your money. Make your own local private keys, preferably on an offline device (old laptop, dice, Trezor) and store them offline. Never leave coins on an exchange or on a webwallet. If you don't own the private keys you don't own the coins. If you let anyone else generate/hold/steal your keys: you don't own the coins.
Cloud mining is a scam and many things related to mining too. Don't get involved in mining unless you are serious and did your homework.
Don't believe anyone trying to make things sound simple. Don't believe anyone promising you good things (profit). Bitcoin isn't simple so they probably don't have any clue what they're talking about and/or are lying to you.
Never invest more than you can afford to lose (completely). If you don't get scammed out of your money (see above) or lose the keys, the Bitcoin price could go to (near) 0 for other reasons.
If you're still reading after the above, read it again, it's quite serious. Here's a list of people and places to follow to get you started on your journey:
- Gregory Maxwell, Blockstream, alias: nullc on reddit.com/r/bitcoin, on bitcointalk.com and IRC #bitcoin
- Adam Back, Blockstream
- Peter Todd
- www.bitcoin.org (note NOT bitcoin.com) for very good introductory content as well as to pick the right wallet software (consider the Core wallet as it's the only truely trustless method of using Bitcoin).
Despite all that, the journey is actually worth it! Enjoy!
I've merged the question this answer was originally posted on with this one. Perhaps this will need some light editing to fit here.– Murch ♦Aug 11, 2016 at 6:44
What is Bitcoin?
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Who created Bitcoin?
Bitcoin is the first implementation of a concept called "cryptocurrency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on Bitcoin.
Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper.
Who controls the Bitcoin network?
Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
How does Bitcoin work?
From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining". To learn more about Bitcoin, you can consult the dedicated page and the original paper.
Is Bitcoin really used by people?
Yes. There are a growing number of businesses and individuals using Bitcoin. This includes brick-and-mortar businesses like restaurants, apartments, and law firms, as well as popular online services such as Namecheap, Overstock.com, and Reddit. While Bitcoin remains a relatively new phenomenon, it is growing fast. At the end of April 2017, the total value of all existing bitcoins exceeded 20 billion US dollars, with millions of dollars worth of bitcoins exchanged daily.
How does one acquire bitcoins?
As payment for goods or services. Purchase bitcoins at a Bitcoin exchange. Exchange bitcoins with someone near you. Earn bitcoins through competitive mining.
While it may be possible to find individuals who wish to sell bitcoins in exchange for a credit card or PayPal payment, most exchanges do not allow funding via these payment methods. This is due to cases where someone buys bitcoins with PayPal, and then reverses their half of the transaction. This is commonly referred to as a chargeback.
How difficult is it to make a Bitcoin payment?
Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.
What are the advantages of Bitcoin?
Payment freedom - It is possible to send and receive bitcoins anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. Bitcoin allows its users to be in full control of their money. Choose your own fees - There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it's possible to send 100,000 bitcoins for the same fee it costs to send 1 bitcoin. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks. Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs. Security and control - Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption. Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.
What are the disadvantages of Bitcoin?
Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects. Volatility - The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out. Ongoing development - Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.
Why do people trust Bitcoin?
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.
Can I make money with Bitcoin?
You should never expect to get rich with Bitcoin or any emerging technology. It is always important to be wary of anything that sounds too good to be true or disobeys basic economic rules.
Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that Bitcoin will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to Bitcoin requires entrepreneurship. There are various ways to make money with Bitcoin such as mining, speculation or running new businesses. All of these methods are competitive and there is no guarantee of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project.
Is Bitcoin fully virtual and immaterial?
Bitcoin is as virtual as the credit cards and online banking networks people use everyday. Bitcoin can be used to pay online and in physical stores just like any other form of money. Bitcoins can also be exchanged in physical form such as the Denarium coins, but paying with a mobile phone usually remains more convenient. Bitcoin balances are stored in a large distributed network, and they cannot be fraudulently altered by anybody. In other words, Bitcoin users have exclusive control over their funds and bitcoins cannot vanish just because they are virtual.
