Bitcoin A Guide for Beginners Adelaide Bitcoin com

Bitcoin: A Guide for Beginners Adelaide. Bitcoin. com

What is Bitcoin? • Bitcoin is a peer-to-peer version of electronic cash that allows online payments to be sent directly from one party to another without going through a financial institution. • Bitcoin was created by Satoshi Nakamoto which is the name of an anonymous person or group. Bitcoin has the following properties: • Decentralised – peer to peer ledger of balances • Immutable – can never be changed, transactions are permanent. • Fungible – each btc is equal, maintains it value (not like a banana) • Permissionless and without borders – anyone can participate by downloading software. • Divisible – down to 8 decimal places • Scarcity – 21 million coins ever • Transferrable – can send any amount in seconds , compare to gold.

How to buy Bitcoin? Owning Bitcoin (or fractions of Bitcoin) can be done by either purchasing or mining Here are the steps to buying Bitcoin: • Choose a site & payment method (card, bank transfer, cash, paypal…) • Register & complete identity verification • Deposit AUD, USD… and trade it for bitcoin • Choose a wallet to safely store your cryptocurrency • Withdraw from the exchange to your wallet

What characteristics qualify a good bitcoin exchange? • Commissions & Fees • Payment Methods • Ease of Use • Security • Customer Service • Community interaction

What are the available payment methods to get bitcoins? Payment Method Average Fees Anonymity Speed to Purchase Overall Difficulty Credit Card/Debit Card High Not great Very fast Easy Bank Transfer Very low Not great Slow Easy/Medium Pay. Pal Very high Good Fast Medium Cash Low Excellent Slow Medium Work for it No fees Good Slow Hard

Which are the best places to get Bitcoin? Site Pay. Pal Credit Card Bank Transfer Cash Fees Coinbase No Yes No Average Kraken No No Yes No Good Localbitcoins Yes No Yes Average Coinjar No Yes No Average Bitstamp No Yes No Average Paxful Yes No Yes High Coinmama No Yes High

Example using BTCMarkets. net • To purchase online go to an exchange like BTCMarkets. net and sign up. This will require your bank account details and to be verified as part of the KYC (Know Your Customer) policy • To make a deposit Select the Account menu and press deposit, this will give you the BSB and account number to make a deposit to. This method can take from 1 -2 business days. BTCMarkets also accepts POLI which can be much faster, however the website does state it can also take up to 2 days. • Once the funds have arrived you can now buy Bitcoins, Select the Buy/Sell menu , click on the limit option, then in the buy section you put the price you are willing to pay and quantity and select buy. If you want to buy at the next available price that is being sold you can select the market option (be careful with this option if new as you could end up paying a higher price than you thought you were, compared to the limit option which will not buy higher than the price you entered).

How to choose a wallet for storing my Bitcoins? Wallet Type Safety Beginners Convenience Cost Web unsafe easy very convenient free Mobile unsafe easy very convenient free Desktop safe average free Hardware very safe average not convenient 90 - 400 usd Paper very safe difficult not convenient usually free Multi-sig safe difficult (variable) free

A comparison of the different bitcoin wallet types • Web-Wallets Online web-wallets are websites or even online exchanges that allow storage. Here are examples of good web-wallets: • Blockchain. info – Simple user interface, no ID verification needed to use it. HQ based in Luxembourg • Greenaddress – Synced wallet that works across your devices. Browser extension and smartphone. • Coinbase standard wallet (insured storage) – Super popular, based in US. No fees to send BTC to other Coinbase wallets. Coinbase vault storage (for advanced users) – Extra safe multisig wallet with redundancy in case of website failure.

• Mobile Wallets A mobile or smartphone wallet is, as the name suggests, a bitcoin wallet on your smartphone. Here are some of the best mobile wallets for i. OS and Android: • Breadwallet – simplest wallet for i. Phone and more recently available on Android • Mycelium – HD wallet with many features including support for Ledger & Trezor (hardware wallets), Tor (a privacy-focused mesh network), watching addresses. • Air. Bitz – Easy to use and great for less technical users • Green. Bits https: //play. google. com/store/apps/details? id=com. greenaddress. greenbits_android_ wallet Functional yet basic and support for Ledger + Trezor. • Jaxx – shapeshift integrated, available in mobile and desktop

