Bitcoin: Starters Complete Guide to Easily Buy, Invest and Trade with Bitcoin

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Your Easy to Follow Bitcoin Guide


Let me show you just how easy it is for you to get into the digital revolution of Bitcoin. Whether you want to (1) know all about Bitcoin (2) know all the best ways to acquire and manage Bitcoin, or (3) you just want to know how to Use Bitcoin to Your advantage, this book will give you all you need to know in this easy to follow guide. 

Get excited, because you are about to learn just how powerful and useful Bitcoin can be to you and your lifestyle. There is no need for a degree or special training when it comes to Bitcoin. All you need is the right information, the right mindset, and the right support. I will easily help you with all of these!

What is Bitcoin?


Bitcoin is the first and the most well known cryptocurrency on the market that offers you a dazzling array of powerful options. As the first and most well known cryptocurrency, it currently holds the powerful advantage of being a Category KingA category king can occur if a product comes out first and then is able to maintain the brand over time. In the following pages I will easily answer all your Bitcoin questions and guide you on your golden path to Bitcoin Glory.

Enjoy the Freedom that Bitcoin offers:

 

  • Purchases
  • Investing
  • Trading
  • Mining
  • Your Business and much more!

 

Bitcoin solves a lot of problems


Bitcoin is very flexible and is friendly to new users and does not come with a lot of restrictions that other traditional methods may have. I can take you through the process of using Bitcoin so that you are fully informed and able to easily apply all the strategies that you discover. I will also share other people’s experiences and insights so that you can learn from them and avoid common mistakes. This book will guide you from the very beginning of your Bitcoin journey all the way until the end. After reading this book you will have all that you need in order to start using Bitcoin like a pro.

What Will You Learn About Bitcoin?

 

  • The best places to easily acquire your own Bitcoins.
  • How to choose the right Bitcoin wallet and why this is so important.
  • How to easily understand Bitcoin transactions.
  • How Bitcoin can boost your business.
  • Common mistakes people have made and how to avoid them.

 

You Will Also Discover:

 

  • How to identify the right time to purchase Bitcoins and when to cash your investment in.
  • Just how incredibly versatile Bitcoin can be.
  • How to create and execute an effective investment plan with Bitcoins.
  • How to develop the ideal strategies for making money with Bitcoin in the long term.
  • How to protect yourself when using Bitcoin.

 

Enjoy the sweet melody of bitcoins clinking into your wallet: Get this book now!


Introduction

Congratulations, you have made a great decision in purchasing this easy-to-follow guide on how to buy, trade and invest with Bitcoin!  You will also absolutely love all the incredible possibilities that Bitcoin offers.  I’ve included everything you need to know to become comfortable with Bitcoin and to start using it like a pro. To make the most of this new digital revolution, now bursting onto the world of commerce and finance, it is vital that you understand all things Bitcoin.  This book will introduce you to the basics – and the many intricacies – of Bitcoin.  I’ll explain its background, describe the benefits you can expect to derive from it and reveal details that demonstrate how storing and investing works in the realm of Bitcoin. How This Book Is Organized You will find that this book explains everything in great detail in an easy to understand and fun way.  The concept of cryptocurrencies is so new that it will take some explaining.

 

It’s also an incredibly complex topic, so we’ll start out with a general overview that spans the first four chapters.  This section will help you become familiar with the overall structure involving bitcoin, the blockchain, wallets and much more.  These specific items will then be addressed in greater detail beginning in Chapter 5.  I’ll also talk about business applications for Bitcoin, with due attention paid to international legal and tax implications.  From there, the discussion will range from answers to skeptics to ways Bitcoin is being used today and what many anticipate is on the horizon.  Of course, the issue of how to increase your wealth via Bitcoin will be woven throughout. Bitcoin, The Game-Changer We have all heard of cryptocurrency.  In general terms, cryptocurrency refers to a digital form of currency that is encrypted online.

In 2009, the first cryptocurrency hit the headlines: Bitcoin.  Bitcoin is a form of decentralized virtual currency.  The “virtual” part means it’s not attached to anything physical but exists solely as a mode of exchange agreed upon by the participants in its use. By “decentralized,” I mean that no single entity controls its existence.  With all the hard currency we pass around daily, a sole authority oversees its production, control, distribution and value.  Cryptocurrencies, however, are different.

They spread out the functions of controlling, accounting and currency production across multiple digital “nodes,” so that no one entity has power over its value. Instead, the entire network supports this functionality.  These new forms of currency have effectively removed the need for a single intermediary to be involved in their oversight.

