What is Bitcoin? – New Kindle Edition

What is Bitcoin, is a consistently high ranking search term on google and a question that our readers constantly ask.  Bitcoin is an innovative payment network and a new kind of money called cryptocurrency.  



Institutional Investors are on their way!




Data Shows US Dollar, Not Japanese Yen, Is Dominating Bitcoin Trade

Due to the success of Bitcoin, numerous new cryptocurrencies are entering the market.  Once such cryptocurrency, Bitcoin Cash, which was derived from a software update to the Bitcoin blockchain mid-2017, is making headlines. Bitcoin and blockchain technology is changing our financial world and we all need to educate ourselves on cryptocurrency and the new digital economy.


The new Kindle book, What is Bitcoin?, is not only an introduction to Bitcoin and blockchain but also a very handy resource guide, listing numerous resources that the Bitcoin enthusiast or trader might need.


What is Bitcoin? – The e-book is available for download on Amazon or you could read the full version here.  This is an overview of what you can do with the cryptocurrency as well as some hints and tips are provided, including some links to websites to guide you in your endeavour to understand Bitcoin, also known as the “Internet of Money”.


You can see by reading the list of contents below, this is a comprehensive guide and this is a must read for any “Bitcoiner”. 



A short summary of the contents of What is Bitcoin?

Part 1 – An introduction to, What is Bitcoin?

What can I do with BTC?

How much do I need to know to be involved with Bitcoin?

Legal requirements

Part 2 – How is Bitcoin processed

Part 3 – How to trade with Bitcoin

Part 4 – How to store your Bitcoin

Part 5 – How to make money with Bitcoin

Part 6 – Bitcoin mining

Part 7 – Conclusion 

Part 8 – Resources





PART ONE – Introduction:  What is Bitcoin


Bitcoin (BTC) is a virtual currency, digital, not physical, and independent of banks. It is a peer-to-peer network supported by its users via computing power with no central authority.

Bitcoin was designed in 2008 by Satoshi Nakamoto (alias) and released publically as open-source software in 2009.   Satoshi Nakamoto was involved with the project until late 2010, without disclosing his identity.  BTC has gained popularity as an online method for payments and may be used for anonymous transactions and is irreversible, thus to be treated like cash.  Bitcoin has proved itself to be a “store of value”.


Bitcoin is basically software that follows a protocol and utilises a technology called the Blockchain. The Blockchain is a digital ledger where transactions are recorded in chronological order and cannot be altered. Processing the transactions is called mining.


All cryptocurrencies such as BTC (crypto) utilise the Blockchain. As cryptocurrencies are software you might be required to download a virtual wallet for the cryptocurrency you wish to store. In some cases when you download a virtual wallet you must also download the entire Blockchain, but not always necessary. There are different types of wallets with different security measures.


Keep in mind that as cryptocurrency is basically software with various functionality, such as building smart contracts. The algorithm that dictates the software protocol can also be useful ie. The use of cryptography for encryption of IoT devices.


Bitcoin is the first cryptocurrency introduced and as a result, most widely used and the most popular, however, there are many cryptocurrencies with different uses and are referred to as altcoins – Alternative Coins. Any altcoin including BTC can also be referred to as ‘coins’. When buying altcoins, BTC is mostly used. BTC is currently the main ‘gateway’ to purchase other altcoins, however, there is also other ‘pairing’ with other cryptocurrencies including Fiat currency such as USD, YUAN, YEN, KRW.


The term cryptocurrency is the technically correct term that can be used with Bitcoin/altcoins. ‘Crypto’ pertains to cryptography and is the base of these virtual currencies. Cryptography is about constructing and analysing protocols that prevent the public from reading private messages and/or to secure transactions. This is an intriguing part of mining and a high knowledge skill base is needed to be profitable.


Most importantly remember most cryptocurrency enthusiasts believe strongly in being decentralised and anonymous.


Who controls the Bitcoin network?

Nobody owns the Bitcoin network – Bitcoin is controlled by all BTC users around the world making it decentralised.  Developers of the software cannot force a change in the Bitcoin protocol because all users/miners are free to choose which software they wish to run.  They do, however, need to use the same software complying with the same rules – this requires complete consensus which is strongly protected.



What can I do with BTC?


You can trade on the markets, buy/sell alt-coins, buy/sell BTC, buy/sell commodities, buy/sell other real currencies, loan/borrow, mine (digital mining) and buy/sell real products or pay expenses. Basically, whatever you can do now with money you can do also with BTC, but easier and cheaper.




Different countries accept BTC at different places and are becoming more widespread for payments as more people adopt BTC.  Many online stores now accept BTC as payment.


Currently, some countries, for example, Australia and Switzerland, you can pay for utility bills and pay certain phone carriers with BTC. Bitcoin ATM’s aka BTM’s are popping up globally making cryptocurrency accessible to the general public.  



Many countries in Europe accept BTC as payments including eateries and hotels. Some governments are also showing much interest cryptocurrency (eg. Switzerland, Portugal, Malta, Ecuador, China, Senegal, Singapore, Tunisia, Estonia, Prague, Japan, Palestine, India, Venezuela, Russia and Sweden to name a few).

