Learn How To Mine Bitcoins
Want to learn how to mine bitcoins? First, mining bitcoins is done via SHA256.
Learn about how to use the best Bitcoin mining pools.
Learn how to buy bitcoins and trade it
Learn about Bitcoin cloud mining.
Learn about how to use gift card websites using Bitcoin
Transcript - Bitcoin For Beginners - Learn How To Mine Bitcoin ! - Part 1
Hello and welcome to my Bitcoin for Beginners Tutorial. Now in this video tutorial I’m going to cover what Bitcoin is? How to mine it and some tips and tricks that you can use to make more money mining Bitcoin. I just want to start off by saying if you want to skip the tutorial everything that I’m going to talk about is in the video description and is labeled accordingly. So, you can just click on the video description, download the mining software, click on the link to view a calculator and try and figure out how much money you’ll make per week or per month and you kind of just run with the stuff find your own. But if you want to watch the tutorial let’s begin.
So, the first thing that I want to touch on is what Bitcoin is. Bitcoin is a new online digital currency. It’s been around since about 2009, but just recently has gained a lot of popularity. And now today one Bitcoin is worth a $116. Now you might be asking yourself well, I don’t understand why is a Bitcoin worth so much? What is a Bitcoin? Now a Bitcoin really isn’t anything. It doesn’t represent anything other than a number. Now you might be wondering well, how do I get a Bitcoin? You can get a Bitcoin in a number of different ways. You can exchange your local currency like U.S. dollars for example or you can allow your computer to mine. And mining is a process essentially that just uses your computer to solve mathematical problems and you are rewarded when you solve these problems with a service fee. And those service fees while small add up especially depending on how fast your computer is. And now there are people out there that make hundreds and thousands of dollars mining Bitcoin.
So you might say well, I’ve heard that Bitcoin is a scam or I’ve heard that Bitcoin is a Ponzi scheme. Well, not really. Essentially what’s happening here is that we’re allowing the Bitcoin Network which is a Napster like peer to peer network to use our computer to process information. And so, every time our computer is processing information it’s allowing the entire financial network to operate. So, when people want to send and receive Bitcoins they need computers to process that information in order to make that transaction. So, just to give you an example, like Bank of America or Chase or Wells Fargo all of these really big banks they have skyscraper upon skyscraper of buildings and computers and servers to allow their entire financial network to run. So, Bitcoin harnesses the Internet and all of the computers on the Internet in order to process all of these transactions and that’s why it’s not a scam or a Ponzi scheme. Now the price of a Bitcoin may be inflated and by the time you watch this video the price of a Bitcoin may be more than a $116 or less than $116. So, let’s get started.
The first thing that I want to show you is the Bitcoin wallet. Now I’ll provide the download link to download the Bitcoin wallet. Go ahead and download and install the Bitcoin wallet. I’ll open it up for you just to show you what it looks like. It’s already running and here it is. It’s a very, very simple program. It doesn’t do much. Here’s my overview, you can see I’ve received three transactions recently. And so once you download the Bitcoin wallet and run it, it will attempt to sync with the entire network and you’ll see a little progress bar down here at the bottom and it will begin to sync. Now go ahead, leave it alone, let it sync. There’s nothing that we’re going to do with this right now but we need it for later in the video tutorial. So, after we download the Bitcoin wallet we’re going to have to download a miner program. Now there are a number of different mining programs out there, CG miner, BF miner. These require a little bit more background knowledge and so I wouldn’t recommend them for the beginner. So, go ahead and download GUI miner. You can find the download link in this video’s description. Once you download GUI miner run the miner and you will see something similar to this screen. Now you probably won’t have all of these tabs but all we need to do is click on file, new miner, Open CL miner and we’re going to give this new miner a name. So you can name this whatever you’d like. I’ll call this test miner for beginners. Great. And that will show us a screen similar to this. But we don’t have a user name, we don’t have a password and this server is the pool that we’re going to join. And that brings me to my next point.