They also offer plenty of additional benefits that extend far beyond mere efficiency and ease of use. With the disadvantages of individually-managed currencies becoming increasingly apparent, cryptocurrencies appear more attractive every day.  This fresh concept of virtual currency is now in the process of taking the world by storm!

Today it possesses the power to change both trading and commerce. Can you see now why it’s so vital to get a handle on the most powerful form of cryptocurrency on the market?  Do you sense the urgency?  Most of us are way behind the curve and have a lot of catching up to do.  So let’s dig in.


Chapter 1:

 

All About Bitcoin The aim of this chapter is to learn about Bitcoin, understand how it can benefit you and discover ways to keep yourself safe while amassing your own personal stash! Obviously, you will be aware that Bitcoin is a new form of money known as a digital currency.  But do you really know how it works? Let’s start at the beginning, with the three major aspects of Bitcoin: The origin of Bitcoin,  Bitcoin technology and how it works and  How you can apply bitcoin as currency.  By the time you finish this chapter, you will understand Bitcoin well enough to envision the ways Bitcoin can be of use to you. Bitcoin’s Origins Bitcoin was the brainchild of Satoshi Nakamoto.

Instead of designing an entirely new way to make payments and wipe out the way things can be paid for online, Satoshi looked for ways to handle existing problems within the current payment systems. During the 2008 financial crisis, many individuals worldwide were affected by its impact on the economy.  Today many people still suffer the ripple effects of that crisis on the value of their fiat currency.  By the way, “fiat” refers to the government-approved official form of currency for a nation. While the global financial system was on the verge of collapse, many central banks chose to attempt to ease the crisis by printing more money, a practice known as quantitative easing. Quantitative Easing As the central banks pumped money into the market to create liquidity, they also greatly reduced interest rates, intending to prevent a situation similar to the Great Depression of the 1930s.

Their actions generated huge fluctuations in the country’s currency values.  It set off a flurry of currency wars, where nations raced to devalue their money and so make their economies stronger and more competitive than other countries. The international response tends to be the same whenever this happens.  Governments bail out their banks by printing additional money, ultimately devaluing the existing supply. By helping the banks stay afloat, they bailed out some of the institutions whose reckless behavior had caused the crisis in the first place.  The banks, who were apparently acting independently of their governments, guided many countries into unknown waters, without apparent concern that they were devaluing the nation’s currency in the process. The other choice was to let the country’s economy collapse, putting it in the same situation as Iceland.  When Iceland was unable to pay its debts, it experienced enormous economic instability. A Third Option Bitcoin offers a fresh way to think about money.

It is easy to appreciate why some people are looking for creative new ways to establish a more stable economy.  Because Bitcoin is transparent and decentralized, it offers an attractive alternative. Welcome to the creation of Bitcoin, a financial organization with no connection to the few elite global decision makers.  Satoshi Nakamoto decided the time was right for a different type of monetary system, a system that was different from anything currently in existence. We don’t know if Bitcoin was initially intended as a replacement for the current financial systems.  However, we do know that many financial institutions are currently researching Bitcoin’s technology with an eye to potentially adopting something similar for their own use.

Of course, they are free to do this.  The basis for Bitcoin technology, the blockchain code, has been open sourced from the beginning.  Anyone can make improvements, even building whole new platforms based upon this code. This innovation is about far more than using digital currency to pay for goods.  Along with Bitcoin, the world-shaping development of blockchain technology has yet to be fully tapped. There are many arguments about the flaws in the mainstream financial sector and any alternative is always to be welcomed.

Whether Bitcoin will emerge as the alternative of choice is yet to be seen, but as the very first cryptocurrency to come out, it has great brand awareness around the world, which is a huge advantage. Be sure to keep in mind that decentralization plays a significant role in Bitcoin.  Bitcoin relies on no one: no bank, no government and no middleman.  It was formed as a true peer-to-peer network in which each user doubles as part owner. If there were no individual users, there would be no Bitcoin.  The more people who embrace Bitcoin technology, the better it will work.  Bitcoin depends on an ever-increasing community of people who are actively using the currency.  Whether they use bitcoin to pay for goods or services, or they offer their products or services in exchange for bitcoin, active use is critical. Digital currencies are a free market; therefore, anyone has the capability of setting up their own business anywhere across the globe and accepting bitcoin as legal tender.

