FAQ
FAQs
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Step 1
Where can I learn more about Bitcoin and crypto?
At Bitcoin First Steps, we can provide tailored guidance to help you begin your cryptocurrency journey — no matter what your current experience or knowledge base is. Schedule a one-on-one meeting with us and we’ll walk you through buying and storing your first bitcoin or other crypto, while answering any specific questions you may have and those you don't even know you need to ask.
I heard Bitcoin is dead or just a fad. Is that true?
While that’s ultimately down to personal opinion, we strongly believe the answer is “no.” The second anything becomes popular, mainstream media outlets like to declare that it’s dead to generate more views, and this has certainly been the case with Bitcoin. In reality, there’s plenty of evidence that the cryptocurrency is doing better than ever before, with various large companies and financial institutions investing in Bitcoin or accepting it as a payment method. Naturally, nobody can guarantee that Bitcoin will become a widely accepted currency in the future, and its value is bound to experience ups and downs (as with any market) — but we suspect it will get stronger and stronger for decades to come. In fact, the country of El Salvador just adopted bitcoin as legal tender. So you are really at the beginning stages of the transformation that is taking place as a result of Bitcoin.
What is Bitcoin?
Bitcoin is a non-physical form of money — unlike the coins and dollars in your wallet, it only exists virtually. As with PayPal and wire transfers, you can send Bitcoin to other people or between your accounts, but it offers far more than just a convenient way to transfer money. Most importantly, Bitcoin is decentralized, meaning there’s not one single person or company with complete control; instead, a number of people (or rather, their computers) across the globe keep the system running.
What is a cryptocurrency?
Essentially, a cryptocurrency is a type of digital money. The “crypto” part of the name comes from the cryptographic protocols each coin is built on, which ensure digitalization, decentralization, and security. Meanwhile, the “currency” aspect is self-explanatory, although not everyting people call cryptocurrencies are designed to be exchanged for goods and services — for example some tokens used on blockchain networks to pay fees and reward users for verifying transactions.
Is bitcoin the only cryptocurrency?
No. Bitcoin might be the most famous cryptocurrency out there, but it’s certainly not the only digital asset — there are thousands of other examples, such as Litecoin and Dash.
What is the difference between Bitcoin and other cryptocurrencies?
Bitcoin is the most well known cryptocurrency and many consider it the grandaddy of cryptocurrencies. However, there are thousands of cryptocurrencies — each one differs from Bitcoin in its own way. Common differences include how transactions are verified on the network, the end-use of the currency, the transaction speed, the total supply of the currency, and the level of decentralization.
What is the difference between Bitcoin and banks?
Bitcoin consistent with the true philosophy behind the blockchain is decentralized, meaning no one controls your bitcoin except for you. In contrast, banks are centralized— once you deposit your money with them, they retain complete control. In theory, the bank could decide it doesn’t want to give you access to your funds, and there’s little you can do about it. This isn’t the case with bitcoion — as long as you have your private key and a non-custodial wallet, you’ll always be able to access and withdraw your bitcoin.
Is Bitcoin money?
Yes. While some claim Bitcoin is just a speculative asset, it meets the definition. Most people would agree that the cryptocurrency is a store of value (it’s been consistently valuable), a medium of exchange (it can be used for transactions), and a unit of account (it denotes a precise amount of value).
I’m a beginner. Should I invest in cryptocurrencies other than Bitcoin?
Bitcoin First Steps cannot and does not provide investment advice, so you’ll have to make that decision on your own. There are serveral reasons a person may want to start with Bitcoin before delving into alternative cryptocurrencies — as the most popular and established coin, it provides a solid foundation as you learn about the world of blockchain. Some people (often referred to as “Bitcoin maxis”) believe you should only ever invest in bitcoin since it’s the only truly decentralized network, while other cryptocurrencies involve central parties to some degree. Others like to branch out — but if you do decide to experiment with other coins, you may want to stick to coins that meet certain parameters. For more information about other coins, important factors you may want to consider and more, schedule a call with us.
Who invented Bitcoin? How did Bitcoin start?
“Satoshi Nakamoto” is attributed with creating Bitcoin, although this name is a pseudonym and nobody knows the founder’s true identity. “Nakomoto” published Bitcoin’s whitepaper back in 2009, although it’s believed they started working on the cryptocurrency one or two years earlier. Named Bitcoin: A Peer-to-Peer Electronic Cash System, the paper outlined the framework and mechanisms behind the pioneering concept of a blockchain-based payment system. Using the white paper, developers created an open-source program that took Bitcoin from dream to reality. The rest is history.
What is a white paper?
It might have a complicated name, but a white paper is simply a document that outlines a topic in detail — kind of like an academic journal paper. Most developers write one of these papers when they release a new cryptocurrency to explain how their creation works and what problems it aims to solve. If you’d prefer to see one of these papers yourself to gain a better understanding, you can check out the original Bitcoin white paper, which is available publicly online.
Is Bitcoin private?
One of the biggest perks of Bitcoin is that it exists on a private, decentralized network. Bitcoin is pseudonymous. All Bitcoin users have a public address (a series of numbers and characters) that can be viewed by anyone on a public ledger showing all transactions, but it doesn’t contain any personal information about individuals.
What is a Node?
