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TABLE OF CONTENTS

Topics for the 10 days of the course

Day 1 - The crypto­currency pheno­menon

Day 2 - Essentials to know about Bitcoin

Day 3 - The Laws of Bitcoin's Value

Day 4 - Bitcoin Wallet: Most Precious Thing

Day 5 - How transactions work

Day 6 - This is How You Buy Bitcoin

Day 7 - Where to Spend Your Bitcoins

Day 8 - What the Heck is Mining?

Day 9 - How to Find Your Ideal Exchange

Day 10 - Course Recap

Course Completion

Tips to get Bitcoin

BITCOIN 101 - DAY ONE

Welcome to Bitcoin 101 Lesson 1: Cryptocurrencies and Bitcoin.

In Lesson 1 you will learn:

• Cryptocurrencies are decentralized digital currencies secured with cryptography

• Bitcoin is the top cryptocurrency due to its first-mover advantage • Bitcoin was created by Satoshi Nakamoto • Bitcoin is only in its infancy period with huge growth potential

WHY CRYPTOCURRENCIES?

Cryptocurrency is a new type of digital money used to exchanged agreed-

upon values. It is just like regular currency, except it uses cryptography to

secure transactions and control the creation of its native currency.

In centralized financial systems—such as the U.S. Federal Reserve

system—government and banks control the supply of currency. They

essentially "print" units of this currency, which is called fiat. When

centralized entities operate in this fashion often times the "fiat" system can

be inflationary. By contrast, a lot of cryptocurrencies like bitcoin have a

capped supply, although some digital assets do not. This means currencies

like bitcoin are produced by a cryptocurrency protocol at a predetermined,

set rate. The supply is capped at a specific amount. Bitcoin's cryptographic

financial system is built on a peer-to-peer, open source, and decentralized

network. The currency is not controlled by one person or organization, and

their specifications are not easily altered without consensus on the

network.

The great thing about cryptocurrencies is that you can send and receive

money anywhere in the world at any given time. You don’t have to worry

about bank hours, formal permission or any other limitations. You can

make and complete payments in bitcoin without anyone’s personal

information being tied to the transactions, therefore it also protects against

identity theft. The fees involved are usually also low, compared to legacy

systems like Western Union. Bitcoin payments are irreversible and secure,

meaning that merchants don’t have to worry about the cost of fraud.

INTRODUCING BITCOIN

Bitcoin pioneered the field as the first decentralized cryptocurrency back in

2009 and the decentralized control is by use of Bitcoin's distributed ledger,

called the blockchain. Bitcoin is by far the most popular digital currency

and it has tens of thousands of programmers and entrepreneurs around

the world developing new services and apps. Like most other

cryptocurrencies, Bitcoin is not controlled by any single government or

central bank, and no one can decide who is allowed to send or receive

money. Bitcoin transactions are censorship resistant. This means that no

one, including banks, or governments, can block you from sending or

receiving bitcoins.

Bitcoin was the first decentralized digital currency and has had time to gain

acceptance among both merchants and consumers. It is considered very

safe compared to other digital currencies, it has no third parties, and the

protocol is open source (i.e. its code is peer-reviewed by a large

community of developers). It is also the first digital currency to implement

the blockchain as a core component. All these factors have helped attract

the open source developer community to the currency. The no-VAT ruling

in Europe has also helped to enhance the popularity and value of the

currency, and today most countries around the world allow bitcoin as a

payment method. Many companies now also accept bitcoin as a method of

payment. From restaurants and coffee shops, to real estate companies and

online shops, Bitcoin is now accepted by a wide variety of establishments.

It also has a strong advantage over its competitors because of important

network effects like adoption-rate and developer mindshare.

THE PAST, PRESENT, AND FUTURE

Bitcoin was created by an anonymous person or group who called

themselves Satoshi Nakamoto. Nakamoto published the invention on

October 31, 2008, to the Cryptography Mailing list called metzdowd.com.

The research paper was called "Bitcoin: A Peer-to-Peer Electronic Cash

System". It was implemented in its first client and released to the open

source community in January 2009. The Bitcoin network came into

existence on January 3, 2009, with the release of the first Bitcoin

software and the issuance of the first bitcoins. Satoshi Nakamoto continued

to collaborate with other developers on the bitcoin software until mid-2010.

Around this time, he handed over control of the source code repository to

the bitcoin developer Gavin Andresen. Nakamoto also transferred several

related domains to various prominent members of the bitcoin community,

and then stopped his involvement in the project. Prior to his absence and

handover, Satoshi Nakamoto made all modifications to the source code.

At first, the initial exchange rates for Bitcoin were set by individuals on

online forums. The first “famous” transaction was the infamous 10,000

bitcoin pizza purchase, worth around 20 million USD eight years later.

Today, however, most bitcoin exchanges are made through online trading

platforms. In 2013, several mainstream websites began accepting bitcoin.

Wordpress started in November 2012, followed by OKCupid in 2013. In

2014 several major vendors started to accept bitcoin, including TigerDirect,

Overstock.com, Expedia, Dell, and Microsoft.

With bitcoin’s transactional volume increasing every day, a cap on supply,

and an ongoing reduction in bitcoins produced, bitcoin values should

continue on an upward trend. Compare this to most all fiat (paper)

currencies which lose value every year due to inflation.

The digital currency has not gone viral yet, and many of the apps,

upgrades, and protocols that will make it truly ready for common use are

still being developed, so the potential is still huge. We’ve probably only

scratched the surface of what Bitcoin can do.

