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How to Start Using Bitcoins?

Maybe you’ve heard about Bitcoins before, as the big news sites has written *A LOT* of articles about the digital currency since March. However, as we daily hear about a lot of new technologies, chances are you haven’t thought much about it just yet. However, this article takes you in the hand and let you get a deeper understanding of Bitcoin, and tell how you can get started using Bitcoins.


Why should you care?

First of all, what is Bitcoins and why should you care about it? Instead of explaining what’ve been explained a thousand times before, I want you to see this video:

So, Bitcoins is a new digital currency. Why should you care? Think about the following situations:

You are living in Hong Kong, and want to send 1000$ to a friend in Copenhagen (that’s me). The money needs to be transferred as soon as possible, and you don’t want to pay a lot of fees. Too bad, that is impossible. When my Chinese friend wanted to send these 1000$, we had the option to use a bank transfer (her bank kindly told her they would charge 94$ for this transaction) or PayPal (and we all know their fees). Had my friend owned some Bitcoins, it would’ve been way easier. She could’ve send the money using her online wallet, and paid less than a few cents as a fee and I would’ve received the money right away.

Another situation is one most of us experience daily. You go to the super market and buy some groceries. You pay with your trusted credit or debit card. In most shops, you don’t see a transaction fee up front. Well, that’s because the super market pays the fee. They pay 1.5-5% depending on which country the shop resides, shop size and other factors. The gross margin of groceries is not that high, so this fee matters. With Bitcoins, the shop would earn 1.5-5% more!

Bitcoin has a lot of interesting properties. Besides the very low transaction fee and efficiency in sending/receiving money worldwide, there is anonymity, decentralization (no accounts can be frozen) and it has deflation instead of inflation (your money will theoretically be worth more every year instead of the opposite).

Interesting properties: What’s in it for me?

We can all probably agree the properties of Bitcoin are very interesting. However, besides getting more for your money (like buying electronics cheaper than at Amazon at http://www.bitcoinstore.com/ ), why should you bother buying a new currency?

Well, the possibility of getting rich is one argument. Remember, there is a maximum of 21.000.000 Bitcoins. IF Bitcoins really catches on, a Bitcoin will be worth 100-10000 times more than its value today.

Some only invest in Bitcoin for investment purposes. If you want to play with the potential investment opportunity, I suggest playing around with the following popular tool which was released a month ago: http://www.btcglobe.com/tool/calculate-future.

How do I get started with Bitcoins?

Well, the first thing you need is a Bitcoin wallet and then some Bitcoins. Fortunately, the first part is very easy to get. You can either go visit www.coinbase.com or www.blockchain.info and register a wallet within minutes.

Getting Bitcoins is the difficult part. If you live in United States, both Coinbase and Blockchain provides an easy way to buy Bitcoins. If you live outside United States, it can be more difficult. However, if you search a little on the Internet, you can probably find some providers relatively fast.

When you have Bitcoins, it gets really easy. You can go to a website like http://www.bitcoinstore.com/ , build your order and then checkout with Bitcoins. You will see a Bitcoin address like this one 1MvvjbwmTtYFkbMTcVxLSFPBiNhuETH9Am, and then you can easily transfer the money from Coinbase or Blockchain.

Now you are effectively a part of the Bitcoin economy!

Author Bio:- Lars Holdgaard lives in Denmark, and run several companies. Besides running one of the biggest student sites in Denmark, he also runs HC Emballering (please link to http://www.hcemballering.dk ) which sells packaging machines for both normal money and Bitcoins. Recently he has spent a lot of time and money on Bitcoins.

{ 3 comments… add one }
  • Syed Qasim

    May 21, 2013, 7:31 pm

    Thanks for sharing the good tutorial. I had no idea about it. I’ll learn more about it. Thanks Bilal.

  • Pavan Somu

    May 20, 2013, 10:40 pm

    Hi Bilal,
    I searched for BitCoins a week ago but I didn’t find any useful information. But now I understood what BitCoins are exactly and their usage. Thanks buddy 🙂


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