Invoice for first Lamborghini purchased with Bitcoin


People around the world have bought houses/property with BTC and it is now available to purchase certain high-end luxury vehicles. This is becoming more readily acceptable in many countries

A Lamborghini was the first vehicle bought with Bitcoin in December 2013.




BTC was previously linked to certain Mastercard and Visa Cards (designed for crypto) where you could load BTC onto the card and use your card to spend the BTC by swiping the card.  Recently, Visa stopped this globally without warning leaving some Bitcoiners without access to their funds. Regulation is an attempt to limit criminal activity. Read more here


When you trade BTC, the fee for doing so is normally low (eg. five cents to a few dollars 0.5%-1.5% trading fee) making trading cost effective. In recent times transferring BTC to different wallets has been a hot topic for discussion. At the end of last year, 2017 the median price for transferring BTC was US$31-$52. This is a high cost compared to previous costs of only of a few dollars earlier in the year. There are various options the core BTC team are investigating to decrease these fees at a more reasonable rate.  Issues such as high transaction cost and extended transaction time on the BTC network (blockchain), is giving rise to new altcoins which aim to fill the gap as a fast, efficient payment system such as Bitcoin Cash, Dash and EOT.


There are altcoins with actual use cases as well as crypto’s that are simply clones of BTC derived for speculation.  Also, there are many more ways to invest rather than just trading cryptocurrencies.  Investing in Initial Coin Offerings (ICO) or ‘Internet Start-Ups’ are an option but this is more of an advanced skill with regards to researching your target company.  Read more on cryptocurrencies to watch in 2018



How much do I need to know to be involved?


You only need medium technical knowledge to trade with BTC. The analysis of charts can be as easy or complicated as you wish. The majority traders are only beginners as they buy and sell hoping the coin will go in their favour without knowledge of charts or research into a coin.


If you wish to just buy BTC or other altcoins and only hold them hoping for the increase in value (easy skill level), then this would be the option with the minimal technical knowledge required, although knowing about online security is important.


Easy to medium skill would be someone who can register themselves on a website and then told how to secure their login with two-factor Authentication (2FA) which is a requirement of some cryptocurrency exchanges. Basically, at this skill level, you should be able to login into certain websites and wallets once shown how and to follow instructions. You then could buy and sell anything (eg. Crypto / $US/commodities/ currencies etc) once shown.


Medium to high-end level would be someone who has the understanding to securing their funds, the analysis of charts (candle-stick analysis) with varying degrees of skill.  This includes being at ease to trade and transfers cryptocurrency although you may require help with problem-solving such as funds not received or taking a while to be available. Mining at an entry level where you follow instructions on how to get setup would be included. Different strategies can be learned as well as how to mine other altcoins.


Mining would require a high-level technical knowledge to make a profit and to set up a mining-farm (multiple mining computers connected). You should have ease and understanding of cryptocurrency with profound knowledge of security, such as anyone in who works in IT or has a deep understanding with computers. One would expect ease of analysing charts and the impact of environmental, political and governmental influence on crypto. Having knowledge of the Blockchain is very important as well as the use of smart contracts.



Legal Requirements



Depending on the country of use, BTC may be treated as commodity trading, currency trading or as property and therefore subjected to tax requirements. Not all countries recognise BTC, thus no tax is applied to any profits or any losses recognised.



On 1 April 2017, Japan became the first country to pass a law making BTC a legal payment system, which revealed the cryptocurrency to the retail investor, “Mrs. Watanabe” as well as increasing institutional, merchant and consumer adoption.  Is your country on this list?  Click Here






PART TWO:  How is Bitcoin processed?


BTC is processed by computing power where a network of user-computers becomes a financial public ledger that will process the use of BTC. This is a network of computers and is no longer reliant on one computer to process a transaction but instead many computers to process. As the network comprises of many people from all over the world, no one organisation or person can control or shut down the network.


This makes BTC decentralised, however, sometimes you are required to provide identification to websites that trade with BTC.  This is because the country of origin where that website is registered may have to comply with local laws to prevent money laundering. They must show responsibility to Know Your Customer (KYC) and identify people who can transfer funds out of the country or hide funds. If the local authority approaches them then they can hand over details of interest. Not all websites do this, as it is not required for them. It is this providing of identification that decentralises Bitcoin and hands back financial authority to the government.



Using cryptography to secure and process BTC, special computers are used that process these tasks (mostly ASIC miners) and are connected to the Internet.


It takes time for these miners to process a transaction, in theory, 10 minutes for BTC but practically it will take more time-varying up to hours depending on the fee you wish to pay – Click for more info on transaction fees.


It will take many of these miners to confirm the transaction is correct and valid. This helps secure the network and prevent ‘double spending’. The process once valid is termed ‘confirmation times’ where typically BTC is spendable after one confirmation. The funds, however, will show in your virtual wallet in a matter of seconds. The miners are rewarded with new BTC and fees so it can be financially viable.

Bitcoin transactions are public and can be tracked on the Blockchain Explorer – Blockchain.info


To check on a transaction, there is a search tool available.  Remember, once on the Blockchain, always on the Blockchain.


The BTC network becomes congested due to an increased number of transactions, low transaction fees and, as suggested by some, the block size of 1M which confirm blocks every 10 minutes as per the prescribed schedule developed by Satoshi Nakamoto, Bitcoin’s anonymous inventor.


