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Bitcoin Buying Guide: Buy, Sell and Trade Bitcoins Safely!

There is a new way to spend. It is by using a digital currency or virtual money. It is the kind that you cannot touch with your bare hands. It is the new way to enjoy technology. It is referred to as the Bitcoin software and Bitcoin exchange is slowly getting its popularity. A virtual money can buy anything and through the use of virtual money, services can be rendered to the users.

This website is dedicated to providing you with the latest and the best information when it comes to buying, selling and trading bitcoins. Our aim is to help you discover the most trust worthy places to do transaction while at the same time, avoid all of the common scams.

Rank
Exchange
Information
Rating
Link
1
USA Based, ZERO Trading Fees. $5 Sign-up Bonus. 27/76 Phone and Email Support

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2
Offline Backups - 97% Stored Offline. Fully Encrypted. USD Only.

4.5 Stars
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3
Sleek Interface. Free SEPA Desposits. International Wire Transfers. 0.2-0.5% Trading Fees.

4.5 Stars
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4
Supports BTC, LTC, NMC, NVC, TRC, PPC, FTC, and XPM. Additionally, supports USD, EURO, and RUR. Provides Level 2 Quotes and Chatroom.

4 Stars
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5
Supports Over 150 Alternative Cryptocurrencies. Easy to Use and Fast interface. Does NOT Support Fiat (USD) Conversion.

4 Stars
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Bitcoin 101

The Bitcoin software was created in 2009 by a very elusive man, Satoshi Nakamoto. He is being rumored as the man behind this latest system of fund transfer but he is not admitting it. There are many unsolved puzzles behind the name because it could refer to a man, a woman, or even a group of people or the government. Until no one has formally admitted publicly, the creator of the Bitcoin software is a cryptology that still needs to be solved.

Bitcoin exchange is not regulated by the government. It is the first ever decentralized peer-to-peer fund transfer platform. It is not governed by the government or the Central Bank and this is one feature of the Bitcoin software that makes it appealing to the users.

Since there is no central regulating body, users can monitor their account through a file sharing service like BitTorrent. Since it is not regulated, it is vulnerable to threats from the outside because the true identities of the users are very hard to trace.

The best way to store Bitcoins is to get a wallet service. A user is assigned with a Bitcoin wallet from which the user can transact his funds or do a Bitcoin exchange. The only risk is that the user must have faith and trust in the provider of the service that his Bitcoins will not be stolen, or get hacked, for that matter.

A user can install his digital wallet on his tablet or in his smartphone so Bitcoin exchange can be done anytime and anywhere. It is crucial though that the user keeps his computer up-to-date and free from viruses. If not, in case something bad happens to his computer or the hard drive, his Bitcoins have nowhere to go but with the damaged computer. It is recommended therefore for users to keep a back-up copy. A broken hard disc can also mean lost Bitcoins.

This latest technology is presumed safe to use because of its encryption technique. A user is assigned with a key to open his Bitcoin wallet. Now this is key is encrypted with two mathematically related keys for any Bitcoin exchange transactions. The first key is used by the user while the other key is public.

The encrypted key cannot decrypt a message and the other way around. A user who wishes to make a Bitcoin exchange transaction needs the two mathematically related keys to finish the work. The user is the only one who has the knowledge about the code or the encryption on his key. In this way, there is a second way to verify the authenticity of the user.  It is supposed to be hack-free and this encryption method is the one that can give protection to the users.

Block Chain

A block chain is the ledger where all the Bitcoin transactions are recorded. It is open to all Bitcoin users and they are given the authority to monitor the block chain. The purpose of the block chain is to prevent users from double spending. The Bitcoin software has the ability to identify or locate the recipient of the Bitcoins through a Bitcoin address, not through the names of the recipients. In this way, there can be a clue as to the flow of the Bitcoins. All Bitcoin users are permitted to view the ledger anytime they want to.  Bitcoin exchange centers are required to have some personal information of the users.

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Regulating Bitcoin Exchange

Due to the recent negative news about the Bitcoin software, there are talks on regulating Bitcoin to protect the public from fraud and to put a halt to illegal activities with the use of Bitcoins, like the transfer of drug money and the possible funding of terrorist activities. The features of the Bitcoin software are the reasons why drug dealers can easily transfer funds because of the lack of limit of Bitcoin exchange. Add to that, the true identity of the Bitcoin user is difficult to identify.

In Singapore, the government is seriously considering regulating Bitcoins after Mt. Gox filed for bankruptcy. The Bitcoin users must have some kind of protection from the government. There are speculations that those in the underworld business were able to generate so much Bitcoins that could amount to as much as five hundred million dollars’ worth of Bitcoins. It is an activity that could be difficult to thwart without government intervention. It is growing and in spite of the negative news surrounding Bitcoin exchange, it is able to withstand all adversities.

What Needs to be Done

In order for the Bitcoin exchange to thrive, so much needs to be done. First, the software needs to be upgraded to eliminate all bugs and malwares that have the ability to steal Bitcoins from the Bitcoin wallet. Secondly, regulating Bitcoin could alter the very reason why the Bitcoin software was created in 2009, but if it could be the only way to protect the Bitcoin users, then there must be an agreement between the government and the Bitcoin officials.

