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.
The following videos are a good starting point for understanding how bitcoin works and a little about its long term potential:
For lots of additional video resources check out the videos wiki page or /r/BitcoinTV.
Key properties of bitcoin
- Limited Supply (there will only ever be 21,000,000 bitcoins created and they are issued in a predictable fashion, you can view the inflation schedule here)
- Open source (You can read the source code yourself here)
- Decentralized (Bitcoin is globally distributed across thousands of nodes and as such can't be shut down similar to how Bittorrent works)
- Permissionless (No one can prevent you from interacting with the bitcoin network of your own free will, even in areas currently unserved by traditional banking. This makes it a truly global payment platform)
- Censorship resistant (No one can censor 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 bitcoins reside has the authority to move them)
- Designed to fit all the fundamental properties of money better than gold or fiat
Additional Bitcoin statistics can be found here. Developer resources can be found here and here. Peer-reviewed research papers can be found here and here. And of course, the whitepaper that started it all 🙂
Where can I buy bitcoins?
You can buy or sell any amount of bitcoin and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, more can be found here.
Here is a listing of local ATMs. Also, Lawnmower is also a handy way to make small recurring purchases of bitcoin. If you would like your paycheck auotmatically converted to bitcoin use Cashila or Bitwage.
Note: Bitcoins 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. Here are a couple useful sites (bitkoin.io, preev.com) that shows how much various denominations of bitcoin are worth in different currencies. Alternatively you can just Google "1 bitcoin in (your local currency)".
Securing your bitcoins
With bitcoin you can "be your own bank" and personally secure your bitcoins OR you can use companies which will hold the bitcoins 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, there are many software wallet options here. If you prefer easy and secure storage without having to learn computer security best practices, then a hardware wallet such as the Trezor, Ledger, Case Wallet, or KeepKey is recommended.
If you prefer to let bitcoin banks manage your coins, try Coinbase or Circle but be aware you may not be in control of your private keys.
Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!
2FA requires a second confirmation code to access your account, usually from a text message or app, making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below.
Where can I spend bitcoins?
|Steam, Disco Melee, HumbleBundle, GreenmanGaming, and Coinplay.io
||For when you need to get your game on
||Xbox games, phone apps and software
|Spendabit, The Bitcoin Shop, Overstock, Rakuten, DuoSearch and BazaarBay
||Retail shopping with millions of results
||Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
|NewEgg, TigerDirect and Dell
||For all your electronic needs
|Foodler and Takeaway
||Takeout delivered to your door!
|Expedia, Cheapair, Lot, Destinia, BTCTrip, Abitsky, SkyTours and 9flats
||For when you need to get away
|Cryptostorm, Mullvad, and PIA
||For new domain name registration
|Stampnik and GetUSPS
||Discounted USPS Priority, Express, First-Class mail postage
||Premium membership which can be gifted to others
Coinmap and AirBitz are helpful to find local businesses accepting bitcoins. A good resource for UK residents is at wheretospendbitcoins.co.uk.
There are also lots of charities which accept bitcoin donations, such as Wikipedia, Red Cross, Amnesty International, United Way, ACLU and the EFF. You can find a longer list here.
Additional goods and services can also be found at the Trade FAQ or The Bitcoin Directory
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 bitcoins 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 more here. 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 using this setup guide. You can view the global node distribution here.
Just like any other form of money, you can also earn bitcoins by being paid to do a job.
You can also earn bitcoins by participating as a market maker to allow users to perform CoinJoin transactions with your bitcoins for a small fee (requires you to already have some bitcoins)
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.
|Lightning Network, Amiko Pay, and Strawpay
||Payment channels for network scaling
|Blockstream and Drivechain
|Open Transactions, Counterparty, Omni, Open Assets, Symbiont and Chain
||Financial asset platforms
|Hivemind and Augur
||Decentralized media library
|Tierion and Factom
||Records & Titles on the blockchain
|BitMarkets, DropZone, Beaver and Open Bazaar
|Samourai and Dark Wallet – abandoned
||CoinJoin implementation (Increase privacy and/or Earn interest on bitcoin holdings)
||Trade bitcoins and altcoins without creating an account
|Coinffeine and Bitsquare
||Decentralized bitcoin exchanges
|Keybase and Bitrated
||Identity & Reputation management
|Bitmesh and Telehash
||BitTorrent client with paid seeding
||Decentralized, encrypted internet
|Storj and Sia
||Decentralized file storage
||Internet of things??
|Streamium and Faradam
||Pay in real time for on-demand services
||Global P2P money transmitter network
||PIN secure hardware token between SIM & Phone
||Decentralized address book w/ ratings system
||Institutional-level Bitcoin Data & Research
|Blocktrail and BitGo
||Multisig bitcoin API
||Open source blockchain API
||Kill your friends and take their money 😉
Use ChangeTip.com (/r/changetip) for tipping people on Facebook, Reddit, Twitter, YouTube, Tumblr, Google+, GitHub, Slack and more! (you can even use custom monikers to tailor your tip to the discussion or add a bit of humor). Read more about ChangeTip at their reddit wiki.
One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:
||1,000 per bitcoin
||SI unit for milli i.e. millilitre (mL) or millimetre (mm)
||1,000,000 per bitcoin
||SI unit for micro i.e microlitre (μL) or micrometre (μm)
||1,000,000 per bitcoin
||Colloquial "slang" term for microbitcoin
||100,000,000 per bitcoin
||Smallest unit in bitcoin, named after the inventor
For example, assuming an arbitrary exchange rate of $500 for one Bitcoin, a $10 meal would equal:
- 0.02 BTC
- 20 mBTC
- 20,000 bits
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. A complete list of bitcoin related subreddits can be found here
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!