How Do I Get Bitcoin?
Often referred to as the currency of the future, Bitcoin is a relatively new virtual crypto-currency that was created in 2009. Since its release to the public, the non-regulated, decentralized currency has taken the world by storm, growing in leaps and bounds. Today, more merchants than ever before, both online and offline, are accepting bitcoin as a form of payment.
So how do you get bitcoin? This is one of the most common questions that people have after learning about the virtual currency. Fortunately, it is easier than you might think. Below is a discussion of how to get Bitcoin and how to spend it once you have it.
Get a Bitcoin Wallet
Before you acquire any bitcoin, you must first get a bitcoin wallet. A sort of “digital wallet,” it is often easier to think of it as a sort of online bank account. It’s simply the place where you will store your new bitcoins.
There is a vast variety of bitcoin wallets to choose from right now. It is important to do your research on each of them before making a final decision. One of the most important factors to take into consideration is security level. The lowest security levels are comparable to a traditional real life wallet; you're just carrying cash. The highest security levels offer military-grade protections.
The other important choice you must make is the type of bitcoin wallet you get. The main options include a wallet stored on your computer's hard drive, a wallet stored on an online, cloud-based service, or a "vault" service that stores your bitcoins offline. Each type of wallet has its list of pros and cons. Once again, it is important to understand each so you can choose the one that is the best fit for your personal needs and preferences.
Buy on Exchange
The first of the three main ways to get bitcoins is through an exchange. It is the most popular and perhaps the easiest way for newcomers to acquire bitcoins.
A bitcoin exchange works like an online marketplace. It acts as an online meeting ground for you to buy and sell Bitcoin with other people from around the world. Using an exchange is a smart choice if you plan to engage in regular trading and speculation.
Most bitcoin exchanges require proof of identity and have somewhat bureaucratic setup procedures. No regulated exchange can get around these regulations as they are the law in most countries. Because of this, using a Bitcoin exchange is not the best bet for users that require or prefer anonymity.
The most popular full trading exchanges by volume currently include Bitfinex out of Hong Kong, Bitstamp out of the United States, Kraken also out of the United States, and Huobi out of China and Hong Kong. However, these are only the tip of the iceberg as far as bitcoin exchanges go.
Bitcoin Transfers
Another popular way to get bitcoins is through a transfer. This is the same as sending cash digitally. It is the method that most merchants use to receive cash in exchange for products or services. With a bitcoin transfer, you can send the currency to another person using an app on your mobile phone or your computer. Transfers are the way that the vast majority of online payments with bitcoins are made.
Bitcoin Mining
Though one of the most fascinating methods of getting new bitcoins, Bitcoin mining is the most complex. It is also the most difficult. And it only becomes more difficult as time goes on.
Bitcoin mining consists of making new bitcoins with powerful computer systems. The computer systems solve complex problems with complex calculations to create new bitcoins. While it was once possible for the layman to effectively use mining, it is no longer.
For starters, each bitcoin that is made requires more energy and is more difficult than the preceding one. Furthermore, the actual number of bitcoins that remain to be mined goes down sharply as time progresses. Simply put, it's not a cost-effective way of getting new bitcoins unless you are part of a company specifically set up to mine. In this sense, Bitcoin mining is a little bit like mining for gold.
Other Ways to Get Bitcoin
There are some other ways to get Bitcoin. Probably the best of these is an Over-the-Counter (OTC) trade. Also known as a face-to-face trade, this method is done in real life with a local seller. Naturally, this means that an OTC trade is not anonymous.
You can use LocalBitcoins to find out where bitcoin trades are happening in your local area. The website also provides an escrow service for an added layer of protection. It’s a smart idea to check to ensure that such trades are legal in your local area.
Spend Your Bitcoins
Getting bitcoins is the hard part. Once you have it figured out, it’s time to spend them. Fortunately, that is a whole lot easier.
A growing number of merchants around the world now accept bitcoins. You can spend them on their products and services much like cash. The payment process works much like using a credit card or a PayPal account for purchase. The proper amount of bitcoins is simply transferred out of your digital wallet and into the digital wallet of the merchants.
UseBitcoins.info is a great resource for those looking for where to spend their bitcoins. It features a number of businesses from around the world that currently accept bitcoins.
There are also some online leisure activities that accept bitcoins. For example, online gambling with bitcoins is becoming increasingly popular. Websites geared towards bitcoin gambling simply let their customers use bitcoins to gamble on a variety of games and events.
Final Thoughts on How to Get Bitcoins
Though buying bitcoins is not always as easy as newcomers expect, it isn’t terribly hard either. All it takes is a little know-how and a little patience. It is also important to note that the number of options for getting new bitcoins is increasing all the time. Bitcoins are often considered the currency of the future so you can expect that both getting and using them will become even easier in the next couple of years.