The objective of this blog is to show you a little bit about how you can get started with Bitcoin. The below image shows you how to start with bitcoin.

1. Learn About Bitcoin
Bitcoin has some peculiar qualities. It behaves a lot like money, but it is different from money. For example: with bitcoin, we cannot reverse any transactions after adding on the blockchain. Every transaction in the blockchain network is permanent. It makes the blockchain different from actually sending of money with a bank where you may issue a stop payment or reversal of it’s a wrong payment. Bitcoin is also fast and efficient as compared to physical currency.
2. Choose Your Wallet
After learning about Bitcoin, the first thing you need to do is to install a wallet. The wallet is a type of software that you install on your mobile device or your computer. It enables you to get into Bitcoin and create your own addresses.
3. Get an Address
An address in Bitcoin is very similar to an e-mail address, which is used to receive bitcoin. As opposed to an e-mail address where you have one e-mail address, you can have multiple addresses in bitcoin. It’s a good practice to have multiple addresses for different needs. You may use bitcoin address for every single transaction you use.
4. Public and Private Key
When you open up your wallet, you will receive two valuable pieces of information. One of them is the public key, and another one is the private key. This information makes Bitcoin more interesting. With most businesses and different organizations, you need to have a password which you share with the people who are running the organization. So you can click on Retrieve my password, and you can get it back. But in the case of bitcoin, you will get keys instead of a password. The public key that you can share with everybody, and a private key which only you know. The private key is an alphanumeric sequence which knows only you, and with them, you can remain completely in control of all the funds that go into your wallet.
5. Get bitcoins
Once you have your wallet, you can get bitcoins. There are different ways to get bitcoins. You can earn Bitcoins by doing a job or getting paid. You can also buy bitcoins it means you could go to an exchange and get bitcoin by put in dollars or whatever currency into bitcoin. You can also gift bitcoins and can receive them from others. So these are ways of getting bitcoin.
6. Spend bitcoins
Here, we are going to know about how you can spend bitcoin. You can send bitcoin to anyone. You can use bitcoin over millions of businesses at this moment Worldwide. Many of the best-known brands like Microsoft and Dell take bitcoin as payment. You can also use bitcoin to send payments and paying bills. It works great if you are actually sending payments to people in different currencies globally. You don’t have to worry about having to change into different currencies. You can just pay in Bitcoin, and it’s universal around the world.

How to Choose Bitcoin Wallet

In this section, we are going to learn the process of choosing the bitcoin wallet. If you want to involve in bitcoin, you need to have a wallet. A wallet allows you to receive bitcoins, send bitcoins, store bitcoins. Here, I will take an example of a page called bitcoin.org to choose the wallet.
Bitcoin.org is a website that was developed by Satoshi Nakamoto and Martti Malmi. Now, Martti’s is no longer an active developer, but he maintains the Bitcoin.org websites. He is not involved in developing bitcoin. Bitcoin.org website is not tied into any specific core developers. It’s an open-source project which is handled by a global community.
Bitcoin.org is a very good starting point to explain how to choose your wallet because there is a lot of options available. In this page, we will go to an option called Choose your wallet. We can see this in the below image.

In the above image, we can see that there are different types of wallets that you can choose, like Desktop wallet, Mobile wallet, Web wallet, Hardware wallet, etc.

Mobile wallet

In the mobile wallet, you can run any type of application, whether it is on Android, iOS, Windows, or even on Blackberry. They are significantly smaller and simpler and serve as a convenient on-the-go wallet for daily usage.
Popular Mobile wallets are Bitpay, BTC.com, Edge, Electrum, Mycelium, Bitcoin Wallet, etc.

Desktop wallet

In the desktop wallet, you can run it on your desktop or laptop computer for Windows, Mac, and Linux. Generally, they are secure, but sometimes they are vulnerable to various malware and computer viruses.
Popular Desktop wallets are Bitcoin Core, Bitcoin Knots, mSIGNA, Armory, etc.

Hardware wallet

In a hardware wallet, there are devices which contain your private keys. The hardware wallets are the most secure wallets, but it will also cost money.
Popular hardware wallets are BitBox, Keepkey, Trezor, Ledger Nano S, etc.

