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    Home Unlabelled Bitcoin Bitcoin Newcomers FAQ - Please read!

    Bitcoin Bitcoin Newcomers FAQ - Please read!

    February 02, 2021

    Bitcoin Bitcoin Newcomers FAQ - Please read!

    Bitcoin Newcomers FAQ - Please read!

    Posted: 06 Jan 2021 08:06 AM PST

    Welcome to the /r/Bitcoin Sticky FAQ

    You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments.

    It all started with the release of Satoshi Nakamoto's whitepaper however that will probably go over the head of most readers so we recommend the following articles/books/videos as a good starting point for understanding how bitcoin works and a little about its long term potential:

    Some other great resources include Lopp.net, Gigi's resource page, and James D'Angelo's Bitcoin 101 Blackboard series.

    Some excellent writing on Bitcoin's value proposition and future can be found at the Satoshi Nakamoto Institute.

    Some Bitcoin statistics can be found here, here and here. Developer resources can be found here. Peer-reviewed research papers can be found here, also course lectures from the Princeton crypto series.

    Potential upcoming protocol improvements and scaling resources here and here.

    The number of times Bitcoin was declared dead by the media can be found here (LOL!)

    Key properties of Bitcoin

    • Limited Supply - There will only ever be 21,000,000 bitcoin created and they are issued in a predictable fashion, you can view the inflation schedule here. Once they are all issued Bitcoin will be truly deflationary. The halving countdown can be found here.
    • Open source - Bitcoin code is fully auditable. You can read the source code yourself here.
    • Accountable - The public ledger is transparent, all transactions are seen by everyone.
    • Decentralized - Bitcoin is globally distributed across thousands of nodes with no single point of failure and as such can't be shut down similar to how Bittorrent works. You can even run a node on a Raspberry Pi.
    • Censorship resistant - No one can prevent you from interacting with the bitcoin network and no one can censor, alter or block transactions that they disagree with, see Operation Chokepoint.
    • Push system - There are no chargebacks in bitcoin because only the person who owns the address where the bitcoin resides has the authority to move them.
    • Low fee scaling - Fees are chosen by the sender - you can choose your own fee. An appropriate fee for an on-chain transaction depends on network demand and how much priority you wish to assign to the transaction. Most wallets calculate on chain fees automatically but you can view fee estimates here and mempool activity here. On chain fees may rise occasionally due to network demand, however instant micropayments that do not require confirmations are happening via the Lightning Network, a second layer scaling solution currently rolling out on the Bitcoin mainnet.
    • Borderless - No country can stop it from going in/out, even in areas currently unserved by traditional banking as the ledger is globally distributed.
    • Trustless - Bitcoin solved the Byzantine's Generals Problem which means nobody needs to trust anybody for it to work.
    • Pseudonymous - No need to expose personal information when purchasing with cash or transacting.
    • Secure - Blocks and transactions are cryptographically secured (using hashes and signatures) and can't be brute forced or confiscated with proper key management such as hardware wallets.
    • Programmable - Individual units of bitcoin can be programmed to transfer based on certain criteria being met
    • Nearly instant - From a few seconds on the lightning network to a few minutes on-chain depending on need for confirmations. Transactions are irreversible by normal users after one confirmation and irreversible by anyone (including miners) after 6 confirmations.
    • Peer-to-peer - No intermediaries taking a cut, no need for trusted third parties.
    • Portable - Bitcoin are digital so they are easier to move than cash or gold. They can be transported by simply carrying a seed (a string of 12 to 24 words) on a device or by memorizing it for wallet recovery (while cool, memorizing is generally not recommended due to potential for forgetting the seed and the potential for insecure key generation by inexperienced users. Hardware wallets are the preferred method for most users for their ease of use and additional security).
    • Scalable - While the protocol is still being optimized for increased transaction capacity, blockchains do not scale very well, so most transaction volume is expected to occur on Layer 2 networks built on top of Bitcoin.
    • Divisible - Each bitcoin can be divided down to 8 decimals, which means you don't have to worry about buying an entire bitcoin.
    • Designed Money - Bitcoin was created to fit all the fundamental properties of money better than gold or fiat

    Where can I buy bitcoin?

