How to Use Bitcoin

Earn yourself a few bitcoins using any of the methods below:

• Buy small amounts of bitcoins online . If you bought under 40 million bitcoins or don’t know much about cryptocurrencies, try one of the wallet/bitcoin combo exchanges to get started. For example, you can start with Coinbase or Xapo. These sites allow you to buy small amounts of bitcoin with a service fee of about 1%. Like banks, they will also store your bitcoins for you on their servers.
• Buy large amount of bitcoin through exchange . If you buy over 40 million bitcoins, you should take advantage of the exchange’s lower commissions. These exchanges operate like stock markets with buy/sell prices changing 24 hours a day. Creating an account at an exchange is similar to opening a new bank account, most likely you will have to provide your real name, contact information and send money to them. Different countries and currencies have different bitcoin exchanges, suitable for different geographies:
  • From USD to bitcoin – Bitfinex, GDAX (by Coinbase)
  • From EUR to bitcoin – Kraken
  • From Chinese Yuan to bitcoin – BTCC, Huobi or OKCoin
• Withdraw money from bitcoin ATM . Many cities around the world offer bitcoin ATMs that allow you to exchange money for bitcoins. These ATMs usually take 5-8% conversion fees. A list of up-to-date bitcoin ATMs can be found at CoinATMradar.com.
• Buy bitcoins directly (not over-the-air) from someone . Anywhere in the world, you can give someone a handful of money and ask them to transfer bitcoins to your phone. However, only trade in small amounts until you can trust the counterparty. Check out LocalBitcoins to find online bitcoin merchants near you.
• Earn bitcoins . Find companies willing to hire and pay in bitcoin. Or open a store on OpenBazaar (eBay’s version of bitcoin) and sell your stuff for coins.
• Bitcoin Mining . Download and run a “mining” program (such as CGMiner) on a computer that has been customized to convert mathematical equations into bitcoins. In the early days, it was possible to make a profit from bitcoin mining. Up to this point, however, it has been the domain of dedicated companies. ^[1]

Set up your first Bitcoin wallet. If you are not technically savvy, you can completely skip the steps below and just leave your bitcoins in the account where you bought them. In fact, most bitcoin holders do. But the beauty of bitcoin is that it is a currency that doesn’t need to be controlled by any third party for you. In addition, since exchanges store hundreds of millions of dollars in bitcoin, they are very attractive targets for hackers. So unlike keeping coins under your mattress, storing bitcoins yourself is actually safer than depositing them on an exchange. Neither of the following wallets will allow third parties to access your bitcoins:

• Mobile Wallet is a Bitcoin wallet that runs on mobile devices. These wallets are portable and highly functional for use in stores. Mobile devices are generally less vulnerable to malware attacks than computers, thus creating a moderately secure environment for small amounts of bitcoin. Some of the best mobile wallets include:
  • Airbitz
  • Mycelium
  • BitPay
  • Jaxx
• Network Wallets are convenient and easy to use because they are available for online use. You just need to set up an account and log in. The most popular network wallets are:
  • Blockchain.info
• Hardware Wallets are very secure and almost infallible. If you are new to bitcoin and want to store large amounts of bitcoin safely, you should invest in a hardware wallet. Popular hardware wallets include:
  • Trezor
  • Ledger
• Paper wallets are very safe for long-term storage. While paper wallets are very resistant to unauthorized access, they are quite troublesome for spending bitcoins.
  • Read more to learn how to create and use a paper bitcoin wallet.
• Advanced Wallet is not really suitable for beginners. Bitcoin was originally formed from this type of wallet. You will have to run a local copy of the blockchain to keep the transaction anonymous. More well-known software wallets include:
  • Armory
  • Multibit

Generate a public Bitcoin address. Use the wallet you created in the previous step to create a public address for you. Think of this public address as an email address, which you can share with anyone you want to receive emails, or in this case bitcoins, from them.

• A public bitcoin address is a seemingly random string of long letters and numbers, such as 16BPS8xb5k36MeNLWmfZ1zpjCqbDhgyaHg.

Send a small amount of bitcoins to the public address you created above, using the “withdraw” or “send” function where you bought the bitcoins. You may have to wait 10-20 minutes for confirmation, but if you have done everything right, you should see a small amount of bitcoins that you have deposited in your personal wallet. Congratulations! You have successfully transferred bitcoins to a wallet that you and only you control!