The use of the Bitcoin software is a good alternative to spend one’s money, but the safety of the users must be taken into account. Apparently, the cryptography mechanism and even the second sign-in did not work, as proven by the hackers. So much has to be done still for the Bitcoin software to survive.

In spite of all the good reasons, anyone who wishes to acquire a Bitcoin wallet must practice certain caution. It may be very convenient and cost-effective but safety must be practiced at all times.

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How to Earn Bitcoins

Bitcoins are earned in many different ways. It may not be widely used as of the moment, but more individuals are becoming aware of the advantages of the Bitcoin software.

1)      Form of payment – Bitcoin exchange between buyers and sellers is the most common way to accumulate Bitcoins. These days there are business establishments that accept Bitcoin as a form of payment, apart from credit card and PayPal. A user can find a Bitcoin directory so he can check which establishment accepts Bitcoins.

2)      As salary – for those who are new to the Bitcoin software, you will be surprised to learn that there are entrepreneurs who pay their employees in the form of Bitcoins. These are deposited in their Bitcoin wallet.

3)      Buy Bitcoins – there is also the option of buying Bitcoins. A user can use his dollars or euros to purchase Bitcoins. A directory of Bitcoin sellers is available online.

4)      Mining – miners are rewarded with Bitcoins. These miners are the ones who take care of the block chain. They are rewarded with Bitcoins for the transactions or Bitcoin exchange. The miners need to solve an extremely difficult mathematical algorithm. For more Information on mining, check out Bitcoin Miner – it is a site that contains a ton of information about the various aspect of mining.

Advantages

If you wonder why there are people who are attracted to the Bitcoin software, it is because of the many beneficial features. First, there is the anonymity factor. A user’s personal information is not required for downloading the software or the app. Then a user is likewise not required to open up his personal and private information for a Bitcoin wallet application. There is anonymity and there is no bias involved.

A user is not required to say how much he earns in a year. In banks, an application can only be approved if the banks think that a person is qualified based on his personal information.

The second feature of the Bitcoin software that makes it attractive is the lack of jurisdiction of the government over it. In this way, the Bitcoins stored in the wallet is tax free. For every transaction or Bitcoin exchange transaction, a user does not have to pay some fees or taxes. If a user opts to pay an online transaction using his Bitcoins, he does not have to shell-out additional costs compared to PayPal or other services. In a way, it is cheaper and more convenient.

The third feature of the Bitcoin software is that a user can send and receive Bitcoins in any amount. If a user wishes to purchase a car using his Bitcoins, he has the right to do so. There is no limit as to how much a user can send. He has the full jurisdiction over his money. He can do whatever he wants with it without any limit, unlike in banks or credit cards wherein a certain ceiling is required.

Another feature of Bitcoin is the convenience for constant travelers. Monetary exchange rate agencies do charge extra for every money exchange. Since Bitcoin is gaining popularity across the globe, a traveler does not need to bring cash with him. He can carry his virtual money on his smartphone. There are more shops and restaurants around the world that accept Bitcoins as a form of payment. Thus a traveler can save money on the surcharges that are applied for money exchanged.

Disadvantages

Of course, the Bitcoin software has also its faults. It is fairly new and it is still open to all sorts of vulnerabilities. The question of volatility is the issue regarding Bitcoin exchange. The value of the Bitcoin is not as stable as compared to currencies and because of this issue; it can fluctuate drastically in a matter of days.

Merchants need to adjust the prices according to the value of Bitcoins. It can be likened to the stock market and a user is in a way gambling his Bitcoins. A user must always be on top of everything and watch closely the Bitcoin exchange rate.

If a user wants to use his Bitcoins as a form of long-term investment, then factors such as hacking must be his utmost consideration. Bitcoin exchange is not regulated by the government and in case a hacking incident happens, the government cannot come in between the user and the Bitcoin bank.

In a very recent news, the first ever Bitcoin bank, Flexcoin, became a victim of hacking activities. The users lost all the Bitcoins that were placed in the hot wallet. By hot wallet, it means that the Bitcoins are available online and users can transact or do Bitcoin exchange with these Bitcoins placed in the hot wallet.

On the other hand, those Bitcoins that were placed in the cold wallet or storage were not stolen. This is because these Bitcoins are not online and the hackers were not able to access them.

The bad news is that the users cannot do anything about it. It is a lost investment and there is no one to help them except themselves. The Bitcoin software is still at its advent stage and there are still a lot to learn from all these hacking incidents.

In fact, there are news that even before Mt. Gox filed for bankruptcy, there were already reports of theft and hacking in the Bitcoin exchange. About seven hundred thousand worth of Bitcoins were already lost from theft and hacking. This figure is the one that is reported, but there are also speculations that other users may have lost Bitcoins but they have not reported it to the authorities because they know that the Bitcoins lost cannot be redeemed because of lack of a regulating body.

There is also the issue of malware. This is created to infiltrate the Bitcoin software and steal money from the Bitcoin wallets. There are about one hundred malwares that were reported last year.

The Bitcoin exchange can also be a safe haven for the criminals. There is news that Bitcoins are being moved to funds criminal activities. It is also used in high end gambling activities.

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What is a Block Chain?

Aside from having a unique digital fingerprint, Bitcoins are also often characterized by their position in the public ledger of all Bitcoin transactions that is known as the “block chain”. Purchasing Bitcoins might be thought of as buying a certain spot on the “block chain” that will then record your purchase permanently and publicly. The…

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