    Bitcoin.org and BuyBitcoinWorldwide.com are helpful sites for beginners. You can buy or sell any amount of bitcoin (even just a few dollars worth) and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also check out the bitcoinity exchange resources for a larger list of options for purchases.

    Here is a listing of local ATMs. If you would like your paycheck automatically converted to bitcoin use Bitwage.

    Note: Bitcoin are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year.

    Securing your bitcoin

    With bitcoin you can "Be your own bank" and personally secure your bitcoin OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoin for you.

    • If you prefer to "Be your own bank" and have direct control over your coins without having to use a trusted third party, then you will need to create your own wallet and keep it secure. If you want easy and secure storage without having to learn computer security best practices, then a hardware wallet such as the Trezor, Ledger or ColdCard is recommended. Alternatively there are many software wallet options to choose from here depending on your use case.

    • If you prefer to let third party "Bitcoin banks" manage your coins, try Gemini but be aware you may not be in control of your private keys in which case you would have to ask permission to access your funds and be exposed to third party risk. There is a saying in the community, "Not your keys, not your coins" meaning if you don't store your coins in a wallet that you control the keys to then you do not really own your bitcoin as you have to ask permission from the third party in order to move them.

    Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!

    2FA requires a second confirmation code or a physical security key to access your account making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.

    Google Auth Authy OTP Auth andOTP
    Android Android N/A Android
    iOS iOS iOS N/A

    Physical security keys (FIDO U2F) offer stronger security than Google Auth / Authy and other TOTP-based apps, because the secret code never leaves the device and it uses bi-directional authentication so it prevents phishing. If you lose the device though, you could lose access to your account, so always use 2 or more security keys with a given account so you have backups. See Yubikey or Titan to purchase security keys.

    Both Coinbase and Gemini support physical security keys.

    Watch out for scams

    As mentioned above, Bitcoin is decentralized, which by definition means there is no official website or Twitter handle or spokesperson or CEO. However, all money attracts thieves. This combination unfortunately results in scammers running official sounding names or pretending to be an authority on YouTube or social media. Many scammers throughout the years have claimed to be the inventor of Bitcoin. Websites like bitcoin(dot)com and the btc subreddit are active scams. Almost all altcoins (shitcoins) are marketed heavily with big promises but are really just designed to separate you from your bitcoin. So be careful: any resource, including all linked in this document, may in the future turn evil. As they say in our community, "Don't trust, verify".

    • Avoid using ad-based search engines like Google or Yahoo: ads are shown based on how much the advertiser bids, and scammers can easily outbid legitimate providers for ad space, since immoral ways of earning money are far more lucrative than moral ways. Use DuckDuckGo instead, which has no ads, and never tracks you as well.
    • Ignore private messages offering services.
    • Never enter your seed words in a website of any kind. Hardware wallets will recover by displaying possible seed words on their own interface, never on a website.
    • Avoid clicking on links like that look like links, such as https://www.google.com/, without first hovering over it and actually checking where they go to. Just because a link is labelled with an HTTPS address does not mean it actually sends you to that address. It is trivial for someone to comment a link on Reddit that looks like it will send you to one website when it actually sends you to another, and you might not notice the difference until a scammer has gotten all your money, or you have downloaded and installed software that steals your money.

    Where can I spend bitcoin?

    Check out spendabit or bitcoin directory for millions of merchant options. Also you can spend bitcoin anywhere visa is accepted with bitcoin debit cards such as the CashApp card or Fold card. Some other useful site are listed below.