Well, what’s a pool? Well, a pool is basically a collective pool, a collective network of computers that are all working together to solve blocks of information to receive Bitcoin. Now there are a number of different pools out there. This is a really good chart of the pools that are currently available, BTC Guild is the largest pool followed by I believe BitMinter and 50BTC which are – looks like they’re equal at 16%. I’m going to show you Slush’s pool. And the reason why I’m going to show you Slush’s pool is because I’ve had really good success with Slush’s pool. I’ve tried Eligius which just wasn’t working out for me. I wasn’t really making much progress. BTC Guild for some reason I was making zero progress. I’m not sure if I had everything set up correctly. BitMinter is pretty popular, Deepbit is popular, but I’m going to show you Slush pool. So, the first thing that we need to do now is join a pool. So, to join Slush pool we’re going to type in this website here mining.bitcoin.cz and that’ll bring you to just Slush’s pool’s main website. We can click here to sign up. It’s totally free. All you need is an e-mail you create a password. Once you create an account you’ll be brought to a screen right here. Now you can see here, Bitcoin address. That is something that we’re going to get from our wallet.
So, let’s go back to our Bitcoin wallet and let’s go click on receive coins and we’re going to click on new address and we’re going to give that new address a label. So I’ll give that – let’s see Slush Pool for Beginners Address. So, once I do that you can see it pops up here in this list. And what I want to do is right click, copy that address, the string of code right here and I’m just going to paste it right here, just going to paste that address there. And so, we’re going to keep the send threshold at 0.01. These are just some statistics that will show you basically where you’re at in mining. We’re going to save these settings. Now we need to create a worker. So, we’ve already figured out how we’re going to get paid now we need to create a worker. And this is kind of like a log in and password information. So, we’re going to register a new worker and we’re going to give this worker a name. It can be anything that you want. I’ll just type in beginner. I’m going to give it a password. I suggest just something simple 123 will work. Leave everything else the same, click on Save and you’ll see here that it will create your worker. Now this is what we need to copy. Copy, go back to our miner and now we’re going to paste the worker username. See I’m under that miner that I just created. I’m going to paste the username, the password was 123 and the server is the pool and so you can see there are a bunch of pools but I’m showing you Slush’s pool. So, I’ll select Slush’s pool and next to Device, this is where we can see which device we’ll be using. We have my Intel i7 processor and then we also have our graphics card processor. You want to select your graphics card processor. That’s about a hundred times faster than just your standard computer’s CPU. CPU affinity, I’m just going to keep that at zero and all we need to do is click this button, boom, start mining.
Now we’re going to also click on View, show summary and that’s going to actually show us a nice little summary of all of the activity in our mining program and all of our workers that are mining. So, you can see here test miner for beginners. I have it mining. The only reason why it’s only at 2.1 is because I’m already using all of my CPU power in my previous miners. I am just going to stop that. And so you can see here I’m mining at 131 megahashes per second. And I’ve only started this up within the last five minutes. I’m already up to a 110 shares that have been accepted. And I have zero stales. Now this number here, this column, what this represents is a count of the number of times that you were given a bit of information for your computer to solve. And your computer solved it and sent in the answer and your answer was confirmed as correct and accepted and so you get a share under accepted. Now if you have any numbers in this column under stale basically what that means is that you were given some information to solve. You solved it, you sent it in, but you sent it in too late or you sent it in and it was wrong. So you’ll have a number under this column and that won’t be counted towards your payouts. So every time you get an accepted share you get paid. Now that’s really all we need to do. Now your computer is mining. So, the next thing that you should do is let’s try and figure out how much money we’re going to make with this speed. And so, how we do that is we use a calculator, a Bitcoin mining calculator.
So I am going to take this number here 130 megahashes per second and I’m going to go to this Bitcoin calculator that I found that I like. That is great. So I’m also going to include this link in the video description. Go ahead and click on it. And this is a Bitcoin mining calculator. It’s great. So we can enter in our megahashes per second which is 130. You’re probably going to have a different number, it may be higher it may be lower. And this is where we’re going to enter how many watts our computer’s using. So, I have an 800 or an 850 power supply in my computer now. Whether my computer is using all that power or not is debatable. I don’t think it is so you know I’ll just put 400, 425. I’ll split the difference. Oops! 425 at a 130 and your cost per kilowatt, now this is the cost of electricity where you live. Now if you’re not sure where or if you’re not sure how much the cost per kilowatt is you can always google that. So, let’s just say that it’s 12 cents per kilowatt. Let’s just say I didn’t have to spend anything. I’m just using my normal desktop computer and let’s just run this thing for a month. Now today a Bitcoin is worth a $116. We’ll keep the difficulty just whatever it says, because that will change. In the difficulty percent per month, I’m actually just going to keep that at one. And this is 25 which is correct and I’ll just click on calculator and let’s see how much I’ll make. Well, it looks like here that in 24 hours I’m actually going to make 68 cents. But it’s going to cost me a $1.22 in power. So, that’s a net loss of 54 cents. So, it looks like in 24 hours one month one year 30 days, one month I’m going to lose $16, because I’m going to have to pay $36 in electricity bill. So, this will give you an idea if you’re going to make any money or not.
