how to use bitcoins

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Joined: Sun Dec 23, 2012 1:17 pm

how to use bitcoins

Post by wearehidden » Fri Jan 11, 2013 8:00 am


Bitcoin is a digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Bitcoin is also the name of the open source software which enables the use of this currency.

What is Bitcoin [video] introduction

What is Bitcoin [text/wiki] introduction

How to get a wallet (first step)

Bitcoin clients Downloads:

For Windows ... e/download

For Linux (tgz 32/64 bit download) ... z/download

mac ... g/download

After downloading, simply install the client on your Windows, Mac or Linux computer. It will automatically create a wallet for you and start downloading the transaction history.

Step by step:

1) install and complete installation wizard



The Bitcoin window will open and connections will start up in minutes. The blocks will begin downloading.


) Your wallet will automatically have your first bitcoin address.

* see details of bitcoin address a bit further down

Want to get started right away and get a few free bitcoins to test it out? Then look into Bonus programs (more about that below) There are many free marketing sites that offer this, for first time users. Here are three examples.


4) Fill in the form with your bitcoin address. (enter a captcha)


6) After about one hour the transaction should get 6 confirmations. You are able to spend the coins once the transaction shows at least one confirmation.

The confirmation counter (like the block counter) will increase by one roughly every 10 minutes. Six confirmations are considered as 100% sure a transfer has been processed.

Another way to get a wallet is to get one online at flexcoin, InstaWallet or MyWallet. With this option you don’t have to install anything, but you have to take great care not to lose your password and you’re trusting that site to keep your wallet safe.

1) Open e.g. MyWallet

2) Click the “Start a new wallet” button in the top left

3) Enter a secure password. It is important this password is kept safe as lost passwords cannot be recovered. Click continue when done.

4) You may optional enter an email or short link for your wallet.

5) Proceed to the next page and login with the password you just used.

6) You can now begin sending and receiving bitcoin, Your new bitcoin address is listed on the “My Addresses” page.

Bitcoin Address:

Once your wallet is set up, you’ll get your first Bitcoin address, which means you’re ready to receive Bitcoins. A Bitcoin address, or simply address, is an identifier of approximately 34 alphanumeric characters, that looks like this:

Example of a address is: 37muSN5ZrukVTvyVh3mT5Zc5ew9L9CBare

Whenever you send a coin, you are actually sending a cryptographically signed message, associating your coin with the recipient’s address. This effectively transfers ownership to to the recipient. Once they own the coin, they are free to transfer it to another person.

A wallet is a collection of addresses. You can create as many new addresses as you wish; having more addresses makes you more anonymous, because then people cannot see how much BTC you received. Your wallet contains the secret keys used for spending that money, and must be backed-up regularly. If you lose the wallet then you no longer possess the money.

How to get bitcoins

Bonus Programs These websites have bonus programs that allow you to earn bitcoins by doing things like taking surveys, trying apps, viewing advertisements, referring others to the website, and making purchases at other websites. Not the most convenient way, and only offers small payouts.
See if there are local Bitcoiners in your area at
You can buy bitcoins at e.g.
If you prefer skipping the exchange and dealing directly with other people you can head over to the Bitcoin market place.


Let’s clear up some misconceptions about mining. Most Bitcoin users don’t mine! Bitcoin mining is a business and very competitive. But if this is what you want to do here are some pointers, it can get a bit advanced, and you want to do some further research on your own. there are tons of great forums about bitcoin mining.

Solo mining

Instead of joining a pool, you can setup your Bitcoin client to run “solo” and attempt to solve/generate blocks yourself without the need of joining a pool. There are a few steps you will need to take in order to begin, such as downloading the Bitcoin client and setting up the RPC settings/users which is explained below. When your machine solves/generates a block, you will be rewarded 50+ Bitcoins in your client, yes, all to yourself without sharing with anyone. Solo mining is based off of probability and hashing power; it can take hours, days, weeks, months or if you’re just out of luck, possibly an infinite amount of time.

