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    Home Unlabelled Bitcoin Bitcoin Newcomers FAQ - Please read!

    Bitcoin Bitcoin Newcomers FAQ - Please read!

    August 17, 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, August 17, 2021

    Posted: 16 Aug 2021 10:07 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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    and ppl say Bitcoin supports terrorism...

    Posted: 16 Aug 2021 05:49 PM PDT

    How I made $3.2 million from $2200 loan from a friend

    Posted: 16 Aug 2021 07:42 PM PDT

    Afghanistan has looting race and banks close: “We don’t have cash”

    Posted: 16 Aug 2021 12:49 PM PDT

    Just found out my wife is slowly buying BTC!

    Posted: 16 Aug 2021 07:42 PM PDT

    A few week ago I helped her put a small but decent amount in Bitcoin. I showed her how the e-transfers work, to buy and send to her wallet. She has been buying $30-$50 worth here and there. She does not even check the price (the balls on her!) nor does she know what the price is (a power I need to learn). She showed me her wallet transactions and sure enough she's stacking sats!

    Should I marry her? I was impressed to say the least.

    Edit: you are all are awesome, I expected no less. Lol.

    submitted by /u/One_2_Three
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    Just found out that the top post of r/Poor is about dollar cost averaging into Bitcoin

    Posted: 16 Aug 2021 02:24 PM PDT

    The Bitcoin Lightning Network Records 15% Capacity Growth in Just 30 Days

    Posted: 16 Aug 2021 05:51 AM PDT

    News: The Very First Show in the History of the Edinburgh Fringe Festival to accept Bitcoin!

    Posted: 16 Aug 2021 09:37 AM PDT

    You are promised $10k in a year. Take out a loan today for $10k or wait til you get the $10k?

    Posted: 16 Aug 2021 05:20 PM PDT

    So is it "don't invest what you can't lose"...OR...."don't ever take out a loan to buy Bitcoin"?

    A friend took out a loan to buy Bitcoin so of course I berated him. Then he calmly explained how he has been killing it at work and has a big commission bonus coming, so repaying the loan was not an issue. He also doesn't have kids, debt, etc. I gotta say, his point is valid, so kinda don't blame him.

    But seems the #1 rule is "don't invest what you can't lose" and #2 rule is "don't EVER take out a loan to buy Bitcoin."

    Does he qualify for the exception? Would you do the same?

    submitted by /u/OwwNowwBrowwnCoww
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    The US Dollar From the Bitcoin Perspective — Buying USD Is Clearly Too Risky Right Now. If you understand Bitcoin, being a HODLer no matter what is the only logical decision.

    Posted: 17 Aug 2021 01:40 AM PDT

    The price shouldn't be stable at first anyway, Satoshi: " Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases."

    Posted: 16 Aug 2021 11:49 AM PDT

    read more here

    http://satoshi.nakamotoinstitute.org/posts/p2pfoundation/3/

    but really if the price were stable at this point wouldn't that be bad?

    submitted by /u/KingTimKap
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    Fitch Warns El Salvador’s Bitcoin Adoption Will Be Negative for Insurers’ Credit

    Posted: 17 Aug 2021 12:47 AM PDT

    Bitcoin Mining Power Increases In Australia As Mawson Buys 17,352 BTC Miners

    Posted: 16 Aug 2021 05:34 PM PDT

    US and Bitcoin

    Posted: 16 Aug 2021 02:00 PM PDT

    I'm trying not to be offensive to Americans, but I've just seen a post where a person asks if the USD crashes what would happen to the BTC, and if it would go to 0... With a lot of people answering that yes.

    Bro, do the Americans know that there are other economics outside US?

    China and the yuan, Europe and the Euro, Japan and the yen are really solid economies and you can measure the value of Bitcoin with them.

    Not everyone in crypto is from USA, so not all the money in crypto is USD.

    I get that a big amount of money comes from the US, obviously, but it's not the only single country that buys crypto. I think it's very easy to understand.

    submitted by /u/juanly_xx
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    What would happen to the bitcoin price if the USD collapse?

    Posted: 16 Aug 2021 04:43 AM PDT

    What would happen if the USD or the Euro collapse completely with a currency cut ect. What would happen to the bitcoin price?

    submitted by /u/DutchS87
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    PSA : Beware of the " feel free to DM me" people.

    Posted: 16 Aug 2021 10:11 PM PDT

    Listen to me carefully.

    There are some pretty great people on reddit. Some of them are REALLY generous.

    But 9/10 people who will give you a long set of complicated instructions and then say " feel free to DM for more help" are nothing but scammers.

    You are welcome.

