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People who are new to using Bitcoin may be wondering, "how do I start getting some coin?"
Just as with conventional money, there are three basic ways to get it.
Earn it: While most employers are not offering to pay their employees in Bitcoin, there are a few. You can find them if you look for them on Google. Most of these jobs are going to involve programming, software development, and the like; however there are a lot of blogs and niche websites out there looking for freelance writers and graphic artists who are willing to pay with the currency. You can sell stuff online using Square and easily accept Bitcoin, or make your own website and place "Pay with Bitcoin" buttons linked to your Coinbase account
Buy it: You can trade any other currency for Bitcoin on an exchange or in person. To buy Bitcoins on an exchange in the U.S., I like to use Coinbase. Buying in person is more private, since exchanges are regulated by governments and will eventually no longer be private. To find local people to buy privately, I like to use LocalBitcoins. A lot of people trade coins. I've met a few that just buy coins on Coinbase, then sell them on LocalBitcoins with a small mark-up
Mining: Bicoins are put into circulation through a process called "mining". Mining is very
similar to mining gold or silver. There is a finite amount of Bitcoins possible (21 million total can be mined). Currently there are about 13.1 million coins in circulation. A Bitcoin miner is a special computer system that acts as an anonymous node on the network processing the transactions by writing them into the Blockchain (the public ledger of all Bitcoin transactions). All miners around the world agree on the order of transactions placed in the ledger, and the order of transactions determines who owns what. In the midst of this process, miners are also generating the cryptographic hashes needing to encode the blocks and secure the Blockchain. Miners are rewarded for each successful block by receiving 25 newly-minted coins. Today, mining has become so difficult that pools of miners typically hash together and divide the coins according to shares of work completed. Successful mining requires a financial commitment, and continual upgrading of equipment to stay on top of the increases in difficulty.
There are a lot of other creative things you can do to earn Bitcoins, feel free to leave your suggestions in the comments section.
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Many people are enthusiastic about Bitoin, but don't know how to get started. I've found that the best way is to jump in and learn as you go. If you're worried about losing money, just start small.
A lot of people are put off by the high price of Bitcoins (currently about $460 US per coin). When Bitcoin first launched a few short years ago, they sold for $0.001 per coin and have traded around $1,200 at their peak in 2013. Fortunately, Bitcoins are divisible into parts just like any other type of money. Bitcoins can be broken down into 100,000,000 parts. The smallest part (1 hundred millionth) of a Bitcoin is often referred to as a "Satoshi". So, there is no need to worry about investing a lot of money. Go ahead and buy $100 worth or if that's too risky try $5 worth. There really isn't a minimum amount that you must purchase, though once you get down to the hundred thousanths or millionths place, you'll start to incur some errors due to volatility and rounding on the fiat side of the equation (sometimes referred to as Satoshi Spam).
Here is how you can get started in a two simple steps:
1. Get a free Bitcoin Wallet
A wallet is a piece of software where you can receive Bitcoins and from which you can send them. It contains a private encryption key, that is contained within the software. Your wallet addresses are public encryption keys which you can safely give out to anyone in order to receive money from them. When someone sends money, they basically send an encrypted message which state the amount of Bitcoins being sent. That message is encrypted using the public key of the recipient. Since the public key matches the private key contained in the recipients wallet, only the recipient can interpret the message and receive the coins.
There are several wallet options. You can download a local wallet which will be stored on your device (desktop, laptop, phone, tablet, etc.) You must be careful to back up these wallets (by simply printing out your wallet addresses) in case you lose your device or your hard drive crashes.
A hosted wallet is online and can be accessed from any computer through the web. A good password is needed in order to keep it secure so others can't log into your account. I also recommend signing up for 2-step authentication which is offered by most online wallets. Instructions for doing this are provided on those sites.
I like Coinbase for their online wallet because they are also a Bitcoin exchange, so you can load your wallet from a connected bank account if you wish.