This ends today’s lecture and hopefully you now have a first grasp on what

Bitcoin is and why you should start learning about it and using it.

Tomorrow we’ll dig a little deeper into the world of Bitcoin and

how it works in practice.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY TWO

Welcome to Bitcoin 101 Lesson 2: Essentials of Bitcoin

In Lesson 1, you learned that Bitcoin is a decentralized cryptocurrency

invented in 2009 by Satoshi Nakamoto and that it can be freely

transferred between people all over the world, without the control or the

limitations imposed by conventional payments through banks or

government authorities.

In Lesson 2 you will learn:

• Bitcoin isn’t 100% anonymous • Bitcoin wallets are used to protect and access your money • Bitcoins are stored in a public ledger called ‘the blockchain’ • Bitcoin isn’t printed like regular money, it’s discovered, or ’mined’, by

a network of computers worldwide

AUTHORITY AND ANONYMITY

As mentioned in Lesson 1, Bitcoin is not controlled by any third party. It's

the first decentralized peer-to-peer payment network and it’s solely

powered by its users. Bitcoin awards you freedom from government

control, but at the same time it’s your own responsibility to safeguard your

money. There’s no formal entity to complain to if you misspend BTC or

lose access to your wallet’s password.

Bitcoin is pseudonymous rather than anonymous, this means that the

value within a wallet is not tied to real-world people or email addresses,

but rather to specific bitcoin address(es). Owners (those in control of

bitcoin addresses) are not explicitly identified, but all transactions are

registered on a digital ledger called the blockchain. The blockchain is

public and all transactions are recorded and visible via tools known as

‘blockchain explorers’. Additionally, bitcoin exchanges, where bitcoins are

traded for traditional currencies, are often required by law to collect the

personal information of users.

HOW CAN I STORE MY BITCOIN SAFELY?

To start using bitcoin you’ll need to use a bitcoin wallet. A wallet stores

the information necessary to handle your bitcoins. Wallets are often

described as a place to hold or store digital currency. But, bitcoins are

inseparable from the transaction ledger, the blockchain. A better way to

describe a wallet is as “something that stores the digital credentials for

your bitcoins and allows you to access them”. Bitcoin uses public-key

cryptography, in which two cryptographic keys, one public and one

private, are generated. You could say a wallet is a collection of these keys.

There are also several types of wallets to choose from. Software wallets

connect to the network and allow you to spend bitcoins in addition to

holding the credentials (the cryptographic keys) that prove ownership.

There are also online wallets that offer similar functionality. In this case,

the keys to access the money are stored with the online wallet provider

rather than on the user's hardware or software app.

There are also physical wallets that store the credentials offline, which

could, for example, be just the keys printed on a piece of paper in your

pocket, or

remembered in your head. Because a piece of paper can't be hacked, this

is the most secure method of storing bitcoins (assuming your physical

wallet can be kept safe).

THE BLOCKCHAIN

All bitcoin transactions are stored in a public ledger called the blockchain.

It’s not maintained by an authority, but by a network of communicating

nodes and miners running open-source bitcoin software. Transactions are

sent to this network using readily available software applications (such as

wallet apps). These nodes can validate transactions, add them to their

copy of the blockchain (the ledger), and then forward these additions to

other nodes. The blockchain is a distributed database, which means each

network node verifies and stores its own copy of the blockchain.

As I explained before, bitcoin prices were first set by enthusiasts on

bitcoin forums and exchanged both offline and online. Nowadays

everything has moved to online exchanges where participants offer bitcoin

buy and sell bids, just like on other commodity exchanges.

The price is subject to the market forces of supply and demand which, at

this point in time, go hand-in-hand with the trends and whims of

speculators. The price can move suddenly and sharply up or down in

response to news events.

BUYING AND SPENDING

You can buy bitcoins online from Bitcoin.com using a credit card, or by

using an exchange via a bank transfer of fiat currency. Bitcoin can also be

purchased locally using services like Localbitcoins or Bitcoin ATMs.

So where can you spend your bitcoins? Well, the currency is up and

running with some of the most popular ecommerce platforms and point-

of-sale systems. Additionally, hundreds of thousands of merchants and

vendors, both online and offline, already accept bitcoin for payments.

A BRIEF WORD ON BITCOIN MINING

In traditional money systems, governments simply print more money

when they need to. This leads to inflation which reduces the value of each

unit of the currency previously printed. But in bitcoin, money isn’t

printed—it's discovered.

Computers around the world ‘mine’ for coins by competing with each

other. To succeed in mining you’d need a specialized mining computer, as

they are much faster than your regular laptop and specialized to complete

mining work. Mining is competitive business today and requires specialized

equipment to earn return. Mining is the act of processing and verifying

transactions on the Bitcoin network and securing them into the blockchain.

Each set of transactions are processed into blocks, secured by the miners,

and added to the blockchain.

This ends today's lecture. Now you know a little more about bitcoin. Let’s

recap:

• Bitcoin isn’t strictly anonymous • You can make use of a wallet to protect and access your money • Bitcoins are stored in a public ledger called the blockchain • You can buy bitcoins online, with a credit card, at exchanges, or via

ATM’s • Bitcoin isn’t printed like regular money, it’s discovered or ’mined’ by

a network of computers worldwide

In the next lesson, we will discuss more about Bitcoin price.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY THREE

Welcome to Bitcoin 101 Lesson 3: Bitcoin Exchange Rates

In Lesson 2, you learned that bitcoin is pseudonymous rather than

anonymous and that you can make use of a wallet to protect and access

your money. You also learned that bitcoins are stored in a public ledger

called the blockchain, and that you can buy bitcoins on exchanges, with a

credit card, or by using ATMs. We explored how bitcoin isn’t printed like

regular money; it’s discovered, or ’mined’, by a network of computers

worldwide.

