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What You Need to Know About Bitcoin Wallets

published Jun. 20, 2016

What You Need to Know About Bitcoin Wallets
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Many have heard of Bitcoin, but some simply do not understand how Bitcoin works. Essentially, Bitcoin is a unique system of gaining money and making payments that are completely secure. Here is a breakdown at how Bitcoin works.

Security is Important

Start by installing a Bitcoin wallet on your computer, smartphone, or tablet. As soon as you create your account, you’re assigned a Bitcoin address that people can use to send you money or for you to submit secure payments to companies, including some online casinos. After each transaction, a new Bitcoin address is assigned to you to help prevent fraud. You never store a credit card in Bitcoin, so there is no risk of having your banking information stolen.

As each transaction takes place, they become part of the block chain that makes it easy to track your balance and ensure the Bitcoins are owned by the person spending them. All transactions that enter the system must be approved. The system prevents a person from trying to scam the system and send two payments to two users at the same time. If this ever happens, only one transaction is approved and the block chain is there to help decide which transaction is valid. You cannot stop a Bitcoin transaction once you’ve made it. All of this is protected by military-grade encryption software.

Gaining Bitcoins

To add Bitcoins to your Bitcoin wallet, there are a few methods to use. First, you can sell products or services and request payment through Bitcoins. You can purchase Bitcoins through an exchange. You can trade Bitcoins with others. Finally, you can mine for Bitcoins. Remember the block chain system where transactions must be approved. People that go into the system and help approve these transactions are performing mining and gain Bitcoins for helping.

Bitcoin Isn’t Taxed

As Bitcoin is not official currency, when you make or accept a payment, you are not required to pay taxes on it. Some jurisdictions are changing this, however, so it’s important to check your local and state laws.

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