Some things you need to know

If you are about to explore Bitcoin, there are a
few things you should know. Bitcoin lets you exchange money in a
different way than with usual banks. As such, you should take time to
inform yourself before using Bitcoin for any serious transaction.
Bitcoin should be treated with the same care as your regular wallet, or
even more in some cases!

Securing your wallet

Like in real life, your wallet must be secured. Bitcoin makes it
possible to transfer value anywhere in a very easy way and it allows you
to be in control of your money. Such great features also come with
great security concerns. At the same time, Bitcoin can provide very high
levels of security if used correctly. Always remember that it is your
responsibility to adopt good practices in order to protect your money. Read more about securing your wallet.

Bitcoin price is volatile

The price of a bitcoin can unpredictably increase or decrease over a
short period of time due to its young economy, novel nature, and
sometimes illiquid markets. Consequently, keeping your savings with
Bitcoin is not recommended at this point. Bitcoin should be seen like a
high risk asset, and you should never store money that you cannot afford
to lose with Bitcoin. If you receive payments with Bitcoin, many
service providers can convert them to your local currency.

Bitcoin payments are irreversible

Any transaction issued with Bitcoin cannot be reversed, they can only
be refunded by the person receiving the funds. That means you should
take care to do business with people and organizations you know and
trust, or who have an established reputation. For their part, businesses
need to keep control of the payment requests they are displaying to
their customers. Bitcoin can detect typos and usually won't let you send
money to an invalid address by mistake. Additional services might exist
in the future to provide more choice and protection for the consumer.

Bitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All
Bitcoin transactions are stored publicly and permanently on the network,
which means anyone can see the balance and transactions of any Bitcoin
address. However, the identity of the user behind an address remains
unknown until information is revealed during a purchase or in other
circumstances. This is one reason why Bitcoin addresses should only be
used once. Always remember that it is your responsibility to adopt good
practices in order to protect your privacy. Read more about protecting your privacy.

Unconfirmed transactions aren't secure

Transactions don't start out as irreversible. Instead, they get a confirmation
score that indicates how hard it is to reverse them (see table). Each
confirmation takes between a few seconds and 90 minutes, with 10 minutes
being the average. If the transaction pays too low a fee or is
otherwise atypical, getting the first confirmation can take much longer.







Confirm­ations
Lightweight wallets
Bitcoin Core



0
Only safe if you trust the person paying you



1
Somewhat reliable
Mostly reliable



3
Mostly reliable
Highly reliable



6
Minimum recommendation for high-value bitcoin transfers



30
Recommendation during emergencies to allow human intervention

Bitcoin is still experimental

Bitcoin is an experimental new currency that is in active
development. Each improvement makes Bitcoin more appealing but also
reveals new challenges as Bitcoin adoption grows. During these growing
pains you might encounter increased fees, slower confirmations, or even
more severe issues. Be prepared for problems and consult a technical
expert before making any major investments, but keep in mind that nobody
can predict Bitcoin's future.

Government taxes and regulations

Bitcoin is not an official currency. That said, most jurisdictions
still require you to pay income, sales, payroll, and capital gains taxes
on anything that has value, including bitcoins. It is your
responsibility to ensure that you adhere to tax and other legal or regulatory mandates issued by your government and/or local municipalities.

How does Bitcoin work?

This is a question that often causes confusion. Here's a quick explanation!

The basics for a new user

As a new user, you can get started
with Bitcoin without understanding the technical details. Once you have
installed a Bitcoin wallet on your computer or mobile phone, it will
generate your first Bitcoin address and you can create more whenever you
need one. You can disclose your addresses to your friends so that they
can pay you or vice versa. In fact, this is pretty similar to how email
works, except that Bitcoin addresses should only be used once.

Balances - block chain

The block chain is a shared public ledger on which the entire
Bitcoin network relies. All confirmed transactions are included in the
block chain. This way, Bitcoin wallets can calculate their spendable
balance and new transactions can be verified to be spending bitcoins
that are actually owned by the spender. The integrity and the
chronological order of the block chain are enforced with cryptography.

Transactions - private keys

A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key
or seed, which is used to sign transactions, providing a mathematical
proof that they have come from the owner of the wallet. The signature
also prevents the transaction from being altered by anybody once it has
been issued. All transactions are broadcast between users and usually
begin to be confirmed by the network in the following 10 minutes,
through a process called mining.

Processing - mining

Mining is a distributed consensus system that is used to confirm
waiting transactions by including them in the block chain. It enforces a
chronological order in the block chain, protects the neutrality of the
network, and allows different computers to agree on the state of the
system. To be confirmed, transactions must be packed in a block
that fits very strict cryptographic rules that will be verified by the
network. These rules prevent previous blocks from being modified because
doing so would invalidate all following blocks. Mining also creates the
equivalent of a competitive lottery that prevents any individual from
easily adding new blocks consecutively in the block chain. This way, no
individuals can control what is included in the block chain or replace
parts of the block chain to roll back their own spends.

Going down the rabbit hole

This is only a very short and concise summary of the system. If you want to get into the details, you can read the original paper that describes the system's design, read the developer documentation, and explore the Bitcoin wiki.

Getting started with Bitcoin

Using Bitcoin to pay and get paid is easy and accessible to everyone.

