Introduction
Cash is great.
There are no banks to worry about. No fees, no credit cards, no chance of having
your identity stolen or your account frozen. You may not earn any interest, but you
always have instant access to your money and you know exactly how much you
have.
It's also great for when you need to give money to someone else. There's no forms
to fill out or confusing account numbers. There are no fees to worry about. You don't
need to deal with a middleman. You just hand over the money and that's it.
Then the Internet happened. Great services like eBay and web stores let you do your
research at home and then buy exactly what you need without having to hunt for it
in brick and mortar stores. All well and good, but suddenly cash isn't cutting it any
more. After all, it's hard to hand someone a few notes and coins when they live on
the other side of the world.
Wouldn't it be great to be able to use cash on the Internet, too? To have the ability
to store your own money on your own computer? To buy what you need online
without dealing with banks and middlemen?
That‟s where BitCoin comes in. Cash for the Internet is here.



BitCoin: The Virtual Currency

What is BitCoin?
BitCoin is a new, all-digital, peer-to-peer (p2p) currency,
which can be used to replace cold, hard cash when
buying and selling goods and services online.
Unlike most money online, which is stored in banks and
transferred using payment processors like PayPal, BitCoin is
completely distributed between its users and sent between
users without the need for a middleman.

Why should I use BitCoin?

There are a few major advantages to using BitCoin in place of your normal currency
for online transactions, most of which stem from how BitCoins are stored.
First of all, BitCoin is a global, decentralised currency. This means that there is no
country to which BitCoin specifically belongs, making it a viable currency to use all
over the world. This makes international transactions simple; no longer does there
need to be a discussion over whether the payment should be made in the buyer's
currency or the seller's, nor at which exchange rate the transaction should take
place.
Another big advantage that decentralised currencies have is that a Federal Reserve
or national bank does not manage the value of the currency. This means that the
currency will retain its value regardless of the performance of the global economy,
similar to the value of rare metals and commodities like oil. It has no single point of
failure; the entire Internet would have to go down for BitCoin to fail.
Second, because transactions are made directly from one person to another, there
is no middleman, and therefore no fees. In a few years time there will be a slight
charge for transactions due to the way that the currency is managed, but it should
be much less than the standard alternatives.
Third, because the BitCoins you own are stored in a wallet file on your computer, you
have full control over your funds. Since the BitCoins are not stored in an “account”
they cannot be frozen, meaning that you will never be left without cash.
Furthermore, there is no “small print”, transaction limits, forms or other limits like you
would have with a bank.

How to use BitCoin
Getting a BitCoin wallet
The first step to getting started with BitCoins is to get yourself a BitCoin wallet. Just like
a real wallet, this is where your BitCoins are stored. It is far more tangible than money
stored in a bank account – the wallet file you create is a file just like any other
document. It can be moved around and stored on different devices. You can even
duplicate it to have multiple copies (obviously this doesn‟t duplicate the money
inside, though!).
Your BitCoin wallet is comprised of two parts: the wallet file, which stores the BitCoins,
and the wallet application (also called the BitCoin client), which opens those wallet
files. This means that it is possible to store the wallet file on a USB drive (for example)
and open it on any computer that has the wallet application installed. As there is a
version for most operating systems, it‟s possible to open the BitCoin file pretty much
anywhere.
You can download the official client from the BitCoin website (www.bitcoin.org).
There you can get the right version for your operating system.
For Windows and OS X, installing the wallet application is just like installing any other
application for your platform. I‟ll assume that you already know how to do this.
Opening the application will generate the wallet file and assign you your first
receiving address (more on this in a bit).
For Ubuntu, downloading the client gives you a .tar.gz file which contains four
different versions: the main application and the windowless server in both 32-bit and
64-bit flavours. You can put this folder anywhere and then click on bitcoin to start
the program.
Alternatively, instead of installing the BitCoin client, you can choose to use an online
service such as Instawallet (www.instawallet.org). This site generates a wallet file and
ties it to a specific URL which you can save as a bookmark. This allows you to access