Summary of The Idiot’s Guide to Bitcoin
PAGE 1
PAGE 2
The Idiot’s Guide to Bitcoin
Gustaf van Wyk
All Rights Reserved
Chaos Publications
Disclaimer:
e material in this publication is of the nature of general comment only, and does not rep-
stances and it should not be relied on as the basis for any decision to take action or not to
take action on any matter which it covers. Readers should obtain professional advice where
appropriate, before making any such decision. To the maximum extent of the law, the au-
thor and publisher disclaim all responsibility and liability to any person, arising directly or
indirectly from any person taking or not taking action based upon the information in this
publication.
PAGE 3
Contents
Contents
Foreword – i
About this – iii
Start here – v
Part 1 – MONEY
Chapter 1 – What the Heck is Money, and Why Doesn’t Anyone 1
Care About it During a Zombie Apocalypse?
Chapter 2 – Our Current Monetary System, Paper Currency, 12
Centralized Banking and Debt.
Part 2 – BITCOIN
Chapter 3 – WHAT IS BITCOIN
• How Bitcoin is changing the World 23
• What is Cryptocurrency 24
• The Rise of Bitcoin 26
• Legitimacy 27
• Decentralization 28
• It’s like Gold, but Better 30
Chapter 4 – HOW BITCOIN WORKS 32
• Bitcoin Creation 33
• What can Bitcoins be used for 34
PAGE 4
Idiot’s guide to Bitcoin
Chapter 5 – BUYING & SELLING BITCOIN
• How it’s Done 37
• The Bitcoin Wallet 38
• Paper wallets AKA “Cold Storage” 39
• Software Wallets 42
• Mobile Wallets 44
• Web Wallets 45
• Transferring Bitcoins between Wallets 46
• Buying Bitcoins 47
• Bitcoin Exchanges 48
• Selling Bitcoins 55
Chapter 6 – TRADING BITCOIN 60
• The Bitcoin Economy 61
• The Psychology of Trading 63
• Bitcoin Trading Basics 66
• Live Bitcoin Market Charts 67
• Helpful Mobile Apps 70
• Forums and the Bitcoin Community 71
• Set your alerts and search for Info Daily 72
• Buy Low, Sell High 72
Chapter 7 – SPENDING, ACCEPTING AND PROMOTING BITCOIN 73
• Spending Bitcoin Online 75
• Donating Bitcoins 75
• Spending Bitcoins Offline 76
• Accepting Bitcoins as a merchant 76
Chapter 8 – MINING BITCOIN
• Thar’ be Gold in Them thar’ Hills! 82
• How Mining Works in a Nutshell 83
• Bitcoin Mining Hardware 85
• Bitcoin Mining Software 87
• Mining Pools 88
QUESTIONS & CONCERNS
• I’m Afraid Bitcoin will be hacked – everything 89
can be hacked!
• Will The Government Shut Down Bitcoin? 91
92
• Is Bitcoin Just a Bubble Waiting to Burst?
CONCLUSION 95
PAGE 5
Foreword
Forword
he ‘Idiot’s Guide to Bitcoin’ provides you with an integral
understanding of the digital currency known as Bitcoin which is
Trevolutionizing the way we think about money. It explains everything
you need to know to get involved, from beginning to end.
Though this book is part of a larger movement towards economic
freedom it focuses absolutely on making Bitcoin easy. At rst glance
digital currency might seem like a small and exclusive movement
on the internet that might not have uses beyond those of today’s
laptop-investors and cyberpunks. The ‘Idiot’s Guide to Bitcoin’ aims
to demonstrate how important this change in the way we think about
money is and most of all to show you how easy it is for you to get involved.
The book starts by discussing the main principles of Bitcoin as well as
some of the more politico-economic implications of the revolution.
These are covered in depth but the book is designed in such a way that
these can easily be skipped in case you are more interested in getting
to the nitty gritty of things right from the start. There are some technical
parts to understanding Bitcoin and the book covers these in an easy
to follow, step-by-step fashion. There are ten chapters in all and every
chapter covers a different aspect of Bitcoin in the most appropriate
fashion. Nothing is left out.
The implications of a Revolution, and Bitcoin IS a revolution, is often
uncertain and shrouded in rumour and conjecture. The Idiot’s Guide
to Bitcoin deals with all the concerns surrounding Bitcoin on a factual
basis and strives to inspire con dence in you by giving you a sound
understanding of everything Bitcoin and provide you with resources
that you can turn to when in doubt.
i
PAGE 6
What the Heck is Money, …?
