I've been getting a lot of PM's asking questions about Bitcoin, so I thought it would be better to start a thread and put all info here.
What is Bitcoin?
I recommend watching the videos from this guy:
Everything is explained for the layman and there really is a goldmine of information over many topics.
Bitcoin is a digital currency that has many advantages over gold, cash, credit cards and even paypal.
- It's fast. You can send R1,500,000,000.00 (1.5 Billion Rand) worth of bitcoin across the globe in a matter of seconds.
- It's cheap. There are no paypal fee's, no bank fee's, no SWIFT fee's when owning bitcoin or sending it across the globe.
- It's secure. Your credit card can be used easily if someone has cloned your card. Nobody can do anything with your bitcoin address and you can share it online without worrying.
- It's safe. If you get spoofed and send a payment to a phishing site, all they get is the 20 bucks you sent - not the ability to empty your account like a credit card.
- It's anonymous and private. You can subscribe to a porn site for example, without your credit card bill being assigned to your name. There are a million other reasons, but this is just one example.
- It cannot be inflated on a whim. As there can only exist 21 million, there is no inflation. The longer you save the more it will buy in the future, not less (Prices of food/etc goes down, not up).
- There are no requirements or age limit to get a wallet or an "account" - anyone can get a bitcoin wallet and start sending money to people around the globe, instantly. No waiting period!
- It's safe from bank crashes & bailouts, where they might give your account a "haircut" and take anything over 100,000 of your own money, as seen happen in Cyprus last year.
- It's safe from "freezing" your account, like Paypal is a fan of doing.
- It's completely fungible.
- Transactions cannot be reversed (by default) that creates chargeback fraud. (although it can be built on top of bitcoin by a 3rd party, if preferred)
- It cannot be forged/counterfeit like gold or cash.
- It's extremely divisible, up to 8 decimals. Think micropayments - no other payment systems are feasible to send 1/50th of a cent (to read an article, for example)
- The bitcoin network doesn't "close" like banks, it's always online, 24/7/365.
- It can exist in many places at once, unlike cash.
- It's insanely portable.
Where do I buy Bitcoin?
1. You can buy straight from an exchange.
This is the cheaper option. We have two local exchanges in SA:
*You will need to verify and provide some documentation/identification before you can buy from an exchange.
2. You can buy from other people, directly.
There might be a higher markup here. You can do person-to-person transactions, and also in cash. This is an global website but there are people in SA selling.
*This is a person to person transaction based website, and as such make sure the person can be trusted by looking at their ratings.
How do I store Bitcoin?
There are many ways. You can store Bitcoin on your PC, on a phone/tablet, on a web wallet, on a paper wallet, or even in your brain.
For the PC, I recommend MultiBit because you don't need to download the blockchain, which can be a few gigabites in size - it's user friendly and easy to use.
it's a little tougher at this point in time for iPhone/iPad users as Apple feels Bitcoin is a threat to their way of business (Bitcoin bypasses their In-App purchase system where they take 30% of profits)
If you have an Android though, you are golden.
What does a Bitcoin cost?
http://bitcoin.clarkmoody.com (Good website with up the the minute feed - works only on Chrome though)
Bitcoin is too expensive!
You don't need to buy a full bitcoin, you can buy 0.1 or even 0.00000001 bitcoin
A single Bitcoin can be divided into 100 million pieces, called "satoshi's".
Think of 1 Bitcoin as a bar of gold - You don't really need to buy a full bar to own gold or trade it.
There will only be 21 million bitcoin by 2140, and if everybody on earth had an equal share, they would each only own 0.003 bitcoin. (or, 300 000 satoshi's)
It's impossible for everyone to own a full bitcoin, just like it's impossible for every person to own a bar of gold.
Can I create Bitcoin myself?
Yes you can - it's called mining and is the only way to introduce the coins into circulation. (sort of like "minting", only at a controlled pace determined by math)
It is pretty much unfeasible to mine bitcoin at this stage, but if you want to know more there is a discussion going on in this thread.