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    Bitcoin Bitcoin Newcomers FAQ - Please read!

    February 09, 2021

    Bitcoin Bitcoin Newcomers FAQ - Please read!

    Bitcoin Newcomers FAQ - Please read!

    Posted: 31 Jul 2020 08:50 AM PDT

    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 09, 2021

    Posted: 08 Feb 2021 11:01 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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    If Bitcoin doesn't hit $69,420 in 2021, I will eat a carolina reaper January 1st 2022 and post it on here.

    Posted: 08 Feb 2021 02:20 PM PST

    Title says it all. I posted this in my main Discord too and it got pinned, I'm locked in boys.

    Price today started making my hands shaky. Now I have a new incentive for 💎🙏

    Wish me luck!

    submitted by /u/Mogli_Puff
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    It never gets old..

    Posted: 08 Feb 2021 03:19 PM PST

    Should the Tesla Roadster be the new standard instead of Lambos?

    Posted: 08 Feb 2021 02:06 PM PST

    Andreas Antonopolous Appreciation

    Posted: 08 Feb 2021 09:07 PM PST

    There is a lot of talk about elon musk and michael saylor and other big players , and how much they are doing for btc adoption , which is great. They deserve the spotlight.

    I just wanted to take some time to show appreciation for andreas antonopolous. The average person will never know about him, and the mainstream media will never mention his name. But he has played such a big role in making so many people understand what bitcoin really is. In my humble opinion, we wouldn't be where we are today without him.

    A smart, humble, patient individual with a rare ability to deconstruct and make sense of the most complex of subjects. A true visionary who doesnt care about the financial gains that may come along with bitcoin, but about the potential for this technology to better people's lives.

    If it wasn't for him, I would have dismissed bitcoin as hype couple years ago. He was the only one who made things click. Thanks to him I saw the light.

    So thank you Andreas for all your hard work and passion.

    submitted by /u/speedstickman
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    When friends and family ask me to tell them how much Bitcoin I hold

    Posted: 08 Feb 2021 03:36 PM PST

    Tesla buys $1.5b in Bitcoin and is looking to accept the crypto as a form of payment in the near future...

    Posted: 08 Feb 2021 04:48 AM PST

    "Id rather have a volatile 200% appreciation a year than a stable 15-20% depreciation a year"

    Posted: 08 Feb 2021 01:55 PM PST

    With Tesla's Help, Bitcoin Displaced Facebook Today as the 10th Highest Market Cap Asset on the Planet!

    Posted: 08 Feb 2021 12:52 PM PST

    BITCOIN is going to ZERO ! ��⚡✨

    Posted: 08 Feb 2021 06:58 AM PST

    MicroStrategy CEO Michael Saylor on sharing his bitcoin playbook and how many companies could follow Elon Musk's lead with Tesla betting big on Bitcoin, buying $1.5B worth.

    Posted: 08 Feb 2021 07:07 PM PST

    Current feels after the “Elon bought BTC” day ~

    Posted: 08 Feb 2021 02:01 PM PST

    CHANGING COURSE TO MARS ��

    Posted: 08 Feb 2021 06:28 AM PST

    BTC passed Facebook and Tesla. Now a top 10 asset in the world!

    Posted: 08 Feb 2021 03:06 PM PST

    After thinking a lot about it, I finally decided to sell some Bitcoin to buy a Tesla

    Posted: 08 Feb 2021 11:41 AM PST

    Don’t buy Bitcoin (they said) - i’ve built a thing

    Posted: 08 Feb 2021 01:01 PM PST

    As a little side project we created a website of 100 news items of big shots saying not to buy Bitcoin. The website automatically pulls current value and calculates what you would have made when you would have bought 100usd of Bitcoin at the time of publication of the news item. Check it out at https://dontbuybitcointheysaid.com

    submitted by /u/hully77
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    If Bitcoin crashes 50% today it will be worth 23k USD

    Posted: 08 Feb 2021 03:58 PM PST

    Just that. I just realized how big is this. Even a 50% crash today would end up being more than 100% gain from Feb 2020.

    This is amazing!

    submitted by /u/NoRewardsForYou
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    I'm a Small business owner, I just put my company's liquid balance sheet into Bitcoin yesterday.