In simple terms, solo mining is when a miner performs the mining operations alone without joining a pool. All mined blocks are generated to the miner’s credit.

Solo Mining Pros

• Solo mining is less prone to outages resulting in higher uptime.
• Solo mining doesn’t incur any fees.
For each discovered block, 50 BTC and the transaction fees are paid to the miner.

Solo Mining Cons

• Solo mining tends to generate more erratic income.
• Solo mining wastes time due to only supporting getwork pull.

If you are 100% certain you’d like to solo mine and understand the risk of not finding a block for days and or months , please follow the steps below:

1: Download the Bitcoin client.

2: Install the application run it.

3: Close/Exit out of the Bitcoin application.

4: Download the GUIMiner tool from here (includes q&a and installation help)

5: Install and run the application.

6: After running GUIMiner, you will need to create a solo password.

7: From the menu item in GUIMiner, select “solo utilities” > “create solo password.”

8: Create anything arbitrary for username and password; but remember it.

9: After you have created your solo user/password, select “launch Bitcoin client as server”

10: This should bring back the Bitcoin client in in server mode.

11: Wait until all the blocks are downloaded; the bottom right status bar in the Bitcoin client will display a number such as 131,304, visit Bitcoin block explorer to see what your count should be.

12: After your block number matches what is on the website, you are ready to solo mine.

13: Select “solo” from the dropdown of GUIMiner and enter the credentials you created in step 8.

14: Select your OpenCL card (Your video card, codenames are given such as Cypress [0] etc… as your first miner.

15: If you have two video cards, you will see an additional one named something like Cypress [1].

16: Repeat step 13 for the 2nd card and begin mining for each card and or computer.

Note: If you are unable to connect and or are seeing “Unable to connect to RPC” please follow these additional steps:

1: If you are using Windows 7, navigate to: C:\Users\[username]\AppData\Roaming\Bitcoin I

2: Inside the appropiate bitcoin folder, open “bitcoin.conf” with notepad.

3: Make sure you see the following:

rpcuser=you username you selected in step 8
rpcpassword= your user password you selected in step 8

4: Save, exit notepad, exit GUIMiner/Bitcoin.

5: Open GUIMiner, select as server and begin mining.

Note: It may be needed to open ports during this process such as port 8332 and 8333 (TCP) on your router

Mining Pools

If you like steady payouts, such as 1-2 BTC per day, you should consider mining in a pool. When you join a pool, you are combining your hashing power with all of the other users on that pool. Instead of 600 mHases/s (lets say you have two ATI 5830’s to mine) you will contribute your 600 mHashes/s to the pool’s overall hashing rate. The higher the hashing rate, the more shares or payouts you will get. A typical 1.8 gHash machine that has joined a good solid pool can generate anywhere up to 2-3 Bitcoins per day. The more hashing power the pool has, the bigger your payouts are and the faster the pool solves blocks. It is solely up to you to either solo-mine or join a pool. If you do not have a sufficient amount of hashing power, consider joining a pool.

Pool Mining Pros

• Pooled mining generates a steadier income.
• Pooled mining can generate a 1-2% higher income (before fees, if any) due to long polling provided by the pools

Pool Mining Cons

• Pool mining can suffer interruptions from outages at the pool provider.
-Pools are subject to DOS attacks and have other downtimes, too. Backup pools and solo mining can be configured for these cases.

• Pooled mining tends to generate a smaller income due to fees being charged and transaction fees not being cashed out.
- There are zero fee pools. Until now, transaction fees are not cashed out by any pool.

• Pools might be part of attack scenarios.

Some top pools (there are many, always search for more, ask other miners of favorites etc these are just examples)

Or just simply advertise your address, (e.g “send bitcoins to”, “donate bitcoins to” etc )

Ok so now are your starting to receive Bitcoins, what to do with them? what can you buy with them? How to trade etc You must check out the Bitcoin Wiki page, lots of information/links there.