Processing a transaction takes a matter of minutes.  Existing companies can add bitcoin as an additional method of payment, allowing them to grow swiftly from a local business to a national firm and then to expand rapidly across the worldwide market. What’s So Cool About Bitcoin? It’s almost an understatement to say the technology that powers Bitcoin is phenomenal.  Bitcoin’s blockchain technology is a completely new way of processing information.  It is also a powerful and vital tool within the financial sector.

This is not surprising, as most of Bitcoin’s focus revolves around currency. The technology behind Bitcoin provides users with options like never before. A massive amount of potential remains hidden and the best minds in the world are working to discover exactly what it will mean to see the Bitcoin technology integrated into daily life. There is no question that the technology behind Bitcoin is seriously underestimated; however, it does have a slightly checkered past.  Many platforms have been built with the sole aim of making it easier for people to use bitcoin.  Unfortunately, this has not always ended well, especially in the realm of security.  This type of technology involves extensive learning to understand it clearly.

The truth remains that Bitcoin is still maturing. It’s young and experiencing growing pains, but we’ve only scratched the surface of its marvelous potential.  The raw capacity behind this technology has caught the attention of a multitude of interested parties, with the forerunners coming from the financial sector. There is much curiosity regarding the open ledger aspect of Bitcoin.  Open ledger means the whole network can be viewed anytime by any individual from any location in the world.  Anyone can watch transactions as they take place.  While this idea may appear frightening, there are massive benefits to using a ledger that allows us to trace multiple events.  None of the implementations need to be financial in nature, but a multitude of items in the financial sector are worth exploring.

There is still a lot to be investigated before you settle upon Bitcoin as a definitive method of sending and receiving payments.  The decision to accept bitcoin payments on your virtual store will take only a few moments, but there are multiple implications when it comes to brick and mortar stores.  You’ll find many processors will happily assist you in exchanging between bitcoin and your local currency.

The main advantages are that the processing takes a lot less time and it costs a lot less than working with credit cards or PayPal! Bitcoin’s Value Whenever people talk about Bitcoin, the first thing they bring up is the price.  Currently, the rate hovers around $6000 per bitcoin.  Until 2011, bitcoin had very little value and when it began to increase in price, it was a slow process.  In 2013, the bitcoin value peaked at just above $1,100; however, many believe this was because of manipulation of the biggest Bitcoin exchange at the time. The bitcoin rate is determined by its usage and by the concept of supply and demand.

Although the bitcoin supply has been limited to 21 million, experts predict  this will run out by the year 2040.  Nobody knows why Bitcoin has been capped at 21 million, although some believe it is related the mathematical equations involved in generating bitcoin. We have yet to see how the bitcoin value will behave when it is more commonly used.  Even though Bitcoin has been well publicized, it is still a relatively unknown quantity.  We expect it to emerge from obscurity, however, as the product matures. Worldwide financial experts view Bitcoin as a pure form of digital currency.  As we get our heads around this new technology, who can say whether this term is correct? We can conclude that Bitcoin is a valid way for people to pay for purchases and this makes the digital aspect increasingly appealing.  There is yet more to explore and learn, about the potential uses of Bitcoin technology. Bitcoin gives everyone – anywhere they are in the world – the opportunity to accept a common digital currency as a form of payment.  Bitcoin remains the same everywhere, so it can be converted to any form of local currency upon request.  There is no transaction fee and payments are received the very next day. Mobile payments are increasing at a rapid rate.  This adds another reason for choosing Bitcoin.

It is an excellent source for mobile payments, giving businesses the ability to expand beyond national borders, at a minimal cost.  Bitcoin is also an excellent investment tool if you’re looking to trade in digital currency.  More about this later. Customers Drive Acceptance Bitcoin needs to be used a lot more frequently for it to be recognized as a bona fide form of currency.  Many sellers have yet to embrace Bitcoin and few buyers even know about it.  As a result, it often falls on the shoulders of the Bitcoin user, to convince the other party of its merits. The advantages for sellers are apparent: Bitcoin allows them to save on fees and other costs associated with payments.  But this is only of value if customers use bitcoin to make payments.  It really is up to the customers to make Bitcoin their preferred method of payment.

To make Bitcoin more convenient for buyers, a seller can offer the more familiar plastic in the form of pre-paid bitcoin cards or debit bitcoin cards.  Both cards can have bitcoin deposited onto them.  They can also be linked to a Bitcoin wallet, allowing the consumer to buy and sell bitcoin wherever they are accepted.  Merchants pay the usual fees and receive payment in their own local currency. While Bitcoin is far from being classified as a popular mainstream method of payment, I feel that now is the right time for people to begin using it as their go-to form of payment, even if only for the security of leaving cash and bank cards at home.  Because fraud remains a constant danger, the ability to make mobile phone payments using bitcoin is increasingly viewed as a more secure option. Widespread acceptance of bitcoin is not going to happen overnight.  Until it does, those who are already using Bitcoin will need to be patient.  It’s good enough, for now, to know that you are already ahead of the financial curve.

