Bitcoin is the first digital currency that can reduce the need for intermediaries. By circumventing banks or payment processing, Bitcoin is developing a worldwide decentralized marketplace, whose participation requires only an internet connection and the investment of fiat money (national currency). To get started, earn Bitcoins through online exchanges. Then, create a digital wallet to store Bitcoins. From here, send Bitcoins to individual wallets or merchants if you want to use them to pay for goods or services. You can also save Bitcoin as an investment or trade it for other cryptocurrencies on online exchanges.
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Method 1 of 4: Earning Bitcoin
Step 1. Buy a small amount of Bitcoin directly over the internet
On some sites, such as Indacoin or SpectroCoin, you can immediately buy small amounts of Bitcoin using a credit or debit card.
- Limits on the number of Bitcoins that can be purchased vary on various sites. For example, Indacoin limits the first transaction to IDR 750,000. After 4 days, you can make a second transaction of up to IDR 1,500,000.
- If you want to buy a small amount of Bitcoin without needing to register or create an account on the site, this transaction is for you.
Step 2. Use a trading exchange to buy large amounts of Bitcoin
Through an online cryptocurrency exchange, such as Coinbase or Kraken, you can create an account to buy and sell large amounts of Bitcoin. This exchange operates similarly to a stock exchange, with a buy/sell spread.
- For those who live in the United States, consider using Gemini, which is a licensed exchange that is overseen by regulators. Although it is not as secure as traditional banks, the applicable rules and regulations make it more secure than other online exchanges.
- Opening an account on a cryptocurrency exchange is similar to opening a bank or investment account. You are asked to provide your real name and contact information. Once verified, you deposit money into your account to use to buy Bitcoins. Various exchanges have different minimum deposit amounts, although some are only up to a few tens of thousands of rupiah.
Tip:
Once you have purchased Bitcoin through an exchange, it is much safer to transfer it from your exchange account to a more secure wallet. Large exchanges are a prime target for hackers.
Step 3. Exchange money for Bitcoin at a Bitcoin ATM
Bitcoin ATMs have sprung up in major cities around the world, and allow you to put money in to buy Bitcoins. This machine will transfer the purchased Bitcoins to an online wallet for you to retrieve, or issue a paper wallet containing a QR code to scan and earn Bitcoins.
Go to https://coinatmradar.com/ to check the map showing Bitcoin ATMs near you. In Indonesia, currently there are only Bitcoin ATMs in Jakarta and Bali
Step 4. Earn Bitcoins online by selling products and services
If you sell products or services over the internet, you can add Bitcoin as a payment method in your online store or website.
- If you have your own website and want to accept Bitcoin, you can download promotional graphics at
- Bitcoin auction sites, such as OpenBazaar, allow you to open a shop, similar to eBay, and accept payments in Bitcoin.
Step 5. Buy Bitcoins from other people offline
As with the normal exchange rate, you can meet someone and exchange money (or other commodities) for Bitcoin. Go to https://localbitcoins.com/ to connect with other people in your area who are interested in making offline transactions.
You have to be extra vigilant and only buy a small amount of Bitcoin until you fully trust the person concerned. Don't bring a lot of money with you to the appointment. To be on the safe side, meet in a public place or parking lot near the police station
Step 6. Run the Bitcoin mining program
To “mine” Bitcoin, you need to set up a computer to solve complex equations and add solutions to the blockchain. Usually, you need expensive equipment and software, as well as a separate server, to be able to mine Bitcoin. Some cloud mining companies allow you to mine with them, but it's usually much more efficient to buy Bitcoin on an exchange than trying to mine it yourself.
In the early days of Bitcoin, anyone could still mine Bitcoin and make a profit. However, since 2018, the most profitable mining operations are run by large and specialized companies
Method 2 of 4: Setting Up a Bitcoin Wallet
Step 1. Try a mobile wallet if you want to access Bitcoin
Mobile wallet is a smartphone application available for iPhone and Android. This app is easy to use and is a great option for beginners, especially if you only have a small amount of Bitcoin and want to always have access to it.
Some popular Bitcoin wallets include Airbitz and Breadwallet. Unlike Breadwallet, Airbitz manages accounts using usernames and passwords and doesn't actually store or have access to your Bitcoins
Step 2. Create a web wallet for online use
If you plan to use Bitcoin primarily for online shopping, a web wallet is the best for you. This wallet is practical and easy to use so you don't have to be too tech savvy.
- A web wallet works just like any other online account. You just need to register, transfer your Bitcoins and then log in to manage your wallet.
- Because of the security risks that come with web wallets, we recommend choosing a hybrid wallet, such as Copay, which can be used on multiple devices and provides an additional layer of security that regular web wallets don't provide.
