Bitcoin is a digital currency in which encryption techniques are used to mine/generate new coins as well as verify the transfer of funds.
Why is bitcoin Worth Anything?
1.Belief in the System: Peoples willingness to accept the currency in exchange for goods and services
2.Scarcity: There are only a set number of bitcoins in the world that can be mined. After that there is no more. This is different than fiat currency which is generally worth less and less each year because more and more money is printed. As more money is printed the overall value of that money declines. There is a reason why we don’t have penny candy anymore or 5 cent gas.
Mining coins takes hardware investment and investment in power to operate the hardware.
As of 9/2/2015
1 BTC = $225 USD
See btc-e.com for current prices.
Can I mine Bitcoin?
Yes
However the cost of the hardware and electricity at current market prices, most will loose money doing so.
Can I Buy BTC?
Yes
There are many places to buy BTC.
What is a Digital wallet?
A digital BTC Wallet is an electronic wallet where you can store your BTC. They call connect to the same bitcoin block chain which is used to verify transactions.
This may be on your computer, or stored on a wallet online
Creating your wallet
Get Your BTC Wallet at
https://bitcoin.org/en/choose-your-wallet
There is no charge for creating a wallet or downloading the BTC software. You can have unlimited amounts of wallets.
Where to Buy BTC
I generally recommend coinbase as they have a very straight forward user interface and it’s easy to buy BTC with your bank or credit card and they can buy your BTC as well. It’s very simple to open an account and make a purchase. While I have used other places and markets I strongly trust coinbase and do most of my BTC transactions through them.
What happens if I delete my wallet?
If your BTC wallet gets destroyed for any reason your bitcoins are all gone permanently unless you have a backup of that wallet. It’s vital if you have BTC stored on your wallet on a computer that you print out a physical copy of those addresses that contain bitcoin in them. This is the only way to recover those bitcoins if your hard drive crashes.
For this reason it’s recommended that you have backups of your wallet in hard paper form and that you don’t store all your BTC in 1 location.
This is also a major downside of owning bitcoins. Countless amounts of BTC have been lost because of hardware failure or people deleting their wallets. It’s unknown how many bitcoins are lost as nobody can tell when a bitcoin wallet has crashed.
Who accepts Bitcoin as Payment?
More and more companies are opening the doors to bitcoin payments. It’s too much work to list them as they change but you can generally find local shops and online merchants that will accept bitcoins for everyday goods you want to purchase.
Is Bitcoin a Good Investment?
I can’t predict the future and I won’t even try with bitcoin. Personally I see many great uses for BTC but at the same time there are downfalls. It’s still not the easiest to buy and sell. A perfect example is I just bought 5 BTC with my bank account on coinbase but have to wait 8 days before that BTC is in my account. 8 full days is an eternity.
The prices for BTC go up and down all the time. It’s a very fluid market at the moment but has stabilized a little over the past 6 months. With that said it could jump in price or crash in price. It’s impossible for me to say. I would urge extreme caution to anyone who thinks they can get rich off of investing in bitcoin.