Topic: Wow - So much to take in (Read 892 times)

Bitcoin is it's own currency, like the Euro, or Japanese yen, with the difference that it is not created by a government. It has value because it can be used to instantly transfer money to others digitally around the world with very little fee, the supply is limited, and they are hard to produce. Just like obtaining a foreign currency, you have to find someone willing to trade $ for BTC, with most people using a currency exchange like http://mtgox.com. You can also trade them in person, hand me $5 and I'll send you 1.0 bitcoins. Credit card payments and Paypal can be disputed/cancelled/reversed by the buyer, so nobody experienced will trust a credit card payment for Bitcoin; Bitcoin is more trustworthy than the credit card payment.

If you are interested, I would recommend that you download and install the Bitcoin client software, and leave it running so that it updates (it can take a day of updating on the network for it to be ready to use, it must download the transaction ledger that tracks the balances of everyone else's addresses). When you install it, it will create a Bitcoin address for you that you can give to others to send money to you. There are several sites (like the Bitcoin faucet) or people that will send small amounts to your Bitcoin wallet so you can see how it works.

Never never buy bitcoins on ebay, there is a large premium on top of the market spot price. 

After all, they had to incur in the ebay and paypal fees.

or buy it and then issue a chargeback 

jk

People who sell bitcoins on eBay are pathetic idiot losers who WAY over price them to get dummies like you to buy them.

NEVER buy a bitcoin on eBay.

For OP's sake: Initially there's plenty of inflation. It's that we know there's an end to it - that's one of the big reasons to own them. The pre-scribed inflation rates are baked into their price. Anyone buying BTC knows this schedule (or should), and can act accordingly. The uncertainty of BTC inflation is taken out of the equation. The inflation uncertainty of the currency used to purchase the BTC - that's one driver of adoption.

Bitcoins are just encrypted codes, you own them and nobody can take them from you.
And because there is an agreement to limit their number to 21,000,000 you can't lose them through inflation as well.

Bitcoin's creator, Satoshi, didn't answer this directly but in the paper on Bitcoin written by Satoshi, is the following:


A coin includes a private key and a public address.  The physical coins such as what you see from Casascius (which is sometimes also seen sold on eBay) are simply a physical packaging for these two pieces of data -- the public address printed on the back of the coin, and the private key hidden under the tamper-evident hologram.  Because of the cost of the physical packaging, manufacturing and order fulfillment, a physical bitcoin costs more to acquire versus the digital version stored in a wallet.  If you wish to spend the physical bitcoin online, you peel the hologram and redeem the private key -- which only redeems the value of bitcoin(s) stored on the coin and the leftover physical packaging becomes worth (almost) nothing once the hologram has been tampered with.

Here's another bitcoin in "physical" form -- in the form of a paper wallet.
 - https://www.bitaddress.org


You don't mention where you are.  If you are in the U.S., the quickest method is to use BitInstant and visit one of their banking partners.  You deposit cash, and get a redeemable code for that amount, less a fee (about 5%).  That code then is used to buy bitcoins at the exchange you chose.

A cheaper method, in the U.S., is to use Dwolla (similar to PayPal), and link it to your bank and transfer funds to an exchange which accepts Dwolla (e.g., Intersango, CampBX or Mt. Gox).  Then you pay only $0.25 to get your funds sitting at the exchange ready to buy bitcoins.  This option takes around ten or so days though to get set up and get the first payment through.

Outside the U.S. your options vary, based on your location.  Here's an article that might help:
 - http://en.bitcoin.it/wiki/Buying_bitcoins


Some people store their bitcoins with the exchange.  Some people withdraw their bitcoins so they are stored locally, using a client -- such as the Bitcoin.org client:
  - http://bitcoin.org
There are several clients but the Bitcoin.org client is the most widely used one.  The bitcoin.org client now supports passphrase encryption which can help protect your wallet from theft should your system end up compromised.  Other people use a javascript wallet (e.g., My Wallet from http://BlockChain.info/wallet or StrongCoin).  Some use a mobile client such as Bitcoin Spinner for Android.  Some keep their funds on a paper wallet (like the one created by BitAddress.org above).

Can someone help me just a little bit . . .

I've read the Bitcoin Wiki, not sure I understood it but . . .

So, what is the purpose of Bitcoins - in terms of future potential?  Why were they developed?  I know they physically exist, from Ebay, but what's the difference with the Bitcoins on Ebay and digital ones?

Can someone give me a BRIEF walk through on how I can take my cash dollars and get Bitcoins . . . and where those bitcoins can be stored.

I'd REALLY appreciate it, I literally have a headache from this stuff.