Check unconfirmed transactions by viewing this website – Unconfirmed Transactions



PART THREE – How to trade with Bitcoin


BTC can be traded on Exchanges (online companies regulated/non-regulated and are located all over the world) to buy other altcoins. Exchanges may also trade commodities and currencies. Some large BTC Exchanges that mostly trade against the US dollar are Bitstamp, Coinbase, and Bitfinex.


Click here to view the BTC Markets


Common commodities include Gold, Silver, Copper, Oil, US$ (any currencies) and are as easy to trade as just buying or selling BTC. BTC can be traded in all currencies but is the most popular and bought in US dollars (followed by the Japanese Yen, Korean Won, Chinese Yuan and Euro). All Exchanges trade with BTC as this is the ‘gateway’ to buy altcoins and crypto-assets.

As these online companies may not be regulated there is a risk of losing your funds. With all Internet-based businesses a risk of hacking, inside job of stealing, cyber attacks can cause you to misappropriate your investments.


Peer-to-Peer trading of BTC is called OTC (over-the-counter).  OTC is facilitated directly between two parties or with the use of a platform called LocalBitcoins. This website connects buyers and sellers locally.


Some wallets (not core BTC wallet) can provide a platform where you can trade securely, and it is recommended never to keep funds on Exchanges just to store BTC/alt-coins. Use exchanges for what they are intended, to buy and sell cryptocurrency.  One of the most important things to remember is that it is best practice to own your private keys vs an exchange holding them.  A private key is a secret number that allows bitcoins to be spent and for this reason, needs to be kept secure, preferably by you. More on storing BTC coming up in the next article.



You can liken Exchanges to Banks, but don’t confuse a Banks’ reputation with an Exchange. Exchanges may not always be honest and have the risk of being hacked. As Bitcoin is mostly unregulated taking an Exchange to court, which is located overseas may not result in a good outcome.



There is, however, reputable Exchanges with examples including Coinbase, Bitstamp, Cryptopia, Gemini, and Binance. There are more available to trade on but careful thought to market volume, legitimacy and Knowing Your Customer (KYC) rules need to be considered before using any service.


Buying your first BTC means you have taken a step into the new digital economy… smile and take a selfie… and keep learning.



PART FOUR – How to store your Bitcoin


You can store Bitcoin or altcoins in the following ways:

  • Paper Wallet
  • Offline
  • Online
  • Encrypted Hardware Device
  • Encrypted Software Wallet


Each method offers both pros and cons


A paper-wallet is just that, a special code (address + keys) that is then printed out on a piece of paper. You can load BTC to an address then physically print your wallet details in a secure way.  This way no one can steal your BTC online even if they stole your computer. They would need to physically view the paper (wallet) to access the BTC.  This is a very secure way to store large amounts of BTC that you don’t need to access immediately but it does need to be physically stored.  Your paper-wallet can be stored somewhere safe such as a home safe or third-party safety deposit box.


An offline wallet is when you download the BTC wallet (or alt-coin wallets) and then the Blockchain (done automatically and will take hours on the first download, however, not always required). It is a very secure method if you are security conscious and maintain a virus/malware/spyware free computer. This is recommended and once set up, is very easy to use. If you wish you could also save your wallet.dat file, which is very small in size and contains all the relevant information needed as a backup, which is then transferred it to a USB.


If you end up having to reinstall your computer then your wallet.dat file will be safe somewhere else and you can re-establish your wallet. You should always encrypt (eg. Trucrypt or similar) your wallet.dat file in case someone tries to steal them from you, although they still need your password to open the wallet. It does not matter if you need to re-download the Blockchain as this is the public ledger of records, not your wallet information.


The only liability is you need your computer in front of you to transfer BTC from your wallet. This is because your wallet and Blockchain that were downloaded are located on your computer. If you already have another wallet on another computer you can just transfer your wallet.dat file there and then you can access your BTC. This would be very un-secure if the other computer was not yours. Your wallet.dat file is where your BTC is stored so don’t give anyone access to it even if they do not know your password.


The online wallet is the most convenient way to store your BTC (and altcoins). Different online wallets have different security measures and available support. It is highly suggested to use an established online wallet and a reputable one.  Blockchain.info is a good example and is used by many people to store BTC, but Blockchain.info has its downfall of not being able to let the user access their private keys for BTC unlike paper or offline wallets. Other online wallet providers do offer access to the private keys (this is different to your password) but again the reputation must be considered when choosing.  At an early stage in crypto, this is irrelevant.


You can access your online wallet from any computer connected to the Internet. As with any online service, there is always a chance of hacking or misappropriation from inside the company and your funds could be lost. If using a computer that is not yours, this increases more insecurity as someone could have installed spyware and then they will have your password and can steal your BTC.

Some wallets can also store multiple coins including BTC. You just need to research the wallet before selecting. Always consider security, the support, and the reputation of the exchange a priority when making a choice.  Use an Exchange for what it is intended, buying and selling BTC and Altcoins, not for storing them longer than necessary.