Step 3. Download the software wallet if you want more control
A software wallet, as the name implies, requires you to download software to your computer. Once the software has been downloaded, you no longer need to rely on third-party services to complete Bitcoin transactions. Blockchain takes 2 days to download, depending on connection speed. We recommend that you download the wallet to a separate computer dedicated to Bitcoin.
- Bitcoin Core is the "official" wallet for Bitcoin, but it is less than satisfactory due to its lack of features and slow processing speed. However, this wallet offers greater security and privacy as it does not rely on external servers and all transactions are routed using Tor.
- Armory is a secure Bitcoin software wallet and provides more features than Bitcoin Core, but is also quite complex and difficult to use.
Step 4. Purchase a hardware wallet for increased security
Hardware wallets, commonly referred to as "cold storage" are small devices designed to be just Bitcoin wallets. Since no software can be installed in it, this is the method with the highest level of security.
- Hardware wallet prices start at IDR 1,500,000. You don't need to buy the most expensive hardware wallet for the best security. One of the most highly rated Bitcoin hardware wallets, Trezor, is only priced at IDR 1,650,000.
- If you have a used iPhone that is permanently damaged and just lying around, try formatting its contents and installing nothing but a mobile wallet app, such as Breadwallet, and using it to store it as a cold storage device.
Tip:
If you plan to buy or use another digital currency besides Bitcoin, look for a hardware wallet that can support it, such as Ledger or Trezor.
Step 5. Print a paper wallet for long term safe storage
Paper wallets are particularly inconvenient if you plan to use Bitcoin frequently in the short term. However, if you are only buying Bitcoins to hold for a long time, it is safest to use a paper wallet.
- Through paper wallets, the public and private addresses for your Bitcoins are stored on a piece of paper in the form of a QR code. Since Bitcoin is completely offline, your wallet is safe from hackers. However, you will need to scan the code to regain access to your funds.
- While paper wallets allow your Bitcoin to be safe from hackers, don't forget that they are paper wallets, which means they are vulnerable to fire, flooding, and anything that could destroy them (e.g. pets). Store paper in a safe and tightly locked place.
Step 6. Keep your wallet safe
No matter what level of wallet security you use, you can still increase it. Make regular backups of your Bitcoin wallet, and keep multiple backups in different places so you can still access them even if one of them gets destroyed.
- For example, you could keep a spare wallet at home, and another at work (if there's a safe place there). You can also keep a spare wallet in the car dashboard drawer. Also consider entrusting your backup to a trusted relative or friend.
- If you're using a paper wallet, print out several copies to keep in various places for backup.
Tip:
Encrypt all wallet backups stored on the internet. Use secure passwords and add 2-factor authentication whenever possible.
Step 7. Create a public and private Bitcoin address
Public addresses allow you to receive Bitcoins from other people. Private addresses are the ones used to send Bitcoins to other people. A public address is a random 30-character string of alphanumeric characters starting with the numbers "1" or "3." Private addresses have a greater number of characters and begin with the number "5" or "6."
The wallet creates these addresses or "keys". This address is usually given as a QR code that can be scanned. By scanning the code, you can easily pay for products and services
Step 8. Use a public address to transfer Bitcoins to your wallet
A public address is a version of a public key similar to a bank account number. When you have finished creating a wallet, use a public address to send the purchased Bitcoins to your wallet.
Your exchange account has the option to "send" or "withdraw" Bitcoin. Select that option, then enter a public address to the wallet to which you want to send Bitcoin. It usually takes a few hours before Bitcoin appears in your wallet
Method 3 of 4: Completing a Bitcoin Transaction
Step 1. Transfer the Bitcoin you want to use to an accessible wallet
If you buy something online or just pay Bitcoin to an individual, you can copy the information needed to complete the transaction from any type of wallet. However, if you want to pay for goods or services directly, you will need Bitcoin in a wallet that is easy to access and carry around, such as a mobile wallet.
Many merchants use applications, such as BitPay, to process their Bitcoin transactions. To use a mobile wallet, make sure your wallet is compatible with the app the merchant is using. When you download the mobile wallet app, the program will tell you what services are compatible with the associated wallet
Step 2. Copy or scan the payment information
The merchant or individual you wish to pay will provide you with their public address. Next, you need to send Bitcoins from the wallet to that public address to pay for the related goods or services.
- Usually, you will receive a receipt detailing the amount of Bitcoin that needs to be paid to the individual or merchant. The value of Bitcoins is so volatile that these receipts are only valid for a short period of time, usually 10-15 minutes.
- Many individuals and merchants provide QR codes so you can simply scan them through the mobile wallet app on your phone to send Bitcoins to the right address.
