Question 1

1. Digital Wallet

Accepted Answer

In order to conduct transactions on the bitcoin network, participants need to run a program called a “wallet.”2﻿ Bitcoin is not technically “coins,” so it only seems right that a bitcoin wallet would not actually be a wallet. Bitcoin balances are maintained using public and private “keys,” which are long strings of numbers and letters linked through the mathematical encryption algorithm used to create them.   The public key is the location where transactions are deposited to and withdrawn from. This is also the key that appears on the blockchain ledger as a user’s digital signature, not unlike a username on a social media newsfeed. The private key is the password required to buy, sell, and trade the bitcoin in a wallet.3﻿ A private key should be a guarded secret and only used to authorize bitcoin transmissions. Some users protect their private keys by encrypting a wallet with a strong password and, in some cases, by choosing the cold storage option; that is, storing the wallet offline.4﻿   A bitcoin wallet should not be used for long-term storage. Bitcoin or its key should be stored in a secure wallet, such as one that uses a multi-signature facility for security.

Question 2

2. Personal Documents

Accepted Answer

The U.S. Securities and Exchange Commission requires users to verify their identities when registering for digital wallets as part of its Anti-Money Laundering Policy.5﻿ 6﻿ In order to buy and sell bitcoin, you will need to verify your identity using several personal documents including your driver’s license and Social Security number (SSN).

Question 3

3. Secure Internet Connection

Accepted Answer

If you choose to trade bitcoin online, use discretion about when and where you access your digital wallet. Trading bitcoin on an insecure or public wifi network is not recommended and may make you more susceptible to attacks from hackers.

Question 4

4. Bank Account, Debit Card, or Credit Card"

Accepted Answer

Once you have a bitcoin wallet, you can use a traditional payment method such as a credit card, bank transfer (ACH), or debit card to buy bitcoins on a bitcoin exchange. The bitcoins are then transferred to your wallet. The availability of the above payment methods is subject to the area of jurisdiction and exchange chosen. Below is a screenshot of the bitcoin interface on Coinbase showing how to buy and sell bitcoin and also Bitcoin Cash, Ethereum, and Litecoin , which are other popular virtual currencies. The user clicks the "Buy" tab to buy digital currency and the "Sell" tab to sell digital currency. You select which currency you are buying or selling and which payment method (your bank account or credit card) you want to use.   Depending upon the exchange, there may be benefits and disadvantages to paying with cash, credit or debit card, or bank account transfer. For instance, while credit and debit cards are among the most user-friendly methods of payment, they tend to require identification and may also impose higher fees than other methods. Bank transfers, on the other hand, typically have low fees, but they may take longer than other payment methods.

Question 5

5. Bitcoin Exchange

Accepted Answer

After you’ve set up your wallet with a payment method, you'll need a place to actually buy bitcoin. Users can buy bitcoin and other cryptocurrencies from online marketplaces called “exchanges,” similar to the platforms that traders use to buy stock. Exchanges connect you directly to the bitcoin marketplace, where you can exchange traditional currencies for bitcoin.7﻿   Remember that the bitcoin exchange and the bitcoin wallet are not the same things. Bitcoin exchanges are similar to foreign exchange markets. The exchanges are digital platforms where Bitcoin is exchanged for fiat currency—for example, bitcoin (BTC) for U.S. dollars (USD). While exchanges offer wallet capabilities to users, it is not their primary business. Since wallets must be secure, exchanges do not encourage storing large amounts of bitcoin or for long periods. Therefore, it is advisable to transfer your bitcoins to a secure wallet. Because security must be your top priority when choosing a bitcoin wallet, opt for one with a multi-signature facility.   There are many well-established exchanges that provide one-stop solutions with high security standards and reporting, but due diligence should be exercised when choosing a bitcoin exchange or wallet. Besides Coinbase, other popular exchanges include Coinmama, CEX.IO and Gemini.

Question 6

6.Send Your Bitcoin

Accepted Answer

Once you have completed all the steps above, you will then go to the online iGaming website or retailer that you wish to send your bitcoin to.    Go to the "Deposit Bitcoin" section and you will see a Unique Address. This address is your personal wallet address.    Copy your address and then go back to where you purhchased your bitcoin. Click the "Send" option and it will ask your for your BTC address. Paste your address that you copied in this section.    Confirm the informtion is correct and then click "Send".    Bitcoin deposits can take 15 minutes to 3 hours to appear. This is solely dependant on the block chain and how many transactions are being processed, be patient.

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