bitcoins - a primer on bitcoins & digital currencies by ankur vats

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A Primer on Bitcoins & Digital Currencies By Ankur Vats

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Page 1: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

A Primer on Bitcoins & Digital CurrenciesBy Ankur Vats

Page 2: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats
Page 3: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

What is Bitcoin and Cryptocurrencies?

Bitcoin is a form of digital currency. In 2013 , this digital currency suddenly shot up in price from $13

to an unbelievable price of over $1000 Its popularity soared after that . Bitcoins are in fact a kind of electronic money, the first

cryptocurrency started circulation in 2009 and over which the government or traditional banking protocols have no control of.

In traditional currencies, the decision regarding the amount to be printed depends heavily upon factors such as inflation, and is governed and regulated by a central bank.

Page 4: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Contrary to this, there is no central authority to regulate Bitcoin and other Cryptocurrencies supply and transactions.

It is the peoples confidence in this digital currency that decides it value. So the more people who believe in it, the better the demand and the higher the price will go.

Bitcoins…

Page 5: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

The Use of Bitcoins

You can use Bitcoins to purchase things from people or internet who accepts these electronic currencies. Moreover, since these coins are digital, they can even be transferred over the internet through the proper software, thereby leading to successful online transactions.

Bitcoins are a quite attractive propositions if you are looking forward to the settlement of international transactions, but hate being plagued by exchanged rates or bank charges.

Page 6: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

The Aftermath…

The wild success of Bitcoin has inspired the launch of a number of other competing Cryptocurrencies such as PPCoin, Freicoin, Litrcoin, Dogecoin and so on.

You guys can go to www.cryptsy.com for a list of tradable and active coins that are available today.

Page 7: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

The History of Bitcoin

The creator of Bitcoin is Satoshi Nakamoto who created it in 2007. Bitcoin.org first surfaced on the internet in 2008. The first Bitcoin transaction was conducted in 2009 between Mr.

Satoshi and Hal Finney, a cryptographic activist and a developer. In the same yearn an exchange rate is published for this electronic

currency with a value against US dollars at 1309.03 BTC per dollar. In 2010 a truly historic event took place when 10,000 Bitcoins which

was worth $25 at that time was spent on Pizza. It was one of the first transactions that involved a tangible product. Today, that amount of Bitcoins would be equivalent to at least 5 million dollars.

Page 8: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Coming Into Present

A range of events geared up in 2011, including significant ones like Bitcoin becoming on par with the US Dollar, an offer to sell a vehicle for Bitcoins, the opening of exchange markets with respect to the British pound Sterling and Brazilian Real, and so on.

In 2013, the market capitalization of Bitcoin rose to $1 Billion and in April 2013, the value went beyond $100.

From 2013 onwards space travel could be conducted in exchange of Bitcoins by Virgin Galactic a company that belongs to Richard Branson.

At the end of 2013, Bitcoins and other digital currencies suddenly exploded in price thanks to the power of the media and the internet bringing the peak price to $1000 per coins.

Page 9: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

How Does Bitcoin Work ?

Bitcoins are actually generated by computer online by dealing with difficult math tasks and is more widely known as Bitcoin mining.

The math tasks in the Bitcoin mining are programmed to progressively increase in difficulty.

This means it will become more and more difficult to ‘mine’ Bitcoins over time and the total amount of Bitcoins that will ever be mined is capped at 21 million coins.

Hence, because of this very unique arrangement, no central bank has control over the flow of Bitcoins or can manipulate its value which is already in circulation.

Page 10: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

A Strong System

All the computers in the network are coded to be used to monitor and verify the validity of each Bitcoin that is mined and all the transactions between users.

Around 25 new Bitcoins are mined every 10 minutes. Which is why more and more Bitcoin miners are building

powerful computers just for the use of Bitcoin mining. Bitcoins can be bought, sold or traded with real money in a lot of

online exchanges.

Page 11: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

How Does Bitcoin Protocol Work ?