Step 3. Send Bitcoin to the copied address
From within the wallet app, select the option to send Bitcoins to another wallet. Enter the payment information that the individual or merchant provided along with the amount of Bitcoin you wish to send. Then, tap or click the button to send Bitcoin.
If you scan the QR code from within the wallet app, all this information will be auto-filled for you. Double check all the details to make sure they are correct before clicking send
Tip:
Bitcoin transactions are subject to mining and network processing fees. These fees are added to the total purchase price or charged to the merchant or individual who accepts your Bitcoin.
Step 4. Wait until the transaction is confirmed
After you enter the payment, the transaction is sent to the blockchain for confirmation. Miners (Bitcoin users with powerful computers) work to confirm transactions. The length of time it takes is usually 10-30 minutes.
Confirmed transactions cannot be cancelled. If you buy something from a merchant, the purchased item or service will be received before the transaction is fully confirmed. However, you may be sent another payment receipt if the transaction has not been confirmed or takes several hours to complete
Method 4 of 4: Exploring Ways to Use Bitcoin
Step 1. Barter Bitcoin for another digital currency
Some new digital currencies, such as Ardor, can only be purchased with other digital currencies. Bartering Bitcoin allows you to diversify your digital currency.
If you want to trade cryptocurrencies, consider using an exchange like Abra, which allows you to have multiple wallets in the same account. That way, you can manage multiple digital currencies, as well as fiat currencies, without having to switch exchanges
Step 2. Shop online using Bitcoin
Many retail and online service providers, including Overstock, Microsoft, and Newegg, accept Bitcoin payments. When browsing online shopping sites, look for the Bitcoin logo.
- Many vendors on Etsy and Shopify also accept Bitcoin payments.
- The number of retailers and service providers accepting Bitcoins is growing every day so if one of your favorite sites doesn't accept Bitcoin, this could change in the future. You can also submit suggestions to the site's customer service for accepting Bitcoin payments.
Step 3. Turn Bitcoins into gift cards
Pioneered by Gyft, there are many gift card sites that accept Bitcoin as gift card payments at major online stores and retailers, including large companies like Amazon, Starbucks, and Target.
Some sites, such as Gyft, offer discounts and rewards to customers who buy gift cards using Bitcoin
Step 4. Pay for services or subscriptions with Bitcoin
Online services such as VPN networks, domain name registrations, and internet service providers often accept Bitcoin payments. Many sites allow you to use Bitcoin to purchase premium memberships or services.
- Dating sites like OkCupid accept Bitcoin payments. You can also subscribe to Bloomberg, the Chicago Sun-Times, and other foreign online newspapers using Bitcoin.
- If you have a blog on WordPress, you can use Bitcoin to pay for additional services and blogging options.
Step 5. Store Bitcoins and wait for the value to increase
Since the value of digital currencies is very volatile, using Bitcoin as an investment is very risky. However, if you want to monitor the market closely, there is a chance you can make a profit.
- You should be extra wary of companies or sites that claim to be able to double your Bitcoin, offer high interest rates, or help you invest Bitcoin for a big profit. Most of these sites and companies are scammers or target pyramid schemes. You may get good returns for a few months, but then fall to nothing.
- You can trade Bitcoin like trading stocks or other commodities. However, this method requires knowledge and practice to be successful.
Step 6. Use Bitcoin for donations
There are a number of charities and foundations that accept donations in various digital currencies, including Bitcoin. Many of these organizations, such as the Electronic Frontier Foundation (EFF) and The Internet Archive, are dedicated to supporting internet freedom.
Prior to the 2017 holiday season, Bitcoin published a list of 15 foundations accepting donations in Bitcoin on the news site
Tip:
Like online retail, look for the Bitcoin logo on the website of your favorite charity or foundation. If these charities or foundations haven't accepted Bitcoin yet, get in touch and suggest them to the organization.
Step 7. Look for a local merchant that accepts Bitcoin
Although transaction fees and long confirmation times make Bitcoin an impractical payment method for large merchants, there are still some who accept it. However, there are major retailers that accept Bitcoin payments.
- For a list of retailers that accept Bitcoin payments, visit https://coinmap.org/welcome/ or
- As with online retail, look for the Bitcoin logo alongside a large credit card logo on the store door or at the checkout counter.
Tips
Bitcoins can be divided indefinitely. You don't need to buy or use 1 Bitcoin. You can use (or send) 0.0000000001 Bitcoin, or even less
Warning
- Bitcoins are often trusted completely anonymously. However, current versions of Bitcoin use pseudonyms and can still be traced. Do not use Bitcoin for illegal transactions because the authorities can still trace purchases to you.
- Bitcoin transactions cannot be reversed. Don't forget this when you barter or buy using foreign currency.
