Bitcoin Tutorial for Starters -How to Trade Bitcoins?

Bitcoin, invented in 2008 by Satoshi Nakomoto, is the first and the most popular digital currency worldwide. You can trade Bitcoins in a Bitcoin Exchange (information at the end), but first here is some basic information about the Bitcoin currency.

 

Bitcoin General Information

Bitcoin is an open-source decentralized currency allowing internet users to shop online or send money around the world. Bitcoin doesn't require a credit card or a bank account and can be bought, held, or sold 100% electronically.

These are some of the advantages Bitcoin offers:

→ A low-cost way to conduct business (tight fees)

→ No need for banking accounts or debit/credit cards

→ Wide acceptance worldwide

→ Secure and Anonymous Transactions via the Bitcoin Blockchain

→ Payments via Mobile Phone

How Do Cryptocurrencies Work in General?

An electronic coin is defined as a chain of digital signatures. Each coin owner transfers the coin to the next owner by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

How Does Bitcoin Actually Work?

Actually, Bitcoin transactions are based on a peer-to-peer payment network. Unlike any other payment system, Bitcoin is not controlled by any government or non-government organization. Due to the fact that Bitcoin is a peer-to-peer system, there is no need for 3rd parties. Each and every Bitcoin transaction is made via the Bitcoin software. Any internet user can download this software. You can download it here: » https://bitcoin.org/en/download

 

The 20 Top Cryptocurrencies Worldwide

There are more than 70 cryptocurrencies with a capitalization of over 1 million USD. In total, there are more than 500 different cryptocurrencies. Here are the 20 most capitalized cryptocurrencies in the world: » https://coinmarketcap.com/currencies/views/all/

The Bitcoin Blockchain

The Bitcoin revolution is based on the fact that each and every PC running the Bitcoin software incorporates a copy of the universal Bitcoin public ledger. This public ledger is called the Bitcoin Blockchain. Bitcoin users can buy or sell bitcoins from various sources and store them in a digital wallet using complicated encryption for security reasons. The Blockchain tracks every Bitcoin transaction through a public computer process called Bitcoin Mining.

 

Bitcoin International Legal Status

This is Bitcoin's legal status in all over the world:

Countries Allowing the Use of Bitcoin

□ Countries allowing Bitcoin include:

US, United Kingdom, China (with restrictions), Russia (with restrictions), India, Japan, Hong Kong, Indonesia, The Netherlands, Sweden, Ukraine, Slovenia, Denmark, Greece, Estonia, Belgium, Lithuania, Israel, New Zealand, Lebanon, Jordan, Thailand, and Malaysia.

Countries Forbidding the Use of Bitcoin

□ Countries banning Bitcoin transactions include:

Iceland, Bolivia, Ecuador, Kyrgyzstan, Vietnam, and Taiwan.

Other Countries

□ European Union: The European Union allows the use of Bitcoins but released also a statement discouraging the European financial institutions to use cryptocurrencies.

□ United States: Bitcoin is generally accepted in the US but some US states are friendlier towards the use of Bitcoin (like California) than others.

□ Australia: Australia treats Bitcoin both as a good and an asset, and that depends on the transaction situation.

□ France: France does not recognize Bitcoin as a currency but it is considering money made from Bitcoin a subject to taxation.

□ Germany: Germany is treating Bitcoin as private money and imposes a capital tax. This tax gets higher if Bitcoins are held less than 1 year.

□ Canada: Canada allows the use of Bitcoins but has also stated that it will tax Bitcoins in the future.

□ Brazil: Brazil imposes a 15% tax on all cryptocurrency transactions above $16,000 USD.

□ Cyprus: Cyprus is one of the most Bitcoin-friendly countries in the world.

□ Bulgaria: The National Revenue Agency (NRA) imposes a 10% tax on all digital currency transactions.

□ Finland: Finland sees Bitcoin as a commodity and imposes capital gains taxes on Bitcoins and mining.