In Lesson 3 you will learn:

• Bitcoin has a value set by the laws of supply and demand • Because of its current adoption phase and limited distribution,

exchange rates are often influenced by news • Bitcoin has a fixed supply that is limited to 21 million units total

BITCOIN'S VALUE

How is the value of bitcoin determined? Well, all currencies and

commodities have an exchange value, agreed upon by the seller and

buyer. Bitcoin is a currency because it is a limited medium which people

have agreed possesses value. This agreement is no different from ancient

merchants who at one time did the same thing with materials such as

The difference between bitcoin pricing and the pricing of paper money is

that bitcoin’s value is set solely by the supply and demand within the

community. There is no governing body like a central bank e.g. The

Federal Reserve to influence or control seashells, precious stones, gold, or

silver.

the flow of money. Given that bitcoin is in its infancy, and has yet to fully

find its identity and function, the price is easily influenced by news and

rumours.

Large markets like the EU, China, Japan or the US may announce new

bitcoin regulations, either favourable or restrictive to bitcoin’s growth,

causing the price to rise or fall respectively. Other factors that can

influence the value of bitcoin are internal issues. Examples of this include

miners’ conferences or a meeting to decide changes to the Bitcoin

protocol. The price may sometimes dip if an agreement on a subject

cannot be reached, or seems to be too far off.

SUPPLY & DEMAND

The supply of bitcoin is limited to 21 million units. This was set according

to the initial design of the Bitcoin software, and this limitation is fixed into

the bitcoin algorithm. As more and more people come to use Bitcoin, the

increased demand combined with the fixed supply will force the price to

go up. Because the number of people using Bitcoin in the world is still

relatively small, the price of Bitcoin (in comparison to a more traditional

currency) can fluctuate significantly on a daily basis. As more people

continue to use Bitcoin, the value of the network increases. In early 2011

one bitcoin was worth less than one USD, but in early 2017 one bitcoin

was worth more than one thousand USD. If Bitcoin continues to grow, a

single bitcoin could be worth more than a hundred thousand dollars.

Due to the limited number of bitcoins in circulation, and the fact that new

bitcoins are created at a predictable and decreasing rate (currently 12.5

bitcoins on average every 10 minutes), the demand for bitcoin must follow

the supply increase to keep the price stable.

Like any other money, the value of Bitcoin will grow with more user

adoption and trust. This can be measured by its growing base of users,

merchants, and startups. As with all currencies, bitcoin's value is

determined directly by people willing to accept them as payment.

This ends today’s lecture. Now you know that bitcoin has a value set by

the laws of supply and demand, and because of its relatively early phase

of adoption and limited distribution, prices are easily influenced by news.

You have also learned that the total supply of bitcoin is limited to 21

million units.

Tomorrow you will learn more about how bitcoin wallets work.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY FOUR

Welcome to Lesson 4. Today is all about how to safely store your

Bitcoin (BTC) in a bitcoin wallet.

Yesterday, you learned that bitcoin has its value set by the laws of supply

and demand and that prices are easily influenced because of Bitcoin’s

relatively small, steadily growing distribution. You also learned that

Bitcoin's total supply cap of 21 million affects the price.

In today’s lecture, you’ll learn that there’s a wide range of choices when it

comes to bitcoin wallets. You will learn that bitcoin wallets do not actually

“store” or “hold” bitcoins. Rather, wallets store your private keys needed

to handle the bitcoins you own which are stored on the blockchain ledger.

WALLETS

As mentioned above, you’ll need to get yourself a bitcoin wallet to store

the private keys necessary to access your bitcoins. Wallets are often

described as a place to hold or store bitcoins, but your bitcoins are

actually stored on (and are inseparable from) the blockchain transaction

ledger. Your wallet is a tool that stores the digital credentials for accessing

your bitcoins and allows you to send or receive them. Bitcoin uses public-

key cryptography, in which two cryptographic keys, one public and one

private, are generated. A wallet is a collection of these keys. A public key

is similar to your email address while the private key can be understood

and should be treated like a password to that email address. Never share

your private key with anyone.

You can choose from several types of wallets. They all share basic

functionality. You should pick a wallet depending on how you will use your

bitcoins. For instance, do you prefer to use the wallet on your mobile

device? Perhaps you just want to store bitcoins safely and hold for many

years without spending? Will you use Bitcoin as a shopping wallet and

regularly spend/transfer them online and offline? Each of these purposes

can be best achieved with a specialized wallet. Remember, you can have

more than one Bitcoin wallet and choose which one to use based on the

given circumstance.

Let's discuss some of the various types of wallets.

Software wallets connect to the network and allow you to spend

bitcoins in addition to holding the credentials (the keys) that prove

ownership. They usually come in the form of mobile applications

downloaded from app stores.

Online wallets offer similar functionality but may be easier to use. In this

case, credentials are stored with the online wallet provider rather than on

the user's own hardware and can be accessed across each of your

devices.