To get started with Coinbase, click the link below and follow the on-screen instructions.
You can also download wallet software to your mobile devices on Android and now on iPhone as well. Keep in mind that Bitcoins kept in those wallets will be lost if you lose your device (or it breaks) if you do not back them up (print or screencap wallet addresses.
2. Buy your first Bitcoin
If you're set up with Coinbase and have a connected bank account you can purchase coins directly from their exchange into your wallet. You first purchase will take up to ten days to process. Coinbase may collect a very small fee for the service.
You can also buy them directly from regular people online or in person. To find people in your area to trade coins with, open up a free account at www.LocalBitcoins.com. This allows you to buy Bitcoins and meet new people at the same time. It also allows you to pay cash for Bitcoins. Transactions are listed on the website, and users can rate each other. The website also allows you to buy/sell online rather than in person and includes an escrow service so you can avoid getting ripped off.
Benefits of Bitcoin
No banks
No bank fees
Transactions happen very quickly (usually 10 minutes or less)
Transactions are encrypted and secure
You can be as anonymous as you wish
All transactions are public record and can be viewed by anyone
It is a deflationary currency, rather than an inflationary one (it appreciates in value over time).
Currency cannot be controlled by any central bank or government. Minting of coins is done in a steady and predictable manner with a finite maximum number of coins (21 million Bitcoins total which will all be in circulation in the year 2140).
Drawbacks of Bitcoin
Takes a little time to learn and get the hang of, but once you do it turns out to be fun.
Once money is sent, there is no getting it back. No ability to cancel a payment already made or do a "chargeback" as with credit cards.
Online/hosted wallets are only as secure as your username and password (as with online banking)... USE 2-STEP VERIFICATION!
Price volatility - This is due to a relatively tiny market capitalization in relation to central bank currencies, but it's getting more stable over time.
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Many of the critics of capitalism love to point to those parts of the world where newly-freed markets have encountered major problems as "proof" that capitalism doesn't work.
Without hesitation, big-government advocates will talk about large global corporations that were deemed "too big to fail", and had to be bailed out at the expense of the taxpayers and little guys. With similar logic, they point to former Soviet bloc countries which have seen violent opposition to capitalist reforms and little benefit from them.
Like many controversies, much of the problem lies in the differing definitions of words. To a Free-Market Capitalism, free market means zero regulation. To pro-government socialists, "free market" usually means "not regulated the right way" or "not regulated enough".
The truth is that the big banks, auto manufacturers, and investment firms that received the bailouts from the U.S. government operate in the some of the most highly-regulated industries on earth.
For example, the auto industry is regulated by thousands and thousands of laws and regulations; everything from those pertaining to import/export restrictions, safety, fuel economy to labor relations, and emissions standards - not to mention the SEC regulations controlling the issuing and sales of company stocks and their financial businesses like GMAC. Each of these regulations presents a barrier of entry to new players in the market. This is how government protects the cartel, by discouraging competitors from entering and competing against their existing political contributors and allies. This stifles innovation.
Then there are those who bring up the failure of "free markets" in other countries. There is a very long list of countries which were once socialist or communist, but then either peaceably or through violent revolt gained some level of personal and/or economic freedom, only to find that the transition didn't go as smoothly as free market advocates had hoped for.
Hernando deSoto makes a great observation in his book The Mystery of Capital where he explains the foundation of all capital in being the establishment of undisputed claims to property. The thing that makes capitalism work is that the foundation of all capitalism lies in proving that a particular piece of property actually belongs to a particular person or entity.
He also argues that capitalism has been successful in the west precisely because of the establishment of records of ownership via titles. In the west, when a person purchases a piece of property, there is a record of the transfer of ownership that is recorded in a public registry which can be accessed by anyone.
