Beginner's Guide To Get Bitcoin

Bitcoin is on a roll these days. You might be new to bitcoin and are wondering how to get into it. However, a Google search will come up with terms like sha256, hashing power and other words which at first might seem confusing. This beginner's guide will attempt to distill everything to the easiest but still applicable techniques to get Bitcoin.

First, get a Bitcoin Wallet

A Bitcoin wallet is where you will store your funds. There are essentially three ways to do this. One is storing it in a private software wallet, another is using a software wallet and lastly storing it on an exchange. The first two makes you the sole owner of the wallet and also the responsibility to keep it safe, while the exchange option is easier to access but riskier since you do not hold the private key to the wallet and exchanges could get hacked. My recommendation is to keep the majority of the funds in a private wallet and keep on an exchange wallet only what you need to trade.

Private Wallet

There are several options out there for private wallets, but you should be careful as some might be scam. One option I recommend is BitPay. As part of the wallet creating process BitPay will provide a private key made up of random words, make sure you store this in a safe place. BitPay also offers a Visa credit card that can be used to spend your Bitcoins, but they charge $5 a month if it has not been used for 90 days.

Another option is a hardware wallet. This consist of a usb that contains the private key to access your funds. Trezor is one of the most popular hardware wallets.

Exchange Wallet

There are also several exchanges with multiple wallets for Bitcoin and other altcoins (like Bitcoin but of lower market value) like Poloniex, however it could be confusing to use unless you expect to trade between coins. The most popular is Coinbase, which is a trusted US-based Exchange that allows you to easily move funds between Fiat (like US Currency) and Bitcoin, as well as buy or sell Ethereum or Litecoin. Coinbase also provides a Visa credit card option that allows you to pay for goods using the current exchange rate.

Got my wallet, now how do I get Bitcoin?

This guide will focus on the main ways to get Bitcoin. You could mine it on the "cloud", mine it at home or simply buy it.

Cloud Mining

Cloud mining is when you essentially rent someone else's mining hardware to generate bitcoin for you. Of course, the result is not as profitable that having your own mining operation running but you won't have to deal with the hassles of building the equipment and dealing with the maintenance and electricity which could be costly. The most popular mining site by far is Genesis Mining, which has videos showing their big mining farm in Iceland to assure investors that it is a real operation. Genesis Mining does not guarantee a specific ROI, since Bitcoin mining difficulty and price fluctuates, but it is a good option if you believe in the future of Bitcoin and want to make a long-term investment. All you need is link your wallet address with their service, rent Bitcoin (or other altcoin) hashrate and it will make automatic deposits as it mines. Bitcoin mining offers an "open-ended" contract which means it will continue mining on your behalf until it is no longer profitable after taking maintenance fees, however you could continue to upgrade to keep it running.

If you are interested in Genesis Mining there are 3% coupons that are easily available from other users.

Mining at home

If you have technical expertise and live in a place with cheap electricity mining could be for you. You could mine Bitcoin directly, although some experts recommend against it due to long term hashing difficulty making the hardware potentially obsolete. Another option is to use a PC Graphics Card (or GPU) in which you could mine altcoins like Ethereum, which can then be traded for Bitcoin. If you want to go the GPU route I recommend NiceHash which will mine altcoins and pay you in Bitcoin, automatically finding out the most profitable altcoins to mine and by paying you directly in Bitcoin you avoid the hassle and risk of trading them on an exchange.

Buying Bitcoin

Of course the easiest way could be to buy it. However, keep in mind that by buying Bitcoin you are then subject to price fluctuations, think of it like making an investment like you would on gold or another stock, except Bitcoin could fluctuate more rapidly, so keep an eye on the price. Coinbase offers the easiest way to buy Bitcoin.

Hope these tips help you on your quest to conquer Bitcoin. Please share other ideas or comments on how to buy and manage bitcoins by leaving a comment on the section below.

Feel free to comment and improve on this guide for the benefit of the new bitcoin community.