Bitcoins For Absolute Beginners, How To Buy Bitcoins

Bitcoins are all the rage in the media these days. You've probably been inundated with stories about Bitcoins used on Black Markets, the rise in the value of Bitcoins, articles about the theft of Bitcoins. Maybe you have an interest in Bitcoins or other Crypto currencies. It can be confusing knowing where to start or even just wrapping your head around the idea of Bitcoins, what are they, how do you hold them, how do you buy them, and how are they used. In this article we are going to explain Bitcoins to you in a way which is easy to understand. Tell you how to hold Bitcoins, how to send and receive Bitcoins, and how and where to purchase Bitcoins with US Dollars. I don't claim to be the foremost expert on Bitcoins but I have done a lot of research, have been using them for a while, and had a hard time understanding them myself so I feel I can explain them in a way which is easy to understand for absolute beginners.

Bitcoins For Absolute Beginners, How To Buy Bitcoins

What Are Bitcoins?

I won't get into the whole history of Bitcoins and who created them, there's plenty of places to research that if your interested. I just want to explain what Bitcoins are and how they work. Bitcoins are a virtual electronic currency. They are not a tangible or physical thing you can hold. You can't have a Bitcoin or a note in your pocket, it's strictly electronic and strictly online.

Bitcoins are what's referred to as a Crypto Currency. There are a number of competitors out there like Litecoins, Feather Coins, Crypt Coins, and many more. Bitcoins are by far the most valuable and also the most widely accepted and well known. If you have an interest in the other crypto currencies and want to diversify and hold a bit of each you generally have to buy Bitcoins first and then you can go to an exchange and swap those for Lite Coins or Feather Coins or Peer Coins or any other coins you want.

Some unique things about Bitcoins is it's not a currency of a country like we generally think of currency. It's basically the currency of the internet, though more and more brick and mortar stores, restaurants, and shops are now accepting them.

Bitcoin transactions cannot be reversed. If you send to the wrong address there is no calling them back. It's argued this is both good and bad. It's good in the sense people can't open a Paypal case or do a credit card chargeback and wind up keeping someone's product or service and getting their cash back. It can also be a downside in that if you send to the wrong address or put a decimal in the wrong place there's no reversing a transaction. Some people view this as a positive, others claim any legit banking system needs a way to reverse mistakes. Many sites which accept Bitcoins however use an escrow service so Bitcoins are held until both parties are satisfied with a transaction.

I know it can be hard to wrap your head around the idea of Bitcoins but it's really no different than sending money via Paypal or online banking, it's actually much simpler than you think. The confusing parts can be how do I hold Bitcoins if there's no physical coins. You can't put them in your pocket or a safe in your house for example. Also, how do I send and receive Bitcoins as well as how do I buy them. These things can be confusing to a newbie so we'll address those below.

How Do I Hold Bitcoins?

You can hold your Bitcoins either through a third party service like Coinbase, which just happens to be a place you can buy Bitcoins from your bank account as well as hold them. There's also other third party services out there which you can buy Bitcoins from and which can also serve as Bitcoin wallets. Another way to hold Bitcoins is in a paper wallet. A paper wallet is basically a program you download onto your computer which is on your computers hard drive, NOT online. This is a more secure way of holding your Bitcoins and you have more control of them.

CoinBase is a great place to buy and maybe keep a small amount of Bitcoins in, however I would not recommend keeping your holdings in a third party online wallet. If they are hacked or seized by the Government or anything you potentially lose your Bitcoins. In a Bitcoin wallet you have a wallet on your computers hard drive which is encrypted and password protected where you can hold Bitcoins.

One confusing thing is you don't really setup an account with a paper wallet like you do with a site like Bitcoin. I had a hard time understanding this. With most things you have to setup an account which is hard to change, your locked into a username and email, etc. With a paper Bitcoin wallet literally within one click you create a new wallet and can easily add or delete wallets. Technically you could use a different wallet for every single transaction you do. You add a name to your wallet, you have the option of adding a password, and you can also keep the details on a zip drive for safe keeping. The paper Bitcoin wallet may seem confusing at first but it's actually a very simple menu and very simple to use.

Each wallet has a unique address which is basically random letters and numbers. Your wallet also has a QR code which can be scanned to send you Bitcoins as well.