Still, accusations of collusion, forgery, corruption, and conspiracy would occasionally bring challenges
to this system, which would be resolved by a system of courts. In countries where distrust of government institutions, courts, and wealthy landowners is embedded in the minds of the populace (such as in former communist countries), this system is even more limited. Trust in the institutions that witness and record these transactions is absolutely necessary for the entire system to function. That trust often does not exist in other countries and cultures.
What made the limited form of capitalism that the U.S. enjoyed a success was the system of public record-keeping of property ownership that was somewhat accurate and the court system that was in place for resolving disputes. When buying a house, for example, a lawyer or title company could do a simple search through public records to find if the seller has the legitimate legal right to sell the house to the buyer and transfer that ownership and file the transfer with the local government office in order to list it in the public record.
Today, we are seeing a very strong erosion of that trust in the system which is needed in order to facilitate the peaceful exchange of goods due to the exposure of the corruption that is (and probably has been) in the system. The massive amounts of foreclosures going on with the current and on-going housing crisis is exposing the fact that many people are being defrauded out of their homes through either corrupt lawyers, banks, and title companies, environmental regulations, and/or through lazy and sloppy filings.
The failure of these centralized systems is that they require a level of trust in the system.
Enter the Blockchain
The backbone of the phenomenon that is crypto-currency, the most famous of which is Bitcoin, is the Blockchain. The Blockchain is a public record of ownership of currency which is anonymous, fully-distributed, decentralized, and publicly viewable from any computer. The computer code behind the Blockchain is open-source so anyone can view it to make sure it is on the up and up.
Bitcoin transactions work by simply updating records in this public ledger which is stored on multiple computers all over the world, and agreed upon by all of them. The entry of transactions appear in the order decided by the network itself and not by any person or group of persons. For every transaction the ownership of the coins being used as currency is traced all they way back through the Blockchain to the time the coins first went into circulation or all the way back to the Genesis Block. Best of all, the entire thing is encrypted, secure, and anonymous. While this system is what is used for the transfer of currency, the uses for the Blockchain idea are nearly endless.
The beauty of the Blockchain system is that it requires zero trust in anyone. In fact, it operates on the assumption that everyone is a crook.
Here are some of the other potential uses for blockchains:
Title transfers of real estate. The use of a blockchain for real estate is the next most-logical step. This would eliminate the need for lawyers and title companies along with their outrageous fees.
The existence of a public ledger that is free from political corruption would work miracles in places where land disputes often escalate into violent wars. This is one of the primary roles for many or perhaps most country governments, almost eliminating the need for a county government altogether.
Sales of automobiles. Imagine no more involvement of the local or state DMV in selling or buying
cars. No more standing in their lines, paying whatever fees they demand, and no more annual registration fees.
The need for license plates also goes away - which won't make law-enforcement happy, but it's your right not to be identified while traveling, and you've given up that right by putting a license plate on your car.
Ownership and Structure of Corporations. Already, the blockchain model is being to theoretically create corporations where the ownership is fully-distributed and shares are traded like currency on a Blockchain instead of on a central trading floor through
a brokerage.
Intellectual Property Rights. While most advocates of decentralized networks are opposed to the idea of Intellectual Property in general, there is no reason that a Blockchain could not be used for this purpose. This would eliminate the central bureaucratic powers that run the U.S. Patent and Trademark Office and their foreign counterparts. Enforcement of these "rights" would be a different subject altogether, though a voluntary system could be implemented and the Blockchain could be used for the management of royalty payments and licensing fees, etc.
Registration of Internet Domain Names. Currently Domain Names are registered by a single corporation that holds a monopoly on this service (ICANN). The oversight of a world-wide distributed network like the Internet by a corporate monopoly makes little sense. Complaints against ICANN abound, and they are often slowly and poorly handled (as you would expect from a monopoly). Replacing ICANN with a group of fully-distributed networks could handle all their functions and totally replace the organization.
Namecoin is already in the process of making much of this happen.
