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    Bitcoin Bitcoin Newcomers FAQ - Please read!

    July 23, 2021

    Bitcoin Bitcoin Newcomers FAQ - Please read!

    Bitcoin Newcomers FAQ - Please read!

    Posted: 18 Jul 2021 11:56 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 Michael Saylor's Hope.com and "Bitcoin for Everybody"' course, Jameson Lopp's resource page, 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.

    If you are technically or academically inclined check out developer resources and peer-reviewed research papers, course lectures from both MIT and Princeton as well as future protocol improvements and scaling resources. Some Bitcoin statistics can be found here, here and here. MicroStrategy's Bitcoin for Corporations is an excellent open source series on corporate legal and financial bitcoin integration.

    You can also see the number of times Bitcoin was declared dead by the media (LOL) and what you could have earned if you didn't listen to them! XD

    Key properties of Bitcoin

    • Limited Supply - There will only ever be 21,000,000 bitcoin created and they are issued in a predictable fashion per the inflation schedule. Once they are all issued Bitcoin will be truly deflationary. The halving countdown tells you how much time until the next drop in block rewards.
    • Open source - Bitcoin code is fully auditable. You can read and contribute to the source code yourself.
    • 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 - Most wallets calculate on chain fees automatically but you can view fee estimates and mempool activity if you want to set your fee manually. 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.

    You can also purchase in cash with local ATMs. Services such as CardCoins let you purchase bitcoin with prepaid gift cards. 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.

    • If you cannot afford a hardware wallet there are many software wallet options to choose from depending on your use case. Mobile wallets like BlueWallet are generally more secure than desktop wallets. Beware of fake mobile wallets and check reviews from reputable Bitcoin websites. Avoid paper wallets or brain wallets.

    • If you prefer to let third party "Bitcoin banks" manage your coins, try Gemini or Unchained Capital 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.

    Avoid using your cell number for 2FA. Hackers have been using a technique called "SIM swapping" to impersonate users and steal bitcoin off exchanges.

    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 r / 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.
    • Always check addresses on your hardware wallet before sending or receiving. Some malware has been known to replace addresses in your web browser or that you copy-and-paste.
    • 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.

    Common Bitcoin Myths

    Often the same concerns arise about Bitcoin from newcomers. Questions such as:

    • Is Bitcoin a Ponzi scheme?
    • Will governments ban Bitcoin?
    • Will quantum computers break Bitcoin?

    All of these questions have been answered many times by a variety of people. Here are some resources where you can see if your concern has been answered:

    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
    Bitrefill, Gyft Gift cards for thousands of retailers worldwide 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
    Piixpay, Bitbill.eu, Bylls, Coins.ph, 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 the mining FAQ. 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 for a visual representation of the node network.

    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, July 23, 2021

    Posted: 22 Jul 2021 10:10 PM PDT

    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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    JPMorgan just became the first big bank to give retail wealth clients access to cryptocurrency funds. Yes, that JPM, James Dimon's bank, the “i will fire every employee who touches Crypto” bank.

    Posted: 22 Jul 2021 07:49 AM PDT

    Just bought my first BTC!

    Posted: 22 Jul 2021 09:47 PM PDT

    I'm a little nervous being here because I'm such a noob - Just wanted to say hi! I wish us all luck on this adventure!

    submitted by /u/BigLambrowski
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    Just received my very first payment for a haircut in BTC!

    Posted: 22 Jul 2021 05:08 PM PDT

    Begged my girlfriend to take this photo of a bitcoin ad minutes before her flight EWR airport

    Posted: 22 Jul 2021 07:43 PM PDT

    4 years later

    Posted: 22 Jul 2021 12:17 PM PDT

    Circle K has become the first major retail chain to deploy Bitcoin ATMs within its stores. 700+ in 30+ states are already installed. Bitcoin Depot now has an international partnership with Circle K that spans across both the U.S. and Canada

    Posted: 22 Jul 2021 10:01 PM PDT

    Michael Saylor is CRUSHING it!

    Posted: 22 Jul 2021 01:37 PM PDT

    Am I the only one that thinks MICHAEL SAYLOR does an outstanding job explaining the multitude of benefits being a Bitcoin Hodler?

    Honestly the majority of minutes I get to watch tv, I watch YouTube interviews of MS!

    submitted by /u/Fun_Letter8435
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    Crisis in Ethiopia

    Posted: 22 Jul 2021 07:35 PM PDT

    Guys, Ethiopia is facing massive inflation mostly due to the war funded by their Govt. Another example of what we can avoid by achieving the Bitcoin Standard. As we all know, Bitcoin is money no one can fuck with. These Govt depend on fiat which they control and can print whenever they want and fund such wars. Ethiopians should read The Bitcoin Standard and The Bullish case for Bitcoin. We already have a financial system that can fix and help many countries. As Jack Dorsey said - "I hope Bitcoin brings world peace" We need to create more awareness about how Bitcoin can help.

    My heart goes out to the people of Ethiopia and rest of Africa.

    submitted by /u/Deep-Art3195
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    Jack Dorsey says bitcoin will be a big part of Twitter’s future

    Posted: 23 Jul 2021 02:48 AM PDT

    The BTC capacity in lightning is growing at a blistering rate...

    Posted: 23 Jul 2021 12:26 AM PDT

    Satoshi should get a Nobel Peace Prize!