I would recommend having an account with Coinbase or a similar site as well as a paperwallet which you'll actually use to store your Bitcoins. Next we'll address how to send and receive Bitcoins.

How To Send & Receive Bitcoins?

It's actually surprisingly simple. Either from a paper wallet or an online wallet it's very easy to send Bitcoins. Most people use the actual address vs the QR Code but both are options for you. The nice thing because transactions aren't reversible wallets have a copy to clipboard feature and don't allow you to highlite, copy and paste as you could leave off a letter. They basically force you to be accurate in getting your Bitcoin address to give to someone else. If you want to receive money all you do is give them your address, they send to you and within a minute or a few minutes you receive the Bitcoins.

If you want to send Bitcoins all you need is that persons Bitcoin address, click send Bitcoins, and paste in their Bitcoin address. Whether through an online wallet or a paper wallet this is very easy and straight forward.

Where To Buy Bitcoins?

Many people wonder, where do I buy Bitcoins? It's actually somewhat difficult to buy Bitcoins. Nobody wants to accept Paypal or Credit Cards understandably because once you give away the Bitcoins you cannot get them back and some bad people could do credit card chargebacks or Paypal disputes, get their cash back and they have your Bitcoins.

There are a few sellers on eBay and some on other sites who will take Paypal but it's generally at a huge markup and in small amounts like $50 or less.

I'm going to share with you my favorite and easiest ways to buy Bitcoins. These methods are what I consider to be more reputable sites or people or more secure ways of buying them as well as the easiest.




CoinBase.Com
Coin Base is a known and trusted supplier of Bitcoins. It's one of the few if not the only place you can buy directly from your bank account. Some people don't like the idea of linking a bank account but the site is very secure and in addition to having a password by default it's setup to send you a text message at each login which you have to verify a code. It's a pretty secure system in my opinion.

You link a bank account and can transfer Bitcoins easily with a relatively small fee, the only downside it's about a week for the coins to clear to your wallet. This is probably the easiest and most straightforward way for a newbie to buy Bitcoins. Even if you'd prefer to buy on Bitlocal or Craigslist or something give these guys a try if even for a small amount just so you can get your feet wet and figure out how to transfer from CoinBase to your paper wallet. Also, though it doesn't have to be CoinBase you will need Coin Base or another site to convert your coins back to dollars unless you want to sell to an individual on Craigslist or something like that.



LocalBitCoins.Com
This site basically connects buyers and sellers. You can buy from and sell to people remotely and deposit money directly into their bank account. Some users accept bankwires or Moneygram or Western Union. It's basically setup on an escrow system so the Coins are held until the seller can provide you with a secret code. Once they provide this to you, you know they sent the Bitcoins.

You can also meetup with people locally and pay cash, they do allow their escrow system to be used for this as well. You'd basically meet someone at a Starbucks or McDonalds, and hand over cash once they provide you with the secret code.

This is a bit more complicated in that if you don't know what your doing and run into a bad seller being face to face they could offer to help you with your wallet or something like that and return the coins to them or screw you over. I think most people are good but don't do anything besides use the escrow system which is setup. I'd recommend having completed a few Bitcoin transactions sending and receiving before using this site.

I find this site to be somewhat overpriced. When Bitcoins were at $1,000 people were asking for upwards of $1200. You could do better on CoinBase.Com than those prices. That said you can find some good deals in person occasionally.

Craigslist
Yep, no special accounts, no codes, just regular sales like buying an X-Box or a couch on Craigslist. Look at your local Craigslist site, search for Bitcoins and you'll see a number of people selling them. You can work the transaction however you'd like but generally you'd meetup at a safe trusted place where you have access to internet. You'd give the person cash and they would transfer Bitcoins to your wallet at an agreed upon price or rate. Again, I'd recommend having a few transactions under your belt so you know what to expect before doing this.

Meetups
Bitcoin Meetups are kind of a cool concept. Just like people have meetups for people with pets or Bulldog owners or people who play chess or ride motorcycles. There are meetups for people into Bitcoins. It's basically a community, you can go network with people. Oftentimes there's a weekly or monthly meetup at a bar or coffee shop. You can buy from others and sell to others. I like this method as it's kind of a community with regulars. If someone rips you off they will probably see you or others in the group again making it less likely to happen. You can also ask advice and help from others.