Much of the "under the hood' stuff of the World Wide Web systems could be better managed by distributing these tasks through the network of a blockchain. A lot of the stuff most of us never see like the management of TLS/SSL certificates and that sort of thing.
There are literally hundreds of current uses for the Blockchain architecture. All of them are designed to take power out of the hands of the few large corporate monopolies, oligopolies, and government-protected cartels and put them in the hands of the individual - thus fully-distributing their powers. The Blockchain is a threat to all things centralized, be it banks, insurance cartels, oil & gas cartels, unions, trading floors, etc. For this reason, it is the key to crushing government oppression by starving it of the labor, resources, and power that it acquires through centralization.
The reason capitalism has failed to take hold or flourish in many 3rd world countries is taken away by the Blockchain. A trustworty, anonmymous, private, encrypted, secure, and efficient system that records ownership records is here. It will liberate the entire world by crushing cartels like the Federal Reserve, the International Monetary Fund, the World Bank, OPEC, the New York Stock Exchange, the regional energy utilities, Internet Service Providers, currency exchanges (FOREX), NASDAQ, as well as the drug cartels, not by outright destruction, but by making them irrelevant and obsolete. Bitcoin can and will liberate the world... peacefully.
In 2001, the California-based fast-food chain, Carl's Jr introduced their Six Dollar Burger. This products spearheaded a marketing campaign whose idea was to make a direct comparison of their fast-food burgers to some of the premium, top-of-the-line burger offerings of major restaurant chains like Chili's or Red Robin. In fact they even mentioned the burgers at some of these restaurants in their ad campaigns. The ads poked fun at those fancier sit-down restaurants with people having trouble getting the waitress' attention, having drinks spilled on them, and having to leave tips, etc.
They proudly proclaimed that now, you can get a comparable burger for less money and no need to leave a tip. You can get a "Six-Dollar Burger" for under $4. At that time, a Big Mac from McDonald's sold for $2.54.
This served as a great marketing campaign however, as predicted by many people, it wouldn't be able to last because inflation would render this campaign (if not the product itself) obsolete. It's like how the Five and Dime Stores became Dime Stores, then Dollar Stores and will soon become Five-Dollar Stores.
Today, those $6 burgers at Chili's typically sell for about $9-10 for a basic hamburger and up to $13 for a more premium cheeseburger, while the Big Mac sells for about $4.50.
Recently, the price of many of Carl's Jr. Six Dollar burger options were priced at $6 or above. The idea of a burger costing $6 isn't seen by the public as premium fare anymore, it more-likely tends to conjure up images of the happy-hour burger special at the local dive bar.
Still the Six Dollar Burger campaign got a longer run than I thought it would. In my opinion, it should have ended years ago. The name given to the Hardee's version, which was always known as the Thickburger, has replaced the Six Dollar Burger. (Though it is a gradual phase-out with the current brand being the "Six Dollar Thickburger").
The problem with the campaign was never with the burger, it was always a very good burger. The increase in price was not due to improvements in its quality, added value, or anything of that sort, it was strictly due to the devaluing of the U.S. dollar through inflation.
In 2010, a Six Dollar Burger with fries would very likely cost you more than $6, while the fries at those fancier sit-down restaurants they poked fun at would likely be included with the hamburger at no extra charge.
In order to illustrate the difference between price and value, let's look at this in terms of Bitcoin. Let's pretend that in June of 2010, Carl's Jr re-branded their Six Dollar Burger as the 75 Bitcoin Burger - that's $6 in Bitcoin at that time. Today, they would have had to rename it to the 0.009 Bitcoin Burger. That's a 99.988% drop in price, simply because we're using a different currency.
Some will argue that this comparison isn't fair because the price of Bitcoin is going up. However, the value of the burger remains constant in either case. The loss in purchasing power that is experienced by using dollars is a function of the devaluing of the currency, not an increase in the value of the product being purchased. Conversely, the price drop in the burger against Bitcoin is due to the increasing purchasing power of Bitcoin. It also illustrates the decreasing value of the dollar against Bitcoin. As of this writing, there are 645 dollars to 1 Bitcoin.
