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Thursday, May 8, 2014

How To Buy Bitcoins

how to buy bitcoins - b8coin exchangeEverything you need to know about starting to buy and trade Bitcoins. Bitcoins have been all the rage for the last few years. It’s made some people millionaires overnight and, with the security breach at Mt. Gox, made others very leery of the digital currency. Countries like China want to regulate the currency, while other countries say they’ll never recognize it as legitimate.

Yet more and more online shops are taking Bitcoin as a valid payment and the very first Bitcoin cash machines have begun appearing. So the big question is: how do you get your hands on some Bitcoin? Well, you can begin mining it, which will take forever, or you can just buy your very own. Here’s how to do that. 

1. Get A Bitcoin Wallet
A Bitcoin wallet is pretty much the equivalent of a classic current account. To get a Bitcoin wallet you simply need to go to a website that deals in Bitcoin and register for a wallet. One of the most reputable websites is 
www.blockchain.info/wallet. Go there and click the “Create my free wallet” button. Once you enter your email and create a password your wallet will be automatically generated. The wallet will allow you to make and receive transactions in Bitcoins.

2. Get Your Address
Your Bitcoin wallet enables you to make and receive transactions because it gives you a unique code known as your Bitcoin address. These codes are made of between 34 and 36 characters and always begin with a “1”. My Bitcoin address is 1BCXKt17KdyJ1c2eS6MZ8GffsxodKdusK4

Now you may be freaking out right now because I just published my Bitcoin address for all to see. This doesn’t matter from a security standpoint in the least. Matter of fact, I’ll give out my Bitcoin address anytime I make or receive a transaction with/from anyone. The Bitcoin address simply facilitates the transaction and in no way can anyone steal money from my Bitcoin wallet just by having my address. Your personal Bitcoin address is not linked to any personally identifiable information.

3. Create An Account At An Exchange
So you’ve got your wallet and your address, the next thing you need to do is get some Bitcoins. Yes, you can start mining your own, but this will take ages and you’ll need some pretty powerful computer hardware running 24 hours a day to get even a few hundredths of one Bitcoin in a month. The way around this is to simply buy some Bitcoin so you can start making transactions in it. 

Here it’s also important to note that a Bitcoin is not like a stock. It is instead akin to currency. Yes, the price of a Bitcoin fluctuates in relation to the dollar or pound, but people don't “bid” the price of a Bitcoin higher like they do a stock (for the most part). Right now the exchange rate of one Bitcoin equals about $429USD. 

Thankfully, Bitcoins can be used to buy items in fractions of one Bitcoin, so you aren’t going to find many sites that sell a product for even one whole Bitcoin. 

Got it? Good. Now to buy some Bitcoins you need to create an account at a Bitcoin exchange. Coinbase (www.coinbase.com) is one of the most reputable. Go there and follow the instructions to create an account. 

4. Verify Your Bank Account & Phone Number 
Bitcoin for the most part is totally anonymous--especially if you are just mining your own. But in order to buy Bitcoin you’ll need to verify your traditional bank account and phone number with the Bitcoin exchange you are using. This is necessary so they know someone else isn’t essentially stealing your traditional cash to buy Bitcoin. Coinbase has a great verification system that still keeps you relatively anonymous. You’ll just need to enter your account number and sort code. Coinbase then can log in automatically for you or make a small deposit and withdrawal which you then verify the amounts of.

5. Buy Your Bitcoins
Once your account is verified you can begin buying and selling Bitcoins. Simply select the amount of Bitcoins you want to buy on Coinbase’s website and the money in GBP will be debited from your bank account.

6. Transfer Your New Bitcoins To Your Wallet
Now that you own some Bitcoins you need to transfer them to your wallet. To do this you simply need to copy and paste your Bitcoin address (that long number beginning with “1”) into your Coinbase (or other Bitcoin exchange) account settings. Once this is done your Bitcoin address is now registered as having so many number of Bitcoins and you can begin spending them right away.

7. Spend Those Bitcoins!
So how do you spend your Bitcoins? Well, many websites like OKCupid, Overstock, and more take Bitcoin, or you can simply pay anyone with a Bitcoin wallet in Bitcoin. To do this you simply log into your Bitcoin exchange account, enter the recipient’s Bitcoin address (that long number beginning with “1”) and the amount of Bitcoin you want to send them. And that’s it.

8. One Final Note
Bitcoin and other alternative digital currencies are an exciting phenomenon going on right now, but the Bitcoin exchange rates can fluctuate in price wildly. Last year a single Bitcoin went from being worth less than $10USD to over $900USD. 

In today’s rate one Bitcoin is worth about $429USD. If you are using Bitcoin to “get rich quick” you can quickly lose all your money. So use Bitcoin for what it was meant for: conducting secure, anonymous transactions online, and don’t try to become a day trader with it hoping to get rich.



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