□ Singapore: Bitcoin is treated as a financial asset and not as a currency. Like an asset (good) will be subject to VAT taxation. Bitcoin will not be taxed as an investment asset, as Singapore does not impose capital gains taxation policy.

 

Bitcoin Glossary

These are the basic Bitcoin Terms:

• Bitcoin

Bitcoin is an open-source currency invented in 2008-2009 by Satoshi Nakomoto.

• Bitcoin Blockchain

The Bitcoin Blockchain is a universal Bitcoin public ledger that incorporates a copy of all Bitcoin transactions.

• Bitcoin Mining

Bitcoin Mining is a computer process that tracks and stores every Bitcoin transaction in a public manner.

• Blockchain.info

It is a live online service displaying transactions and live-statistics of all the Bitcoin transactions and blocks.

• BTC

BTC is the currency code for 1 Bitcoin or else 100 million Satoshis.

• Satoshi

Satoshi is the smallest unit used in Bitcoin transactions, where 1 Bitcoin is equal to 100,000,000 Satoshis.

• Bitcoin Exchange

Online Markets where you can buy and sell Bitcoins (check below).

• Robocoin ATM

Robocoin is the first Bitcoin ATM machine, installed in 2013 in Vancouver, Canada. Robocoin ATMs are similar to bank ATMs and include features such is the ID doc scanner.

• Bitcoin Wallet

A Bitcoin Wallet is a software used for storing Bitcoins electronically.

• Private Key

A Private key is actually a password used in any Bitcoin Wallet which allows signing a Bitcoin transaction. Without a private key, no Bitcoin transaction can be made.

• Key Pool

Key Pools refer to Bitcoin wallet applications that can create new private keys randomly and maintain unused pre-generated Bitcoin private keys.

• PSP (Payment Service Provider)

A PSP company allows Bitcoin holders to use different online payment methods.

 

How to Trade Bitcoins Online

The first thing you need to open an account with a Bitcoin Exchange:

(1) Open an Account with an Exchange

(2) Transfer some funds into your Bitcoin account (Bank wire, Cards, Internet Wallets, etc)

(3) Go to the Buy/Sell web page, and buy your Bitcoins

(4) Once you have purchased some Bitcoins you can withdraw them to your own PC computer or send them to someone else.

 

The LocalBitcoins Exchange (Free for Buyers & Sellers)

LocalBitcoins is a P2P bitcoin trading site where people from all over the world can exchange their local currency to buy bitcoins. The LocalBitcoins website allows everyone to post his bid/ask order for buying or selling Bitcoins. There are no fees for buyers (Free) and the only fees are charged to Bitcoin traders (1%).

» The LocalBitcoins Online Market

LocalBitcoins Features

-LocalBitcoins is Free for Buyers and Sellers

-You can buy Bitcoins online or you can agree to go to a local shop near you and buy bitcoins with cash

-You can get your bitcoins instantly (the duration from starting a new account to buying bitcoins is a few minutes)

-For every transaction, LocalBitcoins.com offers escrow services to protect the buyer

-LocalBitcoins supports various payment methods (Bank transfers, PayPal, Skrill, Western Union, QIWI, EgoPay)

The Fees for Buying/Selling Bitcoins:

□ Registering is free
□ Buying Bitcoins is completely free too
□ Bitcoin traders who create advertisements get charged a 1% fee for Bitcoins released from escrow
□ Transactions to other LocalBitcoins wallets are free

» Start Buying / Selling Bitcoins with LocalBitcoins | » Compare Bitcoin Exchanges

 

Warning: Please Be Careful with your Money

When sending funds to an exchange or other counterparty you are trusting that the operator will not abscond with your bitcoins and that the operator maintains secure systems that protect against internal or external theft. It is recommended that you obtain the real-world identity of the operator and ensure that sufficient recourse is available. Exchanging or storing significant funds with exchanges is not recommended.

 

■ Bitcoin Trading

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