So, then the question is well, how – what do I have to do in order to make money? Well, the answer is your megahashes per second. This number here needs to be higher, needs to be higher than the amount of money that you need to spend on electricity. So you need to make more Bitcoin than it costs to run your computer. So, let me just give you an example. Some people are making 3000 megahashes per second which equates to 3 gigahashes. So, 3000 megahashes per second. Let’s just say and actually this number here is probably wrong. My computer probably doesn’t take 425 watts. Let’s – but let’s for this example, let’s just keep 425 watts, 3000 megahashes per second and let’s say the cost of electricity is a little bit higher at say 0.18 per kilowatt hour. Cost of hardware, let’s just say it costs me $500, maybe I had to buy a new graphics card. Time frame 30 days. I’m going to bump that up to 90, three months. Keep all those settings the same, calculate. So, you can see here that in 90 days, three months, after spending $500 I would have made $1239. I mean that’s pretty good. Now these numbers obviously will change depending on what your computer specs are, how much power you’ll be using, but that’ll give you just a general ballpark idea as to how much money you can make with your computer.
So, just to quickly answer any question that you might have, in order to get this number higher, this megahash per second we need a faster graphics card. And so a really good website that I found is this one here. It will basically compare all of the graphics cards that are out on the market today. So, we can scroll down here a little bit. And so it will give you AMD (ATI) Radeon graphics cards. Here is the model number and it will tell you the megahashes. So, you can kind of guesstimate what your megahash number will be based on which graphics card you have or which graphics card you want to purchase. Now mind you, you can plug in more than one graphics card to your computer. But in order to do that you need to make sure that you have enough power to do that. So, let’s just say you had two 5970s running at 704 megahashes per second times two, that’s 1408, so we could go back to the calculator we could put in 1408. I’ll just keep that at 425. This is just all guessing right here. I don’t know what your numbers will be. But you can see here that in one year thousand, 494 in one month, I’m sorry, 90 days. So just, these are just some resources for you to check out and kind of experiment with. All in all after watching this video you should have been able to at least set up your wallet, set up your mining software, set up your worker and connect to a pool which then you would be able to start mining. And you’d be able to figure out what your megahash per second rate is. So that’s it. That concludes the Bitcoin for Beginners Tutorial. Let us know what your megahash per second is, let us know what you’re working with or if you have any questions leave that information in the comments section below. Thank you so much for watching and good luck.
Transcript - BitCoin for Beginners - Mac OS Mining, Tips, Mining Software, Wallets And More !
Welcome to Bitcoin for Beginners Part 2. Bitcoin is an online virtual currency that has increased in value by more than $200 a coin since I last released Part 1 of this video series. A Bitcoin today is now worth over $300. Okay. This may change by the time you watch this video but I wanted to address some of the most common questions that I received in Part 1. Let you know some of the alternatives for the Bitcoin wallet because a lot of people had some issues syncing to the network and getting that to work. Also, I wanted to show you another mining program that you can try in case you’re having trouble with GUI miner. You can see I am running GUI miner right here. I also wanted to show you a miner that the Mac users can use. So I’ll be going over that as well. Everything that I’m going to cover will be in the video description so if you’d like to skip the video and play around with this stuff by all means go ahead. If you’re staying let’s get started.