    Store Product
    Gyft Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
    Spendabit, Overstock and The Bitcoin Directory Retail shopping with millions of results
    NewEgg and Dell For all your electronics needs
    Coinbills, Piixpay, Bitbill.eu, Bylls, Coins.ph, Bitrefill, LivingRoomofSatoshi, Coinsfer, and more Bill payment
    Menufy and Takeaway Takeout delivered to your door
    Expedia, Cheapair, Destinia, Abitsky, SkyTours, the Travel category on Gyft and 9flats For when you need to get away
    Cryptostorm, Mullvad, and PIA VPN services
    Namecheap, Porkbun Domain name registration
    Stampnik Discounted USPS Priority, Express, First-Class mail postage

    Coinmap and AirBitz are helpful to find local businesses accepting bitcoin. A good resource for UK residents is at wheretospendbitcoins.co.uk.

    There are also lots of charities which accept bitcoin donations.

    Merchant Resources

    There are several benefits to accepting bitcoin as a payment option if you are a merchant;

    • 1-3% savings over credit cards or PayPal.
    • No chargebacks (final settlement in 10 minutes as opposed to 3+ months).
    • Accept business from a global customer base.
    • Increased privacy.
    • Convert 100% of the sale to the currency of your choice for deposit to your account, or choose to keep a percentage of the sale in bitcoin if you wish to begin accumulating it.

    If you are interested in accepting bitcoin as a payment method, there are several options available;

    Can I mine bitcoin?

    Mining bitcoin can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read more here. Still have mining questions? The crew at /r/BitcoinMining would be happy to help you out.

    If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node. You can view the global node distribution here.

    Earning bitcoin

    Just like any other form of money, you can also earn bitcoin by being paid to do a job.

    Site Description
    WorkingForBitcoins, Bitwage, Cryptogrind, Coinality, Bitgigs, /r/Jobs4Bitcoins, BitforTip, Rein Project Freelancing
    Lolli Earn bitcoin when you shop online!
    OpenBazaar, Purse.io, Bitify, /r/Bitmarket Marketplaces
    /r/GirlsGoneBitcoin NSFW Adult services
    A-ads, Coinzilla.io Advertising

    You can also earn bitcoin by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoin for a small fee (requires you to already have some bitcoin).

    Bitcoin-Related Projects

    The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.

    Project Description
    Lightning Network Second layer scaling
    Liquid, Rootstock and Drivechain Sidechains
    Hivemind Prediction markets
    Tierion and Factom Records & Titles on the blockchain
    BitMarkets, DropZone, Beaver and Open Bazaar Decentralized markets
    JoinMarket and Wasabi Wallet CoinJoin implementation
    Decentralized exhanges Decentralized bitcoin exchanges
    Keybase Identity & Reputation management
    Abra Global P2P money transmitter network
    Bitcore Open source Bitcoin javascript library

    Bitcoin Units

    One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:

    Unit Symbol Value Info
    bitcoin BTC 1 bitcoin one bitcoin is equal to 100 million satoshis
    millibitcoin mBTC 1,000 per bitcoin used as default unit in recent Electrum wallet releases
    bit bit 1,000,000 per bitcoin colloquial "slang" term for microbitcoin (μBTC)
    satoshi sat 100,000,000 per bitcoin smallest unit in bitcoin, named after the inventor

    For example, assuming an arbitrary exchange rate of $10000 for one Bitcoin, a $10 meal would equal:

    • 0.001 BTC
    • 1 mBTC
    • 1,000 bits
    • 100k sats

    For more information check out the Bitcoin units wiki.

    Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /r/Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit.

    Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval.

    Welcome to the Bitcoin community and the new decentralized economy!

    submitted by /u/BitcoinFan7
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    Daily Discussion, February 02, 2021

    Posted: 01 Feb 2021 11:00 PM PST

    Please utilize this sticky thread for all general Bitcoin discussions! If you see posts on the front page or /r/Bitcoin/new which are better suited for this daily discussion thread, please help out by directing the OP to this thread instead. Thank you!

    If you don't get an answer to your question, you can try phrasing it differently or commenting again tomorrow.

    Join us in the r/Bitcoin Chatroom!

    Please check the previous discussion thread for unanswered questions.

    submitted by /u/rBitcoinMod
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    We have this beautiful monument in the small country of Slovenia, Kranj. Do you like it?