Web wallet

The web wallets are online wallets that are considered less secure than other types of wallets, yet they can be highly convenient.
Popular web wallets are Guarda, Coinbase, GreenAddress, Binance, etc.
There are multiple different wallet options available which you can have and install on your mobile device, or on your computer or a web one. There is not necessary to have only one wallet. You can have multiple wallets for different needs. It helps you to spread the risk by not keeping all of your personal crypto’s in one location but across different locations(wallets). You can create a wallet in any of these options that you find. If you wish, you can open up another wallet elsewhere and can send coins to a different wallet.
If you want to get started fast, select one of the wallet options that are available here. I would recommend you to try one of the web wallets options that are presented here. In the wallet, open up an account and try to send bitcoin to someone, buy bitcoin from someone, and store bitcoin into your wallet.

To select a reliable Bitcoin wallet, one should judge it based on the following criteria:
• Hot/Cold Wallet: Whether a wallet is a hot (Online storage) or cold (offline storage).
• Control private keys: A wallet where you own and control your keys.
• Backup & security features: Here, you can seed backup keys and pin codes.
• Developer community: It is an active development community for maintenance.
• Compatibility: It can be compatible with different operating systems.
• HD Wallet: It is a wallet that generates new addresses itself.
• KYC: A wallet that doesn’t require KYC.

Sending and Receiving Bitcoin

Sending and receiving bitcoin is one of the core building blocks of any bitcoin application. Sending and receiving bitcoins securely over the internet gives you a bitcoin value. To send and receive bitcoin, you need to have a wallet where you need to put the public address of the sender and recipient. The process of sending and receiving bitcoin can differ between wallets to wallets, but the general steps are given below.
Step-1 Log-in into your wallet.
Step-2 Go to Send and Receive icon.
Step-3 Choose whether you want to send or receive bitcoin.
Step-4 Send bitcoin: Enter the public address of the recipient and choose the amount which you want to send. Once you decide the amount, confirm the amount to avoid mistakes, then click on send transaction, and verify the transaction one last time for confirming your public address and sender’s public address.
Step-5 Receive bitcoin: To receive bitcoin, you need to share your public wallet address with the sender. You can also do this by letting them scan a QR code.
For example:
Alice wants to send five bitcoins to Ben. She is sending five bitcoins because she may have bought a product or paying him for services. For sending those five bitcoins, Alice needs to have five bitcoins in her wallet, and can also be able to receive bitcoins in her wallet. Now she could have bought bitcoins, or she could have received bitcoins as payment.
Here, we are assuming that Alice has 20 bitcoins in her wallet. When the wallet is created, it assigns two keys. One is the public key which is used to receive bitcoins. And second is the private key which is used to sign and authorize to send or spend those bitcoins to other people. We know that Alice has the private key to her wallet, so she is able to spend those bitcoins.
Ben can receive five bitcoins if he has a wallet of his own, which allows him to get bitcoins from anyone else. Ben also has a private key for his wallet that will enable him to spend those bitcoins that he has in his wallet. Ben’s private key is completely different from Alice’s private key. Now, if Ben wants to receive five bitcoins from Alice, he needs to provide his Bitcoin address to Alice. The bitcoin address is used for receiving money, which is a hashed version of the public key. Ben has the option to generate a new bitcoin address for every single transaction if he wants. Creating the new bitcoin address for every transaction is a good security recommendation in terms of privacy.
Ben can share his bitcoin address in two ways. He can share an alphanumeric code which starts with the number one and ends in the letter H, and another one is the QR code. The alphanumeric code is always different for every single bitcoin address, and these addresses are typically between 26 to 35 characters in length. The bitcoin address which you see numerically is the Ben address used to receive bitcoins from Alice.
Now, when Alice sends the five bitcoins to that address, she creates a transaction. She is able to do this transaction because she can access the private key and can authorize to transfer five bitcoins on Ben’s bitcoin address. So, a new transaction shows that from Alice’s wallet, five bitcoins are being sent to Ben’s wallet. The transaction at that point gets sent out into the network, and the miners begin mining blocks. When the first block comes in and includes that transaction in it, then the transaction is said to be confirmed.