Bitcoin Boosts Business All forward-thinking retailers should prepare to use Bitcoin payments for both brick and mortar and online stores.  They don’t need acquire any additional hardware in order to accept bitcoin payments.  Digital sales can be transacted using the existing payment infrastructure.  All you need is an Internet connection, something most retailers already have in place.  I’ll describe more details in later chapters. There are many business advantages to bitcoin: Accepting Bitcoin payments will involve an almost nominal transaction fee, far less than the three to five percent fee per transaction that is commonly charged by credit card companies.  Bitcoin payments can be cleared and in your account, ready to be spent, the very next day.  You can choose your preferred form of currency and will only be charged a small fee for any conversion.  Compared to other card transactions, where you are kept waiting for a week or more to receive your funds and you’re charged a fee of 3%-5% for the privilege, you can see why Bitcoin is a winner on all fronts.  Bitcoin never changes, regardless of where you go in the world.

A bitcoin’s value is calculated precisely, to the last decimal point.  For example, if you trade in US dollars and you charge $11.99, Bitcoin makes it possible to charge 11.98765432.  This might not seem significant today, but if the value of bitcoin were to skyrocket, the extra decimal places could make all the difference and set you up for accurate future pricing.  By accepting bitcoin, you can grow your customer base globally and you won’t need to constantly track the exchange rates on multiple currencies.  Bitcoin remains stable throughout and will suffice as a standard international fair rate of exchange.  Bitcoin-to-Bitcoin is the term used to indicate that Bitcoin will not lose its value while it is waiting to be converted.  Consumer Advantages As a consumer, the benefits of Bitcoin are straightforward.  The first benefit is that there is little need to carry cash around.  Cash money has a habit of filling up your purse with notes and your pocket with change. Because bitcoin are every bit as real as your bank card,you won’t need to carry cash or a billfold full of plastic.  The advantages are numerous: Never again will you need to rely on services provided by a government-backed financial institution.

With Bitcoin, you can pay anyone, anywhere in the world.  When you pay online using bitcoin, the transaction is processed immediately.  Bitcoin is a borderless digital currency; it operates the same anywhere in the world.  Help For The Bankless Bitcoin offers a genuine opportunity for the thousands of individuals who are currently unable to own a bank account.  For example, there are several African countries where fewer than10% of the population has a bank account.  Is this fair?  I am beginning to view it as a human rights issue.  In some areas of the world, even though citizens may have the legal right to own a bank account, some of the banks establish such strict regulations that the vast majority of people find a simple savings account beyond their reach. Society is trending toward a cashless existence.  More and more people now use debit or credit cards, as a form of payment, both on and offline.

Making payments via mobile phone is another trend on the horizon.  It may well usurp the place of plastic in a few years.  Whether or not you realize it, your smartphone gives you the means to complete transactions using bitcoin; the technical basis has been available for years. On the whole, people are just now beginning to grasp the full potential of blockchain technology.  They have scarcely imagined how useful it will prove in the future.  A blockchain can do almost everything, you just need to locate the correct pieces of information and link them together in the right way. Using Bitcoin technology, you can: Transfer funds between individuals; it covers all aspects of a transaction.

Send money in seconds, to any location in the world.  Convert funds into any local currency.  Live quite successfully without a bank account.  This last item makes Bitcoin extremely powerful in areas of the world where bank accounts are not easy to come by. But What If? What if you live in an area without reliable internet access? Even today, some services will let you send a text to any mobile phone in the world to complete digital transactions.  Yet again, Bitcoin proves that it is an effective tool in both the underbanked and unbanked regions of the world.

Take a look at the Bitcoin network and you’ll be impressed by its capabilities.  Each transaction is recorded and visible at all times, giving the user total access to financial data worldwide.  In addition, the blockchain lets a user track the origins of any payment and see its destination, even while the money is in transit.  I would welcome this level of transparency in our current financial systems! Is Bitcoin Anonymous? Probably the most significant question that surrounds Bitcoin is whether it can indeed provide anonymity.  The truth is: no, not entirely.

