Bitcoin explained in simple terms:
Getting started with Bitcoin – An Introduction to Bitcoin
This article, “Getting started with Bitcoin” currently consists of this page plus 4 Parts. It would be updated as and when required. Though this article is not exhaustive, it gives you a fair idea to get the ball rolling with Bitcoin.
I have kept it as simple as possible so as not to overwhelm you with too much information. This will give you a jump start in understanding Bitcoin. Here you will find Bitcoin explained in Layman’s terms.
Bitcoin, the Worldwide Cryptocurrency is creating a financial revolution never seen in the last 100 years. They’re the largest and most well-known digital currency. In short, Bitcoin is a Virtual Digital Currency that can be transferred directly from person to person through the internet without any third-party involvement.
Before getting into the details of Bitcoin, let’s see what it can do for you. What difference does it make in the world of financial transactions?
First of all, let’s take an example of Bob who wants to transfer some money to his Daughter. It can be done in a few simple steps.
How to Transfer Bitcoins from person to person
- Bob who lives in the US wants to send some cash to his Daughter in London.
- He Logs into the Bitcoin Wallet App on his Mobile Device (Bob can also use his Laptop or Desktop Computer to send Bitcoins)
- Then, he enters the Bitcoin address (Public address) of his Daughter’s Bitcoin Wallet
- Enters the amount in Dollars or Bitcoins
- Finally, he hits Send
That’s it. The amount is directly transferred to his Daughter. No payment gateways or Banks involved. The transaction is private between Bob and his Daughter.
Let’s take another example of Bob who wants to gift $500 to his Son, Thomas on his Birthday.
How to Gift Bitcoins to someone on an occasion
- First, Bob creates a Paper Wallet (I will explain Paper Wallets later in one of the 4 parts of this series “Getting started with Bitcoin”)
- Then, he Logs into the Bitcoin Wallet App on his Mobile Device (Bob can also use his Laptop or Desktop Computer to send Bitcoins)
- Thereafter, he enters the Bitcoin address (Public address) of the Paper Wallet
- Enters the amount in Dollars or Bitcoins
- Finally, Bob hits Send (The amount is invisibly transferred to the Paper Wallet)
- Bob hands over the Paper Wallet as Gift to Thomas on his Birthday.
- Additionally, gives him the optional PassPhrase of the Paper Wallet. (PassPhrase provides extra protection)
Given below are some of the options for Thomas:
- Thomas stores the Paper Wallet for the future as an investment. (Not recommended as his Father still has access to the Money)
- Thomas transfers the amount from the Paper Wallet to his Bitcoin Wallet. (A good option)
- Thomas can create another Paper Wallet and transfer the amount to it for future use an investment. (Recommended as Thomas has full control of the Money)
Another scenario is given below to illustrate how easy it is to give Bitcoins to someone even when there is no Internet:
How to pay with Bitcoin to someone when the internet is not available
- Bob wants to give John a few Bitcoins the next day at a party for whatever reason. (There is no internet at the meeting place)
- Bob then, pre-creates a new Paper Wallet and transfer those many Bitcoins to it. (At his home where the internet is available)
- Bob meets John where there is no internet access, gives him the Paper Wallet.
- John transfers the amount from the Paper Wallet to his Bitcoin Wallet (When he gets back to a place where the internet is available)
Use Bitcoin online to buy Goods and Services
Bob can also use Bitcoins to buy Goods and Services Online and Offline as well. Many big companies are accepting Bitcoins as a legitimate source of money. Customers can buy their online products with Bitcoin. On the 1st of April 2017, the Japanese government officially recognized Bitcoin as a legal payment method and currency.
Over 300,000 Stores Will Accept Bitcoin in Japan by this year end.
More than a million establishments around the world accept Bitcoins.
Getting started with Bitcoin – Finally, A few of the major companies Who Accepts Bitcoins as Payment
- AT&T and American Airlines Accept Bitcoin Vouchers
- Bloomberg.com – An online newspaper
- Dell – An American privately owned multinational Computer technology company that provides technology solutions, services & support.
- Dish.com – Satellite television and Internet service provider
- eGifter.com – You can use bitcoins to purchase gift cards from here for places that don’t directly accept bitcoins.
- Expedia – It is one of the world’s largest online travel booking agency
- Foodler.com – online food delivery and takeout service
- Microsoft – Users can buy content with Bitcoin on Xbox and Windows Store
- Namecheap – An Internet Domain Name Registrar
- Newegg – An Electronics retail giant
- Overstock.com – A big online retailer that sells from laptops and television sets to pillows and ottomans
- Reddit – You can buy premium features there with bitcoins
- Shopify stores – An e-commerce platform for merchants to setup online stores
- Steam – Desktop gaming platform
- Subway – Eat Fresh
- Takeaway.com – A major food delivery portal
- TigerDirect – A Major Electronics Online retailer
- Virgin Galactic – Richard Branson’s company that includes Virgin Mobile and Virgin Airlines
- WordPress.com – An online company that allows users to create free blogs
- UK Art Gallery accepts Bitcoins
Then, dig into it.
- Get to know about Bitcoin?: Information on Bitcoin – Part 1
- How does Bitcoin work? – Part 2
- How to setup a bitcoin account? – Part 3
- Where to buy Bitcoins? – Part 4
This article “Getting Started with Bitcoin” will surely pep you up in using and exploring Bitcoins.