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How To Use A Bitcoin Account

With all the current news in regards to finances and the Internet, you are  likely wondering how to get set up and use Bitcoin.  As we mentioned earlier Bitcoin is the network that is using a digital currency to conduct transactions in many places across the Internet.  Unlike a physical currency such as U.S. Dollars and Euros, Bitcoins are “mined” on the Internet, and all transactions take place on the Internet with no physical currency actually changing hands.  

So just how do you get access to Bitcoins?

There are two ways in which you can gain bitcoins:

There are two main sources from which you can buy bitcoins: regulated exchanges and from other people who are selling them.  You can pay for bitcoins in a variety of ways; most people will use either hard cash or wire transfers.  It really depends on where you live and who you are buying them from, as different sellers have different requirements for selling bitcoins to others.

Note that it is virtually impossible to purchase bitcoins via such payment methods as credit cards and PayPal. [though this is something that may change in the future]

This is certainly different from most transactions, as most digital items and a great majority of physical items can be paid via either of these two popular payment methods.  The main reason why credit cards and PayPal are not accepted for buying bitcoins is because such transactions using these payment methods can be easily reversed with a call to the credit card company or a press of a button in your PayPal account.  

Being that the Bitcoin itself is a transfer of bits, most governments and agencies will not see this as proof of goods changing hands, and consequently, the bitcoin seller will be out of gaining any money for the transaction.  This is why credit cards and PayPal are largely avoided by exchanges and private sellers when offering Bitcoin payment options.

The other main option to gain bitcoins is to mine them yourself.  However, this isn’t as easy an option as it may sound.  For one thing, you need a Field Programmatic Gate Array (FPGA) or an Application Specific Integrated Circuit (ASIC) to really be able to mine Bitcoins on your own. Even a computer with a graphical processing unit (GPU) would not be able to mine for bitcoins nowadays, because the mathematical process of mining them has become too complex.  

You also have to factor in the amount of electricity used for the computer or circuit to mine those Bitcoins, as there will be more electricity used than is used by most of your household appliances and items.  

Even if you do get the necessary equipment for mining, you’d still have to join a pool of other miners in order to really obtain bitcoins.  Thus, while mining bitcoins is an option for some, it’s for a relatively small portion of the population and is definitely not for everyone.

When you do get bitcoins via purchasing or mining, you need to have a digital wallet.  This is similar to an online bank account.  

You have several options:

When you want to send bitcoins to someone else, the transaction takes place between your digital wallet and the other person’s digital wallet.  When this occurs, everyone on the Bitcoin network knows about the transaction. Plus the history of a transaction can be traced back to the point where the bitcoins were produced. This is thanks to the public ledger where all Bitcoin mining and transaction are recorded.

As you can see, bitcoins can be acquired either via purchasing from a bitcoin seller or from mining the bitcoins yourself, though the latter option is only practical for a small number of people.  

You keep the bitcoins in a digital wallet, either on your own computer or via a Web-based service.  When you want to conduct a bitcoin transaction, the transaction takes place between your digital wallet and the digital wallet of the other person.  

By knowing how a bitcoin account works and how to use it for funding transactions, you now have the opportunity to utilize the first digital currency in the history of humankind when making purchases on the Internet.