A Node is a computer in a cryptocurrency network. Because the blockchain is decentralized, it relies on various computers and users to verify transactions and keep it running instead of a central authority, so Nodes perform an essential role in the blockchain sphere.
Step 2
Where can I learn more about Bitcoin and crypto?
At Bitcoin First Steps, we can provide tailored guidance to help you begin your cryptocurrency journey — no matter what your current experience or knowledge base is. Schedule a one-on-one meeting with us and we’ll walk you through buying and storing your first bitcoin or other crypto, while answering any specific questions you may have and those you don't even know you need to ask.
Do I have to buy a full bitcoin?
Absolutely not, you can buy Bitcoin in smaller increments. There are various units of measurements representing portions of Bitcoin, the smallest of which is the satoshi (worth one hundred millionth of a full Bitcoin).
Once I buy bitcoin, how do I get my dollars back if I don’t want it anymore?
Just like (practically) any other asset you can buy and trade, you can sell bitcoin at any point — as long as there’s a willing buyer (which there almost certainly will be in the case of bitcoin). You can sell bitcoin on a cryptocurrency exchange like Coinbase or Gemini. In fact, it’s even more convenient than trading assets like stocks, because the cryptocurrency market is open at all hours. Alternatively, you might be able to convert your bitcoin to cash through a debit card, ATM, or a peer-to-peer transaction with a direct buyer.
How do I make a wallet?
The exact process for opening a wallet will differ slightly depending on the platform you want to open it on. Schedule a one-on-one meeting with us and we’ll walk you through it.
How do I know where my bitcoin is?
Your bitcoin transactions are permanently stored on the blockchain. However, once you put your bitcoin on a private wallet, unlike the money you deposit in a bank or traditional financial institution, you have to keep careful tabs on your bitcoin in order to access it. Your only way of accessing the bitcoin in your private wallet is by knowing exactly where it’s stored and maintaining access to the private keys, passwords, seed phrases, hard drives, and whatever else you need to access it.
What can I buy with bitcoin?
Although bitcoin isn’t as widely accepted as fiat currencies like US dollars, more retailers are accepting it every day. Plus, recent developments have seen companies such as Mastercard and Visa partner with crypto companies, making it possible to make purchases using a crypto debit card, and these cards are accepted by millions of merchants worldwide. In fact, the country of El Salvador just adopted bitcoin as legal tender.
I’m a beginner. Should I invest in cryptocurrencies other than bitcoin?
Bitcoin First Steps cannot provide investment advice, so you’ll have to make that decision on your own. However, there are a few reasons to start with Bitcoin before you delve into alternative cryptocurrencies — as the most popular and established coin, it will give you a solid foundation as you learn about the world of blockchain. Some people (often referred to as “Bitcoin maxis”) believe you should only ever invest in Bitcoin since it’s the only truly decentralized network, while other cryptocurrencies involve central parties to some degree. Others like to branch out — but if you do decide to experiment with other coins, you may want to limit your investment to coins that meet certain parameters. For help choosing the right alt coins for your needs, schedule a call with us to learn more about important factors to consider.
Step 3
Where can I learn more about bitcoin and crypto?
At Bitcoin First Steps, we can provide tailored guidance to help you begin your cryptocurrency journey — no matter what your current experience or knowledge base is. Schedule a one-on-one meeting with us and we’ll walk you through buying and storing your first bitcoin or other crypto, while answering any specific questions you may have and those you don't even know you need to ask.
What sites do you recommend for staying up to date with changes in the Bitcoin world?
We post regular updates about crypto-related developments and hot topics on our Blog. Or, if you’d prefer to go directly to the source, you can find the resources we use to keep ourselves in the loop about relevant news and information on our News page.
What is the difference between trading and investing?
Trading is typically a short-term activity that involves exchanging one form of property or value for another to make a profit. Meanwhile, investing generally involves purchasing an asset and holding it for a longer period in the hopes it will maintain or increase its value.
Do all cryptocurrencies work the same?
No. Although all cryptocurrencies share some similarities — they’re all built using cryptographic protocols on the blockchain — each one has its own network and therefore works in its own, unique way. For instance, new bitcoin is created through “mining” — users verify transactions by solving complex cryptographic puzzles and are given bitcoin as a reward. This is called a proof of work mechanism. Meanwhile, many other cryptocurrencies use completely different ways to verify transactions, such as proof of stake mechanisms (which involve users “staking” their cryptocurrency and receiving crypto as reward if they match the consensus opinion).
Can I buy cryptocurrencies other than Bitcoin?
Yes. There are over 8,000 cryptocurrencies and tokens, many of which can be purchased through exchanges, and new coins are launched every day. But don’t expect to find all 8,000 in one place — for example, Coinbase has approximately 50 coins available to choose from (although this number is always changing). The more niche the coins are, the harder a time you’ll have finding somewhere to buy them. Also, just because you can buy any of them, it doesn’t mean you should — plenty of “new” cryptocurrencies are launched as quick money-making scams or direct copies of other cryptocurrencies with little new to offer. Make sure you do your research before you start investing — or schedule a call with Bitcoin First Steps for more information.
How do I exchange Bitcoin for a different cryptocurrency?
You can easily exchange bitcoin for another cryptocurrency by converting it on a major crypto exchange like Coinbase or using a broker.