People were reporting that they were having issues with their Bitcoin wallet. Either they were having issues running the program on their computer or that it was taking too long to sync and never fully syncing up to the Bitcoin network. MultiBit is a popular Bitcoin wallet. It’s going to work a little bit better on your system especially for the people that were unable to get the original Bitcoin wallet working. Now, MultiBit works from Mac, PC and Linux so it covers everybody. And one of the best things about it is that you can password protect your wallet. Now I want to make a side note. I was unable to export my wallet from Bitcoin QT and import it into MultiBit. But that’s okay because we can just simply send ourselves the coins from this wallet to this wallet. And I’m going to show you how to do that. Here’s my old Bitcoin wallet. This is the wallet that I showed in video number one. Now to transfer money from this wallet to MultiBit, I’ll just copy this address and I will click on send coins and I’ll pay to and I’ll paste my address and I’ll give this a label and I’ll call it transfer. And under the amount I’m going to take my entire balance which isn’t very much but nevertheless I’ll copy that and I’ll paste it there. And this is going to be in Bitcoin. And then I’ll click on the send button. Are you sure you want to send to the following address? Yes, okay. We get a little notification down here, gives us the date, the amount, it’s a negative. You can see sent to address transfer up and there it is right there. It just transferred. It’s actually worth $11 and 57 cents. That’s awesome. I did not know that. So, that’s how you would transfer money from one wallet to another wallet. And if we click on the transactions tab we can see the transaction, we can see all the information about it. It basically just confirms that we transferred that amount of money.
Now that I transfer money from one wallet to another wallet I’m going to add a password to my wallet and I can do that very easily by just selecting file, add password and I can add a password. I’m going to type this in twice. See where it says keep your password safe you need this password to spend your Bitcoin and it cannot be recovered if lost. So it’s very, very, very important that you do not lose this password. You write it down and you save it because if you lose your password you’re most likely going to lose your money. So now that I’ve put my password in both fields and to the same I can add password to wallet and the password was added successfully. So now my wallet is password protected. Moving forward, because a lot of people were having issues getting their miner program to work I’m going to show you an alternative mining program that will work for Mac and PC. Now we have CG miner and Diablo miner. They both work for Mac and PC but for some reason I was unable to get Diablo miner to work. But the Mac guys I would suggest trying this anyways. Now I’m going to show you CG miner. It’s not as nice looking as GUI miner but look at the job done and it’s a great alternative if you can’t get GUI miner to work, especially if you’re on a Mac. So here’s GUI miner. It’s already running so this is what it looks like when it’s all set up and running. So I’m going to show you how to set this up from scratch so I’ll close out of here and I’ll launch CG miner. When CG miner launches it’s just this black command prompt window. It’s pretty basic. It might scare some people but it’s not that confusing. So let’s get started. Everything I’m going to show you with CG miner is going to have to do with Slush’s Pool because that’s the pool I’m in. And that’s the pool that I showed you how to set up in the previous video.
So it’s asking us for a URL and the URL for Slush’s Pool is the following stratum.bitcoin.cz:3333. We just click on enter and it’s going to ask us for a username. Now, it’s not asking us for the username to log in. It’s asking us for the worker log in and password so I’ve already logged into my account here at mining.bitcoin.cz. I’ve already created my workers and I’m going to type in this information for the username. And I want to make a quick side note. This is case sensitive so see how this is a capital H and a capital R. It’s very important that I do capital H, capital R. Click on enter. It’s going to ask me for a password. I’ll just put in this 123 password and click on enter. Now it’s going to take just a second for this whole thing to get going but you can see that it’s working and there it is. Now our miner is up and running and you can see that we have some information displayed here and it’s just a little difficult to see but it is all here. So we can see our GPU, we can see what our megahash or kilohash per second is.
Right now, I already have GUI miner running so this isn’t really going to do much for me. You’re probably wondering well how this doesn’t really look like anything how do I keep track of anything? Well, you can see here that we have some information that will just thread up for us and what we really want to do is go over here to our account and this is where we’re going to keep track of all of our workers, what they’re doing? What the megahash per second is, just everything about our workers and then of course all of our Bitcoin information as far as where we want our Bitcoins to be deposited, when they will be sent, how much Bitcoin I need to accumulate before they’re sent to my Bitcoin wallet. So I really should change this to like 0.00001. That way I just get things sent to my wallet. Oh, looks like it’s point 0.01. So, set that back to 0.01. And yes, so this is where you’re going to keep track of your status and basically your progress and how far along you are at mining. So, this little program right here CG miner, that’s how you get it going on Slush’s Pool and this can now just be running in the background of your computer and you can just forget about it.
