PictureTour on 14 Bitcoin themes
Arranged for the visitors of the MoneyMuseum
- 1st Theme: Basic Knowledge
Bitcoin is the currency the Internet lacked until recently. It enables anonymous payments without exorbitant transaction costs and exchange rate charges, avoids the risks associated with credit card payments, and lets users transfer even very small amounts of money with minimal additional costs. Bitcoin quickly went from being an insider tip to fairly mainstream, and stories about the new currency abound in the media. For beginners, it’s a classic case of TMI — too much information. We present a simple guide here to what Bitcoin is and isn’t.
So, you’re interested in Bitcoin and you’ve informed yourself about the currency’s basic concepts. If you want to learn a bit more now, this is the right place to look. Without diving too deeply into the technical and economic complexities, we will answer some fundamental questions about Bitcoin.
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!
Who exactly invented Bitcoin remains a mystery even today. What we do know is that in 2007 someone started using the pseudonym Satoshi Nakamoto. Shortly after Lehman Brothers collapsed in 2008 and the global financial crisis erupted, a ninepage text appeared on the Internet introducing, “Bitcoin: A Peer-to-Peer Electronic Cash System.” This founding document describes the technical and economic bases of the currency in detail. Payments take the form of transfers from one user to another (peer-to-peer), using advanced cryptographic techniques.
- 2nd Theme: Technical Knowledge
You can acquire Bitcoins in three ways: - You can produce them yourself. - You can receive them as payment from others. - You can buy them on the internet or at an ATM In this picture tour we will show you how to buy Bitcoins. There are many Bitcoin markets. For this tour, we will use www.Bitstamp.net.
There are many companies offering online wallets to process payments in Bitcoin. For smaller Bitcoin amounts, these payment platforms can be quite handy. You can spend, or receive Bitcoins wherever you are without any great effort. I will show you two such services, both with smartphone apps: coinbase and blockchain. Be aware that online wallets are convenient, but never as secure as so-called cold-storage.
There are many ways to store Bitcoins, but, in general, the easier the storage method the less secure it is. Online wallets are fine for small amounts of Bitcoin, although these walles get more secure over time. These convenient services are called “hot storage,” and we present a couple of examples of online wallets in another picture tour.
Your MoneyMuseum bitcoin wallet is a card onto which you can receive bitcoins from other people. Show them the address at the bottom of the card - that is your address and it’s like your bank account. Smart phones can scan the image on the right side of the card which contains your bitcoin address. The smallest denomination is 0.00000001 bitcoins, called a Satoshi. Once you want to transfer your bitcoins to a safer place or if you want to spend them, follow the simple steps outlined in this tour.
- 3rd Theme: additional Knowledge
Traditional currencies primarily serve as a medium of exchange. Basically, they can be created by anyone who has the skills to produce them. There is no central bank or other authority regulating their production or circulation. Similarly, Bitcoins are also created by private individuals, not central banks. But, in contrast with cowrie shells or spear points, accepted currencies in many societies, Bitcoins remain virtual. You can’t hold them in your hand. They are digital.
Everybody’s talking about Bitcoin. Since its launch in 2009 the media has followed Bitcoin’s story closely, as the community of users has grown globally and Bitcoin’s acceptance as a medium for payments has grown with it. Economists, politicians and entrepreneurs have had some strong words for the new virtual currency. We present a few of their remarks here.