    Posted: 01 Feb 2021 01:59 PM PST

    We all know eventually it will happen

    Posted: 01 Feb 2021 10:19 PM PST

    Not much left to sell: The Bitcoin supply stored in exchange wallets is at its lowest level since almost 2.5 years. @glassnode

    Posted: 02 Feb 2021 04:07 AM PST

    IRS seized $107,000 from this business owner for making too many small cash deposits. Another reason to love Bitcoin more.

    Posted: 02 Feb 2021 04:30 AM PST

    How Bitcoin happened to me

    Posted: 02 Feb 2021 02:57 AM PST

    It started in 2008 with the financial crash. I couldn't understand how it happened, and so I dived down the rabbit hole and learnt about the creation of money. That blew my mind. Somewhere around this time, Max Keiser started his campaign 'Buy Silver crash J P Morgan.' That was enough for me and I was in. Me and millions of others bought physical silver, kilos of it in bars and coins. We then sat back and waited for the crash, it didn't happen. Why?, because J P Morgan got out of it's short position and that was that. They always will. They own wallstreet the media all of it.

    During this time I would be on ZH arguing against Bitcoin and for Silver. I was in IT my whole life, but just thought that Bitcoin was stupid. One day while having a major fall out with someone on ZH, I realised that I actually didn't know what I was talking about, and that I knew nothing about Bitcoin. And so I read the white paper. Before I had even finished reading it, I was converted. 20 mins later I was back on ZH saying just how wrong I had been.

    I started buying small amounts of Bitcoin in late 2016 early 2017. I bought all the way up to the top, and all the way back down again. DCA all the way. I sold my silver at at a loss, and put that money into Bitcoin. The best thing I ever did.

    I am writing this here as I have been trying to let people know that buying silver now is still a waste of money if you want to change the system. Bitcoin is the ONLY way this will happen. You have to separate the state from money creation. It's the only way that you can beat the system that has been evolved to not include you. Today I am still buying Bitcoin along with all my friends and some family. 99.9% of my wealth is in Bitcoin. I would never sell not if it went to -0. Long live Satoshi and coders that are making this happen. For everyone involved with it, even the ones I don't agree with. The common ground here is change, and complete and total change the likes of which have never been seen before.

    PS. I also run a full node on a dedicated machine :)

    submitted by /u/bjaxen
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    MicroStrategy Acquires an Additional $10 Million in Bitcoin

    Posted: 02 Feb 2021 05:54 AM PST

    Michael Saylor: Massive Interest From CEOs In MicroStrategy's Bitcoin Conference

    Posted: 02 Feb 2021 02:30 AM PST

    Change the language. Bitcoin is not expensive #stacksats

    Posted: 02 Feb 2021 03:38 AM PST

    HOW TO RECOVER YOUR FUNDS FROM THE BLOCKCHAIN WALLET WHICH IS CURRENTLY NOT WORKING!

    Posted: 02 Feb 2021 04:35 AM PST

    The Blockchain wallet is not working for anyone, displaying balance as 0, do not use this wallet anymore. Here's a solution:

    Download the Electrum Wallet: electrum[dot]org

    Install it, choose "Standard Wallet Address"

    Choose "I have a seed phrase" and write your 12 word seed phrase

    Press "options" and choose BIP39

    Press next and then change it to Legacy "BIP 44"

    Press next. Your balance and transactions should load up.

    Upvote for visibility.

    submitted by /u/ravharn
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    TO ALL NEWCOMERS ASKING ABOUT THE NEXT DIP PLEASE READ

    Posted: 01 Feb 2021 04:13 PM PST

    STOP ASKING ABOUT THE NEXT DIP AND READ CAREFULLY

    It's pointless to try and time the market. Bitcoin has an average of 200% gains every year since it was invented. I am not a day trader, I don't give a flying fuck what the new "price floor" is. As someone who has been watching the market for 7 years I can tell you this: Buy as much of it as you can whenever you can afford it. Wait 5 years, and thank me. Every single person with experience will tell you the same thing. STOP TRYING TO TIME THE MARKET AND JUST BUY. I could give you my opinion about the short term price action, but I could be wrong and it doesn't really matter anyways. The money you may save is not enough to justify sitting on the side lines. If it hits 220K this year and falls back to 50k, then you will just tell yourself it's too late and "I should have bought in at $33,000". DO YOU GET IT YET? If you buy in at $33k and it falls, to $20k, who the fuck cares? Buy more. In 5 years your $33k buy will be worth a shit load. Not to mention you will be a part of the new monetary network.