The Hardware Wallet is a device which is similar to a USB that stores your BTC securely.  There are a few of these hardware wallets on the market, namely, Ledger, Trezor and Swiss Bank in Your Pocket.  Let’s look at secure Hardware wallet  Swiss Bank In Your Pocket (SBIYP).  For security purposes, each SBIYP has customized encrypted USB keys plus you are completely in control of your private key.  The Software is downloaded to your personal computer and the SBIYP USB will only work on this computer.  A backup USB provided which should be kept secure.  A suite of digital banking applications and, basically, it is “Just you, the blockchain and your Swiss Bank In Your Pocket” – no middleman at all.  Most hardware wallets support altcoins.



Encrypted Software Wallet – Embedded VaultThe most secure cryptocurrency software wallet that turns your PC into a secure hardware device.


This is how the Embedded Vault works – Using your phone, PC and blockchain together the Embedded Vault creates secure storage for your cryptocurrency and cryptography assets.

Biometric security is a further intricate part of the security and the dynamic key generation process.

To use the Embedded Vault, you need a smartphone with a fingerprint scanner as well as a PC or laptop.

The “secret sauce” of the Embedded Vault is that the keys are dynamically created with a combination of a cryptographic transaction, biometrics as well as other hardware and software input.


You are in control of your private keys – You Are the Key

As an additional security feature, all transactions are double checked by a fingerprint scan of the user.  EOT – Encryption of Things will be the cryptocurrency used as part of the key generation and encryption process.



PART FIVE – How to make money with Bitcoin


Buying and Selling



A way to make money is to buy BTC/alt-coins at a low value and to sell at a higher value on an Exchange. Selling BTC as mentioned above can be done in any currency. Most large Exchanges allow users to trade back to US dollars.




Another method would be to buy BTC on one Exchange and to transfer that BTC to a different Exchange and take advantage on that Exchanges BTC rate, as it might be higher. For example, Bitstamp Exchange may be US$15650 and Bitfinex Exchange BTC rate might be US$15700. This is called Arbitrage.


The only considerations would be how long would it take for the BTC to confirm (example 10 mins or maybe 1 hour) as the market value would change over time.



Another consideration would be how much BTC you were buying or selling, as this would affect the value of BTC on that Exchange.  This as a medium-high skill level transferring any cryptocurrency to other Exchanges unless you were familiar with confirmation time’s – if it were time critical.



Buying and selling of altcoins is a quick way to make a profit. Using BTC to purchase other altcoins on Exchanges is a great way to diversify. Most people buy and sell alt-coins to make a profit. You will receive greater rewards with this method of trading rather than just trading or holding BTC. The level rating would range from easy-hard skill-level depending on your ability to analyse charts or depth of researched coins.


The three main points to take from this are:

  • Buy and sell on an Exchange
  • Buy on one Exchange and sell on a different Exchange (arbitrage)
  • Buy and sell altcoins



Related information – How to make money with Bitcoin, today [Guaranteed]




Betting the price of BTC and altcoins will fail


Some Exchanges also offer the ability to trade with BTC falling (and other altcoins) by trading ‘long’ or ‘shorting’ against BTC. This allows you to bet that if BTC (or other altcoins) price is going to fall and you still make a profit.


The markets that allow you to trade provide this very powerful tool that can make great profits and losses quickly. When trading in these ‘margin trading’ accounts you are often allowed to borrow up to 2-5 times the amount you need to spend. For an example, Poloniex.com offers 2.5 X the amount.  This type of trading is what they do in the share-market when someone ‘long or shorts’ shares.


It is very important to understand when trading in this market you are not actually buying coins. You are entering a contract to buy back or to sell at the end of a period that you control. Using this market is very easy to do so, and if you know how to buy and sell on Exchanges then you already know how to margin trade as the graphic user interface looks the same.


  • The ability to make profit with price of BTC falling (and altcoins)
  • The ability to leverage





Buying and selling on Exchanges can be done manually where people watch the markets live and sell BTC at a higher price or trading can be done automatically with software called ‘Bots’. Different bots will have different reputations based on how easy it is programmed or what different variables can be programmed into it.


Bots can run 24 hours a day, 7 days a week, 365 days a year without interruption. Bots can be programmed with certain values that are inputted by the owner and will run on an Exchange. The software will automatically buy and sell BTC hopefully at a profit. The most common software Bot is available at https://www.haasonline.com. However, there are different Bots available that can be programmed.


The points to be considered are:

  • BTC bought or sold manually
  • BTC bought or sold automatically
  • The sophistication of the Bot


A high skill level is needed to set-up a Bot and to link the software to an Exchange so please consider this before setting up.  This is not recommended unless you are at an advanced level, not just with coding, but financial formulas and how to apply them.



Expense Reduction


Another method for a company to make money would be to use BTC/altcoins to reduce company expenses as fees are often cheaper than money transfers or traditional banking methods. With the recent increase in BTC fees, other cryptocurrency transfers are an alternative.


Not only are fees involved but the time taken for International transfer of money may take up to days for it be available in bank accounts. The transferring of BTC is almost instant.   See transaction fees


As each country views cryptocurrency differently, whether regulated or not, this could change the tax perspective.  For example, BTC in New Zealand is not regulated, not seen as legal currency and therefore not subjected to tax.  Some countries like Portugal and Malta are attracting the crypto community.  This would mean any profits you would make trading with cryptocurrency is tax-free and not required to be reported.


