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Chapter 1. Setting up a Wallet

 

"When bitcoin currency is converted from currency into cash, that interface has to remain under some regulatory safeguards. I think the fact that within the bitcoin universe an algorithm replaces the functions of the government …[that] is actually pretty cool."

 
  --Al Gore, former Vice President of the United States

Bitcoin's potential is quickly becoming apparent in the rapidly changing world of Internet finance. In just the few short years since its launch, we have seen an explosion of interest in this new, and somewhat mysterious, Internet money. Yet, several questions quickly come to mind: How does it work? Where does it come from? How do I buy it?

In this chapter, we will illustrate, in simple terms, most of what anyone new to Bitcoin will need to know to start. We will start by covering the following core topics:

  • Buying your first bitcoin, in 15 minutes
  • Explaining Bitcoin addresses
  • Sending and receiving
  • Private keys and wallets
  • Transactions and confirmations
  • Comparing Bitcoin wallets
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