    Posted: 08 Feb 2021 05:44 PM PST

    I've been a hodler since 2013 with my personal money so I've been in the crypto space for a long time.

    I own a small digital consultancy with a handful of employees and a liquid balance sheet under 7 figures. Chump change compared to Micro Strategy, Tesla, and the big money. But these past couple days I converted everything over to BTC bar some fiat for operational costs. I just finished the transactions yesterday thinking "It's basically at an all time high but the price I paid will likely seem like a bargain in 5 years time". Fortunately it already is as of today.

    A major tipping point in this decision came from Saylor's interview with Ross Stevens and specifically the comment "For us everything's getting cheaper". That's been the case with my personal funds so why not with my company's funds?

    So yeah, you don't have to be Tesla to do it.

    To Mars Bitches.

    submitted by /u/analogue_in
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    Poorly Aged Tweets

    Posted: 08 Feb 2021 06:44 AM PST

    21 Bitcoins = $1 Million

    Posted: 08 Feb 2021 11:00 PM PST

    Well, I haven't posted in a while. But for me today is a significant day in the history of Bitcoin, and I thought it was worth posting this given how astounding the year has been for Bitcoiners. My comment here is significant for no other reason than superstitious numerology. So take it for what it's worth. But today is the day that anyone who owned .0001% of Bitcoin's supply - 21 of 21 million coins - became a millionaire. To me, that's more significant than a $50,000 coin.

    I don't usually care about price. But for some reason, this little fact got me right in the feels.

    May Hal Finney watch down on us from heaven, and smile.

    submitted by /u/junseth
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    In my country (Czech Republic) the price of bitcoin has just exceeded 1 Mil. CZK

    Posted: 08 Feb 2021 10:49 PM PST

    Did blockfolio get hacked?

    Posted: 08 Feb 2021 11:04 PM PST

    If you're debating on buying, just buy

    Posted: 08 Feb 2021 05:42 PM PST

     There's a lot of new people to this page and I see the same question a lot. "Should I buy Bitcoin now?". If you're debating, the answer should always be yes. People have this preconceived notion that everyone who posts here have millions invested into Bitcoin and everytime they buy they're throwing down 10s of thousands of dollars, which just isn't true. Buying 25 dollars is perfectly fine..Hell, even buying 5 dollars is fine. It's getting your foot in the door and becoming part of the 1% of the population that owns Bitcoin. For myself, I buy every two weeks on pay day. I don't care about the price because I'm not worried about the price tomorrow, next week or even next year, because I know in 10 to 15 years Bitcoin could easily be worth 500k to 1m. People are so caught up trying to "buy the dip" and get the best price possible, when its almost impossible. If you wanted to get in last night and thought it was to expensive, you woke up to a big surprise when checking the prices this morning. Telsa buying Bitcoin won't be the first or the last major company to get in on Bitcoin. It's the future. If you're questioning "where do I even buy bitcoin?!". I would recommend using Shakepay if you live in Canada like myself. It's one of the safest and most trust here. If anyone has any questions or is hesitant on buying, please send me a DM and I'll try my best to help you!
    submitted by /u/theluckyowl
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    Fiendin for more btc!

    Posted: 08 Feb 2021 09:14 PM PST

    How Rich People Get Richer: Step 1, Buy $1.5 billion worth of BTC. Step 2, Announce that you bought $1.5 billion worth of BTC. Step 3,

    Posted: 08 Feb 2021 11:38 PM PST

    47,729.89, 24h Change +8,721.62 +22.36%

    Make $335.4 million in under 24 hours!

    ​

    Side note: I am not implying that non-rich people did not benefit from this move, simply that non-rich people do not have market moving capabilities. I mean, I once announced that I bought $100 worth of BTC and it pumped 10%, but I have suspicion that was for other reasons. I did eat premium ramen noodles that night, though. Delicious!

    submitted by /u/RepresentativeSalt82
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    Throwback to that guy who held up an address in the background during college gameday. He ended up making 44 coins - over $2M at todays price.

    Posted: 08 Feb 2021 08:22 PM PST
    Read more
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