A practical guide: how to use bitcoins?

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Considered the world’s most popular virtual currency, bitcoins emerged in 2009 and have since awakened the interest and investment of millions of people, businesses and financial institutions around the globe.

Bitcoins are virtual coins (or cryptocoins) transferred between their users without the intermediation of traditional financial systems. It is a fully digital model, decentralized and independent of the regulation of governments, tax bodies and central banks.

Despite being a freer model, the opportunities that this type of currency offers are still not well known by the public. Therefore, to know how to use bitcoins, it is essential to understand its advantages, how to buy it and all the possibilities of use.

And that’s what we’ll see in today’s article. So, follow it to the end!

What are the advantages?

Safety

The first positive point of bitcoins is security. Despite being a virtual model and causing the mistrust of many people, this currency can be considered much safer than the traditional formats.

Bitcoin’s protocol and encryptions are extremely difficult to circumvent. What’s more, users have full control over the access and transactions made in their wallet. The access keys are long and complex to be hacked, so long as they contain between 51 and 52 alphanumeric characters.

In addition, this wallet can be stored or backed up on an external or internal HD: that is, for it to be stolen, the thief or hacker would have to have i) face-to-face access to the computer, ii) the private key access so that to make the bitcoins transaction.

Although the vulnerability of the system is low, it is important to take some precautions, such as:

• use cloud-based, virtual wallets (if you choose this model) with recognized level of safety;
• make full backups of your wallet;
• encrypt wallets and backups made online;
• keep virtual wallet software updated.

Practicality

Because it is a peer-to-peer and decentralized model, transactions are much simpler. There are three pieces of information: an input (address of the sender), an output (address of the recipient) and an amount of bitcoin. The processing is done by miners (other users of bitcoins) who validate these transfers.

Moreover, transactions via bitcoins do not depend on exchange rates and are accepted in thousands of companies around the world.
It is also worth noting that commercial operations with this virtual currency also do not require the user to enter any personal data.

Low transaction fees

In the bitcoin system, the average fee per transaction rarely exceeds 1%. With conventional currencies, this percentage fluctuates from 2% to 9%, depending on the form of payment.

This is great for businesses, who profit a larger margin, and for consumers, who may experience lower prices given the absence of government taxes.

In short, bitcoin combines the economics of paying cash in kind, with the convenience of an online purchase. No fees, no intermediaries and no state control.

How do you get bitcoins?

To have bitcoins, the first step is to create a wallet. The need to have one is in getting your public key, which is as if it were your bitcoin user identity.

Through this alphanumeric address, you can acquire bitcoins in three ways: buying, receiving, or mining.

The purchase can be made in currency exchange bureau. The system is similar to purchasing traditional currencies: you check the bitcoin quote for the currency you are going to use for purchase and get the amount you want through a brokerage fee.

Another option is to accept the bitcoins as a form of receipt. Although the adoption of this model is still incipient, it is natural to expect growth if the currency consolidates itself over time. On the website 99bitcoins, you can check a list of some of the stores receiving bitcoins as payment.

The third option to get bitcoins is through mining. In order for this decentralized system to work, and transactions to be performed, joint processing by millions of computers is required.

This processing, which is called mining, is done by users individually or in groups (the most common mode). These groups are supported by well-known companies in the industry, as BTC Mine and SlushPool, and receive a reward in bitcoins fractions to ensure recording of transactions in blockchain.

How to use bitcoins?

Purchase of products

The first way of using bitcoins is the acquisition of products and services through the virtual currency.

The number of establishments is not yet so great, but there is already a certain variety of companies that bet on bitcoin as a form of payment.

For example, you can purchase technology solutions, games, cars, hotel rooms, clothes, digital marketing and many other things.

Currency exchange in kind

Do you know those houses or foreign exchange markets you use to buy bitcoins? So they can also be used to sell that virtual currency.

When you need or need a traditional currency (real, dollar, euro), you can quote the bitcoin and make the exchange, also at a brokerage fee.

Direct investment

What many investors and financial institutions do is invest directly on bitcoins. For those who like to high risks, the choice is interesting.

The value of the currency is highly volatile. For you to have an idea, it already came to be worth R$ 3 reais, but rose amazingly with time. Currently, the value of 1 bitcoin is in the house of R$ 8.500 reais, according to Mataf.net.

This quote is one of the highest in the history of bitcoin. Same time last year, its value circulated near the R$ 2.250 reais.

Think about the profit of those who bought bitcoins in mid-2016 and sold in mid-2017.

In the market for buying bitcoins, it is important not to be afraid of the risks and volatility of the currency. In the same way that growth is great, the fall can also be huge.

An important detail is that there are different quotations for bitcoins. Therefore, it is common to find investors who buy this currency in one place for a certain amount and then sell for another in a different market.

Different ways of using bitcoins do not differ much from traditional currencies such as credit and cash. It is possible to buy different types of things, make exchange trades and make direct investments looking for an above-average profitability.

In fact, the decentralized, democratic and independent aspect of bitcoins stimulates its movement because it involves derisory rates for transactions, more security and practicality for its users.

So now that you already know how to use bitcoins, do you want to acquire them and use them in your business and in your personal finances?

Tell us what you think of this coin and enjoy to get your questions answered with us in the comments!