• Desktop Wallets Desktop wallets are apps installed on a desktop computer or laptop. Many people store significant proportions of their bitcoins in desktop wallets as these are much safer than web or mobile wallets. Here are some examples of Desktop Wallets: • Electrum – most popular desktop wallet because of simplicity. Users have to write down a seed when creating their wallet. Can be integrated with the Trezor or Ledger hardware wallets. • Exodus - one of the most popular desktop wallet in the space. A lot of people use it because of it’s UI (user interface). It has shapeshift integrated on the wallet and has a beautiful live chart. • Copay – A Multisig Bitcoin Desktop Wallet. Copay is a wallet created by Bit. Pay, one of the largest Bitcoin payment service providers around. The wallet is available for most major platforms (mobile and desktop) and is a multisig wallet. Using Copay’s multisig feature allows you extra security against theft and could be a good option if you can’t afford a hardware wallet. • Bitcoin Core - is a full node Bitcoin wallet. This means that once you download the wallet you will also download the whole blockchain to your computer. This can get really messy as the blockchain’s size is over 130 GB and can take some time to download. However, once the Blockchain is downloaded you can now independently verify transactions on the network and do not need to trust anyone else in the system. • Armory – a very secure and feature-laden desktop wallet for advanced users. Offline signing options make this extra secure. Note: this wallet requires Bitcoin. Core to function. Bitcoin Core is the original Bitcoin desktop wallet, but it needs to download the whole blockchain (>100 GB large!) to work. I have not listed Bitcoin Core here for this reason.

• Hardware Wallets Hardware wallets are very sophisticated semi-cold storage (mostly offline) systems. A piece of hardware is used to store the private keys to your bitcoins. Here are the best hardware wallets: • Ledger Nano – has a screen yet is priced cheapest. Most popular hardware wallet. • Trezor – easy to use for beginners, nice user interface. More expensive than the Ledger Nano • Keepkey - Keepkey supports a wide variety of altcoins including Bitcoin, Litecoin, Dogecoin, Namecoin, Testnet, Ethereum, and Dash. Keepkey currently sales for US$99 similar to TREZOR. Recently acquired by Shapeshift. • Cool. Wallet - is a credit card looking hardware wallet that you can carry around in your pocket.

• Paper Wallets Using a paper wallet is the most secure cold-storage solution (more so than hardware wallets). With a paper wallet you only have to trust the wallet-creating software and the physical location that it will be stored in (usually a safe in a bank or at home). Here are some trustworthy paper wallet systems: • Coindesk has a guide for how to make a paper wallet • Bitaddress – is a client side paper wallet generator. It’s open-source and written in Javascript.

Creating Your Paper Wallet This post will walk you through creating a bitcoin paper wallet through bitaddress. org • First, go to bitaddress. org and generate some randomness by moving your mouse around, which leaves trails of green dots • Once done, you will be presented with your wallet details, including the private key, the public key and the qr codes. You do not need any of these, but instead you need to click on the “paper wallet”

Creating Your Paper Wallet • Once you click on the “paper wallet” tab, you will be presented by a few options such as hide art, BIP 38 encryption, passphrase etc. • BIP 38 encryption is yet another security measure for your Bitcoin paper wallet. If enabled, and if anyone steals your paper wallet, they cannot withdraw the funds unless they know the passphrase. Otherwise, if your bitcoin paper wallet is not encrypted, the person who stole it can easily withdraw the funds by just scanning the QR code. Once you select your preferences, you can print your paper wallet. How Can I Send Bitcoins to My Paper Wallet? • In order to send bitcoins to your paper wallet from your current wallet, all you need to do is scan the QR code which has the caption “Load and Verify” and send the funds. Yes, its that simple! Many other wallet programs provide the ability to scan QR codes using a phone camera or a webcam.

• Multi-Signature Wallets Most bitcoin wallets simply need one private key signature to make a transaction. Multi-signature wallets require multiple private key signatures to make a transaction. Multi-signature capabilities are sometimes available in web, smartphone, desktop, and hardware wallets. These wallets offer multi-sig capabilities: • Carbon. Wallet, Coinbase, or Block. io (web-wallets) • Blocktrail, Coin. Kite, Copay, Green. Address (mobile wallets) • Electrum or Armory (desktop wallets)

A comparison between Hot vs Cold Wallets The terms “hot” and “cold” are used to describe the online connectivity of a bitcoin wallet, and by extension, its risk factor. Here is the difference between the two: • A hot wallet is constantly connected to the internet with the private keys loaded ready for use. For this reason a hot wallet is riskier because a hacker can theoretically access the private keys if they find a vulnerability. • A cold wallet is not connected to the internet and the private keys are offline. Sometimes I hear people use the term “offline wallet” interchangeably with “cold wallet”. Cold wallets are therefore safer because hackers would have a very hard time accessing your private keys.

Topics for next meetup Different Investments in Bitcoin and Cryptocurrencies How to evaluate ICO’s Mining Bitcoin and other Cryptocurrencies