Some countries are in the process of formulating their guidelines – it is wise to research your country’s tax position.


Valuable points:

  • Reduce bank fees
  • International transfers are almost instant (and costs less)
  • No Tax for some countries


There are complex issues and laws around BTC such as the ability to monitor transactions and the freedom of transferring funds. It would take numerous resources for governments to set up an organisation for such monitoring operations.



Lending Bitcoin


Some Exchanges and businesses lend your BTC to borrowers. The lending rate can vary up to or exceed 10%. There are numerous businesses in this market, however, the business reputation for each of these sites needs to be investigated to confirm the legitimacy of the businesses plus the risk of lending BTC.


A word of warning though, recently, due to regulation many loan platforms are shutting down.  During 2017, a popular loan platform announced on their website:


“BTCJam began with one mission: To provide people around the world with access to fair credit. In the past four years, we have serviced more than 20,600 loans in 122 countries, totaling more than 64,000 Bitcoin loaned. We have helped thousands of people around the world and are proud that we changed lives for the better.

We firmly believe that programmatic money and cryptocurrencies are here to stay and that there is still room for innovation in this space. That said, we have made the difficult decision to close BTCJam. The regulatory challenges around Bitcoin and the difficulties we faced in introducing Bitcoin technology to poor communities around the world are simply beyond our capacity.”



There are other platforms that can lend BTC on your behalf including Exchanges. The Exchanges lock the BTC within their website prohibiting people to run off with your money.

People borrow BTC by Margin Trading where they can borrow more BTC than they have and can trade with or against BTC/altcoins. When someone borrows BTC to trade (which is automatic) they will automatically borrow from someone who is lending.


You can set your own lending rate (paid daily) and the duration of time. Poloniex.com as an example offers this and their rates can exceed 75% returns, at times. Poloniex can take a fee of approximately 15% from your profit, however, the returns can be very good.


Valuable points:

  • Lending BTC at an interest rate
  • Business/Exchange reputation to be considered


Lending could see the growth of your investments and once this is set-up, little input from you is required.



Building Businesses


The ecosystem around BTC continues to grow as start-up businesses emerge. This point also applies to new cryptocurrencies that are emerging, without a strong use case and an ecosystem, they will most probably fail.


Wallet providers, mobile apps, hardware devices, smartphones, exchanges – centralised and de-centralised, mining pools and even blockchain/crypto banks have and are being developed. Note that the BTC mining overview is covered separately.  With increasing innovation and improving technology, the Digital Economy is growing at a rapid pace.  This gives an enormous opportunity for entrepreneurs to develop new or even existing businesses to integrate BTC or other altcoins.


Valuable points:

  • New Business Opportunities in the Digital Economy
  • Entrepreneurial abilities emerging
  • Less reliant on the price movement of BTC



Jobs and Careers 


As mentioned under Building Businesses, this dynamic market is creating many job opportunities for people with the matching skills set.  As this area is developing very rapidly, there is a huge skills shortage leaving a gap in the market for anyone wishing to pursue a career in the Digital

Economy.  Some Universities and colleges have started courses, and the number of these will surely increase over time.  People with the correct skills set are commanding high salaries or they are building businesses.  As an example, one of the programmers on the BTC team co-founded Ethereum, the second largest crypto in terms of market cap.  Vitalik Buterin, a 19-year-old programmer from Toronto, came up with this new platform to transform the internet entirely.


Valuable points:

  • New job offers listed daily on job seekers websites, eg. Indeed
  • Change of career direction possible
  • Education in this field increasing


Statistics from Howtotoken.com

The Digital Economy is booming and yet it has only just begun. If you wish to start a new career or change your career, consider the opportunities in the new Digital Econom

“Bitcoin-related job postings as a proportion of total listings on LinkedIn jumped more than ninefold in the financial services industry over the past three years and 4.6 times in the software technology industry” Bloomberg.


Take action – Now is the time to get involved, however, small your start.  “Start now” are the operative words!



PART SIX: Bitcoin mining – Electronically Processing BTC


As mentioned in the introduction, BTC is processed by computing power and recorded in a public ledger (Blockchain) with the help of a network of computers. The processing of BTC transactions is termed ‘mining’. BTC mining rewards people with computer power by generating BTC and giving fees paid to people who mine.


Currently, BTC is processed by an algorithm called SHA-256. Special mining equipment may be purchased to process these transactions with the most advanced miners being purchased by the Chinese maker Bitmain – SHA-256: https://bitmaintech.com/product.htm

Mining can be done with either a physical miner or a virtual miner. You then can mine as a collective (Pool) and share the profits, which is the most common way ot mine unless you to solo mine to maximise profit.


When mining is done as a collective where multiple people ‘point’ their miners to an online site, you can mine and collect newly produced BTC and the transaction fees. This is shared out with all the miners depending on how fast each computer miner is. The faster the computer miner, the more BTC earned. This is a simplistic explanation and you are required to do more research.



Pool Mining


Pointing miners together with other people guarantees regular payouts, however, profits can vary depending on which online site you point your miner towards (http://poolpicker.eu/table?algo=sha-256). There are a lot of online BTC profit calculators that can help you to select which pool to use to maximise profits.