However, some anonymity exists when using Bitcoin and digital currencies in general.  It’s up to you to decide if it’s anonymous enough for you. Using Bitcoin to move your funds around gives you complete anonymity.  If you want, you can completely hide your identity by using a Bitcoin wallet address.  Wallet addresses are constructed from a complicated set of numbers and letters, which ensures there is no way of knowing who or you are or where you are located.  Therefore, Bitcoin offers a type of protection not found in most other forms of payment. This is as anonymous as it gets.  Because all Bitcoin wallet addresses are visible in a public ledger known as a blockchain.  The blockchain tracks any outgoing and incoming transfers from any specific location at any time.  In other words, if I sent you a single Bitcoin, anyone can observe the transaction taking place between Wallet A (mine) and Wallet B (yours).

No one would know the identity of the persons attached to those wallets, but the transaction itself would be in full view. The story changes slightly when Bitcoin exchanges are involved.  The transfers that you make from your Bitcoin wallet to an exchange are visible, when they are made public.  Anyone can view a transfer from your Bitcoin wallet to the address of the wallet being used for the transaction since these are listed publicly.

However, when the time comes to sell your bitcoin, it becomes much harder to trace where the coins have gone. Third-Party Anonymity It is possible to remain anonymous with Bitcoin.  Currently, this facility is not yet very user-friendly.  Generally, if you are highly interested in anonymity, it suggests that you have something to hide.  You could use online amenities such as a wallet to mix up your coins, taking them from a different address, without the possibility of the addresses being linked. Since this technology is still in the emerging stages, there are risks.

If you were to lose your coins, they would be gone forever.  Yet, you don’t need to start worrying about losing your coins with normal transactions.  When we discuss how to manage your wallet, we’ll address these concerns. If you use an external service to anonymize your bitcoin, you basically return to the original problem.

The whole idea behind Bitcoin, after all, is that there’s no need to rely on any third party, be it a bank, middleman, or whomever.  Trusting a third party takes the control out of your hands and essentially goes against the core value of Bitcoin. How To Protect Your Privacy It’s up to you to protect your privacy, but if you get in the habit of following two basic practices you’ll be pretty safe: For every transaction you make, create a new address.  Avoid posting your wallet address anywhere.  How To Make A New Wallet After you receive bitcoin from another user, you can assign the transaction a new wallet address, one that has no link to any addresses you own.  This allows you to isolate transactions and take the first step to protect your privacy.  How you choose to look after your funds, the type of Bitcoin client and operating system you are using could allow you to make change, using multiple addresses. The easiest way to understand this is as follows: if you had 2 coins and spent half a coin, you would require 1.50 bitcoin in change.  This money can then be sent to a new address.

This address has no link to your original address or the new change address, even though all the steps can be traced by checking the blockchain. Wallet Address Privacy Another way you can protect your privacy is to ensure that you do not post your Bitcoin wallet address anywhere.  Any time you announce this address on social media, you have voided your privacy.  If your wallet address is uncovered and linked to you, you cannot restore your privacy, at least not with that wallet. Fungibility The term fungibility means that goods are interchangeable or can be substituted.  This is perfect for Bitcoin. Most governments in the world stick to their own system of currency in order to remain in control.

Local currencies are issued by a central banking system and are centralized.  If the country needs further funds, the bank turns on the printing press to engage in quantitative easing.  This means the central bank can boost the liquidity of the economy whenever it sees fit. Trusting Bitcoin One of the most significant stumbling blocks of any new technology is the issue of trust.  I remember when online purchasing first rolled out; it took a long time for some people to feel comfortable enough to risk using the new technology.  Today, I seldom meet anyone who hesitates to pay by credit card online. With regards to Bitcoin, trust needs to originate from both sides.  Even though you can control your money all of the time, you also must have confidence that the rest of the network can be trusted.

However, since the chances are slim that Bitcoin will disappear overnight, there’s little need to trouble yourself with this issue.  While nothing in life is certain, the Bitcoin network is so secure, thanks to multiple checks and balances and information duplicated throughout the nodes, that it is able to run without pause, continuously troubleshooting and fixing problems on the fly. The concept behind Bitcoin is what people have the most difficulty trusting.  Its decentralization can be compared to the way the Google search engine works.

Millions of people use Google at the same time, but it never slows down.  Google runs on so many separate servers that it’s nearly impossible to bring down the entire system. Decentralization brings another possible concern to the fore.  Because the network is made up of many separate users and there is no one person or establishment overseeing it, we could easily imagine that Bitcoin will dissolve into chaos, taking your money with it. This means you will not be reimbursed if anything goes wrong, there is no guarantee, once your bitcoin have either been spent or lost they cannot be recovered.

 

 

Author Susan Hollister
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