BitInstant.Com
This is one of my favorites and a very easy way to buy Bitcoins. Unfortunately their site is currently down and it doesn't seem like a fix is comming anytime real soon. Basically how this site works, it finds a local store in your area which does Money Gram, basically a Walmart, 711, or CVS. You decide how many Bitcoins you want, they work out the conversion and then have you put in your zipcode where you can see stores in your area. You select one that you will go to, to pay, you then will print out a sheet of paper showing how many Bitcoins you get for the price and how much money you need to send via Money Gram. You bring that paper into the Walmart, 711, or CVS and pay the Money Gram bill. The coins are then sent to your wallet once you make payment. This is very easy and a good way for beginnners, fees aren't the best but it's not terrible and you get your coins in a timely fashion.

Wrapping Up

Well I hope  that gives you a better idea of what Bitcoins are as well as helping you to wrap your head around the concept. We explained Bitcoins and what they are, how to send them and receive them, and the best places to buy as well as how to do so.

This isn't the most complete guide around but I wanted to give you something which wasn't too long, which was concise and gave you all the essentials you need. If you have any questions please ask in the comments section below.

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When I first got into Bitcoins it took a few days for my first purchase to clear but I wanted at least a small amount of Bitcoins to get comfortable with sending and receiving them, and creating a wallet. I sought out eBay and other venues but found there's not many ways to get Bitcoins quickly let alone for free. I've checked out a number of these sites that claim to allow you to get free bitcoins watching videos and things like that but none of them really work out. Here's a proven way to get 0.007 at todays rate or $5 worth of free Bitcoins.

Don't Lose Your Money!!! The Importance Of Backing Up Bitcoins!!! MUST READ!!!!!

I had a scary experience today, almost losing my Bitcoins. It wasn't a huge amount maybe $80 worth of BTC, however that's still a fair amount of money, with fluctuating Bitcoin prices potentially someday that could be way more than $80, kinda like the recent news story about the guy who 2 years ago spend what today would be almost 3 Million US Dollars in Bitcoins, but at the time was only worth about $30.

Anyhow, this story will show you the importance of making sure you have exported your Bitcoin keys and keeping them backed up in more than one place.

You know I hear news stories about how some guy threw out a memory stick with 8 million Dollars worth of Bitcoins or someone's computer crashed and they lost such and such amount of Bitcoins. I always think how could someone be so stupid.

Today however I almost lost my Bitcoins, let me tell you how it happenned. I had my wallet key on the desktop of my computer and a memory stick. I wound up creating a new walleet however and sending all my coins to it. I saved it on my desktop but didn't back it up and transferred my coins there. I had intended to create a few backups but was in a rush and said I'll get around to it next time. Next day on my computer I wind up getting confused by all the old MultiBit keys on my desktop so I delete them all and say later I'll export to my desktop and a zip drive. Well I got lazy or busy and didn't do it.

So I login today and I get a message from MultiBit, there's a new version out. It winds up automatically updating for me, great right? Not so much, when the new version is downloaded I now see the left part of my screen which normally shows my wallets is blank. The new update had deleted my wallets. I was upset because I remembered I had deleted my keys and hadn't taken the time to re-create and resave my keys. Fortunately for me I hadn't emptied my recycling bin so I was able to restore the key and get my Bitcoins back but they could have been lost. This goes to show the importance of keeping copies and backing up your Bitcoin wallet keys.

Why Fincen Ruling Bitcoin Companies Money Transmitters Isn't The Big Deal People Are Making It Out To Be...

So recently Fincen has made an administrative ruling that Bitcoin exchanges and Bitcoin companies fall into the category of Money Transmitters and must Register with Fincen as a MSB or Money Services Business. I imagine if you're reading this article you already know about this, however if you don't, the best article I've read on the subject was featured on CoinDesk and can be found HERE. GIve this article a read as it lays out what this ruling means and the headaches this presents to Bitcoin companies.

Why Fincen Ruling Bitcoin Companies Money Transmitters Isn't The Big Deal People Are Making It Out To Be...

Sure this adds a bit of Red Tape and extra reporting which is a hassle and will probably cost companies more money, however this isn't the death blow many people are talking about. Many of the articles talk of how regulation kills the soul of an entrepreneur, and though this is true, this ruling isn't the deathblow many articles are making it out to be.

