Bitcoin for beginners - how to buy, store and spend bitcoin

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#1 Sun, Oct 30, 2016 - 2:30pm
James Crighton
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Bitcoin for beginners - how to buy, store and spend bitcoin

Bitcoin for the beginner: how to buy, store and use bitcoin

2016.10.30

A clear algorithm for the buying and management of bitcoin is described. There are alternatives and in time you may wish to learn them but, for the moment, what you see below is all you need.

1. Go to the Coinbase website ( coinbase.com ) and buy some bitcoin - follow their instructions - very clear. ( Note: There are alternatives - Bitstamp; CoinCorner; CoinFloor; - many others - just Google "bitcoin exchange" )

2. Create a paper wallet for yourself by going to the website: www.bitaddress.org - and generating a paper wallet - easy - follow the instructions there - - - - you will at first need to swirl your mouse around to generate randomness - you will see the changes on your screen untill 100% is achieved - after which the screen clears and all will be clear - select the "paper wallet" option from the choices at the top of the window.

3. Print the paper wallet but be careful not to let anyone see the private key - keep it secret. On the paper wallet you will see two "numbers" (character strings really - consisting of letters and numbers) - the one on the left is the Public Address (like your home address - anyone can see it and people who want to send you mail must know it) and, on the right, the Private Key - this (the private key) is the one you must keep secret - it is the number you will use to access your bitcoin when the time comes. Don't lose the Private Key - without it there is no way of recovering your bitcoin. You may wish to make a few copies and store them in different places - but not where they will be found. ( Instead of making a Paper Wallet you could make a Brain Wallet - also generated from bitaddress.org - and explained there - or go to YouTube for a video explanation. With a brain wallet one remembers a string of random words and there is nothing written down )

4. Go to Coinbase and access your account wallet there and send the bitcoin (the ones you want to store) to the Public Address generated in 2. above. And that is all you do - your bitcoin are now safe - for centuries, if that is what you want - just as long as no one gets to know your Private Key.

5. If you want to check that your bitcoin have indeed been sent to the address, go to www.blockchain.info and, on the homepage, type your Public Address into the search box (about half-way down the home page and just off-centre to the right) and there you will see the details of the transaction - sent from the address that Coinbase have sent it from - to your address - with the amount and date and time of the transaction. It takes a little time for the transaction to occur - the process is undertaken by the miners around the World who look after the bitcoin blockchain in cyberspace - you will note they extract a very small fee for the service - negligible really.

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How to mobilise your bitcoin in your paper wallet so that you can use / spend them

1. Download the Electrum wallet from their website - www.electrum.org

2. Open the wallet and register with them. Remember to write down the seed - this allows you to recover the contents of the wallet should you forget your password.

3. One of the options offered is to import or sweep in a private key. This function allows you to sweep the entire contents of your paper wallet into the Electrum wallet. Do this by inserting the Private Key of your paper wallet into the box when it is presented (by the Electrum wallet). It will take a little time for the sweep to occur - sometimes an hour or so - so don't worry - you have not lost your coin. Once the bitcoin are in your Electrum wallet you will be able to spend them. Remember that once you have used your paper (or brain) wallet - i.e. used the private keys - you should not use it again as you have exposed the private key and a hacker could find out what it is.

Don't leave a significant amount of bitcoin in the Electrum wallet (or any online wallet for that matter) for longer than necessary - only what you will need to spend over the next few months - only keep significant quantities of bitcoin in paper or brain wallets - or in a hardware wallet, like a Trezor - see: www.Trezor.com

So, at the risk of being boring I will re-state - the safest ways to store your bitcoin are:

* Paper wallet

* Brain wallet

* Trezor

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Enjoy the security of bitcoin - it is liberating !

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Resources:

* YouTube: in the search box insert "James D'Angelo bitcoin" and you will see a number of his productions on bitcoin - - - he gives a very good talk - keeping them to a comfortable 20 to 30 minutes.

* YouTube: search for " Andreas Antonopoulos bitcoin " many excellent productions - for the neophyte an excellent one is the talk he gave to a Canadian Senate subcommittee - long but good, with a very good Q & A session for the last 45 minutes.

* www.bitcoin.com

* www.Trezor.com

* www.blockchain.info

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