Bitcoin QT wallet guide

With bitcoin in all of the major news outlets lately,many people are asking “what are these things called bitcoins?” The purpose of this article is to give you a very basic introduction to bitcoin,without getting super geeky. Enjoy!

What is Bitcoin?

Bitcoin is an open source peer-to-peer payment system. The system uses bitcoins,with a lower case b,which are a digital currency that can be used like any other currency like US Dollars,Euro,etc.

Unlike other forms of virtual payment,like PayPal or credit cards,bitcoins do not require a third party to conduct the transaction which means no fees,no restrictions on what you can use your money for,and no processing delays.

How are Bitcoin transactions performed?

In order to use bitcoins,you need create a “wallet” where you will store your bitcoins. Wallets can be created online at sites like Blockchain.info and Coinbase.com. Wallets can also be created on your computer or mobile device by downloading numerous wallets out there,such as Bitcoin-qt.

For beginners,I feel it is best to create a wallet on blockchain.info. Once you are set up,you can use your bitcoins by sending them from a computer or your mobile device,by simply using the receiver’s QR code or wallet address.

Every user has his or her own Bitcoin address,just like every Internet user has an IP address. In fact,you can have multiple addresses (wallets). Your bitcoins are stored on your account and can be sent to any other bitcoin user in a matter of seconds,just like PayPal but directly from payer to sender without a middleman. When a transaction is performed,the transaction is recorded in the Bitcoin public ledger that is updated regularly by bitcoin miners,people who help validate the transactions in return for bitcoins. More on that later. The validation process ensures that all transactions are recorded and no user can spend their bitcoins more than once.

What are Bitcoin’s advantages?

Although new,Bitcoin has already proven advantageous for both merchants and consumers.