Is Bitcoin anonymous?
Bitcoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other form of money. However, Bitcoin is not anonymous and cannot offer the same level of privacy as cash. The use of Bitcoin leaves extensive public records. Various mechanisms exist to protect users' privacy, and more are in development. However, there is still work to be done before these features are used correctly by most Bitcoin users.
Some concerns have been raised that private transactions could be used for illegal purposes with Bitcoin. However, it is worth noting that Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems. Bitcoin cannot be more anonymous than cash and it is not likely to prevent criminal investigations from being conducted. Additionally, Bitcoin is also designed to prevent a large range of financial crimes.
What happens when bitcoins are lost?
When a user loses his wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.
Can Bitcoin scale to become a major payment network?
The Bitcoin network can already process a much higher number of transactions per second than it does today. It is, however, not entirely ready to scale to the level of major credit card networks. Work is underway to lift current limitations, and future requirements are well known. Since inception, every aspect of the Bitcoin network has been in a continuous process of maturation, optimization, and specialization, and it should be expected to remain that way for some years to come. As traffic grows, more Bitcoin users may use lightweight clients, and full network nodes may become a more specialized service. For more details, see the Scalability page on the Wiki.
Is Bitcoin legal?
To the best of our knowledge, Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions (such as Argentina and Russia) severely restrict or ban foreign currencies. Other jurisdictions (such as Thailand) may limit the licensing of certain entities such as Bitcoin exchanges.
Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network (FinCEN), a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies. Is Bitcoin useful for illegal activities?
Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.
Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime. For instance, bitcoins are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges such as with credit card fraud. Bitcoin transactions are irreversible and immune to fraudulent chargebacks. Bitcoin allows money to be secured against theft and loss using very strong and useful mechanisms such as backups, encryption, and multiple signatures.
Some concerns have been raised that Bitcoin could be more attractive to criminals because it can be used to make private and irreversible payments. However, these features already exist with cash and wire transfer, which are widely used and well-established. The use of Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems, and Bitcoin is not likely to prevent criminal investigations from being conducted. In general, it is common for important breakthroughs to be perceived as being controversial before their benefits are well understood. The Internet is a good example among many others to illustrate this.
Can Bitcoin be regulated?
The Bitcoin protocol itself cannot be modified without the cooperation of nearly all its users, who choose what software they use. Attempting to assign special rights to a local authority in the rules of the global Bitcoin network is not a practical possibility. Any rich organization could choose to invest in mining hardware to control half of the computing power of the network and become able to block or reverse recent transactions. However, there is no guarantee that they could retain this power since this requires to invest as much than all other miners in the world.
It is however possible to regulate the use of Bitcoin in a similar way to any other instrument. Just like the dollar, Bitcoin can be used for a wide variety of purposes, some of which can be considered legitimate or not as per each jurisdiction's laws. In this regard, Bitcoin is no different than any other tool or resource and can be subjected to different regulations in each country. Bitcoin use could also be made difficult by restrictive regulations, in which case it is hard to determine what percentage of users would keep using the technology. A government that chooses to ban Bitcoin would prevent domestic businesses and markets from developing, shifting innovation to other countries. The challenge for regulators, as always, is to develop efficient solutions while not impairing the growth of new emerging markets and businesses.
What about Bitcoin and taxes?
Bitcoin is not a fiat currency with legal tender status in any jurisdiction, but often tax liability accrues regardless of the medium used. There is a wide variety of legislation in many different jurisdictions which could cause income, sales, payroll, capital gains, or some other form of tax liability to arise with Bitcoin.
What about Bitcoin and consumer protection?
Bitcoin is freeing people to transact on their own terms. Each user can send and receive payments in a similar way to cash but they can also take part in more complex contracts. Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This allows innovative dispute mediation services to be developed in the future. Such services could allow a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. As opposed to cash and other payment methods, Bitcoin always leaves a public proof that a transaction did take place, which can potentially be used in a recourse against businesses with fraudulent practices.