As Bitcoin continues to go up against not only the U.S. Dollar, but every other Central Bank currency on earth, more and more people are starting to take notice and get out of losing currencies and into a winning one. The main reasons people haven't done so yet are: (a) because they do not know how to begin and (b) not enough people accept Bitcoin as a form of payment.
To get started, the first thing you'll need is a wallet. You can get a free one from Coinbase, which I like because it's hosted online so you can access it from anywhere on any internet device. They also make it easy to buy Bitcoins using any other currency. Coinbase is also the preferred payment processor for some of the largest merchants that accept Bitcoin such as Overstock.com and Dish Network.
Click to get your free Bitcoin wallet.
Every day, more and more businesses are accepting Bitcoin as a form of Payment. As more people begin using Bitcoin and asking businesses if they accept it, pressure to accept the currency increases. Businesses that want to succeed will cater to that demand or suffer. The price of the dollar will continue to fall, there is no saving the dollar, it is dead.
Currently the United States has military bases in 153 countries on earth (out of a total of 189-196 countries total depending on the source). The U.S. soldiers are deployed to basically fight to keep the U.S. Petro-Dollar alive and relevant, but we are running out of countries to invade. China and Russia have both made moves to get away from the U.S. Dollar. Russian lawmakers are even working on instituting a ban on the American currency. These actions, even if unsuccessful, will only devalue the dollar further.
Basic economics teaches us that inflation is caused by too many dollars chasing too few goods. Currently, the Federal Reserve, whose sole mission is to control inflation (they like to keep it around 3% annually), has been printing cash like mad. They call it "Quantitative Easing", and it basically means they fire up the printing presses and print money full-throttle. They've done this three times in recent years and all that cash has been stashed in reserves, where it will do its damage at a later date when it is loaned out. On top of this, there is a massive push for minimum wage increases. As more companies move dollars from production to their payroll, we will find people with more dollars while less products make it to market (inflation).
Hyperinflation happens when the value of the money falls so quickly that people are pushed to spend their money now, since it will have less buying power tomorrow. This further increases inflation creating a vicious cycle of destruction since we once again have more dollars chasing fewer products.
Hyperinflation of the U.S. Dollar is no longer just a possibility, it is an inevitability.
It's an election year, so the unions are out spending money in a big push for an increase in the minimum wage. Whenever unions come out of the woodwork, you invariably see the communist wings of those parties (often in the leadership positions) come out and start pushing for other communist ideas as well.
Lately the #FullCommunism hashtag has been trending on social media as more and more politicians start voicing support for a minimum wage. It's obvious that none of the people supporting this movement have ever lived under a communist regime, so here is another video illustrating what every day life was like in the Soviet Union.
This video shows various shopping experiences in Tallinn in 1990, the capital of Estonia, one year before they revolted and gained their independence from the Soviet Union.
Food was rationed in order to make sure that everyone got their "fair share". Again, we see the quality of products and customer service when competition and the profit motive are removed from the economy.
Notice the lines for purchasing gasoline. To those of you who think that it can not happen here, all you have to do is look to the 1970s to see that it already has happened here. Many of us have no problem remembering the gas lines caused by rationing which was the result of the 1979 Energy Crisis that was created by the Iranian Islamic Revolution and idiotic U.S. foreign policy.
Once again, we see the effects of a top-down, command and control economy or "Planned Economy".
In 1991, Estonia declared their independence from the USSR after a 4 year revolt known as the "Singing Revolution".
The destruction of the centralized government, attracted investment from outside Estonia and from within. In 2003, only 12 years after the above video, we see the effects of Capitalism in the same city of Tallinn.
Still, we have idiots making and selling this stuff.
Different ways to get Bitcoin:
