VIDEO: BITCOIN: 5 EASY STEPS TO UNDERSTANDING THE CRYPTOCURRENCY

Cryptocurrency, mostly referred to as Bitcoin by the layman – even though there are many others too, has skyrocketed in value both in public opinion as well as actual value. It has quite literally made multi-millionaires of everyday people in its very short lifetime.

Below is a simple five-step process to help you understand more about cryptocurrency and provide you with a guide to make the most of this phenomenon.

Step 1: Get Started With Bitcoin

Bitcoin has been operational since 2009 by someone using the alias, Satoshi Nakamoto. Although still relatively new and experimental by today's banking standards, there have been no interruptions of any sort in its lifetime.

There are a few things that you need to know before you start using Bitcoin:

• It is impossible to counterfeit or inflate the price of a Bitcoin
• Bitcoin wallets cannot be frozen and payments are impossible to block. Bitcoin has made it easy to transact cheaply with anyone, anywhere in the world.
• You should only deal with businesses or people you trust because Bitcoin transactions cannot be reversed or refunded.
• It is simple to control these transactions, which means no middle-man such as your bank or companies like PayPal.
• A Bitcoin transaction must be validated at least once as transactions cannot be reversed or refunded. However, it's recommended that validation happens multiple before the transaction occurs and becomes irreversible.
• You can receive Bitcoins as a payment for goods and services, purchasing them directly from an exchange using your regular bank account, or you can also buy them directly from an individual.
• Bitcoin is not anonymous as cryptocurrencies provide a public ledger of all transactions. Basically, anyone can see the balance and transactions of any Bitcoin address. However, there is something called 'tumbling', which, according to Wkipedia, tries to obscure the trail back to the original source by mixing potentially identifiable or 'tainted' cryptocurrency funds with others.
• The number of merchants and services accepting Bitcoin around the globe are growing, and you can rate your experience with them to help honest businesses grow.
• The Bitcoin industry is always changing, so make sure you stay up-to-date on developments as cryptocurrency develops.

Step 2: How to Get a Bitcoin Wallet

Next, you will need a place to store your new Bitcoins and it's called a ‘wallet’ in the Bitcoin world.

There are various types of wallets that provide various levels of security. Certain wallets are like using a traditional leather wallet, which is great if you want to use it like an everyday spending account, others however offer Fort Knox style protection if you have a large sum of money stored. Setting up a Bitcoin wallet is easy though, so don't be intimidated, and there are several quality desktop, mobile, and hybrid wallets available.
You can purchase Bitcoins from one of the many exchanges available, do some research for ones available in your country, although it is recommend you use Armory if you want to store a large volume of Bitcoin.

Step 3: How to Get Bitcoins

With the Bitcoin price being so volatile many people have apprehensions about purchasing, and Bitcoin newcomers will find a variety of exchanges competing for their business.

Exchanges are the best option if you want to engage in regular trading and speculation, and most exchanges will store amounts of digital and/or fiat currency for you, much like a regular bank account. Also, you can remain semi-autonomous and they don’t have lengthy bureaucratic setup procedures that usually require proof of identity and detailed contact information. There are many options available depending on your location, so do a bit of research in your country.

Most exchanges allow purchases and payments through them via your regular bank account and some also allow purchases with secured credit or debit cards too.

Warnings about Wallets, Exchanges, and Banks

Exchanges and wallets don’t provide the same protections banks do despite the proof of identity requirements. This means that if your exchange is hacked or should they shut their doors, there is often no or only limited insurance for your account.

Authorities are still to find solutions to thefts and hacking as cryptocurrencies do not have legal status as actual currency around most of the globe. In some cases with larger exchanges, funds have been reimbursed to customers after a theft from the exchange, however, there is no legal obligation for them to do so at this stage.

There is no guaranteed way to recover your funds if the theft occurred from your personal wallet because you gave out your password.

How to Earn Bitcoins

Many people accept Bitcoin as payment for their products and services already,which is an easy route to take as long as you've offered customers this option. You can even download official hires graphics to either place on your site or print for your storefront.

Whether you're a freelancer or merchant, trading face-to-face negates the issue of dealing with a bank if you require anonymity, although, to keep above board and build trust, signing up for a merchant account is recommended to make things simpler. This will allow you to send invoices and integrate Bitcoin payments into your order pages for the most popular online shopping cart systems.

Step 4: How to Use Bitcoins?

Albeit a relatively new technology, Bitcoins can be used to buy just about anything you want as more merchants accept the currency worldwide. Items such as a new car or property, even travelling is becoming simple to purchase.

It's worth asking if Bitcoin is acceptable to the person selling, regardless of the price, as even companies like supermarket chains are climbing on board the cryptocurrency phenomenon. A quick search online will reveal merchant directories of stores already using it, plus you can purchase gift cards with Bitcoin and shop easily at most of these stores.

Bitcoin Debit card is another tool many people like to purchase. It enables people to load a debit card with funds via Bitcoins. This is not available globally though, so be sure to check it out.

Step 5: Staying Informed With Bitcoin News

There is a plethora of onlineinformation to access that will keep you up-to-date, but we recommend you take the time to read The Age of Cryptocurrency by Paul Vigna and Michael Casey of the Wall Street Journal. It is a best seller on the topic of Bitcoin and is a super starting point to help you make a solid foundation of understanding for this new technology.

It's a volatile investment so the more informed and up-to-date you are the better off you'll be.

Conclusion

Purchasing Bitcoins is getting easier all the time as the variety of options available, from stored-value cards, Bitcoin debit cards and physical Bitcoin ‘coins’ with a wallet value pre-loaded, is always increasing. Some may not even necessarily require a wallet or internet access.

All we know is it cryptocurrency is here to stay, so the sooner you become comfortable with it, the better your financial situation will likely become.

Check out the video below for more insight.