Filing with Fincen as a Money Transmitter isn't a big deal. It can be done in less than 10 minutes, to my knowledge there is no approval process, it's simply filling out the form. By filling out the form you are agreeing to follow certain reporting requirements and agreeing to keep records for a specificed amont of time, typically 5 years.

The larger issue and the one this article is really getting at is the State regulation. Where as filing as a MSB-Money Transmitter with Fincen takes just minutes and costs you nothing, typically each state requires their own license. The Fincen regulation is about stoppoing money laundering where as the states registration is about "consumer protection" as the state would call it, but is essentially just a money grab.

For a Bitcoin business, they are most likely going to operate in all 50 states. I belive all but 2 or 3 states license or regulate Money Transmitters. This means you must get 46 or 47 different licenses for each state. The application fees alone can run anywhere from a few hundred Dollars to as much as $2500, and that's just to apply, no gurantee you will even get the license.

On top of the license; you typically also need to have an audit done on your financials, an audit done on your AML or anti-money laundering policy, as well as creating an anti-money laundering policy if you don't already have one. This will run you a few thousand Dollars.

Next you typically need a bond in each state to be a Money Transmitter, a bond in each state will typically run you a few grand per million the bond is for, again, that's if you can even get a company to give you a bond because you deal in Bitcoins. Many will flat turn you down.. Typically most states bonds will cost you 2k-5k.

Most states also require you show a certain amount of money in the bank, liquid cash. This could be something like $35,000 on the low end all the way up to hundreds of thousands of Dollars, another hurdle to keep upstarts and anyone but a large well funded company out.

And once you jump through all these hoops be prepared for the various states licensing departments and regulators to either loose your applications a few times, or tell you the supporting documents and audits you supplied are not sufficient, and require you to pay more money to get more done.

After jumping through all these hoops you may be lucky enough to be licensed as a money transmitter in a state. Good news, only 45 left to go.

So where is the bright side you may ask? The bright side is that the Federal License or Money Transmitter MSB filing with Fincen is the most important part. The states money transmitter licensing is for lack of a better word a $h!t show. Typically the regulators don't even know the laws of their own state. The laws are actually not even really relevant as regulators often choose to either ignore their own laws or require stuff above and beyond what the law calls for and there's not really anything you can do as they are the regulator and have the final say.

The good news is that in most states the department which issues money transmitter licenses also isues licenses for dentists, cosmotoligists, food service workers or sanitation licenses among others.

On top of that most of these states have literally one or two guys handling the licenses for all theses areas which is why the CoinDesk article was correct in stating it can take as much as 18 months or longer to get a license.

What does this mean for Bitcoin businesses? Many lawyers would probably urge Bitcoin businesses to go the route of asking for forgiveness rather than permission. What does this mean exactly? It basically means ignore the states laws and licensing and run your business until a state finds out about you and comes after you.

Because the states departentts are somewhat of a joke and understaffed; assuming you don't have any complaints against your business; they probably will never wind up comming after you. If they do, you deal with it when they come after you and work out a settlement with them, and work on getting your license from that point. Keeping in mind the process will probably drag out for months or even years before you actually have to pay a fine.

Although many Bitcoin businesses are startups without a lot of cash, even large companies struggle keeping up with these regulations and licensing. Square Payments up until recently and possibly even still to this day has Cease and Desist orders against them from various states, and somewhat recently had to pay a large fine in the state of Florida.

Though I havn't verified this story for myself and am having trouble finding documents to back this up, it's been rumored even Paypal who today is a giant company didn't even have all their licenses at the time of their IPO some years back.

Moral of the story is if large companies can't even keep up with licensing and regulation how can a small upstart? It's also unreasonable that a small business would need to have probably at a minimum a half million Dollars just to get everything in line and apply for a license to run an internet business which served every state, and after spending all that money there is no gurantee you will get all those licenses.

Hopefully the increased popularity of Bitcoin and Bitcoin businesses will force states to offer some type of streamlined licensing process or at the very least force states to offer receiprocity meaning if you get a license in your home state other states will honor that license and save you the time, money, and hassle of doing the same thing 45 more times. This would be the smart common sense way of doing things but seeing as how government avoids intelligent common sense decisions like the plague it probably won't happen so for the meantime Bitcoin operators pretty much have two choices, close up shop or ignore state registration and licensing and operate their business until states find them and seek them out.

