Crypto Guide

How to Acquire, Sell, and Store Bitcoin

Acquiring, selling, and storing bitcoin (BTC) are three of the most basic, yet essential aspects to familiarizing yourself with the workings of this multi-faceted cryptocurrency. This article will address where bitcoin come from, along with where to buy, sell and store them.

BTC (bitcoin) were originally created by Satoshi Nakamoto, who to this day remains an anonymous, somewhat legendary figure. What started out being worth less than a penny, has now become worth hundreds of dollars, depending on the market. This digital cryptocurrency is acquired in various ways.

Acquiring Bitcoin

  1. You can receive them as payment for merchandise or services
  2. You can purchase them directly from the bitcoin exchange
  3. You can exchange bitcoin locally at www.localbitcoins.com
  4. Finally, you can earn bitcoin through a technique called “mining”

Many people are already buying and selling with BTC, so one of the easiest ways to start acquiring bitcoin is to sell or give a service to someone who is purchasing with bitcoin. This is a great way to get your foot in the door. Especially if you are selling an item or service, which you are likely up-charging for profit so you will receive more bang for your buck from the get go. This has many advantages that cannot be matched by conventional currencies. Once you begin to collect a stash of bitcoin, you can use them for purchases or sell the BTC directly for cash.

With the proper knowledge, one can have a lucrative endeavor by mining bitcoin, but it is a rather complex process for beginners. Paper money involves centralized government entities to print and distribute currency, whereas BTC has no centralized control system. Bitcoin mining involves special software that allows miners to solve various math problems from which they are then awarded bitcoin in exchange for their work. This provides a strong incentive for people to mine, as well as requiring a logical thought process to acquire this valued cryptocurrency. There is all sorts of hardware that is purposed for bitcoin mining as well. Despite having the ability to mine bitcoin, this is not often the most lucrative way to profit from investing in bitcoin. The electricity required to run this hardware is in the TH/s (Terra Hertz per second) range. This is a lot of money that you will be pending on electricity, without as much of a profit if you were to have just bought bitcoin and wait for the price to rise. Of course, this has only been true in recent history, and is subject to change. It is important to know of bitcoin mining, in case the dynamics and economics of the system change. If you are up to date on BTC news, and knowledgeable on the process, it can be a worthwhile endeavor to pursue bitcoin mining.

Selling Bitcoin

Bitcoin can be sold either online or in person. Each has its own distinct advantages and disadvantages. Selling online is the more common way of trading BTC, because the entire internet is your potential buying market. There are three main ways to go about selling BTC online:

  1. Through direct trade with another person, in which an arbitrating entity facilitates the transaction. Common options are Coinbase (USA), LocalBitcoin (USA), Bitbargain (UK), and Bittylicious (UK). These sites require seller registration through identity verification. Once registered, you can post selling offers to attract potential buyers. The website arbitrates the transaction for security purposes.
  2. Through an online exchange, in which you trade with the exchange itself, rather than another individual. Like direct trade, you will have to register by verifying your identity, but the sales are not as arduous because you are selling directly to the exchange. This method has faced various issues, and therefore you should thoroughly research any online exchange before trusting and using its services.
  3. Through a new peer-to-peer system which connects those who want to buy bitcoin with traditional currently, and those who want to sell bitcoin for traditional currency. Sites like Purse and Brawker help connect the independent buyer and seller to implement a complementary system of bitcoin exchange. These sites can be used to use bitcoin to buy goods from vendors that do not directly accept such currencies. It also attends to those looking to buy bitcoin with a debit or credit card

The most relevant method of the three will vary from person to person depending on the interests of the seller. The 3rd option, the peer-to-peer system, is likely the most useful and lucrative. The way it works is, someone puts up a wish to say, for example, buy a guitar with bitcoin on a website that does not accept bitcoin. They would want to do this because bitcoin can have more buying power, thus allowing the purchase to require less wealth. So, someone with cash offers to buy said guitar, and in return, when the guitar arrives at the requester’s house, the bitcoin will be transferred from the requester to the buyer’s wallet. This process is easier done than said, and is difficult to articulate to someone who has not done a transaction like this. The arbitrating website will take some portion of the transaction, but it is often till worth it to use these services.

Storing Bitcoin

Bitcoin wallets can store your bitcoin at a personal address which allows you to access your funds. No matter what you do, be sure this wallet is secured. Beyond the digital, you can also use paper storage to avoid a potential security breach on your computer. Your bitcoin are actually stored anywhere, but rather, the digital security keys are stored which allow you to access the addresses of your public bitcoin. It is these digital security keys that are maintained within these wallets:

  1. Desktop Wallets: Programs like Bitcoin Core and MultiBit are examples of Desktop Wallets. DarkWallet is a program that prevents people from tracking their various exchanges
  2. Mobile Wallets: Desktop programs are useful, but mobile wallets allow you to purchase at a physical store. These often come as apps on your smartphone, often using the near-field communication (NFC) feature. This allows you to tap your phone on a vendor’s reader to make a payment. Examples include Bitcoin Wallet, Mycelium, and Xapo
  3. Online Wallets: This allows your bitcoin to be stored online, allowing you to access them from anywhere. Online Wallet companies include Coinbase, Circle, and Blockchain. Although these companies have historically been reliable, be careful, because technically with online wallets they are in control of your bitcoin
  4. Hardware Wallets: These are devices which are dedicated solely to holding bitcoin information. Trezor hardware wallet is one of the most commonly used hardware wallets.
  5. Ledger USB Wallet: USB wallets are similar to the software found in hardware wallets. They use smartcard security systems and look like your traditional USB device.