First Steps: A signed letter of intent “I, Alice, am giving Bob one infocoin”

Using serial number to make coins uniquely identifiable “I, Alice, am giving Bob one infocoin, with serial number 1234567”

Making everyone collectively the bank Proof-of-work(SHA-256)

h("Hello, world!0") =1312af178c253f84028d480a6adc1e25e81caa44c749ec81976192e2ec934c64

Page 12: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Your First Bitcoin Wallet

A Bitcoin wallet is a simple software to keep all your Bitcoins. As the owner of the wallet you MUST take extra care to give it a

good and lengthy password and never forget it. If you lose your password or wallet, all your Bitcoins inside will be

gone. So for this reason only you should always make a backup of your

wallet. You can always backup your wallet by making a copy of it and

placing it on another secure hard drive or a thumb drive. To get your own Bitcoin wallet visit to

www.Bitcoin.org/en/download and choose a wallet.

Page 13: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Getting More Bitcoin and where to use them.. https://localbitcoins.com/ http://egifter.com https://www.bitpremier.com/ http://www.overstock.com/

Page 14: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats
Page 15: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Who are already accepting Bitcoins

More and more big companies are accepting Bitcoins right now. Let us take a look at some of them big brands.

Page 16: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Accepting Bitcoins is easy

All you have to do is provide an option for people to pay via Bitcoin.

Got to this URL for a comprehensive guide on how to accept Bitcoins for your online Business. www.en.Bitcoin.it/wiki/How_to_accept_Bitcoin_for_smallbusine

ss

Page 17: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Converting your coins into money

So what you can do with the coins that you acquire from your business ?

You can then sell it off in Bitcoin Exchange or use it to buy other merchandise that accepts Bitcoins.

In fact, you can use the coins that you acquired to invest and trade for even more profits.

Page 18: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Simple Steps to Mining

Step 1 – Get yourself a Bitcoin ‘Wallet’ Step 2 – Prepare and Calculate your Mining Rig Step 3 – Connect your Mining Rig to a client such as CGMiner.You can download CGMiner from www.github.com/ckolivas/cgminer or you can also do a google search for other miners as well. Step 4 – Configure your mining rig. You can choose to mine

Bitcoins or Cryptocurrencies. For Bitcoin mining, it is recommended to join Bitcoin mining pools to maximize

your mining efforts.

Page 19: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Mining Digital Currencies

Mining Bitcoin requires a PC to be running and connected to the internet non stop in order to churn out the coins.

This means the cost that you will have to bear to mine Bitcoins or other crypto coins is the cost of the hardware, the cost of the electricity and the cost of the internet fees.

One of the more popular ways and still profitable ways to mine coins these days is to mine crypto coins such as lite coin or doge coins and then convert them into Bitcoins later on.

What you will need is a basic PC that can run 2 or more graphic cards at the same time.

Page 20: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

What you need to know…

The PC must be able to withstand the HEAT produced from running the ‘mining rig’ non stop.

The rough estimate for a basic mining rig will roughly cost $1000.

And it must have a strong enough power supply that can power the graphic cards that you use for mining.

There are many mining methods out there Ex: Mining with PS3 or mining with an ASIC miner.

For more details visit : crytobadger.com/build-your-own-litecoin-mining-rig/

Page 21: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Mining on Cloud…

There are services available online which allows mining on cloud like: ZenCloud https://cex.io/r/0/conradx/0/

Page 22: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Free Bitcoins are out there…

“WorkForBitcoin” offer you the opportunity to search job listings as well as post them. The majority of the work here involves programming. Work in other fields is also available, so you can always find something that you are good at that interest you. (bittask.com)

‘Bitcointalk’ forum services section is another viable place to search for jobs that help you earn Bitcoins. Many of the jobs here can be done within a short span of time and hence you can earn your digital currencies swiftly. (bitcointalk.org)

‘Jobs 4 Bitcoins on reddit’ (reddit.com/r/Jobs4bitcoins) Bitgigs.com Coinality.com

Page 23: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats

Ways to Cash in on Bitcoins and other Crypto Currencies First method – is to mine coins and sell them for profit. Second method – is to invest in the digital currency with real

money and then sell it again for a profit. Third method – is to offer services or products in exchange for

Bitcoins or Cryptocurrencies. Fourth method – is to get free Bitcoins

Page 24: Bitcoins - A Primer on Bitcoins & Digital Currencies by Ankur Vats