It is also worth noting that while merchants usually depend on their public reputation to remain in business and pay their employees, they don't have access to the same level of information when dealing with new consumers. The way Bitcoin works allows both individuals and businesses to be protected against fraudulent chargebacks while giving the choice to the consumer to ask for more protection when they are not willing to trust a particular merchant. Economy
How are bitcoins created?
New bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.
The Bitcoin protocol is designed in such a way that new bitcoins are created at a fixed rate. This makes Bitcoin mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs. No central authority or developer has any power to control or manipulate the system to increase their profits. Every Bitcoin node in the world will reject anything that does not comply with the rules it expects the system to follow.
Bitcoins are created at a decreasing and predictable rate. The number of new bitcoins created each year is automatically halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins in existence. At this point, Bitcoin miners will probably be supported exclusively by numerous small transaction fees.
Why do bitcoins have value?
Bitcoins have value because they are useful as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies). In short, Bitcoin is backed by mathematics. With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of Bitcoin, this can be measured by its growing base of users, merchants, and startups. As with all currency, bitcoin's value comes only and directly from people willing to accept them as payment.
What determines bitcoin’s price?
The price of a bitcoin is determined by supply and demand. When demand for bitcoins increases, the price increases, and when demand falls, the price falls. There is only a limited number of bitcoins in circulation and new bitcoins are created at a predictable and decreasing rate, which means that demand must follow this level of inflation to keep the price stable. Because Bitcoin is still a relatively small market compared to what it could be, it doesn't take significant amounts of money to move the market price up or down, and thus the price of a bitcoin is still very volatile.
Can bitcoins become worthless?
Yes. History is littered with currencies that failed and are no longer used, such as the German Mark during the Weimar Republic and, more recently, the Zimbabwean dollar. Although previous currency failures were typically due to hyperinflation of a kind that Bitcoin makes impossible, there is always potential for technical failures, competing currencies, political issues and so on. As a basic rule of thumb, no currency should be considered absolutely safe from failures or hard times. Bitcoin has proven reliable for years since its inception and there is a lot of potential for Bitcoin to continue to grow. However, no one is in a position to predict what the future will be for Bitcoin.
Is Bitcoin a bubble?
A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble. Choices based on individual human action by hundreds of thousands of market participants is the cause for bitcoin's price to fluctuate as the market seeks price discovery. Reasons for changes in sentiment may include a loss of confidence in Bitcoin, a large difference between value and price not based on the fundamentals of the Bitcoin economy, increased press coverage stimulating speculative demand, fear of uncertainty, and old-fashioned irrational exuberance and greed.
Is Bitcoin a Ponzi scheme?
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money, or the money paid by subsequent investors, instead of from profit earned by the individuals running the business. Ponzi schemes are designed to collapse at the expense of the last investors when there is not enough new participants.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns. Like other major currencies such as gold, United States dollar, euro, yen, etc. there is no guaranteed purchasing power and the exchange rate floats freely. This leads to volatility where owners of bitcoins can unpredictably make or lose money. Beyond speculation, Bitcoin is also a payment system with useful and competitive attributes that are being used by thousands of users and businesses.
Doesn't Bitcoin unfairly benefit early adopters?
Some early adopters have large numbers of bitcoins because they took risks and invested time and resources in an unproven technology that was hardly used by anyone and that was much harder to secure properly. Many early adopters spent large numbers of bitcoins quite a few times before they became valuable or bought only small amounts and didn't make huge gains. There is no guarantee that the price of a bitcoin will increase or drop. This is very similar to investing in an early startup that can either gain value through its usefulness and popularity, or just never break through. Bitcoin is still in its infancy, and it has been designed with a very long-term view; it is hard to imagine how it could be less biased towards early adopters, and today's users may or may not be the early adopters of tomorrow. Won't the finite amount of bitcoins be a limitation?
Bitcoin is unique in that only 21 million bitcoins will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a bitcoin, such as bits - there are 1,000,000 bits in 1 bitcoin. Bitcoins can be divided up to 8 decimal places (0.000 000 01) and potentially even smaller units if that is ever required in the future as the average transaction size decreases.
