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How To Use Bitcoin – The Most Important Creation
In The History Of Man
By michaelsuede
May 31, 2011
Recently I wrote an article entitled The Most Dangerous
Creation In The History Of Man. The article covered the
emergence of Bitcoin; an electronic open source peer-to-
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peer currency that has no central banking server, is
untraceable (when proper steps are taken), and essentially
can not be taxed through coercive measures. The article makes the
point that if a currency can not be taxed and controlled, eventually it will
topple the coercively funded fascist control grid you call the modern
State. Read more about it in this Bitcoin forum post that explains it in
more detail.
I’ve received several requests for more information about how people
can put Bitcoin to work for them. Most articles on Bitcoin, and even the
Bitcoin site itself, don’t give a clear top to bottom description of how
common users of Bitcoin can put the currency to use.
It is a tad confusing if you are not familiar with how currency markets work, but not to worry, it is not as intimidating
as it sounds. Bitcoins are generated on a logarithmic scale by dedicated “miners” who run software that generate
the complex hash codes which make up a Bitcoin. Bitcoins can not be artificially inflated and require real resources
(electricity and time) to produce.
Here are a few reasons why I think Bitcoins are superior to gold as medium of exchange:
1. It is impossible to artificially inflate the supply of Bitcoins in existence. They are produced at a known steady
rate, the supply of which will eventually top out.
2. Bitcoin transactions are made for the web! It is impossible to actually ship gold across a wire. The best one can
do is use a medium that represents gold, such as shares of GLD, and trade those as a currency. Clearly this
leaves room for inflation of the money supply by unscrupulous bankers. When a person transacts in Bitcoins, it
is the equivalent of actually sending gold across a wire. The unreproducible currency itself is transacted
with, unlike a paper currency that represents a commodity.
3. Bitcoins can not be confiscated since the files they reside on can be replicated and hidden in USB keys
or anonymous servers.
4. The peer-to-peer nature of Bitcoin makes it as impossible to stop as BitTorrents. Governments would have to
shut down the web to stop it.
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5. It is impossible to create salted Bitcoins or “shave the edges” off of them. There are wide spread rumors that the
supply of gold that central banks are holding is loaded with tungsten bars coated in gold.
After a few minutes passed without
firefighters arriving, a frustrated Jensen
stepped forward and leaned…
6. Obviously they are lighter, easier to transact with, and far easier to secure than gold bullion.
Lawmaker asks to be paid in gold
Let me repeat: Bitcoin IS NOT A PONZI – it is the same as if people were digging up gold nuggets out of the
ground and then trading them as money. Any claims that early adopters are simply promoting this as a
Ponzi are like claiming people who were promoting buying Apple’s IPO were promoting a Ponzi.
A Montana state lawmaker is asking that he
be paid in gold coins because of his lack of
faith in the…
Bitcoins use a 256 bit public/private key encryption algorithm that has never been cracked in practice and
is considered secure by the NSA.
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Total Bitcoin production will TOP OUT in the future meaning NO NEW BITCOINS WILL BE CREATED
The Unadulterated Gold Standard[12/4/2012 4:24:46 PM]
How To Use Bitcoin – The Most Important Creation In The History Of Man | Libertarian News
If you have additional concerns, please take the time to research the answers on your own. Don’t blindly
dismiss it because of a concern that could easily be addressed with some simple research and questioning
of those who are current users of the system.
The choice of the word “unadulterated” is not
accidental. There were many different kinds
of gold…
Anyone who has a through understanding of Austrian economics should immediately recognize the inherent
benefits of Bitcoin. Bitcoin is the equivalent of electronic gold. Even better than gold in some respects.
RT: an Anarchic view of America’s
Economic and Political Duopoly!
Here are a few articles that cover the economics of the Bitcoin monetary system in more detail:
Welcome to Capital Account. Last night the
two main contenders for US President
debated issues including…
The Economics Of Bitcoin – Why Mainstream Economists Lie About Deflation
The Economics Of Bitcoin – How Bitcoins Act As Money
Against The Gold Standard
The Economics Of Bitcoin – Doug Casey Gets It Wrong
The Economics Of Bitcoin – Resource Allocation And Interest Rate Distortion
The Economics Of Bitcoin – Challenging Mises’ Regression Theorem
The Economics Of Bitcoin – Challenging Mises’ Regression Theorem – Prof. George Selgin Responds
Police Ignore Man Begging For Help, Man
Michael did not have a medical marijuana
prescription, and his use put him in and out of
the legal system.…
Why Do People Want A Gold Standard When History Shows Us It Does Not Last?