    Even though I HAVE NO IDEA WHAT IS GOING TO HAPPEN, I can tell you what I personally think will happen. 30k is our support level for now until price breaks bullish. It will have an incredible run up to somewhere near 220k and fall to an unknown level. Could be 50k, could be 100k. I doubt it will fall below 40k ever again after it makes this run because there are too many strong hands in Bitcoin now unlike 2017. Historical data is useless when talking Bitcoin because it's an emerging technology unlike other comparative assets. There is no guarantee of anything. If you buy in at 200k IT IS STILL A SMART MOVE because I think Bitcoin's true value is in the millions.

    This is not financial advise. Sometimes I put my finger in my butt and smell it, hard.

    submitted by /u/shleebs
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    To all the Newcomers: You can buy as low as $1 Bitcoin

    Posted: 02 Feb 2021 02:41 AM PST

    US Senator Cynthia Lummis on Twitter

    Posted: 02 Feb 2021 04:27 AM PST

    Stop Selling Your Bitcoin

    Posted: 02 Feb 2021 06:36 AM PST

    There is only 21m BTC, Bitcoin was made by people for the people, elites now acquiring BTC significantly, if we continue selling bitcoin nothing will change, elites will still be controlling everything & Bitcoin will be centralized and owned by a few people/companies.

    submitted by /u/shenegamy
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    Miami’s Mayor Leads The Charge To Bring Bitcoin To America’s Largest Cities����

    Posted: 01 Feb 2021 07:04 PM PST

    CNBC has a page devoted to Bitcoin. Lol. We have come so far.

    Posted: 01 Feb 2021 04:18 PM PST

    What stopped you buying Bitcoin sooner?

    Posted: 02 Feb 2021 02:38 AM PST

    True or false what was the thing that stopped you buying sooner and what changed?

    submitted by /u/bemorebitcoin
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    Fixed it for you. @ CNBC

    Posted: 01 Feb 2021 02:15 PM PST

    GameStop, Musk and cryptocurrency could end global inequality and weaken American power

    Posted: 02 Feb 2021 05:01 AM PST

    Update on Elon Musk and BITCOIN! | Tesla Funds May Send Bitcoin To The Moon!

    Posted: 01 Feb 2021 07:58 PM PST

    MicroStrategy Acquires an Additional $10 Million in Bitcoin

    Posted: 02 Feb 2021 07:08 AM PST

    More capital ready to enter Bitcoin, Reveals on-chain indicators

    Posted: 02 Feb 2021 03:00 AM PST

    Asked my 11year old to do some painting

    Posted: 02 Feb 2021 02:57 AM PST

    After the GME squeeze and market manipulation. Will now long term hold BTC.

    Posted: 01 Feb 2021 03:43 PM PST

    Hey guys. Just for clarity, I do NOT want something like GME to happen to BTC. Back in 2015 I was in High School and people started to talk about the BTC. I really thought of it as a fad, and after BTC crashed I felt like people rushed in without understanding what it truly was, rather thought of it as a way to make a quick buck. After researching and reading Brian Rast's blog post about bitcoin, it really cleared up my mind and helped me understand why I should invest in BTC. The Network of trust will continue to grow in Crypto. In addition, with the dollar has excessively printed and I've been trying to find ways to get out of this fiat currency bubble that has been building up for years. I will continue to learn more about crypto (primarily BTC and ETH).

    If there's any suggestions for a newbie in investing crypto I would love to hear it.

    submitted by /u/AssumptionNegative64
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    Progress Towards Utreexo Goals

    Posted: 02 Feb 2021 01:57 AM PST
    Read more
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