Won't Bitcoin fall in a deflationary spiral?
The deflationary spiral theory says that if prices are expected to fall, people will move purchases into the future in order to benefit from the lower prices. That fall in demand will in turn cause merchants to lower their prices to try and stimulate demand, making the problem worse and leading to an economic depression.
Although this theory is a popular way to justify inflation amongst central bankers, it does not appear to always hold true and is considered controversial amongst economists. Consumer electronics is one example of a market where prices constantly fall but which is not in depression. Similarly, the value of bitcoins has risen over time and yet the size of the Bitcoin economy has also grown dramatically along with it. Because both the value of the currency and the size of its economy started at zero in 2009, Bitcoin is a counterexample to the theory showing that it must sometimes be wrong.
Notwithstanding this, Bitcoin is not designed to be a deflationary currency. It is more accurate to say Bitcoin is intended to inflate in its early years, and become stable in its later years. The only time the quantity of bitcoins in circulation will drop is if people carelessly lose their wallets by failing to make backups. With a stable monetary base and a stable economy, the value of the currency should remain the same.
Isn't speculation and volatility a problem for Bitcoin?
This is a chicken and egg situation. For bitcoin's price to stabilize, a large scale economy needs to develop with more businesses and users. For a large scale economy to develop, businesses and users will seek for price stability.
Fortunately, volatility does not affect the main benefits of Bitcoin as a payment system to transfer money from point A to point B. It is possible for businesses to convert bitcoin payments to their local currency instantly, allowing them to profit from the advantages of Bitcoin without being subjected to price fluctuations. Since Bitcoin offers many useful and unique features and properties, many users choose to use Bitcoin. With such solutions and incentives, it is possible that Bitcoin will mature and develop to a degree where price volatility will become limited.
What if someone bought up all the existing bitcoins?
Only a fraction of bitcoins issued to date are found on the exchange markets for sale. Bitcoin markets are competitive, meaning the price of a bitcoin will rise or fall depending on supply and demand. Additionally, new bitcoins will continue to be issued for decades to come. Therefore even the most determined buyer could not buy all the bitcoins in existence. This situation isn't to suggest, however, that the markets aren't vulnerable to price manipulation; it still doesn't take significant amounts of money to move the market price up or down, and thus Bitcoin remains a volatile asset thus far.
What if someone creates a better digital currency?
That can happen. For now, Bitcoin remains by far the most popular decentralized virtual currency, but there can be no guarantee that it will retain that position. There is already a set of alternative currencies inspired by Bitcoin. It is however probably correct to assume that significant improvements would be required for a new currency to overtake Bitcoin in terms of established market, even though this remains unpredictable. Bitcoin could also conceivably adopt improvements of a competing currency so long as it doesn't change fundamental parts of the protocol.
4It would be useful if you could reference any sources.– WilltechApr 13, 2018 at 12:57
You say initially that you are both new to bitcoin, and that you understand it through your readings. These two are in direct opposition, and judging from the following question, "... but how do you get started with mining?" I would wager that you'd be wise to recognize the vast expanse that is bitcoin comprehension.
Doubly so when it comes to the incredibly technically demanding arena of Bitcoin Mining. About 8 months ago I may have said similar things, asked similar questions, and so to answer them point blank I suggest you;
A. Before posting a question/s search, probe the limitless knowledge base the internet offers. There is a good chance you will find what you seek as many questions you have will always be answered 1mXover.
B. Read as much as you can of the works of the foremost thinkers, developers, companies, geniuses like Adam Back, the creator of Hash Cash and Erik Vorhees, outspoken and soft spoken Model Actor of Bitcoin. By listening to videos and Let's Talk Bitcoin podcasts featuring such acts as these and many others you will quickly enrich your bitcoin consciousness.
C. Have fun! And don't be afraid to ask, and before buying mining equipment, be sure to weigh your Risk Versus Reward (Difficulty at ~3.9Bn and rising!)
The best way to earn coins is to get tipped on reddit or other places that allow it, or using faucets.