That said, lets go through the process of a common user setting up a Bitcoin account in an electronic bank and
then purchasing some Bitcoins with US Dollars. Then we will buy an item using the Bitcoins we just purchased.
Check out for a payment processing service that accepts Bitcoins and translates them directly into an
e-wallet that can be accessed by a Master Card debit card anywhere in the world. Checkout Crypto X Change for
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an easy way to buy and sell Bitcoins through normal bank accounts.
Step 1: Setting up a Bitcoin wallet.
There are a few ways to set up a wallet. One way is to install the Bitcoin client on your PC. The client will
automatically create a wallet address that you can accept payments to or send payments from. The easier
alternative is to simply visit the site InstaWallet and it will generate a wallet address for you as soon as you enter the
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A wallet is simply a datafile that stores your currency. Transactions to and from a wallet are sent via encrypted
peer-to-peer network and are processed across the network, meaning there is no central banking server that a
person needs to log in to.
The datafile that stores the wallet information is worth its virtual weight in gold. If that datafile is destroyed
or compromised, the money you had in that wallet will be destroyed. This is why many people chose to store the
file on their home PC rather than entrusting it to some other site owner’s care. There are advantages and risks to
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storing your wallet on someone else’s site. Storing it on someone else’s site opens your wallet up to possible
confiscation by government or abuse by the site owner, but it does offer the advantage of easy access and the
redundancy/backups that most site operators employ. On your local PC, using Windows 7, the datafile is located in
the hidden folder “AppData” that is under your user directory:
C:\Documents and Settings\YourUserName\Application data\BitCoin (XP)
C:\Users\YourUserName\Appdata\Roaming\BitCoin (Vista and 7)
A good idea is to have multiple wallets and multiple backups, so if one wallet is compromised or destroyed on
accident, your remaining money will not be effected. But let’s continue on using the InstaWallet example for now.
So you’ve visited InstaWallet and bookmarked your wallet’s address. Obviously giving out the web address to a
wallet on this site would give a person total access to the wallet, so don’t do that. On the wallet page, you’ll see a
public address listed that can be used for sending payments to this wallet.
My address is: “17C3iPNMyz5dPELJUc6NbYYarSzPY6gS9M”
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People using Bitcoin can send Bitcoins to that address by entering it into the “Send Payment” field on InstaWallet or
by entering it into their local PC client wallet which has a tab for sending payments.
It’s that easy to create a wallet and use it!
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Step 2: Adding Bitcoins to your wallet
Getting Bitcoins to spend is a touch more complicated, but it is still a fairly straight forward process.
To get Bitcoins to spend, the most common way is to purchase them on the open market. Since there is no central
banking server or exchange, one must purchase them on a private open market exchange. Two of the most
popular exchanges are Mt. Gox and TradeHill.
Using Mt. Gox, we first create a user account on the site. Then we need to add some funds to it in order to
purchase some Bitcoins.
After you’ve created an account and logged into it, click on the “Add Funds” button.
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How To Use Bitcoin – The Most Important Creation In The History Of Man | Libertarian News
this example.
After creating an account on Dwolla, you can add funds to your Dwolla account directly from whatever bank you
chose to bank at by adding a bank account to your Dwolla account. You’ll need to verify the bank account by
entering in the amount of the penny transactions Dwolla sends to your bank to verify that you actually own the
account in question. It may take up to 72 hours for Dwolla to send the transactions and for them to show up in your
bank transaction history. Bookmark this page and return later if you don’t already have a Dwolla account.
Clicking the link that represents your account number on the Mt. Gox “Add Funds” page under the Dwolla payment
method will automatically bring up Dwolla with the appropriate transaction to Mt. Gox already formatted. All you
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have to do is enter in the amount you wish to add to your Mt. Gox exchange fund and complete the transaction.
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After you’ve got some funds in your Mt. Gox exchange fund, you’ll be able to buy Bitcoins on the open market.
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On the Mt. Gox site, click the “Buy Bitcoins” link on the main page. The easiest and fastest way to get coins is to
simply purchase them at the current asking price, which at the time of this posting was $9.28001 USD for one
Bitcoin. Mt. Gox explains how the trade transactions work here.