    Feel free to DM me if you wanna know more about this.

    submitted by /u/I_amNND
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    Simply Bitcoin - Why Bitcoin Will ANNIHILATE the Bond Market

    Posted: 17 Aug 2021 02:10 AM PDT

    Walmart Is Hiring A “Digital Currency And Cryptocurrency Product Lead”

    Posted: 16 Aug 2021 04:49 AM PDT

    Crypto market capitalization is still smaller than the total cost of the U.S. war on Afghanistan...

    Posted: 16 Aug 2021 07:48 PM PDT

    Bitcoin Fans Are Suddenly a Political Force (WSJ Article)

    Posted: 16 Aug 2021 09:14 AM PDT

    A clash over tax rules for digital currencies like bitcoin turned into a political coming-of-age moment for the cryptocurrency industry, galvanizing a usually fractious coalition of investors, exchanges, financiers and social-media influencers.

    In public, Ashton Kutcher, Elon Musk and Square Inc. Chief Executive Jack Dorsey brought the Twitter heat over a provision in the $1 trillion infrastructure bill seeking to expand and strengthen tax enforcement of crypto transactions. That helped prompt tens of thousands of followers to call members of Congress.

    Behind the scenes, lobbyists, trade-group officials and executives at crypto companies hopped on Google Meet every few hours to coordinate Congressional outreach and tracked legislative contacts in a shared spreadsheet.

    https://www.wsj.com/articles/bitcoin-fans-are-suddenly-a-political-force-11629115380

    submitted by /u/thebitcoin10
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    The Fake Bitcoin Energy Crisis

    Posted: 17 Aug 2021 01:38 AM PDT

    Need help deciding: Keep my BTC or buy a miner

    Posted: 17 Aug 2021 01:54 AM PDT

    I have saved up some (not much) BTC and my mentality until now has been to hodl. Today I got a very decent offer to buy a new Antminer S19 Pro which delivers 110TH/s. In theory it could mine 1 BTC in 3 years which is much more than what I would've been able to save by setting some money aside. The miner would've payed itself down in about 5 months. The technical aspect of mining is not a problem.

    If I buy the miner it would mean that I would have to sell off all of my current crypto stock.

    What would you have done?

    submitted by /u/MrAlwaysMiss
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    Publicly listed stock with highest BTC/stock price?

    Posted: 17 Aug 2021 01:09 AM PDT

    Hey there,

    I am trying to increase my exposure to BTC in the financial markets (I am also a hodler). Certain capital I have is limited to the stock market only. I would like to buy stock in firms that own BTC, but which ones have the most compared to their stock price?

    Has anyone calculated the amount of BTC owned over stock price for companies that have publicly announced they are BTC owners? I am in MSTR and BITF, but I do not know if these are optimal for this strategy. They are doing well, but maybe other options are better. Of course miners will increase their holdings over time.

    submitted by /u/Legonitsyn
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    I took some time to detail some of the layer 3 apps coming down the pipe being built atop Bitcoin & Lightning. TLDW: bitcoin is scaling in layers and incredible things are being accomplished without the need for altcoins.

    Posted: 16 Aug 2021 10:55 AM PDT

    Bitcoin Maximalists Believe That The Nash Equilibrium Has Been Reached.

    Posted: 17 Aug 2021 03:37 AM PDT

    The Nash Equilibrium is a "concept within game theory where the optimal outcome of a game is where there is no incentive to deviate from the initial strategy."

    Bitcoin's main strategy is to be the "soundest" money possible that is the best store of value that could last thousands of years. It will not deviate from this plan. Bitcoin maximalists see the strategies of all the other coins, which is not to be the soundest money, but instead to be packed with various features such as being Turing complete, being faster, etc.

    If bitcoin's endgame is to be the soundest money, there is no need to deviate from that plan because it will win with its current strategy. Altcoins are playing a different game that have nothing to do with sound money.

    From wikipedia: Suppose then that each player asks himself "Knowing the strategies of the other players, and treating the strategies of the other players as set in stone, can I benefit by changing my strategy?" If any player could answer "Yes", then that set of strategies is not a Nash equilibrium.

    Bitcoin's answer to this question is "no" because the game it wants to play is to be the soundest money. Altcoins have no choice but to answer "no" because there is no strategy they can implement that can make their altcoin more sound than bitcoin. Since all game participants answered "no" a Nash Equilibrium has, therefore, been reached.

    Bitcoin is the clear winner when it comes to being the soundest crypto currency.

    submitted by /u/baronofbitcoin
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    Big News for Crypto in India

    Posted: 16 Aug 2021 01:02 PM PDT
    Read more
    at

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