Ensure you do more research with regards to mining, as it is a complicated model. As BTC is only software, it has many variables which need to be calculated. Just to name a few, BTC difficulty may change with the available network (for example profit changes which mostly decrease even though computing power remains the same). Also consider the price of BTC as well as the speed of the miner.





Solo mining is where you as an individual point your miner to solve equations on the Blockchain and are rewarded with the most BTC for your efforts. This applies if you have high miner speed which offers good BTC reward probability.


Source – CoinWarz

This is the reason pooling miners together with other individuals is more common as the combination of all the miners then acts as one huge miner and will mine BTC quickly. The BTC from the processing of transactions is then paid out daily, or sometimes more regularly, to the smaller miners if in a Pool. In solo mining, you will receive close to 100% of the profit (minus a fee).


  • Collectively joining other miners (payouts are shared according to miner speed and paid daily or more regularly)
  • Solo Mining (More BTC earned but requires fast miners)


Problems with any type of Pool mining is you must trust the Pool you are mining with not to steal you BTC or get hacked if you are to store the coins there.  However, payments can be sent to your private wallet and this is an option offered by many Pools.


The problem with solo mining is that you are required to have a huge amount of mining power to get regular payments. Technology advances will also require you to purchase new miner’s just to keep down electricity costs plus the value to BTC needs to be in your favour. Over time the newly created BTC payouts will reduce.


  • With collective mining, websites can be hacked
  • Solo mining calculations are complicated and new miners need to be purchased regularly to remain efficient


The advantage of solo mining is there is a higher chance to make a profit, and since the BTC earned is sent to your private wallet it is more secure than keeping it online.

Bitmain has a good reputation for online mining: https://www.antpool.com/home.htm



Cloud Mining


Cloud mining is the easiest form of mining that does not require a physical miner to be sent to you. This removes the cost of electricity, noise, and heating as generated by the miners.


Buying online, mining speed for BTC (currently measured in gigahash per second: GHS) is the fast way to turn a profit. Each Company reputation again needs to be considered, as a lot of faith in these companies is placed not to steal your money, go bankrupt, or even be hacked.

As technology advances, these companies buy newer miner models and can sell GHS at a set value of BTC given the market price. Any buyer can purchase this. The more GHS you buy, the more BTC is earned. One of the most trusted online cloud mining is https://www.hashnest.com.


Alternatively, you can also hire individual miners online for a set price of BTC. This is not really cloud mining, as cloud mining is 24 hours a day, 7 days a week, 365 days a year. Hiring individual miners are only for a set period of time and are prone to going down due to loss of power or network connection. This would mean that you are no longer any profit and are paying for nil speed. Certain websites can broker hiring of miners such as https://www.nicehash.com


Nicehash does not charge BTC when the miners are not working.  Image of Nicehash mobile app.


  •    Cloud Mining is the easiest way to mine BTC
  •    Can rent online individual miners



Cloud Mining would be a medium to high skill level to profit but once set-up can be considered a passive income with no input. This income will decrease over time but if you can consider all the variables necessary then you can get a good return on investment.


Caution:   There are a lot of scams that pretend to be Cloud Miners.  Many of these so-called “cloud mining” websites lure unsuspecting victims to buy mining contracts which pay out in the beginning – this to ensure others will be lured into knowing the contracts pay out.  Unfortunately, this ends in tears as the happy miners are not able to access the website as it goes offline without warning… the perpetrators have run off with the money.


Development of the Bitcoin software

Bitcoin is free software and any developer can contribute to the project. Find everything you need in the GitHub repository.  Development discussion takes place on GitHub and the bitcoin-dev mailing list. Less formal discussion is conducted on irc.freenode.net #bitcoin-core-dev (web interfacelogs).



Overview of Cryptocurrencies


Coinmarketcap.com displays the market cap, price (in USD or BTC + others) and historical graphs for Bitcoin and altcoins. Click on the coin/token name, price, graphs etc this will take you to another menu where data is presented in more detail.  There are also other ‘Tools’ available to help re-organise this data and is an easy website to navigate. When new currencies become available on the market, the developers of these coins will often quickly list their coins on this site, however, not all coins are listed here.


Other information sites:


Brave New Coin

Coin Gecko

Coin Dance





PART SEVEN: Conclusion


There are many ways to join the fast-growing community of Bitcoin and altcoins. From an easier perspective just buying and holding Bitcoin or an altcoin of your choice would be an introduction into the crypto world. All aspects could be tailored to your computing lifestyle and your Bitcoin could be as secure as being offline on a paper wallet held by you physically in a safe place to other wallets that best suit you.


A very small step up in this skill level would be to buy and sell other altcoins by using BTC first. This would include all crypto-assets, commodities, currencies and lending. Your interpretation of charts would dictate how much skill is required and how complicated your strategies are. Continually build your knowledge of the market to diversify.


Any research would obviously lead to an increase in skill. Medium to high-end skill includes mining and utilising software skills to your advantage.


It is very possible to make a profit from Bitcoin surpassing any “real world” rewards. More people are entering the market due to increased attention from media. BTC markets show growth and declines – BTC is still volatile – BTC is unstoppable.


