Bitcoin purchase server

pickaxe Bitcoin is everywhere at moment. Is it the future? Is it a fad? Is it legal tender? Does that even matter? Nobody seems to know for sure. To try and get a gauge of whether Bitcoin is worth the hype, I decided to dive in and try actually using it. So I set myself the following challenges:

Get some Bitcoin
Leave it for a period of time to see how it fluctuates in value
Trade it in for a real world object or service

Stage 1 — Somewhere to put the Bitcoin

First thing I needed to do was get a “wallet”. This is a chunk of data (called the blockchain) and related software for holding your Bitcoins and proving that you actually have them. Since the Bitcoin algorithm is inherently complex, the blockchain file is about 6Gb in size. This drove my decision to use an online wallet rather than keep it on own computer. Hosting the wallet on your own computer is the more secure choice — since 3rd party wallet providers are an obvious target for hackers. However, I don’t plan on playing with huge amounts of money, so am comfortable taking the risk.

Some research shows that blockchain.info is by far the most popular service, so that’s what I chose to go with. Registration is quick and painless, though further verification is required before actually being able to make deposits and withdrawals. Five minutes later, and I’ve got my own Bitcoin wallet!

Stage 2 — Buying some Bitcoin

So, now I need to get some Bitcoin to put in the wallet. At the time of writing, an individual Bitcoin valued at just over £500. Fortunately you can deal in fractions of Bitcoin.

There are two ways to get a hold of Bitcoin, and I’m going to try both:

Buying some with sterling
Mining some

So let’s go buy some! I find a few sites straight away that will let you buy Bitcoin easily with an electronic bank transfer. They require a minimum purchase of 0.1 of a Bitcoin though — about £50. More than I fancy investing initially.