When buying Bitcoins, your Mt. Gox account will be debited the amount your order filled at and the Bitcoins will be
sent to the address of the wallet of your choice.
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Congratulations, you now have some Bitcoins to spend!
note: It is recommended that you use a different wallet address to receive and send Bitcoins each time you make a
transaction. This is not required, but it does help maintain your anonymity by making it harder to trace your
transactions through the block chain. If a vendor knows your identity because you purchased a product from them,
and you have used the same wallet address for all your transactions, the vendor would be able to see the entire
transaction history for your wallet by looking at the block chain. Look for the “New Address” button on the bottom of
your Bitcoin client to get a new address.
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Step 3: Buying an item with Bitcoins
Let’s visit the site and buy a bottle of fertilizer. Once you’ve added a product to your cart and
have gone through the checkout process, you’ll be directed to pay using the BTCInch checkout method.
Simply enter in the address they provide you into your wallet’s “send” field and ship them the coins they require.
Transactions through Bitcoin are non-reversible. So make sure you enter the correct amount to the correct
address. Obviously a reputable business will refund any accidental over-payments and refund any coins for
merchandise returns, but unlike a credit card, there is no middleman to complain to if you get scammed. All
transactions are final.
Step 4: Securing your wallet
Older Bitcoin clients do not encrypt the wallet.dat file. Anyone who can access it can easily steal all of your coins.
Use a file encryption program if there is any chance someone might stumble upon your wallet. The latest version of
the client has built in wallet cryptography that can be enabled by clicking the menu option “Settings” -> “Encrypt
A good practice is to keep at least two wallets, one as a “current account” for everyday transactions and one as a
“savings account” where you store the majority of your Bitcoins.
The “savings account” wallet should be backed up in encrypted form only, and all plain text copies of this wallet
should be erased. In case someone gains unauthorised access to your computer (either by physically stealing it or
by exploiting a system vulnerability via the internet), they will only be able to spend the coins in your “current
account” wallet.
In most operating systems, including Windows, Linux, and Mac OS X, simply deleting a wallet.dat file will not
generally destroy it. It is likely that advanced tools can still be used to recover the wallet.dat file, even after it has
been deleted.
For Windows, the built-in command cipher /W will shred all previously-deleted files. Rwipe or CyberShredder can
securely delete individual files.
If you chose to keep your wallet on your local PC, I recommend encrypting your main wallet file that holds the bulk
of your savings with TrueCrypt, and keeping an unencrypted wallet file for everyday use. I like the idea of keeping
the everyday wallet on InstaWallet, and keeping your main bank on your local PC, encrypted by TrueCrypt, and
backed up onto a thumb drive. Wallet sites like InstaWallet are still fairly new and they have not had a lot of
time to prove their trustworthiness. Use them at your own risk.
Make sure your TrueCrypt password is at least 12 characters long. 8 character passwords can be cracked easily
by brute force hacking attacks.
If you really want to do some super secure transactions using Bitcoin, use the Tor web browsing network that hides
your IP address from online identities to do your shopping and communicating. Tor is a free open source project.[12/4/2012 4:24:46 PM]
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How To Use Bitcoin – The Most Important Creation In The History Of Man | Libertarian News
Learn more about it here. Then follow the directions to anonymize your transactions here.
Other Odds And Ends:
There are other ways to acquire Bitcoins as well, such as mining for Bitcoins or purchasing them directly from other
holders using sites like PayPal. You could literally put up a post on an internet forum and ask people if they will sell
their coins to you for a direct transaction through PayPal.
Mining for Bitcoins is a bit more complex and your average user shouldn’t even worry about it. For more
information on mining for Bitcoins, look here. It used to be that a single PC could effectively mine the coins, but
today, it requires a collective pool of computers or a powerhouse server to be able to mine coins at an economically
efficient rate. Mining coins is a commercial enterprise that requires excessive resources, just like mining for gold
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Watts Up With That?
Anyone may freely distribute this article or use any portion of it as they see fit. I encourage you to do so.
I have no stake in promoting this. I am not being paid to write this. I am not receiving a commission for writing this.
I am staking my site’s reputation on promoting this because I feel the positive benefits to humanity that can arise
from this currency demand that it be given public attention.
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This entry was posted on May 31, 2011 at 11:49 am and is filed under Anti-Fascist Agitprop, Bitcoin. You can follow any responses to
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