The success of BTC has given rise to numerous other cryptocurrencies, some with strong use cases such as Ethereum (ETH) – Smart Contracts, Ripple (XRP) – Inter Bank cross-border settlement, and EOT – Encryption of physical devices connected to the Internet (IoT).  Take advantage now while BTC is still in its infancy and join the crypto world!


Considerations: Cryptocurrency is a very young technology and considered experimental, therefore can fail or be volatile for a number of different reasons. Do not consider cryptocurrency as an investment. Never ‘invest’ in any amount you are not prepared to lose in its entirety.  Having said this, there are Cryptocurrency millionaires and even billionaires out there… they probably won’t be the last to make their fortunes.


Read the Bitcoin Whitepaper here




PART EIGHT – Resources


With more than 1000 currencies and 5000 exchanges makes the crypto trading world a minefield for the new and even the experienced trader. In this section, we aim to give you a handy reference guide of resources that will help you to navigate these treacherous waters.


Information is the chief currency of the trader.  Without quality information, a trader does not have anything to work with and the right information that the right time can make a trader a fortune. There is a famous story of how Nathan Rothschild made a killing on the London Stock Market by having access to quality information, receiving early news about the victory against Napoleon at Waterloo.



So, what are our sources of information?



Crypto news is the starting point for any trader as markets can be moved by news event instantly.  Here are the major news sources covering cryptocurrency.


Prices, Fundamentals, and Analysis

The resources below will help you as a trader with deeper insights and information on specific currencies.


Blogs / Magazines



Social Media

No Twitter list would be complete without John McAfee – certainly one of the most influential tweeters out there… Here is our list of who to follow:


Follow these guys and your Twitter feed is now stocked with some of the finest cryptocurrency advice around. But as they say, that is not all…


Top Ten Influencers in Crypto


YouTube Influencers



Trading and Execution

Top 10 Exchanges according to volume:


Buying Crypto


Converting to Fiat


Safely storing your profit


Hardware Wallets:




ICO’s – Initial Coin Offerings

An unregulated means by which funds are raised for a new cryptocurrency/blockchain project or startup – ICO’s are fraught with danger but very popular with traders currently. Find a great resource for investing into ICO’s below. Coinschedule.com


Free Crypto and Games

It’s always great to get something for free and to have fun at the same time. Check these out and collect some free Crypto.


Below is the Bitcoin Bandit where you can play the Slot machine, Blackjack plus have the chance to win the Progressive Jackpot.  Use either Bitcoin or EOT to play –  Have Fun Here





Are you now ready to live the Cryptolife?  Read more about the Cryptolives of these influences:-


Now that you have the tools and are ready to for your Cryptolife – let’s give you a final tip…

How to make money with Bitcoin, today [Guaranteed]




Crypto Terminology


Cryptography – A method of writing or solving code and storing and transmitting data.


Blockchain – Blockchains are distributed ledgers, secured by cryptography. They are essentially public databases that everyone can access and read, but the data can only be updated by the data owners. Instead of the data residing on a single centralized server, the data is copied across thousands and thousands of computers worldwide.  Blockchains are immutable – once on the blockchain, always on the blockchain.


Block – Blocks are essentially pages in a ledger or record keeping book. Blocks are the files where unalterable data related to the network is permanently stored. Forever. Like eternity.


Block Height – Block height is the number of blocks preceding the genesis block (first block) on the chain. A genesis block will always have a height of zero because nothing precedes it. It’s a metric used to create a bearing on time in the programming world as well as a few other functions such as maintaining counterparty and betting in the crypto world. Considering that a new Bitcoin block is made every 10 minutes, you can work out certain time-related pieces of information if you have the total length of the chain.


Block Reward – Block reward is the reward allotted for hashing, or solving the mathematical equation related to a block. The reward for mining a Bitcoin block is 12,5 bitcoins per block mined, which will halve every 210,000 blocks!


Halving – Halving is the reduction of minable reward every so many blocks. For Bitcoin the reward is halved after the first 210,000 blocks are mined and then every 210,000 thereafter – approximately every four years.


Node – A computer that possesses a copy of the blockchain and is working to maintain it.


Mining – The process of trying to ‘solve’ an algorithm, the next block. It requires massive amounts of computer processing power to do effectively but is rewarded with the coin or token you are mining.


Mining Rig – A computer specially designed for processing proof-of-work blockchains, like Bitcoin, Ethereum, Litecoin etc. They often consist of multiple high-end graphics processors (GPUs) to maximize their processing power.


ASIC/ASIC Miner – ASIC mining is a crafty method of mining various coins at a much faster rate than any normal desktop or laptop might allow. Essentially what an ASIC, or Application Specific Integrated Circuit is, is a chip specifically created to execute one task. Enter ASIC mining. An example of one such model is an ASIC miner created to ONLY process SHA-256, which is the problem offered by the Bitcoin blockchain to mine new coins. There are also ASIC’s for scrypt which specifically solves the mathematical code in relation to altcoins such as Litecoin. Though in recent years there has been a good amount of dialogue surrounding the longevity of mining this way and we’ve even seen coins making it so that it’s impossible to mine with an ASIC.


