It’s a question for beginners, but the very nature of how you attain Bitcoin has changed over the past several months. And what part of the world you live in is also a factor. So the answer is not obvoius. We have plenty of people coming into the Bitcoin community each day, so WELCOME!
(For those wanting to learn more about how Bitcoin works, a podcast called Security Now did a great show a couple years ago that covers the basics. The explanation starts at the 42 minute mark and gets technical after about 10 minutes.)
First, several new exchanges have come online, giving people more options on how to trade dollars, yen, euros (most fiat currencies) for BTC.
Second, Bitcoin “mining” remains a primary vehicle of attaining the currency. Bitcoin “mining” has proceeded to increase in difficulty. Currently, the value of BTC is more than keeping pace with this increase in difficulty, but the costs of entry in terms of hardware are high.
CURRENCY Exchanges
There are many ways to purchase Bitcoin. As a U.S. citizen, I have had good experiences in getting money in-and-out of MtGox via Dwolla. Regardless of where you live, MtGox remains a good purchasing-point for Bitcoin. Dwolla’s transfer rates are practically nothing. I will go into more detail about MtGox below.
(As a US citizen) I would also take a look at CoinBase, which offers simplicity and credibility as a business. (Recently, it has received a large investment from Silicon Valley venture capitalists.) It is also faster than going through an intermediary to MtGox. What you get in simplicity, however, you lose in terms of exchange rates which are currently at 1% at Coinbase. Also, I can’t recommend it as a “trading platform” because of those high rates.
Here is a list of Bitcoin exchanges worldwide: https://en.bitcoin.it/wiki/Trade#Currency_exchanges
Please be cautious and do plentiful independent research before choosing any exchange–as many have opened and closed over the last few years.
MtGox is the simplest way to trade BTC in real-time, which is an important distinction from merely acquiring it. You want to be able to quickly move your money from Bitcoin into a stable store of value.
MtGox is, at the time of this writing (updated 2013), is allowing the following funding sources: aurumXchange, BitInstant, Dwolla (USA), Euro Bank Transfer, Bank Transfer, Liberty Reserve, OkPay
If you plan on transferring money from your bank, expect (4-5 business) days of wait time.
A note on “mining” (using computer hardware to generate) vs. buying Bitcoin:
1.) Mining is always getting more computationally expensive per Bitcoin generated. This is because fewer Bitcoins are generated over time and more people are trying to “win” them.
Opinion: Because fewer Bitcoins are being generated, this means fewer Bitcoins are being “dumped” into exchanges. This means that, over time, downward pressure on the value of BTC has lessened. I believe this scarcity is a contributing factor to the rising value of BTC.
A New Economy
Up until this point, the Bitcoin economy and its participants have been somewhat reliant on making money through mining. It’s been some peoples’ hobby, others’ full-time job.
Another practical way to earn Bitcoins has become to provide goods or services to others. You know, like people do with a normal currencies.
So, where would you go to sell goods and services? Get it listed on the Wiki Trade Page!
Keeping up with bitcoin
If you are invested in Bitcoin, you should be hyper-aware of the news affecting the currency, especially considering how volatile it is. I highly recommend www.bitcoinnews.com. For three years, it has offered pretty fair reporting on all things Bitcoin. I also encourage you to sign up for the Bitcoin Bulletin newsletter, which offers only relevant news with minimal commentary. It is not sent frequently but is very substantive. (There’s a sign up about half way up this page on the right.)
-Spencer Dailey
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