Bitcoin 101 for Beginners

Sep 07, 2020
4 min read
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Diving into crypto space and owning your first Bitcoin is not as complicated as you may think. With the growing Bitcoin community's help, there are many useful guides and articles like this to learn and start your crypto journey.

In this article, we will discuss everything to get you started on your crypto journey, and we will also discuss what Bitcoin is, cryptocurrency wallets, where you can buy Bitcoin, and what you can buy with Bitcoin.

What is Bitcoin?

Bitcoin is a decentralized digital currency and can be sent from a user to another through the peer-to-peer Bitcoin blockchain network without intermediaries like a broker or agent. Bitcoin is also the first implementation of blockchain technology conceptualized by the group known as Satoshi Nakamoto, back in January 2009.

Bitcoin Network is secured by a consensus mechanism called Proof of Work. Independent individuals or a company, also known as Miners, can throw computing power to the Bitcoin Network and validate transactions. In return, the Bitcoin network itself will award miners -> depends on the contribution.

Bitcoin mining is the process of generating a new Bitcoin and release it into circulation. However, mining requires a lot of computing power to solve a complicated math puzzle to generate new Blockchain blocks. There are 21 million Bitcoins that can be mined in total. Currently, around 18.5 million Bitcoins have been mined and released to the circulation. The last Bitcoin will mine probably around the year 2041.

What is a Bitcoin or Cryptocurrency Wallet?

A Bitcoin wallet or a cryptocurrency wallet is a software program that Bitcoin or cryptocurrencies are stored in. Bitcoin wallet facilitates sending and receiving Bitcoins. Bitcoin wallets also hold private keys that will prove your ownership of the corresponding Bitcoin address. You can use that to carry out transactions within the Bitcoin network, and this method is used by almost all cryptocurrency out there. There are different types of Bitcoin and cryptocurrency wallets available to use that include security, convenience, accessibility, paper wallet, desktop, mobile, web, and hardware wallet.

Types of Bitcoin Wallets:

Paper wallet - is a paper that contains your private key and your public address, which allows you to spend or transfer a cryptocurrency stored in the given address. Paper wallets are printed in the form of QR-codes to quickly scan it to initiate transactions and use it to access your wallet via a software wallet. To generate your paper wallet, you can use the popular paper wallet generator service in the crypto space, BitAddress.org. A paper wallet's advantage is that the private key stored offline is immune to hackers, especially a key logger malware.

Desktop wallet - desktop wallets are downloaded and installed to your computer. Storing your private keys in your hard drive makes it more secure than the other wallet, especially the mobile wallets and web wallets. The disadvantage of using a desktop wallet is that it is prone to attacks as a key logger malware. A desktop wallet is still connected to the internet, so that's why it makes them less secure. The best Bitcoin desktop wallets that you can use are Electrum, Exodus, Atomic Wallet, Bitcoin Core, and Armory.

Mobile wallets - is a Bitcoin wallet software installed on your mobile phone that allows you to send and receive Bitcoin more conveniently. Mobile Bitcoin wallets take advantage of simplified payment verification technology that you didn't need to download the entire blockchain ledger to access the Bitcoin network. However, mobile Bitcoin wallets are less secured than the desktop wallet because they're often online, and you may not control your wallet's private keys. The most commonly used mobile Bitcoin wallets that available on IOS and Android are Mycelium, Coinomi, Trust wallet, Edge, and Freewallet.

Web wallets - are wallets run in your browser, just like a website that you are visiting right now. Like a mobile wallet, you don't need to download the blockchain to enable you to make a transaction in the Bitcoin network. However, some of the web wallet providers are holding your private key and public keys; that's why it raises a serious issue of "not your keys, not your coins". The most recommended Web wallets that you can use are Coinbase, Lumi wallet, Blockchain.com wallet, and Xapo.

Hardware wallets - are wallets using a secure hardware device to store your private key and receive and send Bitcoin. Some hardware wallets have a little screen to display important details, such as generating recovery phrases and verify the transaction you will make. Hardware wallets are the more secure wallet for now in the crypto space. However, you need to buy it from the hardware wallet manufacturers. The most popular manufacturers of the hardware wallet you can buy are Ledger, Trezor, and KeepKey.

Where can you buy Bitcoin?

Bitcoin and other cryptocurrencies are welcome in some parts of the world. Still, some countries like Afghanistan, Pakistan, Bolivia, Bangladesh, The Republic of Macedonia, Saudi Arabia, Qatar, and Vietnam banned Bitcoin because of its decentralized nature. Buying a Bitcoin depends on the country you're currently living in, so before you buy, check if your country has regulations on it.

And the best way to buy Bitcoin and cryptocurrencies is in reputable exchanges by using your MasterCard or your Visa, or you can do it over-the-counter.

CoinBase is a reputable and regulated crypto exchange platform where you can buy Bitcoin, especially in the United States. By creating an account in Coinbase and connecting your bank account, you can buy Bitcoin and store it to their wallet.

Okex is also a regulated crypto exchange where you can buy Bitcoin. Okex is available in 100 countries and one of the top crypto exchanges based on volume. To buy Bitcoin in Okex, you need to create an account, do the KYC procedure, and then you can buy Bitcoin using your MasterCard or Visa

EToro is a regulated social trading platform that is available globally to trade stock holdings and also cryptocurrency. To buy Bitcoin in EToro, you need to create an account, fund your account by connecting your bank account, and then buy Bitcoin.

LocalBitcoin is a leading P2P Bitcoin trading platform that is available in 100 countries. LocalBitcoin is a favored over the counter (OTC) platform to buy Bitcoin and protected by an escrow service.

What can you buy with Bitcoin?

With the growing community and influence, Bitcoin is accepted as a payment method in some establishments and big companies worldwide. One of the great examples of this is buying domains in Namecheap.com that are accepting Bitcoin as a payment method. Expedia, one of the world's largest online travel booking agencies, accepts Bitcoin as a payment method on its hotel bookings. Also, Virgin Galactic, owned by Richard Branson, accepts Bitcoin as a payment.

If you are looking for more, use the aggregator platform to search what you can buy with Bitcoin; wheretospendBitcoins.co.uk, useBitcoins.info, and spendabit.co