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    Bitcoin Bitcoin Newcomers FAQ - Please read!

    October 15, 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, bitcoin directory or Coinmap 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

    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, October 15, 2021

    Posted: 14 Oct 2021 10:04 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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    Literally breaking just now: SEC said to not oppose Bitcoin futures ETF

    Posted: 14 Oct 2021 07:28 PM PDT

    Senator Cynthia Lummis on Bitcoin and Extending the debt ceiling

    Posted: 14 Oct 2021 07:03 PM PDT

    We are at war.

    Posted: 14 Oct 2021 09:56 PM PDT

     

    Make no mistake. We are at war.

     

    The Federal Reserve, the investment banks, the retail banks, the hedge funds that own real estate, the corporations all know that their wealth and survival is based on money printing.

     

    They know the harm they are doing to people who can't out earn inflation. They know the suffering their policies have caused. Some of them even revel in the pain they are causing others. Honest people are stuck in poverty and homelessness because of government monetary policy.

     

    They will try to destroy bitcoin, no matter the good that Bitcoin does. No matter the benefits of Bitcoin sound money policy. Warren Buffet et al will use their wealth to lobby the government with the aim of destroying Bitcoin's chances of reaching its full potential.

     

    By debasing our money they declared war on us. By buying Bitcoin you have declared war on them.

     

    We will win, eventually. Before then they will do everything to block Bitcoin from achieving its full potential.

     

    edit: There are two crypto lobbyist groups in Washington: https://theblockchainassociation.org and https://www.coincenter.org/. 🗡 WAR IS ON 🗡

     

    submitted by /u/-ae_-
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    I'm done smelling disinfectants.

    Posted: 15 Oct 2021 03:12 AM PDT

    I'm a physician. I work 60/h a week. A little over a month into the job, I decided that I'm unemployable for reasons I'll keep to myself. I needed a way out. I get paid very well but it's not what I want to do for the rest of my life. I see doctors in their late 60s coming to ER at midnight to evaluate critical cases. While we need people like this, I'm not fit to be.

    ​

    Learned about bitcoin during the bull of 2017, got in August 2018. I forgot all about it and got worked up with my job. Then COVID happens, thought nothing of it, then March 2020 happens. That's when I started learning more about Bitcoin and what it has to offer in a time of economic hiccups. I got hooked, Sold my apartment, and went in for the 2nd time.

    ​

    At today's price, I've made from Bitcoin 10 years' worth of salaries. I'm close to hitting my target. I'll retire early, maybe not rich, but I'll own my time and focus on my passions. I'm done smelling disinfectants.

    submitted by /u/MuchHold6421
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    My friend asked me how much Bitcoin I owned.

    Posted: 15 Oct 2021 02:41 AM PDT

    I was confused. Most people seem to realise that it's kind of an intrusive question to ask.

    But I made a deal with him. I'll show him how much BTC I have stacked, he just needs to open up his banking app and show me how much money he has.

    Yeah, so he never found out how much I have. Shocker.

    submitted by /u/JammieJarJam
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    Bitcoin Futures ETF Won’t Face SEC Opposition at Deadline, Sources Say

    Posted: 14 Oct 2021 07:42 PM PDT

    BTC market psychology

    Posted: 14 Oct 2021 12:12 PM PDT

    Ted Cruz Says Bitcoin Mining Can Fix Texas’ Crumbling Electric Grid. The Republican senator expressed his faith that the mass buildout of crypto mines in the state could add additional energy capacity to the state’s grid in the event of blackouts or power shortages.

    Posted: 14 Oct 2021 05:50 PM PDT

    Feel sad for people who don't understand

    Posted: 14 Oct 2021 11:11 PM PDT

    Long time lurker first time poster. Been in crypto since the peak of the last bull, lost some money, gain much more, but what is more important I realized what BTC is and I love it more than any other asset.

    My question is, in these three years I have been talking to a numerous friends, explaining them what is BTC, what is blockchain, risks and benefits, everything that goes with it. I even created pdf document with guides for noobs and advanced users, on English and my country language.

    So my question, how can someone know about BTC for three years, one of the best friends is investing, trying to teach you and trying to make you understand, you see the price, the news, and your friend talking about BTC a lot, and still in three years you did not take time to read about this new technology, nor did you have shown any interest to learn something new.

    Now when BTC is reaching ATH again, they want to invest. They want to send me money without even researching BTC nor trying to make an acc for themselves.