Converting Bitcoins to Fiat Currency

In this section, we are going first to understand the meaning of Fiat or Fiat Currency.
Fiat currency is a currency which is issued by a government to be legal tender in the territories controlled by it. Fiat money that has value only because of government regulation or law is not backed by a physical commodity, such as gold or silver. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government rather than the worth of a commodity backing it. It is based on the faith and credit of the economy. Most modern paper currencies are fiat currencies.
Every cryptocurrency newcomers want to know how to cash out bitcoin or withdraw from bitcoins into fiat currency(USD, EUR, INR) which will be acceptable in their native countries. There are some easy ways to convert BTC into USD, INR, EUR or GBP, some of them are listed below. Before picking any of the listed methods, you need to find out how you want to receive your fiat currency. You can sell Bitcoins in person for cash or can sell it on exchanges and get the money directly into your bank account. You can also spend your Bitcoin to buy stuff from Amazon.

Cryptocurrency Exchange

The first one is to use a cryptocurrency exchange. Whenever you want to go on a business trip or other countries, the first thing you need to do is that you have to go to a currency exchange centre. The exchange centre switches your local currency with the currency of that country where you are visiting. It’s the same thing with bitcoin. There are cryptocurrency exchanges that will convert your cryptocurrency into your local currency such as US dollars, euros or yen. There are many options available to do the exchanges of your currencies, such as Coinbase. The Coinbase is available in over 30 different countries, which can easily convert your bitcoins into currency and deposit it directly into your bank account. There are other alternatives available such as Kraken, Gemini, BitStamp.

Bitcoin Debit Card

It is also used to convert your bitcoin into fiat currency. The bitcoin debit cards allow their users to deposit their crypto coins via an online website which automatically converts them into a fiat currency such as Dollar or Euro. There are multiple options available for this. For example, Coinbase offers a Visa Bitcoin debit card. This card enables you to keep your holdings in bitcoin, and you can be paying anywhere that accepts Visa using your Bitcoin debit card.

Selling Bitcoins

The next option is to sell your bitcoins to someone else. As we know that, you can transfer bitcoin directly to another person without involving the services of a third-party such as a bank or a credit card. So, you simply need to find out somebody who wants to buy your Bitcoins. When the buyer is available, you can transfer your bitcoins directly into their wallet and can get paid for that. In this type of transfer, there are some security risks involved because when you do a transfer of bitcoin to someone else, that transaction is irreversible. So, if you send your bitcoins to someone else and that person does not pay you for the bitcoins, then there is no way to retrieve your bitcoins back. So, whenever you are going to sell bitcoins to someone else whether it’s a family member, a friend, or some other person, make sure that you can trust on this person, and you are going to get paid for the bitcoins that you send.

Bitcoin ATMs

Bitcoin ATM is also known as BTMs or Bitcoin Teller Machines. It is a machine where you can buy bitcoins or can sell your bitcoins. Bitcoin ATMs are available in most major cities around the world. The bitcoin ATMs provides a relatively fast and easiest way to quickly withdraw funds in your local fiat currency against your bitcoin holdings. Many Bitcoin ATMs also allow users to buy Bitcoin with money in much the same way as someone deposit money into their bank account at a regular ATM.

Who sets the Bitcoin Price?

Bitcoin is like a commodity. The price of bitcoin is determined by the market in which it trades. In other words, its price is determined by how much someone is willing to pay for that bitcoin. The market sets the price of bitcoin as same as Gold, Oil, Sugar, Grains, etc. is determined. Bitcoin, like any other market, is subject to the rules of supply and demand. i.e.
1. More Demand, Less Supply = Price Goes Up
2. More Supply, Less Demand = Price Goes Down
No one, in particular, sets the bitcoin’s price nor we can trade it in one place. Each market/exchange determines its price based on supply and demand. Traders can buy and sell bitcoin on the Luno Exchange.
If you want to buy and selling bitcoin, you must have to choose a particular exchange. For example, the Luno exchange sets a specific price at a specific time for a specific market. Here, you have not confused that Luno exchange fixes the bitcoin price. Instead, the traders who are buying and selling on Luno exchange sets the price. The price of bitcoin can fluctuate at the moment, which is depending on who you talk to, and it is often different from country to country.
Note: If a bitcoin owner sets the prices of their coin too high, no one will buy it. The owner will either have to reduce their price to a reasonable rate or just go without a sale. If the owner set the price too low, the coin will sell immediately and be taken off the market.

