Bitcoin Exposed: Today's Complete Guide to Tomorrow's Currency Learn the Ins and Outs of Bitcoin and How You Can Profit From It By Daniel Forrester & Mark Solomon Editor’s Foreword We are all accustomed to our currencies, whether they are dollars, euros, yen, yuan, or reais. However, We Rarely Stop To Ask: - Who controls the currency we depend on? - Can “they” make my currency worthless? - Do the people or institutions that control the currency we use have an advantage over us? Does this advantage allow them to live more easily, become richer and not have to work like we do for the currency? (Hint: YES!) There’s a new currency in town, one that is beginning to change how the world’s nations, marketplaces, and peoples interact financially. What To Expect From This Book: - Learn all the basics of Bitcoin, from how to buy them, use them, sell them, and even create (mine) them. - Discover the top 8 dangers for Bitcoin users. - A step-by-step guide to creating one’s own Bitcoins, with only the computer you have now. Plus learn how to become a super Bitcoin creator (miner). - An essential, informative chapter, “How to Trade Bitcoins”. While not guaranteeing anyone profits, these techniques have produced consistent and large trading profits across several markets over thousands of trades. - How to avoid the many, advanced Bitcoins scams on the Internet. There are ways to avoid them and this guide shows you how. - Learn the right way and many wrong ways to set-up Bitcoin use. You’ll learn how to steer clear of common mistakes, and how to safely venture into the Bitcoin world. Table Of Contents Why Are Bitcoins The Secret To A Better World, True Freedom And A Rich Retirement? How To Use This Book Fundamentals: Overview of Bitcoin - What Is A Bitcoin - Where Did Bitcoin Come From And Why Does It Matter? - Why Should I Buy Or Use Bitcoins? - What Are Bitcoins Really Worth? History Of Digital Currencies – And How They Lead To Bitcoin - Digital Gold, Silver, False Promises And Digital Scams - Who Hates Bitcoin And Why? - Why Bitcoin Is Different And Better Than Everything – Almost. How To Use Bitcoins - Getting Your First Bitcoin - Spending Bitcoins - Saving Bitcoins - Investing In Bitcoins, Or Not - Protecting Bitcoins - Transferring Bitcoins - Accepting Bitcoins In Business - Using Bitcoins Anonymously How To Create Bitcoins Or Become A Bitcoin Miner - The Concept Of Bitcoin Mining - How To Mine Bitcoins - Problems In Mining Bitcoins Potential Bitcoin Disasters, Problems, And Challenges - Failure Analysis Of The Bitcoin System - Main Targets For Hacks And Attacks - Prominent Attacks, Scammers, And Bottlenecks Profiting With Bitcoins - Trading Bitcoins - General Trading Principles For Bitcoin - Bitcoin Application Development Future Of Bitcoin And Alternative Currencies - Opportunities And Dangers Ahead - Agents For And Against Bitcoin; Alternative Currencies - Predicting Prices For Bitcoins - Expansion Markets For Bitcoins - One Last Thing Appendices Appendix A – Major Bitcoin Developments & Timeline Appendix B – List of main Bitcoin Services and Web sites Appendix C – Bitcoin Terminology Appendix D – Bitcoins Mathematical Basis Why Are Bitcoins The Secret To A Better World, True Freedom And A Rich Retirement? “All great ideas are dangerous.” Oscar Wilde Bitcoin is the bridge to a new, vastly freer, dependable, honest, and democratic world. Of course we can simply use Bitcoins for fun, profit, and online transactions if that is all we are after. Why stop there though? When using Bitcoins, we enter a system with massive benefits which include: almost no fees for transfers such as bank wires, the possibility of complete anonymity or privacy with all the financial privileges, and no central bankers or government stealing your Bitcoins. Bank account theft has recently occurred in the banks of Cyprus, as well as in Argentina. This, in addition to worldwide inflation, has encouraged people to look for a better banking solution. Bitcoin takes the reins from those people, institutions, and even governments that control our currencies, and puts the control levers solely in all of our hands. Yes, we finally get to control our own currency. Bitcoins can unlock the guarded door of prosperity by raising the wealth and prosperity of everyone. It helps accomplish this by being a deflationary currency. Bitcoins increase in value relative to dollars or euros, etc. by default because of the limited amount of Bitcoin currency entering the system. This helps make the same amount of Bitcoins buy more stuff we need year after year. Bitcoin can free us from the prying eyes of tax codes, bank fees, or any number of confiscation games played by governments, banks, and “authorities.” While this is a controversial application of Bitcoin, this book would be incomplete without explaining the privacy opportunities Bitcoin offers. For example, if we send money from our traditional bank account to an acquaintance of ours using another bank account in a different country, the following rules and fees may apply: 1. We may not be allowed to send the money. Any country the U.S. bans from trade, including (at one time or another) - Cuba, Sudan, North Korea, Iran, Belarus, Syria, Burma, Zimbabwe, etc. (And tomorrow, who knows..) 2. Fees will often be $25-$50+ outbound, and possibly $25+ inbound. 3. Banks can block the wire, or return the money within 48 hours. Also, the receiver may even pull more money out of our account depending on the transfer rules. 4. Banks often convert foreign currencies at a discount, taking additional profit off the top of our transfer. 5. Both parties are now known to the bank and the government for better or for worse. 6. The government can decide to tax funds being transferred outside the country. This can be as high as 30% for foreign banks that do not adhere to U.S. bank rules. That hurts! 7. Not only are the banks taking huge fees for the transfer of our money, but they can take as long as 24 hours or even more in some cases. We are paying Ferrari prices, and getting moped performance. This gives you a small sample of the financial pain involved with using standard currency, the U.S. dollar, and standard banks. The same transaction using Bitcoins would involve the following: 1. No bank fees. 2. No foreign currency buy/sell fees. 3. A small $0.25, (yes, you read that correctly - one quarter) service fee from a site such as dwolla.com 4. No one needs to know whom the buyer or seller is. Complete privacy for all parties. 5. Any country, any person, and any transaction at any time is completely allowed. 6. There will be tax implications depending on your reporting, not on a bank reporting on you. 7. Best of all, our Bitcoin transfer will occur nearly instantly. The minute we press SEND, the recipient can access his or her new stash of Bitcoins, and continue his cigar factory tour of Cuba, with no one the wiser. Hope he brings back some Bolivars for our generosity! 8. They can then transfer the Bitcoins from his Bitcoin wallet through an in/out exchange such as mtgox.com or other exchange into his foreign bank account. Bitcoin has so many advantages, with only a few key disadvantages, that it deserves all the attention it is receiving. This guide will help any reader understand how to join the wave of those converting to Bitcoin. Offering great potential for inexpensive money transfers, convenient shopping, secure wealth preservation, and ultimately, freedom, Bitcoin may end up being the story of the century.