    Posted: 22 Jul 2021 09:00 PM PDT

    whatever strings we gotta pull, pull em!

    submitted by /u/InquisitiveBoba
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    Busta Rhymes - After watching the #Bitcoin conference live with @jack @elonmusk @CathieDWood i’m sold on Bitcoin. officially holding Bitcoin.

    Posted: 22 Jul 2021 08:37 AM PDT

    SEC Commissioner fed up with Bitcoin ETF opposition

    Posted: 22 Jul 2021 11:16 PM PDT

    My client just offered me BTC!

    Posted: 23 Jul 2021 02:31 AM PDT

    Hello, I am at work and our client separately offered me to independently consult her start-up and in exchange, she is offering to pay some of my rate in BTC and euro. I am really seeing a revolution happening before my eyes and I am happy to be part of it.

    submitted by /u/KosmosHD
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    I needed to share this historic live trading view coverage of the 2011 Mt. Gox incident. In these 36 seconds in 2011, you could have bought a bitcoin for less than a cent. I wonder if anyone on here is still holding coins they bought when this happened?

    Posted: 22 Jul 2021 10:14 PM PDT

    I made an open-source multisig hardware wallet!

    Posted: 23 Jul 2021 12:33 AM PDT

    A healthy mixture of paranoia, frugality, and the desire to become One with the Bitcoin has culminated in...

    Krux Wallet, software that turns your M5StickV into an airgapped hardware wallet.

    Krux is written in (Micro)Python and built on top of the awesome embedded bitcoin library embit.

    It only works as a cosigner in a multisignature setup and communicates via QR codes, sending and receiving. It also never writes your keys to disk, so it may be odd to consider it a "wallet." It's probably more accurate to call it a hardware signer.

    The reason I chose the M5StickV for this over something like the Pi is because:

    1. You can buy it and use it as-is, no assembly required.
    2. At < $50, it's cheap for all the parts you get: screen, camera, buttons, battery, etc.
    3. Nobody else had done it yet (I think). There's already a great project for the Pi called SeedSigner!

    It needs more thorough testing and vetting before I would consider it production-ready, but it's now "feature complete" and I wanted to share it with the community!

    submitted by /u/jreesun
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    Scammers, scammers everywhere. Be careful everyone!!

    Posted: 22 Jul 2021 08:10 AM PDT

    In FIAT We Don't Trust

    Posted: 23 Jul 2021 03:28 AM PDT

    In FIAT We Don't Trust

    When you see this, 2 out of 3 prefer Internet Magic Money vs FIAT money, you realize that someone is losing faith.

    #Bitcoin Fixes This

    https://preview.redd.it/404u8ezzvxc71.png?width=816&format=png&auto=webp&s=b35bbf1180ca3502c3c5dbddaad1649305872eff

    submitted by /u/VariousTransition795
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    Had no job. Stop Loss sold at $29.6k. Bummed. Now 3 final rd interviews. Buy back in or DCA from here?

    Posted: 22 Jul 2021 11:09 PM PDT

    Been DCAing since 2019. Never a lot but $20-50 here and there when work was good. Then went unemployed and was having trouble finding a job. Spent most my cash savings, so about a wk ago set a stop loss order and it of course went thru at $29.6k.

    Well now I've got 3 final round interviews and quite a few more interviews lined up. Should start work and making money again soon. Pretty excited about that, but bummed I sold sats when now looks I didn't need to. Hindsights a biatch!!

    Of course I didn't sell a lot of my small stack, but I worked hard for those sats and can't bring myself to pay more for them.

    So should I just bite the bullet and buy back in once I get a job offer...or go back to DCAing that's done well for me since 2019?

    submitted by /u/OwwNowwBrowwnCoww
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    Number of investors owning Bitcoin has tripled since 2018: Gallup Poll

    Posted: 22 Jul 2021 10:29 PM PDT

    Bitcoin ATMs to Invade Circle K Convenience Stores

    Posted: 23 Jul 2021 02:28 AM PDT

    Bitcoin Depot is making a play for brick-and-mortar foot traffic through a "long-term" crypto ATM partnership with the Circle K convenience store chain.

    The crypto ATM company plans to install kiosks at "thousands" of Circle K locations, according to a press release, with over 700 already live in 30 states. CEO Brandon Mintz is aiming for 6,000 kiosks across North America before 2021 is done.

    "We feel that the Circle K brand has a wide and diverse customer base with people from all walks of life visiting these stores," Mintz told CoinDesk.

    https://finance.yahoo.com/news/bitcoin-atms-invade-circle-k-215617896.html

    submitted by /u/BitcoinWide
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    They've already deployed 700 Bitcoin ATM's in 30 states

    Posted: 22 Jul 2021 11:59 AM PDT

    #zerobasefee Please reduce your nodes base fee to zero to support research on Lightning!

    Posted: 23 Jul 2021 02:35 AM PDT

    Just stumbled over this guys website http://www.rene-pickhardt.de/

    He's doing great research on Lightning order routing so please let's support him by reducing the base fee of our LN node to zero :)

    submitted by /u/Freefall101
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    tHe Ecstasy oF bITcoin.

    Posted: 23 Jul 2021 02:51 AM PDT

    Small town USA… It’s slowly happening people…

    Posted: 22 Jul 2021 12:26 PM PDT
    Read more
    at

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