Physical wallets store the credentials offline. A simple “paper wallet”

could be the keys printed on a piece of paper that you hold in your pocket

or more securely stored in a safe.

A hardware wallet is a product that holds your private keys securely on

an electronic device that can be accessed without an internet connection.

There are various hardware wallets to choose from including Trezor,

Keepkey, and Ledger. The device acts as a secure location for your private

keys much like a paper wallet but is a far easier method than paper for

sending and receiving bitcoins. If the hardware wallet is lost or stolen it

can be restored using a 12-24 word phrase called a “seed.”

SECURITY & ANONYMITY

If you choose to use services that store your private keys for you, such as

an online wallet, be aware that you are completely at their mercy

regarding the security of your keys. Most wallets, however, allow you to

be in charge of your own private keys. This means that no one in the

entire world can access your “account” (i.e. your bitcoin addresses)

without your permission. It also means that no one can help you if you

forget your password or otherwise lose access to your private keys. If you

decide you want to own a lot of bitcoin it would be a good idea to divide

them among several different wallets. Don’t put all your eggs in one

basket!

Wallets also have a wide variety of anonymity levels, from software

wallets which only store your keys, to more open wallets which displays

sender/receiver name. Keep in mind that even with software and physical

wallets, data will be sent to nodes maintaining the blockchain and the

server may be able to view your IP address and connect this to the

address data requested. To improve privacy, most bitcoin wallets will

automatically create a new bitcoin address each time you want to send or

receive a transaction, which makes it more difficult to identify the

sender/receiver.

This ends today’s lesson where you have learned that there’s a wide range

of wallet solutions. You have also learned that bitcoin wallets do not store

bitcoins, but rather secret keys used to handle the bitcoins, stored in the

blockchain ledger.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY FIVE

Welcome to Bitcoin 101 Lesson 5: Transactions and the

Blockchain

In Lesson 4, you learned that there’s a wide range of wallet solutions

available to you as a consumer. You also learned that bitcoin wallets do

not actually store bitcoins, but rather they store the private and public

keys used to handle your bitcoins.

In Lesson 5, you will learn:

• A bitcoin transaction is a transfer of value via the Bitcoin network • Bitcoin transaction records are not encrypted • Transactions can be viewed by anyone using a ‘blockchain explorer’ • Transactions must be verified by miners on the blockchain network • Miners are rewarded with bitcoins for doing verification work

BITCOIN TRANSACTIONS ON THE BLOCKCHAIN

The blockchain is a public ledger where every bitcoin transaction is

recorded. The ledger is maintained by a network of communicating

computers running bitcoin software. It operates without any central

authority.

Transactions are sent to this network using wallet applications. Mining

computers and nodes try to validate these transactions. Valid transactions

are added to their individual copy of the ledger. Each computer will then

broadcast their ledger additions to the other nodes in the Bitcoin network.

The blockchain is a distributed database. This means that to achieve

independent verification of the chain, (the correct ownership of each and

every bitcoin amount), each participating computer stores its own copy of

the blockchain and all of its transactions. A transaction typically references

previous transaction outputs as new transaction inputs and dedicates all

input bitcoin values to new outputs. As such they constitute a chain of

transactions. Therefore, it is also possible to “trace” a particular bitcoin

back in time (to check which addresses the bitcoin has “visited”).

To clarify: bitcoins don’t really ‘exist’ anywhere. There is no file with

bitcoins in it. Instead, there are records of transactions between different

bitcoin addresses with balances that can increase and decrease. And

while each bitcoin transaction is secured via encryption, the record of that

transaction is not. This enables the ability to browse and view every

transaction ever collected in the blockchain using a hex editor. There are

also blockchain explorers online where every transaction included within

the blockchain can be viewed in human readable language.

A PRACTICAL EXAMPLE OF A BITCOIN TRANSACTION

Step 1: Submission of Transaction to the Bitcoin Network via

Wallet

Alice wants to transfer bitcoin to Bob and they both have bitcoin wallet

apps on their smartphones. Bob opens his wallet, creates a new bitcoin

address, and shares this address with Alice. She pastes Bob's address into

her wallet’s “Send to” field, she also inputs the amount of BTC she wants

to transfer. Alice’s wallet (also called a client) signs her request with her

private key corresponding to the address she’s transferring from.

Step 2: Verification

Now the bitcoin mining network goes to work. Connected computers all

over the world simultaneously verify all transactions, and compete with

each other to earn newly minted bitcoins as a reward. Bob and Alice’s

transaction, once verified, will be added to the next transaction block.

Once the block has been found by a miner, their transaction is confirmed,

and can no longer be reversed. When this process is done, Alice and Bob’s

wallets will display that the transaction is complete. This verification

process ensures that the same bitcoins cannot be used for more than one

transaction at a time.

This ends today’s lesson. You now know that transaction records stored in

the blockchain are not encrypted and can be viewed by anyone using a

blockchain explorer available online. You have also learned that

transactions need to be verified by miners on the blockchain network, who

are then rewarded with bitcoins for doing the work.

Tomorrow's lesson will cover how you can earn some bitcoins of

your own.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY SIX

Welcome to the Bitcoin 101 Lesson 6: How to Buy Bitcoin!

In Lesson 5, you learned that bitcoin transactions are not encrypted and

can be viewed by anyone using a blockchain browser. You also learned

transactions need to be verified by miners on the blockchain network, who

are then rewarded with bitcoins for verifying and timestamping the

transactions.

