Bitcoin Usage
Exchanges / Wallets (Bootstrap)
- Create an account at Coinbase or CashApp exchange
- links your identity & bank account.
- Use it only as an exchange ( crypto to/from cash).
- Do not use this account as your wallet.
- Purchase some trivial amount of bitcoin at the exchange.
- Install Electrum wallet on your desktop machine.
- Generates the passphrase; a 12 word code (seed).
- Send the money from your exchange account to your Electrum wallet.
- Install Mycelium wallet on your phone.
- Handles QR codes; info is amount & address to send to.
- Send some of the money in your Electrum wallet to your Mycelium wallet.
So, the offline wallet (Electrum) is like your savings account, holding the bulk of your crypto, and the online wallet (Mycelium) is like your checking account, holding only that which you need for routine, near-term transactions.
A wallet maintains bitcoin address(es); record(s) on the distributed blockchain; accessible from anywhere, and secured by the passphrase.
Do not use a crypto exchange as a wallet:
A foundational idea of cryptocurrency is that it has no central (single) authority controlling it. Yet crypto exchanges are just that, when used as your crypto store (wallet).
- Crypto exchanges may converge with the other lawless financial institutions, which are notorious for engaging in blatant discrimination against customers in good standing, at the whims of depraved political commissars; blacklisting customers.
- Crypto exchanges are notorious for looting of customers' accounts, in example after example, after example; they, not you, hold the private key.
The private key (seed a.k.a. passphrase) should never be shared; only the bitcoin (account) owner should have access to it.
“Your bitcoins are only as safe as their private keys.”
This is fundamental to all such cryptography (PKE), not merely Bitcoin.
Gift Cards / Mobile Refills
Bitrefill — Live on Crypto
Purchase Gift Cards or Mobile Refills from more than 1650 businesses in 170 countries. Get eGifts & pay mobile bills quickly, safely, … using cryptocurrencies.
- Enter (fake) email address to get QR code.
- Scan & Send using your Mycelium wallet:
- Click
send, which opens the phone's camera. - Scan the QR code, which loads the amount and the (crypto) address to send it to.
- Click
send.
- Click
Transaction time is 1-10 minutes. After which you will be given a code to enter at recipient to claim the Card/Refill amount.
Bitcoin ATMs
Coinstar Kiosk (Vending machine)
- Click "Buy Bitcoin"
- Enter (fake) phone number
- Enter cash; dollar bills (not coins)
- Receive voucher with a Bitcoin redemption code.
Technical Description
Bitcoin: A Peer-to-Peer Electronic Cash System
by Satoshi Nakamoto
satoshin@gmx.com
www.bitcoin.org
A blockchain is a cryptographically (PKE) secured append-only log; a distributed ledger (addressed per hash) whereof a new log entry (chain mutation a.k.a. transaction a.k.a. block) occurs only by some consensus algorithm (work performed by a network of constituent nodes).
A cryptocurrency is simply its blockchain and the code required for mutating it per some P2P network API. A bitcoin account is fundamentally nothing but a construct of the mind; as much so as any US financial account. A block of bitcoin (an entry in the ledger) is owned by whomever, or whatever, has access to the private key (pair) of the public key stored therein. Thus a private key is the proxy for its bitcoin; for that in its (quite public bitcoin) block.
A transaction is an entry (a new block) appended to the log (blockchain). A transaction can have many recipients. Each entry requires both the sender's signature (per owner's private & public key) and the public key(s) of the recipient(s). Note this signing is the one part of the transaction that must be secured.
The transfer (of ownership) occurs by simply changing the private key locking the amount transacted upon, from that of the sender to that of the recipient(s). Yet instead of actually changing an existing block, a new block is appended to the blockchain. (Blocks are immutable.)
Nothing is actually sent anywhere, and there is no thing other than the sum of all transaction records (the distributed ledger; blockchain). Each such record (block) includes its amount (₿), the new owner (their public key), and the (prior) transaction (hash address from whence it came). Thus forming a (growing) chain of such (immutable) blocks.
A wallet (a.k.a. vault) is any application (some wed to hardware) — orthogonal to the blockchain —that stores both public and private key pair(s) to such block(s), and secures them (damn well better), providing a password-based user interace for initiating (signing for) a transaction. That is, a cryptocurrency wallet is a PKE key store/manager. It only contains bitcoins in the sense that it contains (and secures) their proxy, the private key(s) thereto.
Bitcoin Transaction
Note the passphrase (seed) and the private key are two different things. The former is generated (by a wallet application) to secure the latter. They are often referenced synonymously to convey the underlying concepts sans clutter of technical minutia.