In all honestly banking is going to be a much bigger problem for these Bitcoin companies than state registration or licensing is. If anyone doubts this I challenge you to pickup the phone and call a few banks and ask if they offer MSB or money service business accounts. They are all but non-existant these days which basically leaves Bitcoin Companies, Check Cashiers, and Currency exchanges among other businesses pretty much without any options for banking. That's the next bridge Bitcoin companies must face, however seeing as how Bitcoin is being accepted by more and more companies these days that may not present a problem for them.

FInal Thoughts...

- Fincen isn't the bad guy here. It's the states over burdensome regulation that is the issue. Fincen is simply trying to stop money laundering and terrorist financing.

- The states do this in the name of "consumer protection" however they didn't seem to worried about consumer protection when it came to the big banks, predatory lending and the housing crisis so why get in the way of entrepreneurs and innovation since they don't do their job anyway.

- Hopefully this will spur some discussion and get states to offer reciprocity in their money transmitter rules/laws.

- And lastly, hopefully this opens up banking to a huge sector of the economy which currently has few if any banking options. 

Does Falling Bitcoin Prices Mean A Buying Opportunity?

People were freaking out when Bitcoin dropped below $300. Today, January 14, 2015, Bitcoin is currently sitting at $179 leaving many scurrying to sell Bitcoins in an attempt to salvage what money they have left. Is the panic justified however, or is this truly a buying opportunity?

Does Falling Bitcoin Prices Mean A Buying Opportunity?

Many people first got into Bitcoin not because they believed in or appreciated the technology or even because they saw a bright future for Bitcoin, but because they hoped to make an overnight windfall. Nothing wrong with that, more power to you, but it's those people who are getting flushed out of the system with these falling prices.

If you read the comments on articles featured on Forbes or CNBC the prevailing attitude seems to be that Bitcoin is crashing and let's all laugh at the suckers trying to get out. Among those in the Bitcoin community however, though there is some concern, many people, myself included are looking at this as a buying opportunity.

For the past few months, anytime Bitcoin drops below $300 I try to pickup a few BTC. When I saw Bitcoin down to $221 last night I maxed out my Coinbase daily limit and bought some more. I think Bitcoin could see the $160's however I'm confident in the next 90 days we'll see Bitcoin back up over $300.

Personally I'm looking at this as a buying opportunity. This whole Bitcoin situation were seeing right now reminds me of a famous Warren Buffet quote... "Be fearful when others are greedy and greedy when others are fearful."

How I Doubled My Youtube Earnings In Just 30 Days

It's been a few weeks since I logged in and actually checked on my Youtube earnings and was pleasantly surprised to see my earnings had more than doubled.

How I Doubled My Youtube Earnings In Just 30 Days

What did I do to yield these improved results? Many people are probably thinking I optimized all my videos or I had a video go viral. Nope. All I did to more than double my earnings was simply post content and new videos consistantly, that is really all it takes.

I've long been a proponent of just putting in the work and the results will follow. Yes SEO and optimizing titles and descriptions is important both in terms of blogs and Youtube videos, but I feel many people get way too caught up thinking something is going to magically increase views and traffic. The truth of the matter is content is king and if you're putting out quality content on a regular basis the traffic will come and the money will follow the traffic.

I've done similar things on blog posts and Youtube videos in the past, but today I'm going to issue you guys a challenge. I challenge you to consistantly post either blog posts or Youtube videos consistantly for 30 days and come back and report to me how your traffic and earnings have changed either for better or for worse. I would put money on the fact that your traffic and earnings will increase.

So how consistantly should you be posting? Yes there is a point at which you will burn out your audience, however unless your posting 3+ Youtube videos or blog posts a day I highly doubt that will happen. My advice would be at a minimum you should be doing 3 quality blog posts or Youtube videos per week. If you can do one a day even better but post at least 3 times a week, promote those posts on social media and if you have a blog and a Youtube channel cross promote your blog posts on Youtube and vice versa, your Youtube posts on your blog. I can gurantee you will see a pickup in traffic as well as earnings.

I'm going to continue putting out quality content on a regular basis, and though I don't expect as dramatic results, doubling earnings every month if over the course of the next 6 months I can double earnings twice more I'll be at a point where my Youtube earnings are bringing in a fairly respectable income where as in the past it was more just "beer money".

I'll report back on how this little experiment goes.

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