Once you get tipped some altcoins, convert them to bitcoin on an exchange (cryptsy,...)
Be aware that you have to open a wallet for every currency you will be using. For example blockchain.info for Bitcoin.
If you find a way to get free electricity (solar,...) and someone is willing to give you a low end AMD GPU you could also start running a miner for free on very basic PC hardware, which everyone has at home.
Bitcoin is several things at the same time. So, someone could be interested in it for several reasons. For instance, you could be in it to learn about academic cryptography, to learn about networking, economy, or even just to make money. Some would even say that Bitcoin has also a political side, as it interferes with the way money circulates in our societies.
You got to make your choice and try to focus on it. The beauty of Bitcoin is that even when you focus in a sole part of it, there's a huge benefit in learning a little about the other parts, as they're all interconnected.
Good luck, and keep posting your doubts to this forum, as lots of great information can be found here. And please don't forget to share your findings with the rest of the community.
You don't need to include @username in answers - the asker is automatically pinged for each new answer. Feb 19, 2015 at 4:32
My favorite way to teach new people about Bitcoin is just to explain to them how the current money system works first, then just expand upon that and educate them on how Bitcoin is what gold is technically, just digitized.
that's the best approach by far, although I find that many people tend to "not care" about that and the inner workings (or lack of them) in the fiat-currency realm as long as "the music plays". I have to admit that you would achieve the best result using your approach, educating the average Joe about fiat currency vs. money in general as you walk along.– marquixFeb 11, 2017 at 16:35
Except that if the gold miners stopped working you could still spend gold. Sep 23, 2017 at 8:38
there are basically two ways of getting your feet wet in the Bitcoin space:
(1) team up with others and do some learning-by-doing (more entertaining, but potentially time-consuming)
(2) go it all alone (usually faster albeit not as "social" and probably not as much fun)
To team up with others, go to meetup.com and check if there are any local gatherings on Bitcoin you might attend. In most cities, there are. You can simply RSVP and attend a meetup, ask questions, have others show you the ropes, and walk away with a basic understanding.
Going it alone means you read it all on your (lonesome) screen (just like this answer). A good starting point online would be http://www.bitcoin.com/ or websites like Start-Using-Bitcoin, divided up into topics like http://startusingbitcoin.com/blog/3-how-to-buy-bitcoins/ or http://startusingbitcoin.com/blog/2-how-to-store-your-bitcoins/ which are very helpful. Every novice needs to know these, particularly how to store (and secure) one's bitcoins (or other Crypto coins like Llitecoin, Dogecoin etc, they're all the same in these respects). Miscellaneous news on Bitcoin and other Crypto currencies are also covered on http://bitcoinFinancial.info/ as they happen; you may want to subscribe to their RSS feed or read the articles on their website.
There are also very good introductory Youtube videos on the subject, if you want the going-it-alone approach to be more entertaining. Many of them are useful for covering the basics.
If you want to start mining (no equipment wise) you can look at cloud hashing (such as https://cex.io or https://cloudhashing.com/contracts) [there are plenty more out there] but keep in mind that most of these will NOT come close to breaking even. You can also find mining contracts over at eBay. Most contracts that you find online will never let you break even but some of them will let you come close to breaking even, it saves you the electricity cost. I personally wouldn't hop into mining Bitcoin right now because the difficulty that it takes to mine a block is so high that you will need thousands of dollars to invest in equipment, pay for electricity, and possibly wait a couple months for the product to deliver to your doorstep (keep in mind that the difficulty will still be increasing). Or you can just buy some of the currency at famous trading sites such as: https://coinbase.com https://btc-e.com/ or https://www.bitstamp.net. My suggestion is to buy some coins if you are looking to save money and time, start with cloud hashing (contracts) to see how it goes, if it interests you then start buying some equipment (avoid butterfly labs, they have some horrible reviews and long handling time). Hopefully this provided some insight on where to start. (Programs to use would be bfgminer/cgminer but you need equipment to make those programs effective, avoid using graphics cards for bitcoin as well) edit: find faucets, they're free but take a while to reach a payout threshold