Hashrate – Hashrate is the speed at which a block is discovered and the rate at which the related math problem is solved. Certain tools have been created to allow for higher hashrates. See ASIC.



Fork – A situation where a blockchain splits into two separate chains. Forks generally happen in the crypto-world when new ‘governance rules’ are built into the blockchain’s code. A recent fork happened with Bitcoin, and Bitcoin Cash was born.  Learn more – What is Bitcoin Cash


PoW – Proof of work was a concept originally designed to sieve spam emails and prevent DDOS attacks. A Proof of Work is essentially a datum that is very costly to produce in terms of time and resources but can be very simply verified by another party. The proof of work for Bitcoin is referred to as a “nonce,” or number used only once. This has been considered an energy-intensive alternative to proof of stake as the computers, unfortunately, have to be on and running, which also drives the market towards centralization of hashing power… which is what the blockchain aims to defeat!


Address – A bitcoin address is essentially the same thing as your home address. It’s the location from which you would receive, send or hold your currency. These addresses generally manifest in a long string of alphanumeric characters and will look something like:


A wallet address is the public portion of the two encrypted keys necessary for a holder to accept or verify a transaction.


Software wallet – Storage for crypto-currency that exists purely as software files on a computer. Software wallets can be generated for free from a variety of sources. Google is my friend.


Hardware wallet – A device that can securely store crypto-currency. Hardware wallets are often regarded as the most secure way to hold cryptocurrency.


Altcoin – An altcoin is the community accepted name for any coin that isn’t Bitcoin.


Token – Refers to the ‘currency’ of projects built on the Ethereum network that have raised money via issuing their own tokens.


P2P – Another way of saying Peer-to-Peer. Peer-to-peer has become a very large focus of blockchain as one of the biggest selling points is decentralization. Nearly every interaction on the blockchain can be fulfilled P2P, or without a centralized variable like a store, bank or notary.


Public/Private Key – In cryptography, a public key is a cryptographic key that can be utilized by any party to encrypt a message. Another party can then receive the message and using a key that is only known to that individual or group, decode the message.  It is best practice to hold and control your private keys vs a central authority like an exchange.


Smart Contract – A two-way smart contract is an unalterable agreement stored on the blockchain that has specific logic operations akin to a real-world contract. Once signed, it can never be altered. A smart contract can be used to define certain computational benchmarks or barriers that have to be met in turn for money or data to be deposited or even be used to verify things such as land rights.



Exchange -Websites where you can buy and sell cryptocurrency


OTC Trading Desk – Over The Counter – A market where cryptocurrency is traded directly between the Buyer and the trader, generally large buys which do not affect the market price – trading is done online.


FIAT – Government-issued and controlled currency, such as the US dollar, GBP, Euro, Yen


Whale – Someone that owns absurd amounts of cryptocurrency – Whales can sometimes influence the market price so often they buy large amounts of cryptocurrency directly from a trader (OTC Trading Desk)


Limit order/limit buy/limit sell – Orders placed by traders to buy or sell a cryptocurrency when the price meets a certain amount. They can be thought of as ‘for-sale’ signs. These orders are what is bought and sold against when traders place market orders.


Sell wall/buy wall – Using a depth chart, traders can see the current limit buy and sell points.


Market order/market buy/market sell – A simple purchase or sale on an exchange at the current price. Market buys purchase the cheapest ETH available on the order book, and the market sells fill the most expensive buy order on the books.


Going long – A margin trade that profits if the price increases.


Going short – A margin trade that profits if the price decreases.


Bullish – An expectation that price is going to increase.


Bearish – An expectation that price is going to decrease.


ATH = All-Time-High. We’ve had a lot of these the past couple months.


Stable coin – A crypto-currency with an extremely low volatility that can be used to trade against the overall market.


Arbitrage – Taking advantage of a difference in price of the same commodity on two different exchanges. Often mentioned when it comes to comparing prices on Korean exchanges against US exchanges.


FOMO – Fear Of Missing Out. The overwhelming sensation that you need to get on the train when the price of something starts to skyrocket.


Pump and Dump – The recurring cycle of an altcoin getting a ton of attention, leading to a fast price increase, and then of course followed by a huge crash.


Bagholder – Someone still holding an altcoin after a pump and dump crash. Can also just refer to someone holding a coin that is sinking in value with few future prospects.



Market Cap – The total value held in a crypto-currency. It is calculated by multiplying the total supply of coins by the current price of an individual unit.


ROI – Return on Investment. The percentage of how much money has been made compared to an initial investment. So, 100% ROI is doubling your money.


HODL – Long ago, someone on a bitcoin forum got drunk and made a post with this typo in the place of ‘hold’. A meme was born. Often people refer to HODL as “Hold On for Dear Life”


Lambo – What we’re all going to buy when we’re rich – “When Lambo” is a favourite question in the crypto community and also the first car that was bought with BTC


Mooning – In the crypto-world, this does not mean exposing your buttocks. It is referring to a price going up to astronomical levels.


To date, the identity of Satoshi Nakamoto is unknown. Satoshi Nakamoto is the name of the person or persons who developed Bitcoin, wrote the whitepaper and devised the blockchain database.

He, or they, were active in the development and implementation of Bitcoin up until December 2010.




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