A Primer on Bitcoins &
Digital Currencies
By Ankur Vats

What is Bitcoin and Cryptocurrencies?
 Bitcoin is a form of digital currency.
 In 2013 , this digital currency suddenly shot up in price from $13 to an
unbelievable price of over $1000
 Its popularity soared after that .
 Bitcoins are in fact a kind of electronic money, the first cryptocurrency
started circulation in 2009 and over which the government or traditional
banking protocols have no control of.
 In traditional currencies, the decision regarding the amount to be printed
depends heavily upon factors such as inflation, and is governed and
regulated by a central bank.

 Contrary to this, there is no central authority to regulate Bitcoin and
other Cryptocurrencies supply and transactions.
 It is the peoples confidence in this digital currency that decides it
value. So the more people who believe in it, the better the demand
and the higher the price will go.
Bitcoins…

The Use of Bitcoins
 You can use Bitcoins to purchase things from people or internet who
accepts these electronic currencies. Moreover, since these coins are digital,
they can even be transferred over the internet through the proper
software, thereby leading to successful online transactions.
 Bitcoins are a quite attractive propositions if you are looking forward to
the settlement of international transactions, but hate being plagued by
exchanged rates or bank charges.

The Aftermath…
 The wild success of Bitcoin has inspired the launch of a number of other
competing Cryptocurrencies such as PPCoin, Freicoin, Litrcoin, Dogecoin
and so on.
 You guys can go to www.cryptsy.com for a list of tradable and active coins
that are available today.

The History of Bitcoin
 The creator of Bitcoin is Satoshi Nakamoto who created it in 2007.
 Bitcoin.org first surfaced on the internet in 2008.
 The first Bitcoin transaction was conducted in 2009 between Mr. Satoshi
and Hal Finney, a cryptographic activist and a developer.
 In the same yearn an exchange rate is published for this electronic
currency with a value against US dollars at 1309.03 BTC per dollar.
 In 2010 a truly historic event took place when 10,000 Bitcoins which was
worth $25 at that time was spent on Pizza. It was one of the first
transactions that involved a tangible product. Today, that amount of
Bitcoins would be equivalent to at least 5 million dollars.

Coming Into Present
 A range of events geared up in 2011, including significant ones like Bitcoin
becoming on par with the US Dollar, an offer to sell a vehicle for Bitcoins,
the opening of exchange markets with respect to the British pound
Sterling and Brazilian Real, and so on.
 In 2013, the market capitalization of Bitcoin rose to $1 Billion and in April
2013, the value went beyond $100.
 From 2013 onwards space travel could be conducted in exchange of
Bitcoins by Virgin Galactic a company that belongs to Richard Branson.
 At the end of 2013, Bitcoins and other digital currencies suddenly
exploded in price thanks to the power of the media and the internet
bringing the peak price to $1000 per coins.

How Does Bitcoin Work ?
 Bitcoins are actually generated by computer online by dealing with
difficult math tasks and is more widely known as Bitcoin mining.
 The math tasks in the Bitcoin mining are programmed to progressively
increase in difficulty.
 This means it will become more and more difficult to ‘mine’ Bitcoins over
time and the total amount of Bitcoins that will ever be mined is capped at
21 million coins.
 Hence, because of this very unique arrangement, no central bank has
control over the flow of Bitcoins or can manipulate its value which is
already in circulation.

A Strong System
 All the computers in the network are coded to be used to monitor and
verify the validity of each Bitcoin that is mined and all the transactions
between users.
 Around 25 new Bitcoins are mined every 10 minutes.
 Which is why more and more Bitcoin miners are building powerful
computers just for the use of Bitcoin mining.
 Bitcoins can be bought, sold or traded with real money in a lot of online
exchanges.