Why does the price of bitcoin change so often?

It is because the price of a bitcoin is very volatile. Since the number of bitcoins is limited in circulation, new bitcoins are created at a decreasing rate. It means that demand must follow this level of inflation to keep the price stable. The bitcoin market is still relatively small as compared to other industries. Therefore, it does not take significant amounts of money to move the market price up or down. Thus, the price of a bitcoin is still very volatile.
It is not only the bitcoin exchange rate seems to change from day-to-day. There is also the price of many things, such as stocks, currencies, gold and many other products can be volatile. It can be moving up and down a lot against a base currency (such as the US dollar).
Some of the factors behind bitcoin volatility are:
• Bad news hurts adoption rate. The news that scare Bitcoin users include geopolitical events and statements by governments who are regulating the bitcoin.
• There is an uncertainty of future bitcoin’s value.
• Large currency holder risks. It means the bitcoin investors who have holding a large currency is not much clear how they would liquidate it into fiat currency without severely moving the market.

Bitcoin Mitigating Attacks

Bitcoin is the most secure cryptocurrency, which provides security at multiple levels of the protocol. It is often rendering sustained sophisticated attacks. In this section, we are going to look at various types of probable attacks in the bitcoin system.

The Sybil Attack

The Sybil attack happens in the peer-to-peer network. A malicious attacker wishes to carry out this attack on the bitcoin network. In this, a node in the network operates multiple identities at the same time and undermines the authority in the reputation system. Its main aim is to gain the majority of influence in the network to carry out illegal actions in the system.
The Sybil attack is difficult to detect and prevent, but the following measures can be useful:
• By increasing the cost of creating a new identity.
• Require validation of identities or trust for joining the network.
• Give different power to different members.

Race Attack

The Race Attack requires the recipients to accept unconfirmed transactions as payment. As an attacker, you can send the same coin to different vendors by using the two different machines. If the vendors deliver the things without waiting for block confirmation, they will soon realize that the transaction was rejected during the mining process. The solution to this is that the vendor must wait for at least one block confirmation before sending things.
This attack is easier to pull off when the attacker has a direct connection to the victim’s node. Therefore, it is recommended to turn off incoming connections to nodes for receiving payments so that your node will identify their own peers. And it does not allow the payer to submit the payment to the payee directly.

Finney Attack

The Finney attack is named after Hal Finney. The Finney attack is one of the types of double-spending problem. In this attack, the attacker is the miner who mines blocks normally. In the block, he includes a transaction which sends some of his coins back to himself without broadcasting the transaction. When he finds a pre-mined block, he sends the same coins in a second transaction. The second transaction would be rejected by other miners, but this will take some time. To prevent this attack, the seller should wait for at least six blocks confirmation before releasing the goods.

Vector76 Attack

The Vector76 attack is a combination of the Race attack and the Finney attack such that a transaction that even has one confirmation can still be reversed. In this attack, a miner creates two nodes, one of which is connected to the exchange node, and the other is connected to well-connected peers in the blockchain network. Now, the miner creates two transactions, one high value, and one low value. Then, the attacker pre-mines a high-value transaction to an exchange service. When a block is announced, he quickly sends the pre-mined block directly to the exchange service. When exchange service confirms the high-value transaction, the corrupted attacker sends a low-value transaction to the blockchain network that finally rejects the high-value transaction. As a result, the corrupted attacker’s account is deposited on the amount of the high-value transaction. This attack can be protected by disabling the incoming connections and only connecting to well-connected nodes.
So, this brings us to the end of blog. This Tecklearn ‘Getting Started with Bitcoin’ blog helps you with commonly asked questions if you are looking out for a job in BlockChain or Ethereum. If you wish to learn BlockChain or Ethereum and build a career in BlockChain domain, then check out our interactive, Blockchain and Ethereum Developer Training, that comes with 24*7 support to guide you throughout your learning period. Please find the link for course details:

https://www.tecklearn.com/course/blockchain-and-ethereum-certification-training/

Blockchain and Ethereum Developer Training

About the Course

Tecklearn’s Blockchain and Ethereum Certification Training course in the blockchain technology that covers essential concepts like Blockchain programming, Ethereum, Solidity, Digital ledger types, Smart Contracts, Multichain, Bitcoin mining, Cryptocurrency, etc. The course provides an overview of the structure and mechanism of Blockchain. You will learn about the Ethereum ecosystem, how smart contracts are developed using Solidity and how to deploy a business network using Hyperledger Compose.

Why Should you take BlockChain and Ethereum Certification Training?

• The average salary of a Blockchain Ethereum Developer is $158,860 per annum – Paysa.com.
• Blockchain tech has gone far beyond its beginnings in banking and cryptocurrency: In 2019, businesses are expected to spend $2.9B on the technology.
• IBM reports that Blockchain markets are headed to $60 Billion worldwide by 2024.

What you will Learn in this Course?

Introduction and origin of Blockchain

• How does our current financial system work?
• What can be the possible solution
• What is a distributed system
• What is Blockchain
• How does a Blockchain work
• Components of Blockchain
• Business network
• Consensus, Provenances, immutability and finality

Cryptocurrency and Blockchain

• Distributed system
• Distributed Ledger technology
• Global Payments
• Why BlockChain
• BlockChain and use case needs
• Requirements of blockchain for business
• BlockChain benefits
• Types of BlockChain
• Hands on

Bitcoin Platform

• What is Bitcoin?
• Why use Bitcoins?
• Bitcoin Ecosystem
• Structure of a Bitcoin Transaction
• Merkel Trees
• Scripting language in Bitcoin
• Applications of Bitcoin script
• Nodes in a Bitcoin Network
• Bitcoin Economics
• What is Bitcoin Mining?
• Types of Mining
• Mining and Consensus
• Hands On

Introduction to Ethereum

• What is Ethereum?
• Ethereum Layers
• Introducing Smart Contracts
• Cryptocurrency in Ethereum
• Mining in Ethereum
• Consensus Mechanism
• Platform Functions in Ethereum
• Technologies that support Ethereum
• Ethereum Programming Language
• Components for the development of Ethereum DApps
• Editors and tools
• Frontend Development
• Ethereum Test Networks
• ERC Tokens
• Hands On

Solidity

• Introducing Solidity
• Sample Code, Layout of Source File
• Structure of a Contract
• State Variables, Functions Types, Reference Types
• Special Variables and Functions, Expressions and Control Structures
• Function Calls, Error Handling
• Visibility for Functions and State Variables
• Inheritance, Constructors
• Importing Smart Contracts
• Gas Limit and Loops
• Sending and Receiving Ether
• Recommendations
• Contract ABI
• Setting up the development environment and Deploying DApp
• Hands On

Hyperledger

• Introduction to Hyperledger
• Hyperledger architecture
• Hyperledger Fabric V1 Architecture
• Consensus
• Hyperledger API
• Hyperledger Application Model
• Hyperledger project and tools
• Network Topology
• Exploring Hyperledger frameworks
• Business Network Deployment on Hyperledger Composer Playground
• Sample Transaction
• Service invoices
• Hands On

Hyperledger Composer

• Development Environment using Composer
• Developing business networks
• Testing business networks
• Introduction to Hyperledger Fabric
• Hyperledger Fabric Model
• Ways to create Hyperledger Fabric Blockchain Network
• Hands On

Create and Deploy Your Private Blockchain On Multichain

• What Is MultiChain
• MultiChain Privacy and Permissions
• Mining in MultiChain
• Multiple configurable Blockchains using MultiChain
• Setting up a Private Blockchain
• Hands On

Blockchain Use Cases

• Potential use cases in Blockchain
• BlockChain project

Got a question for us? Please mention it in the comments section and we will get back to you.

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