In Lesson 6 you will learn:

• Bitcoin is sold and purchased much like other currencies through exchanges using a credit card, bank wire, Paypal, etc.

• You can also exchange bitcoins for goods and services with people directly, just like you would with cash.

BUYING BITCOIN AND HOW EXCHANGES WORK

Bitcoin can be bought and sold from various sources, online and offline,

like any other currency. You can purchase BTC online directly with a credit

card, or use an exchange or brokerage service that will enable you to buy

bitcoin via a bank transfer. Some applications also offer buying and selling

bitcoin with PayPal and other online payment processors. Some of these

sites are full-service exchanges intended for institutional traders, while

others are simpler wallet services with limited buying and selling

capabilities.

Most exchanges and wallets can store digital and fiat currency for you,

functioning like a regular bank account. Exchanges and wallets are the go-

to option if you want to do regular trading and speculating. Beware of the

fact that total anonymity is difficult to achieve at these sites. Also, there

are setup procedures which usually involve supplying proof of identity and

detailed personal information. Bitcoin can also be purchased locally from

other people via marketplaces e.g. LocalBitcoins, and from Bitcoin ATMs

that operate just like the cash ATMs you see worldwide. These servicess

offer higher anonimity, but tend to charge higher fees.

This ends today’s lesson. You have learned bitcoin can be purchased and

sold much like other currencies through exchanges. You know you can

exchange bitcoins with other people directly, just like with cash.

Tomorrow you will learn more about where you can spend bitcoin

and how you can shop online.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY SEVEN

Welcome to the Bitcoin 101 Lesson 7: How to Spend Bitcoin!

In Lesson 6, you learned that bitcoin can be sold and purchased just like

other currencies through exchanges. You also learned that you can

exchange bitcoin with people directly, just like with cash.

In Lesson 7 you will learn:

• Many merchants accept bitcoin as payment • How to find places that accept bitcoin payments • How to use bitcoin debit cards as payment in any store that accepts

credit or debit

WHERE TO SPEND BITCOIN

Spending bitcoin is very similar to spending traditional money. However,

since bitcoin is not yet universally accepted, you just need to select stores

that accept it. Luckily, there are a bunch of them! Recent figures show that

the number of retailers accepting bitcoin has now surpassed the 100,000

mark. As more countries continue to recognize bitcoin as a legitimate form

of payment, these figures will continue to rise. The best way to find

bitcoin-friendly merchants is by browsing online marketplaces and using

specialized search engines that populate with large numbers of supporting

establishments. For example, the site Coinmap offers a visual way to locate

bitcoin-friendly stores, restaurants, and services around the world. The site

also adds new locations regularly.

Bitcoin payments are easy to make online and offline. You just need to

download a wallet application for your desktop, tablet or smartphone.

Then, during checkout at a store, you will be presented with a code in text

format or as a QR-code. This is a visual barcode representing the store’s

public key. You scan their code with the scanner on your wallet application

and confirm the total amount to be paid and then the transaction is

complete. In the case of purchasing online where no scan option is

available, you can simply copy and paste the public key address of the

store into your wallet’s “Send to” field.

WHAT CAN YOU BUY WITH BITCOIN?

You can purchase just about anything with bitcoin ranging from goods to

services. Bitcoin can also be used to purchase larger items including cars,

real-estate, and even precious metals. Additionally, many merchants who

accept bitcoin also give discounts for people who pay with the digital

currency. One example is Purse.io who offers 15% off on Amazon

purchases made using BTC. The most rewarding way to spend your bitcoin

is by paying it forward. Use bitcoin to tip the author of an article or blog

post with the click of a button, or donate to worthy causes including

Wikileaks and the Foundation for Economic Education (fee.org).

SPENDING WITH CREDIT CARD

If there is a merchant that does not accept bitcoin, there are still ways to

use your digital cash to purchase the items you are interested in. Just use

a bitcoin debit card. These cards help bridge the Bitcoin world with the

world of legacy finance.

Using them is simple, you can either buy bitcoin with your debit card or

load a debit card with bitcoin to spend anywhere that accepts credit cards.

With this bitcoin debit card, you can now essentially buy anything with

bitcoin as any establishment that accepts credit or debit cards would

accept your bitcoin debit card as well. The merchant gets paid in their own

currency by the debit company and the charge will be deducted from your

bitcoin balance.

There are several debit cards to choose from. Some cards can only be

issued to certain countries, and all have varying fees, so be sure to read up

on all the options to choose the best card for you. Two well-known choices

in the U.S. are BitPay and Shift cards.

BEST PRACTICES FOR USING BITCOIN

To use bitcoin safely without worrying about being defrauded or losing

your coins you simply need to heed some practical advice. Follow these

basic guidelines and you can go bitcoin shopping online with confidence.

When seeking to use a shopping website for the first time, do a quick

online search of the store’s name. There are several clear warning signs

that you can look for in the search results to tell if a site is to be trusted or

not.

• Never buy anything from a site that doesn't have SSL (secure sockets layer) encryption installed. You'll know if the site has SSL because the URL for the site will start with HTTPS:// (instead of just HTTP://). There will also be an icon of a locked padlock visible, typically in the status bar at the bottom of your web browser, or next to the URL in the address bar—it depends on your browser.

• No online shopping store needs your social security number or your birthday information.

• Never give out your bitcoin wallet login credentials or passphrase or private key(s).