    People are lazy, dumb, and they don't trust anyone. Herd mentality likes to sleep on the pillow made of cash, and we are about to see one of the biggest inflation crisis in History of a mankind

    submitted by /u/0bran
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    Bitcoin is king, 59K. We need decentralised exchanges that allow/accept local currency

    Posted: 14 Oct 2021 08:09 PM PDT

    We need decentralised exchanges that allow/accept local currency. Right now we just have centralized exchanges in most of countries. The DEXs don't directly accept local currency. One has to buy crypto in centralized exchange/ P2P and then go to DEX. This is annoying, the centralized Exchanges are becoming the unwanted middle man. They are also banning/blocking trades during dips, banning/blocking certain accounts (just read an article about an exchange blocking 14k accounts). This is the opposite of censorship resistance. We really need a good DEX one can buy from directly.

    submitted by /u/Optimal_North_HJ
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    "Bitcoin could trigger financial meltdown, warns Bank of England deputy" — They're trying to blame the economic collapse on Bitcoin instead of their intimate money creation.

    Posted: 14 Oct 2021 02:27 PM PDT

    Jack Mallers Launches “Pay Me In Bitcoin” Service On Strike

    Posted: 14 Oct 2021 08:36 PM PDT

    $1m Bitcoin is impossible because that would mean a market cap of $19 trillion. That means $19 trillion spent on Bitcoin - no it doesn’t!!!

    Posted: 14 Oct 2021 02:24 PM PDT

    Yes people don't understand market cap!

    Alice buys 1000 apples for $1000.

    She sells 100 to Bob at $2 ($200) so the market cap is $2000.

    She sells 800 to Jane at $3 ($2400) so the market cap is $3000.

    She sells 99 to George at $5 ($495) so the market cap is $5000.

    She HODLs the last one. Her last one is currently still worth $5 (cost her $1). The market cap remains $5000.

    The amount spent has been 200+2400+495+1=$3096 yet the market cap is $5000.

    Remember lots of whales bought early and HODL so this will be even more skewed! Doesn't require all the world's wealth to be invested, to be worth more than all the word's wealth!

    submitted by /u/zcpu
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    Everyone here should have one goal here, secure 0.005 BTC to .01 BTC.

    Posted: 14 Oct 2021 10:56 AM PDT

    If I've learned anything, is that I have consistently looked back, and regretted not buying bitcoin when it was lower.

    What I've learned is that as much as 1 BTC is out of reach today, the same will be true for 0.01 BTC in five few years.

    Weigh both best case and worse case scenarios:

    • Worst Case: Bitcoin Crashes, and you are out $600.
    • Best Case: Bitcoin grows, and your $600 will become $2000 - $3000.

    If you look back, which would hurt more? The answer is pretty straightforward, so secure BTC today, and forget about it for the next 5 years.

    submitted by /u/Karmaa
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    SEC Set to Allow Bitcoin Futures ETFs as Deadline Looms

    Posted: 14 Oct 2021 10:10 PM PDT

    El Salvador killing it

    Posted: 15 Oct 2021 04:02 AM PDT

    Since el savador bought bitcoin and is now making some good profit to it it might open the doors for other countries to see it was a good investment. What you guys think?

    submitted by /u/luis091327
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    OFFICIAL: MicroStrategy has doubled its money on its #Bitcoin investment.

    Posted: 15 Oct 2021 04:36 AM PDT

    Remember when they said this time won't be like 1970s inflation because oil prices went up in the 1970s.... well now oil prices are skyrocketing

    Posted: 14 Oct 2021 06:30 PM PDT

    So that means this will be like 1970s inflation

    submitted by /u/hyperinflationUSA
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    Crypto is ‘not a fad’ says Morgan Stanley CEO Gorman, ‘It’s not going away’

    Posted: 14 Oct 2021 12:31 PM PDT

    Petition to SEC to approve Fidelity’s Wise Origin Bitcoin Fund

    Posted: 14 Oct 2021 08:40 PM PDT

    Canadian city plans to supply residents’ heat using Bitcoin mining

    Posted: 15 Oct 2021 12:20 AM PDT

    Love it or hate it, but King Bitcoin is talk of the town

    Posted: 15 Oct 2021 05:00 AM PDT

    Love it or hate it, but King Bitcoin is talk of the town

    We've developed a crypto analytics platform that alerts on high amounts of social filtered signals for over 5000 cryptocurrencies including Bitcoin.

    Out of the 5000+ coins, BTC has been alerted to having the most of amount of social engagement amongst it within the last 24 hours. Each alert generated has also followed with some interesting price movements. This post serves two functions: 1 - to showcase the power of our platform and 2 - BTC is talk of the town.

    We'd be intersted in knowing your thoughts to why this is the case?

    Alert shown below with description. The red arrows represent when the alerts were generated.

    https://preview.redd.it/br7q17pzslt71.jpg?width=1280&format=pjpg&auto=webp&s=4361ea28b4e263ece344fb3d94d4595228fafada

    submitted by /u/Aaron1400BC
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    Latest Bloomberg Report Suggesting SEC Isn’t Likely To Block Bitcoin Futures ETF Plus SEC Tweet Regarding Bitcoin Futures Takes BTC Above $59k

    Posted: 14 Oct 2021 09:23 PM PDT
    Read more
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