Bitcoin complete setup guide with security
How to protect your self on security concerns:
Bitcoin is one of the most popular crypto currency.
Crypto is a virtual currency only in the virtual world.
There is no gold or silver backing.
It comes from the popularity and trust people give it.
The great thing is it is decentralized and there is no central bank.
What is a Bitcoin Node?
Nodes keeps track of all transactions that there has ever been in Bitcoin.
It is possible to create your own note however it require lots of bandwidth
The size of the Nodes is more than 50 Gigs in size at this time.
Big corporations has started to accept the Bitcoin currency.
Some countries have regulations against Bitcoin click here for the list.
There are other competitors coins called Alt Coin
One of the more popular are Litecoin, Dogecoin, Darkcoin, Ziftrcoin.
There are a total of 21 Million Bitcoins the last one to be generated around year 2140.
So there is a good chance in our current life time we wont see the last coin being generated.
The benefit of Bitcoin is it is easily available and can be used world wide.
Some countries do tax the profit made when selling.
There is a lot of versatility in Bitcoin but generally it is going up.
Please click for the latest Bitcoin value here
Latest news around Bitcoin
- 22 October 2015 - Bitcoin exchange ruled VAT free in all of EU says TOP EU Court - Read more
- 31 March 2014 - Bitcoin is taxed in the US as property
How to get started using Bitcoin?
First of all you need to have a BitCoin wallet.
You can have the wallet on your smart phone, tablet, web service or computer.
You can store a secret key in a third party location so if you loose your smartphone, tablet, access to web service or computer you wont loose your BitCoins.
A popular place for a local wallet : https://mycelium.com/
How fast can I setup Bitcoin?
How do I setup Bitcoin or even use it?
The most easy way is to get a Bitcoin wallet on your Android or iPhone.
Once it is installed you get a Bitcoin number inside where you can receive Bitcoins on.
Local Wallet VS Online Wallet
There is a big discussion about if it is safe to have an online Bitcoin wallet.
It can be compared to have your money in a real bank where you can access it with online banking.
What if they get compromised and looses all the Bitcoin do you loose everything?
That is the arguments for the local wallet.
More security aware people might choose to have a wallet themself on their computer, smartphone.
So basically Offline beats online when it comes to security, so offline should be preferred. Reduce risks by choosing a setup like this one:Create an mycelium wallet, using our Android application (http://bit.ly/MyceliumPlayStore), an create an offline backup to safely secure funds.
Security concern for having a local Bitcoin wallet on your smartphone
One of the main risks to Bitcoin is if a poor password is chosen.
Even 6-8 digit passwords that most people use can be cracked in matter of hours.
And even longer 15 character passwords can be cracked in the next 5-10 years by quantum computing that is getting more popular even today.
Where can I buy Bitcoins?
On https://bitcoin.com you can click on Buy Bitcoin?
And see in different countries
An example in the US to buy Bitcoins buy at Coinbase.
Can I get a real Plastic Payment card to pay in US$ or other currency?
A great card is at https://www.e-coin.io/
Who owns Bitcoin?
Nobody controls Bitcoin. So nobody can manipulate with it.
The statement Nobody owns the Bitcoin network can be compared to nobody owns the technology behind sending emails.
Bitcoin is controlled only by the users.
It is not controlled by any Governments or any single company.
There is restriction on how many Bitcoins there are.
It is not possible to just print more Bitcoins as many fiat currencies are subject to.
So I am interesting in buying some Bitcoin where can I buy?
There are multiple places you can buy Bitcoins. A good place is Coinbase
How to mine myself with ASIC mining hardware?
The real heroes of the Bitcoin are the miners.
There is a lottery every 10 minutes. Everytime people make transactions every 10 minutes it goes into a block.
The block has to be verified by someone. But you dont want via a single party that can be corrupt.
So anyone that get the block first gets the point.
So it has a difficulty rating depending on how many people are mining what equipment they are using.
Click here to see current Bitcoin difficulty number
So the more people that start mining and the better equipment coming out the harder it gets to mine.
So to improve this they created Pool.
When you combine all your equipment and starts mining on a pool there is a higher chance you can get the mining point.
Bitcoin has the reward system of the 25 Bitcoin.
You can also do solo mining and hope to find the magic number and win 25 Bitcoin.
The reason that they need to keep increase the difficulty is that if more people and more faster equipment comes online it would take less than 10 minutes to find the 25 Bitcoin.
And it must be maximum 6 times an hour 25 Bitcoin being released every 10 minutes.
So it is an arms race who has the fastest and biggest equipment.
In beginning you could hash on your computer CPU and get a few kilohash.
Then with quadcore CPUs you could get a 20 Megahash.
And then people jumped on GPUs that gave about 3-500 Megahash.
Then everybody joined on ASIC miners. That are designed only to run bitcoin hashing.
An example Antminer S3 4-500 Gigahash per second. 500x times faster than a GPU.
The newer S7 can do about 5.5 Terahash in 1250 Watts
So an example:
2 Terahash for 1450 W with 10 cents per kilowat then it is 3$ a day in power.
You can use the calculator enter power, bitcoin difficulty:
Calculate your profitability
There are several options such as USB miners, standalone ASIC miners.
Please note due to the versatility there can be a risk about not being profitable when buying equipment and consider the electric bill.
In some countries 1 kWh can cost up to 0.44$ and in other countries can cost 0.07$
Make sure to do your research beforehand.
Where can I watch Bitcoin Documentaries?
Bitshares Peer to Peer Tour 2015
November 2015 Bitcoin Gospel Documentary
Bitcoin Your guide to understanding digital Currency Documentary
Bitcoin Digital Economy
VICE Bitcoin 2014 documentary