• Always give out as little information as possible. • Also, try to avoid using the same bitcoin addresses more than once.

Generate a new address for each transaction you receive. Luckily,

• many wallets do this automatically.

This conclude today’s lesson. Hopefully you now feel confident

enough to start spending your bitcoin!

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY EIGHT

Welcome to Bitcoin 101 Lesson 8: Bitcoin Mining.

In Lesson 7, you learned that there are over 100,000 merchants out there

who accept bitcoin as payment and how to find them. You learned how to

sign up for a bitcoin debit card to use bitcoin as payment in just about any

store that accepts regular credit cards. You also learned about best

practices and how to avoid fraud when spending your bitcoin.

Today, you will learn that mining is the process of adding and confirming

transaction records to the blockchain. This process is also how new bitcoins

are created. You will learn that mining is a resource-intensive process.

Aditionally, nowadays mostly done by specialized mining computers in

large data centers.

TRANSACTIONS ON THE BLOCKCHAIN

Today’s lesson is all about the blockchain, mining, and how new Bitcoins

are generated. Remember the previous lesson where you learned how the

blockchain is the public ledger that records bitcoin transactions? Here’s a

quick recap:

The blockchain operates without a central authority but instead by a

network of communicating computers running bitcoin software. Bitcoin

transactions are sent to this network using readily available software

applications. Network computers or nodes validate the transactions, add

them to their copy of the ledger, and broadcast these ledger additions to

other computers.

The blockchain is a distributed and decentralized database. To achieve

independent verification of the chain of ownership of any and every bitcoin

amount, each network computer stores its own copy of the blockchain. A

transaction typically references previous transaction outputs as new

transaction inputs and dedicates all input bitcoin values to new outputs.

There is no file with bitcoins in it. Instead, there are records of transactions

between different bitcoin addresses, with balances that increase and

decrease. Transactions are not encrypted, so it is possible to browse and

view every transaction ever added onto the blockchain.

Mining is the process of adding transaction records to the blockchain.

Bitcoin computers or nodes use the blockchain to distinguish legitimate

bitcoin transactions from attempts to re-spend coins that have already

been spent elsewhere.

BITCOIN MINING

Mining is intentionally designed to be resource-intensive and difficult so

that the number of blocks found each day by miners remains steady.

Individual blocks must contain a proof of work to be considered valid. This

proof of work is verified by other Bitcoin nodes each time they receive a

block. The primary purpose of mining is to allow Bitcoin computers or

nodes to reach a secure, tamper-resistant consensus.

Mining is also the mechanism used to introduce new bitcoins into the

system: a successful miner finding a new block is rewarded with newly

created bitcoins and transaction fees. Currently, the reward amounts to

12.5 newly created bitcoins per block added to the blockchain. To claim the

reward, a special transaction called a coinbase is included in the block with

the processed payments.

All bitcoins in existence have been created via coinbase transactions. The

reason for this setup is to motivate people to provide security for the

system. Miners need to spend energy to find those cryptographic solutions

to new blocks of transactions.

CAN I MAKE MONEY MINING BITCOIN?

In the beginning, anyone could make money mining bitcoins using a

common desktop computer or laptop, but those days are long gone. The

total computing power of the network has risen exponentially since the

introduction of machines designed specifically to solve Bitcoin’s mining

proof-of-work algorithm and nothing else.

Individual miners can still make some money by producing or purchasing

their own designated equipment – however, most mining takes place in

large factory-like environments with hundreds or thousands of machines, in

places where energy and cooling is cheap (such as in China).

Once your machine is superseded by a newer model, usually a few months

after purchase, its ability to compete on the network (and thus its earning

potential) is greatly diminished, along with its resale value. Though the

average user has little incentive to mine these days, mining allows you to

learn a lot about how the Bitcoin network works, and the network needs

individual miners to keep it secure and decentralized. In fact, many

individuals mine bitcoin solely for the sake of contributing back to the

network or just for the fun of it.

Another way to mine bitcoin is to rent out other miners hashing power.

This is called cloud mining. This means any individual can mine anywhere

without needing the same hardware or resources of the miner, although it

does come at a cost.

Furthermore, any mining pools or miners that decide to do cloud mining

may not receive as many returns from the mining process. Also, beware,

because there are a lot of cloud mining scams.

This ends today’s lesson. Now you know that mining is the process of

adding and confirming transaction records to the blockchain, and that the

chain is a network of computers around the world competing to find blocks

in order to be rewarded. This process is how new bitcoins are created. You

also know that mining is an increasingly resource-intensive process and is

mostly done by designated mining machines in large data centers. Still, it

needs its individual miners to keep it secure and decentralized.

In Lesson 9, we will talk more about exchanges and exchange

rates, best practices and what to look out for.

CAN’T WAIT TO LEARN MORE? Jump ahead to the next lesson.

BITCOIN 101 - DAY NINE

Welcome to Bitcoin 101 Lesson 9: Bitcoin Exchanges

In Lesson 8, we explored the world of mining and the process of adding

and confirming transaction records to the blockchain. This process is also

how new bitcoins are created. You learned that mining is a resource-

intensive process and how nowadays it is mostly done by specialized

mining computers in large data centers.