How to use Bitcoin

1. Inform yourself

Bitcoin is different than what you know and use every day. Before
you start using Bitcoin, there are a few things that you need to know
in order to use it securely and avoid common pitfalls.
Read more

2. Choose your wallet

You can bring a Bitcoin wallet in your everyday life with your
mobile or you can have a wallet only for online payments on your
computer. In any case, choosing your wallet can be done in a minute.
Choose your wallet

3. Get Bitcoin

You can get Bitcoin by accepting it as a payment for goods and services. There are also several ways you can buy Bitcoin.
Buy Bitcoin

4. Spend Bitcoin

There is a growing number of services and merchants accepting
Bitcoin all over the world. You can use Bitcoin to pay them and rate
your experience to help honest businesses to gain more visibility.
Find merchants and products




How to accept Bitcoin

1. Inform yourself

Bitcoin does not require merchants to change their habits.
However, Bitcoin is different than what you know and use every day.
Before you start using Bitcoin, there are a few things that you need to
know in order to use it securely and avoid common pitfalls.
Read more

2. Processing payments

You can process payments and invoices by yourself or you can use
merchant services and deposit money in your local currency or bitcoins.
Most point of sales businesses use a tablet or a mobile phone to let
customers pay with their mobile phones.
Find merchant services

3. Accounting and taxes

Merchants often deposit and display prices in their local
currency. In other cases, Bitcoin works similarly to a foreign currency.
To get appropriate guidance regarding tax compliance for your own
jurisdiction, you should contact a qualified accountant.
Read more

4. Gaining visibility

There is a growing number of users searching for ways to spend
their bitcoins. You can submit your business in online directories to
help them easily find you. You can also display the Bitcoin logo on your website or your brick and mortar business.

Bitcoin is a very secure and inexpensive way to handle payments.

Choose your own fees

There is no fee to receive bitcoins, and many wallets let you control
how large a fee to pay when spending. Most wallets have reasonable
default fees, and higher fees can encourage faster confirmation
of your transactions. Fees are unrelated to the amount transferred, so
it's possible to send 100,000 bitcoins for the same fee it costs to send
1 bitcoin.

Protection against fraud

Any business that accepts credit cards or PayPal knows the problem of
payments that are later reversed. Chargeback frauds result in limited
market reach and increased prices, which in turn penalizes customers.
Bitcoin payments are irreversible and secure, meaning that the cost of
fraud is no longer pushed onto the shoulders of the merchants.

Fast international payments

Sending bitcoins across borders is as easy as sending them across the
street. There are no banks to make you wait three business days, no
extra fees for making an international transfer, and no special
limitations on the minimum or maximum amount you can send.

No PCI compliance required

Accepting credit cards online typically requires extensive security
checks in order to comply with the PCI standard. Bitcoin still requires
you to secure your wallet
and your payment requests. However, you do not carry the costs and
responsibilities that come with processing sensitive information from
your customers like credit card numbers.

Get some free visibility

Bitcoin is an emerging market of new customers who are searching for
ways to spend their bitcoins. Accepting them is a good way to get new
customers and give your business some new visibility. Accepting a new
payment method has often shown to be a clever practice for online
businesses.

Multi-signature

Bitcoin also includes a multi-signature feature which allows bitcoins
to be spent only if a subset of a group of people authorize the
transaction. This can be used by a board of directors to prevent any
member to make expenditures without enough consent from other members,
as well as to track which members allowed each payment.

Accounting transparency

Many organizations are required to produce accounting documents about
their activity. Using Bitcoin allows you to offer the highest level of
transparency since you can provide information your members can use to
verify your balances and transactions. Non-profit organizations can also
allow the public to see how much they receive in donations.

Bitcoin is the simplest way to exchange money at very low cost.

Mobile payments made easy

Bitcoin on mobiles allows you to pay with a simple two step
scan-and-pay. No need to sign up, swipe your card, type a PIN, or sign
anything. All you need to receive Bitcoin payments is to display the QR
code in your Bitcoin wallet app and let your friend scan your mobile, or
touch the two phones together (using NFC radio technology).

Security and control over your money

Bitcoin transactions are secured by military grade cryptography.
Nobody can charge you money or make a payment on your behalf. So long as
you take the required steps to protect your wallet, Bitcoin can give you control over your money and a strong level of protection against many types of fraud.

Works everywhere, anytime

Just like with email, you don't need to ask your family to use the
same software or the same service providers. Just let them stick to
their own favorites. No problem there; they are all compatible as they
use the same open technology. The Bitcoin network never sleeps, even on
holidays!

Fast international payments

Sending bitcoins across borders is as easy as sending them across the
street. There are no banks to make you wait three business days, no
extra fees for making an international transfer, and no special
limitations on the minimum or maximum amount you can send.

Choose your own fees

There is no fee to receive bitcoins, and many wallets let you control
how large a fee to pay when spending. Most wallets have reasonable
default fees, and higher fees can encourage faster confirmation
of your transactions. Fees are unrelated to the amount transferred, so
it's possible to send 100,000 bitcoins for the same fee it costs to send
1 bitcoin.

Protect your identity

With Bitcoin, there is no credit card number that some malicious
actor can collect in order to impersonate you. In fact, it is even
possible to send a payment without revealing your identity, almost like
with physical money. You should however take note that some effort can
be required to protect your privacy.