Idiot’s guide to Bitcoin Foreword
I wrote the Idiot’s Guide to Bitcoin with you in mind. I’ve tried to best
support the Bitcoin movement by making it easy and accessible for
everyone. I want you to experience rsthand, as I have, the bene ts
of Bitcoin as a currency as well as a commodity. I wanted to show you
the freedom that Bitcoin offers and that the returns are nothing short of
magni cent. I wanted to be the one to introduce you to our future! So
I wrote the Idiot’s Guide to Bitcoin.
What you read in these pages could set you free and give you
con dence that the future of global economics is not dire. Not to
mention the nancial gains that stand to be made as the relative young
economy grows and its value increases. So I encourage you to grab this
opportunity with both hands and join us in making the world a freer and
wealthier place for everyone.
Wishing you freedom and prosperity
Gustaf van Wyk
ii
PAGE 7
About this…
About
lmost two years ago I was made aware of Bitcoin as an anonymous
way to make payments. At the time Bitcoin’s value as a means
Aof exchange seemed to be very much linked to the clandestine
depths of the internet. It’s was trading at below $10 for one and didn’t
look like much but on that fateful day the larger implications of Bitcoin
dawned on me.
I have always maintained a strong philosophical approach to life and
as such have resolved to stand for that one and only absolute right of
man that is freedom. I had been aware of the dictatorship-like form
of the global nancial situation for a long time. Centralized banking is
a curse on modern life, a poorly disguised form of good ol’ slavery in
the form of self-perpetuating debt and everybody knows it, right. Yet
despite a pervasive awareness of its oppressive nature, we-the-people
are stil ruled by and subject to these powers. It stil surprises me how
seldom these accusations are taken seriously, and when they are, they
are very easily dissolved, discredited or destroyed by those that guard
and maintain the apexes of power. So ghting the ght on the ground
just isn’t, and will never be effective. Not as long as they have us by the
wallet. It would be far more effective to just nd and implement our
own solution that works immediately and circumvents politics which as
you know is far more self-serving than it is service-providing. I realised in
a moment that Bitcoin offers just such a solution.
Bitcoin threatens to make obsolete a system of power that is aggressively
defended by those that wield its sceptre but my book, the Idiot’s Guide
to Bitcoin, was not written in de ance of the corrupt but rather in support
of the free. Bitcoin is a modern solution to an old problem. If money
is power then Bitcoin gives it back to the people. Should Bitcoin ever
become globally accepted as a mainstream way to safely and freely
iii
PAGE 8
What the Heck is Money, …?
Idiot’s guide to Bitcoin Foreword
make payments then mankind will take a revolutionary step, a leap
forward into the next chapter of civilization. We would expel the use of
force from our economies and embrace free and volitional exchange,
as trade was meant to be. Something the founding fathers would be
proud of.
I believe absolutely in the potential that concepts like Bitcoin and
decentralized currency have to change the world as we know it, and
I am not alone. Every day the revolution grows. When I look at history
and see the progress we’ve made from medieval to modern, I can’t
help but feel that progress in the right direction is inevitable despite the
best efforts of the corruption in man. Freedom is inevitable it’s just a
matter of time. Bitcoin, if nothing else, is a step in the right direction. The
Idiot’s Guide to Bitcoin is a gesture in support of the movement.
iv
PAGE 9
Start Here
Start H
Just a Quick Note Before we get Started
Part I of this book is about money and the problems that modern
nancial systems pose to us as a civilisation. It exposes the problem to
which Bitcoin is a solution. It is a good place to start if you are interested
in the politico-economic implications of Bitcoin. However, if you are
unconcerned about all that jazz and want to get right into Bitcoin and
understanding how to buy, sell, trade, spend, mine and promote Bitcoin
then skip straight to Part II on page 23.
Part II is the in-depth step-by-step guide that the title of this book promises
to be.
Enjoy!
v
PAGE 10
PART 1
Money
What the Heck is Money,
And Why Doesn’t Anyone Care About it
During a Zombie Apocalypse?
(Chapter 1)
rom the minute we’re born until the
Fminute we die, one thing is always
principal on our mind – money. Without
it we can’t have a roof over our head. We
can’t put food in our mouths. We can’t move from point A to point B. We
are driven through formal education from grade school to high school to
college to corporate training and beyond so that we may nd a suitable
career in life in order to trade our time and services in exchange for
money. When we’re not busy making money or complaining about the
job we hate, we’re out spending money and complaining about how
broke we are – well at least around 97% of us are.