In Lesson 9 you will learn:

• More about bitcoin exchanges and the importance of finding one that suits your needs

• The initial ID verification can take a few days, but after that you can usually buy or sell bitcoin instantly

• A few tricks to help you determine how serious and secure an exchange is by checking for basic things like SSL encryption, two-factor authentication

ABOUT EXCHANGES

Most bitcoins are bought and sold through online services called

exchanges. Knowing how to buy bitcoin is an essential first step in getting

started with the digital currency. However, knowing which bitcoin exchange

to choose is one of the most important initial steps. Since you will be

investing money into bitcoin you need to trust the exchange. Selecting the

right exchange is a critical step on bitcoin journey.

Lesson 9 will guide you through the most important steps to take before

selecting a bitcoin exchange. Remember, these are just suggestions to help

you make the right decision. In the end, circumstances can be different

based on the exchange and the market. Do your homework first!

CHOOSING AN EXCHANGE

Knowing where your bitcoin exchange is based is very important. The laws

and regulations of your own country can vary from those of another, and

what is considered legal practice in a foreign country may not be so in

yours. You may notice that while certain exchanges are based in a specific

country, they may still accept multiple national currencies.

Make sure to check the fine print; exchanges usually post what currencies

they do and do not accept in their terms of service.

You can usually transfer fiat currencies to an exchange with a wire

transfer, credit card, PayPal, or other payment method. Use what works

best for you at your convenience. Please make sure to consider your

privacy levels. For example, credit cards may be convenient and secure but

are one of the least private ways to transfer money.

You will also want to make sure that the exchange fees are within reason

and not excessive compared to the rest of the market. Fees can change

over time and can vary from exchange to exchange. Some exchanges

charge additional fees on top of the bitcoin network transaction fees.

Different payment methods also have varying fees.

Credit card purchases, for example, are often charged a fee of 3-10%.

Services provided by credit card companies may be convenient but are one

of the least private ways to transfer money. While most deposits with bank

transfers are free at the exchange, banks usually charge hefty fees to

transfer money abroad. More information about fees can be found on each

exchange’s website. By comparing a local bitcoin exchange’s prices to a

bitcoin price index, it’s easier to get the best bitcoin exchange rate. If an

exchange constantly has substantially different prices than others, it is a

sign of trouble and that exchange should probably be avoided.

As with everything else, do your research and find an exchange you can

both use and trust. It’s also a good idea not to use your exchange’s wallet

to store your bitcoins long-term. Move your purchased bitcoin to a personal

wallet when you’re done so that you always have control over your money.

SECURITY AND ANONYMITY

Initial verification can often take a couple of days, but all subsequent

purchases on the same exchange are usually instant if you have funds

available to buy or sell. Do some research on each bitcoin exchange to

determine verification levels and delivery speeds. Also, make sure to check

if the exchange offers ‘locked in’ pricing. This means that the price you buy

at is the price you will be charged even if the bitcoins take a few days to

arrive.

A lot of exchanges follow the Know Your Customer (KYC) and Anti-Money

Laundering (AML) laws in their specific country. If they do, then some

identity information will have to be sent to them before buying.

Exchanges that accept credit cards or bank transfers are also required by

law to collect information about users’ identities.

Staying completely anonymous is difficult. If you seek total anonymity, you

can buy in cash locally from someone else through a person-to-person

marketplace like Localbitcoins.

Making sure the exchange website is secure is extremely important and

should not be overlooked. As you initially investigate a potential exchange,

always ensure that the website domain has a HTTPS address. This, as you

learned in previous lessons, shows that the site and your connection to it is

secured by an SSL encrypted protocol. Look for the padlock symbol next to

the URL or in the bottom of the browser window. Another important

consideration is two-factor authentication (2FA) secure login. If you enable

two-factor authentication on an exchange that offers this type of service,

you will be prompted to enter a short code at login that will be delivered

typically to a mobile device you pair with the service.

Enabling two-factor authentication will provide a second layer of

verification that is required to access your account.

Do not forget to keep your bitcoin off of public exchanges. Keep

your coins stored in your own personal wallet(s). Whenever your bitcoins

are stored with third parties, it is easier for them to fall prey to hackers or

unexpected exchange shutdowns. Your private key is your lifeline to your

funds. Remember: bitcoin is about taking the power into your own

hands and not relying on third party intermediaries or

middlemen.

And, as always, when deciding whether to put your trust in any service, do

an online search of the company or service in question and look for

customer feedback and experiences regarding the service.

This concludes today’s lesson. You now know more about bitcoin

exchanges and the importance of finding one that suits your needs. You

also know that the initial ID verification can take a few days, but after that

you can usually buy or sell instantly. You have also learned a few tricks on

figuring out how secure an exchange is by checking basic things like SSL

encryption, two-factor authentication, and the customary Google search.

Tomorrow is the last lesson in this daily email series. It will be a

recap of all the things you have learned during this course, plus

some hints for what your next steps might be.

Also be sure to check out our selection of exchanges over at Bitcoin.com, if

you already have a wallet.

CAN’T WAIT TO LEARN MORE? Jump ahead to the final lesson.

BITCOIN 101 - COURSE RECAP

Lesson 10 is a recap of all that you have learned

LESSON 1: CRYPTOCURRENCIES AND BITCOIN

You learned that in centralized monetary systems, such as the U.S. Federal

Reserve System, government controls the supply of currency by "printing"

units of money, called fiat. Bitcoin on the other hand, is a decentralized

cryptocurrency, invented in 2009 by Satoshi Nakamoto. It can be freely

transferred between people all over the world, without the control or

limitations usually imposed by banks or government authorities. Bitcoin is

by far the most popular digital currency and it has tens of thousands of

programmers and entrepreneurs around the world developing new services

and apps. It is considered safe compared to other digital currencies, has no

3rd parties, is deflationary, and open source.