How Does Bitcoin Protocol Work ?
 First Steps: A signed letter of intent
 “I, Alice, am giving Bob one infocoin”
 Using serial number to make coins uniquely identifiable
 “I, Alice, am giving Bob one infocoin, with serial number 1234567”
 Making everyone collectively the bank
 Proof-of-work(SHA-256)
 h("Hello, world!0") =
1312af178c253f84028d480a6adc1e25e81caa44c749ec81976192e2ec934c64

Your First Bitcoin Wallet
 A Bitcoin wallet is a simple software to keep all your Bitcoins.
 As the owner of the wallet you MUST take extra care to give it a good and
lengthy password and never forget it.
 If you lose your password or wallet, all your Bitcoins inside will be gone.
 So for this reason only you should always make a backup of your wallet.
 You can always backup your wallet by making a copy of it and placing it
on another secure hard drive or a thumb drive.
 To get your own Bitcoin wallet visit to www.Bitcoin.org/en/download and
choose a wallet.

Getting More Bitcoin and where to use
them..
 https://localbitcoins.com/
 http://egifter.com
 https://www.bitpremier.com/
 http://www.overstock.com/

Who are already accepting Bitcoins
 More and more big companies are accepting Bitcoins right now.
 Let us take a look at some of them big brands.

Accepting Bitcoins is easy
 All you have to do is provide an option for people to pay via
Bitcoin.
 Got to this URL for a comprehensive guide on how to accept
Bitcoins for your online Business.
 www.en.Bitcoin.it/wiki/How_to_accept_Bitcoin_for_smallbusiness

Converting your coins into money
 So what you can do with the coins that you acquire from your business ?
 You can then sell it off in Bitcoin Exchange or use it to buy other
merchandise that accepts Bitcoins.
 In fact, you can use the coins that you acquired to invest and trade for
even more profits.

Simple Steps to Mining
 Step 1 – Get yourself a Bitcoin ‘Wallet’
 Step 2 – Prepare and Calculate your Mining Rig
 Step 3 – Connect your Mining Rig to a client such as CGMiner.
You can download CGMiner from www.github.com/ckolivas/cgminer or you
can also do a google search for other miners as well.
 Step 4 – Configure your mining rig. You can choose to mine Bitcoins or
Cryptocurrencies.
 For Bitcoin mining, it is recommended to join Bitcoin mining pools to maximize your
mining efforts.

Mining Digital Currencies
 Mining Bitcoin requires a PC to be running and connected to the internet
non stop in order to churn out the coins.
 This means the cost that you will have to bear to mine Bitcoins or other
crypto coins is the cost of the hardware, the cost of the electricity and the
cost of the internet fees.
 One of the more popular ways and still profitable ways to mine coins these
days is to mine crypto coins such as lite coin or doge coins and then
convert them into Bitcoins later on.
 What you will need is a basic PC that can run 2 or more graphic cards at
the same time.

What you need to know…
 The PC must be able to withstand the HEAT produced from running the
‘mining rig’ non stop.
 The rough estimate for a basic mining rig will roughly cost $1000.
 And it must have a strong enough power supply that can power the
graphic cards that you use for mining.
 There are many mining methods out there Ex: Mining with PS3 or mining
with an ASIC miner.
 For more details visit : crytobadger.com/build-your-own-litecoin-mining-
rig/

Mining on Cloud…
 There are services available online which allows mining on cloud like:
 ZenCloud
 https://cex.io/r/0/conradx/0/

Free Bitcoins are out there…
 “WorkForBitcoin” offer you the opportunity to search job listings as well as post
them. The majority of the work here involves programming. Work in other fields is
also available, so you can always find something that you are good at that interest
you. (bittask.com)
 ‘Bitcointalk’ forum services section is another viable place to search for jobs that
help you earn Bitcoins. Many of the jobs here can be done within a short span of
time and hence you can earn your digital currencies swiftly. (bitcointalk.org)
 ‘Jobs 4 Bitcoins on reddit’ (reddit.com/r/Jobs4bitcoins)
 Bitgigs.com
 Coinality.com

Ways to Cash in on Bitcoins and other
Crypto Currencies
 First method – is to mine coins and sell them for profit.
 Second method – is to invest in the digital currency with real money and
then sell it again for a profit.
 Third method – is to offer services or products in exchange for Bitcoins or
Cryptocurrencies.
 Fourth method – is to get free Bitcoins