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

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

2016.10.30

Here (below) a didactic algorithm for the buying and management of bitcoin is given. There are alternatives and, in time you may 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 - just follow the instructions there.

3. Print the paper wallet off, 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 (there are other wallets you can use - a Google search will identify them - suggested search terms: "bitcoin wallet sweep "

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. Clearly, keep the seed secret.

3. One of the options offered is to import or sweep-in a private key (e.g. from a paper wallet). 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.

CAUTION: Don't leave a significant amount of bitcoin in the Electrum wallet 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.bitcoinTrezor.com

So, at the risk of being boring I will re-state - as of now ( 30 October 2016 ) 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 !
  DB
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  Further 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.bitcoinTrezor.com

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