LESSON 2: ESSENTIALS OF BITCOIN

You learned you can use a wallet to protect and access your money.

Bitcoins are stored in a public ledger called the blockchain, and you can

buy bitcoins at exchanges and ATMs. Moreover, bitcoin is not printed like

regular money. It’s discovered or ’mined’ by a network of computers

worldwide. Until bitcoin becomes an established currency for payments

globally, it will probably continue to be more popular among traders and

price speculators rather than with the general population. As a result, the

price is subject to the market forces of supply and demand which, at this

point, goes hand in hand with the trends and whims of speculators. As a

result, the price can move suddenly and sharply up or down in response to

new events.

LESSON 3: BITCOIN EXCHANGE RATES

We explored basic facts of the Bitcoin network: the total supply of bitcoin is

limited to 21 million coins, which also has an impact on the pricing. For

example, in early 2011 one bitcoin was worth less than one USD, but in

2017 one bitcoin is worth more than a thousand USD. In the future, if

bitcoin becomes truly popular, each bitcoin will likely be worth hundreds of

thousands of dollars to accommodate additional demand. All that is

required for bitcoin, or any form of money to stabilize, is trust and

adoption. In the case of bitcoin, this can be measured by its growing base

of users, merchants, and start-up companies. As with all currencies,

bitcoin's value stems directly from people willing to accept them as barter

or payment.

LESSON 4: BITCOIN WALLETS

We looked at wallets and the wide range of options available. Bitcoin

wallets do not store bitcoins, but rather hold secret and public keys used to

handle bitcoins, which are stored in the blockchain ledger.

The main types of wallets are:

Software wallets connect to the network and allow you to spend bitcoins

in addition to holding the credentials (the keys) that prove ownership. They

usually come in the form of desktop or mobile applications downloaded

from app stores.

Online wallets offer similar functionality but may be easier to use. In this

case, credentials to access the money are stored with the online wallet

provider rather than on the user's hardware, and it can be accessed across

your devices.

Physical wallets store the credentials offline; which could just be the

keys printed on a piece of paper in your pocket, or remembered in your

head. One type of physical wallet is the hardware wallet. This is a wallet

that is typically used for long-term storage. It is one of the safest wallets

because they usually come with encryption keys and may not connect to a

computer often, protecting the keys from nefarious entities and hackers.

There are many retailers who now sell a variety of hardware wallets at

affordable prices.

If you own a lot of bitcoin, it is a good practice to divide them among

several different wallets. Never put all your eggs in one basket.

LESSON 5: TRANSACTIONS AND THE BLOCKCHAIN

You learned that a bitcoin transaction is a transfer of value over the Bitcoin

network, is not encrypted, and can be viewed by anyone using blockchain

browsers online. Transactions need to be verified by miners on the Bitcoin

network, which are rewarded with bitcoins for doing this work. This is also

where and how the bitcoin system creates new bitcoins. The blockchain is

a distributed and decentralized database. To achieve independent

verification of the chain of ownership of every bitcoin, each network

computer stores its own copy of the blockchain.

LESSON 6: BUYING BITCOIN

You learned that bitcoin is sold and purchased much like other currencies

through exchanges, using your credit card, PayPal, or something similar.

You also learned that you can exchange bitcoin to other currencies with

other people directly, just like you would do with cash.

LESSON 7: USING BITCOIN

You learned how there’s over 100,000 merchants out there who accept

bitcoin as payment and how to find places where you can spend bitcoin.

These include search engines, maps, and dedicated marketplaces. You also

learned about the option of signing up for a bitcoin debit card and using

bitcoin as payment in just about any store that accepts regular credit

cards. We also got into best practices and how not to get ripped-off when

spending bitcoin.

LESSON 8: BITCOIN MINING

You learned mining is the process of adding and confirming transaction

records on the blockchain. This process is also how new bitcoins are

created. Lastly, you learned that mining is a resource-intensive process

that is mostly completed by specialized mining computers in large data

centers.

LESSON 9: BITCOIN EXCHANGES

You learned about bitcoin exchanges and the importance of finding one

that suits your needs. You also learned that the ID verification can take a

few days, but after completion, buys and sells are usually instant. You also

got a few tips on figuring out how secure an exchange is by checking basic

things like SSL encryption, two-factor authentication, and the customary

Google search.

WHAT’S NEXT?

We would suggest you get yourself a wallet and start experimenting with

all the things you can do with it. Also, you can continue learning about

Bitcoin by visiting Bitcoin.com’s Knowledge Base.

We also recommend trying out Bitcoin.com’s new Bitcoin wallet.

Here are some of the features:

• Installs easily on your favorite devices(s) • Buy, send, and receive bitcoin • Keep track of your transaction history

COURSE COMPLETION

Congratulations on completing the Bitcoin 101 Course!

You now possess a basic understanding of Bitcoin and hopefully feel

confident enough to start buying and using this cutting-edge technology.

Now would be a great time to start your Bitcoin journey by changing some

of your money into bitcoin! Visit one of the exchanges, get verified and

make your first buy.

Remember, all Bitcoiners need a wallet to receive and send BTC.

The Bitcoin.com Wallet is awesome and easy to use:

• Compatible with your favorite device(s) • Buy, send, and receive bitcoin • Keep track of your transaction history