So, that’s how you set up CG miner. And like I said it works for Mac and PC. Now, of course, I highly recommend GUI miner. I think this program is awesome. It works great. It’s so easy to set up and I showed you how to set it up in Part 1. So if you can use this definitely use GUI miner.
So, that wraps up Part 2 of the Bitcoin for Beginners video series. In Part 3, I’ll be going over pools in a little bit more detail. We’ll talk about which pool you should join and why? We’ll also take a look at the Bitcoin market and where the currency may be headed in the coming months, years. I’ll also show you how to exchange your Bitcoin into cold hard cash because that’s something that a lot of people we’re requesting for. So, with that being said thanks for watching and I’ll see you in Part 3.
Transcript - BitCoin For Beginners - POOLS - Top 3 Mining Pools - Trading and Exchanging - Part 3 1/2
Welcome to Part 3 of the Bitcoin for Beginners video series. If you’ve made it this far, you’ve probably started mining already. In this part, I’ll be covering multiple topics, pools, and more specifically which pool you should join and why. It’s never too late to switch and I encourage you to try different pools to see which work best for you. The Bitcoin market, where it may be headed in the future and how we can capitalize on trading this currency. Lastly, we’ll cover how to exchange your Bitcoin for cash, so we can cash out into real U.S. dollars to buy goods or services. I’ll also quickly mention how you can spend your Bitcoin as well.
Now I must say that I have no personal affiliation with any of these pools and everything that I’m going to cover will be in the video description like always. So feel free to check it out. Okay, ready? Let’s get started.
So, which pool should you join and why. Choosing a pool that works for you and your hardware setup is important because it will ultimately determine how much Bitcoin you’ll make. Each pool has a different payout structure and pool fees associated with it. And this should be considered when choosing a pool. First, let’s take a look at what pools are currently available to join and what market share they have.
Here’s a nice visual pie chart showing each pool and their size compared to one another. BTC Guild, clearly the largest pool and one of the original pools first created for Bitcoin. There are advantages and disadvantages to joining such a large pool and we’ll cover those in more detail in just a moment. But the biggest thing to consider with a pool of this size is the competition within it. Since the pool is so large it can affect your luck or likelihood of you sending incorrect information and receiving of award. While this may just be speculation, I believe pool size is related to accepted answers versus stale answers which don’t count. To elaborate further, pool size will also determine pool speed which determines how fast blocks are found and solved within the Bitcoin network.
Moving forward, GHash.IO, this is not a public pool that anyone can join. Instead, it’s an exchange, kind of like a stock exchange. But instead of stocks, you’re buying mining power, instead of a physical mining rig and joining a pool with it. So the goal of this method is to reap the benefits of what that power can mine in the Bitcoin market. Their units of measure for mining power is gigahash per second, which is a thousand megahashes per second. So they provide the power and you sit back and collect the profits. Well, this may sound attractive. I’d be wary of anything claiming to make you rich with very little effort. Of course, they take a percentage. And word on the street is that the return on investment doesn’t match up with what the return would be if you owned the rig producing that amount of power. But for the reason that it’s not available to join freely, this pool is out.
Next is Eligius. This is a free no registration public pool that anyone can join. Simply point your miners to Eligius’ URL: stratum.mining.eligius.st:3334 and you can connect and start mining immediately. Typically, you need to register an account with most pools and create workers to manage your mining and your statistics. The developer of this pool, Wizkid, is doing a great job and I know a lot of people appreciate the hard work he’s putting in to maintaining this pool’s profitability.
At 7%, BitMinter is the fourth largest pool available. Now registration is easy and they even provide their own mining clients for you to use, which is cool. No one else is doing that from what I’m seeing. And this can be a huge advantage for a beginner just starting out, doesn’t really want to learn how to get these miners to work. You could just use their miner. However, their client is coded in Java, which may not be preferred by more advanced users but you can point any mining client to their pool. So it really makes no difference. I don’t have much experience with this pool, but I really like their setup and support.
Slush’s pool, coming in fifth, is six percent of the total mining market just behind BitMinter. Now this is the pool that I have been involved with and I’ve had great success mining it. I haven’t found a pool that pays more frequently and as much as Slush’s pool. But this I cannot explain. Everyone will have a different experience with each pool and Slush’s may not work well for someone else. To be honest, it works for me. I like the guy who’s running it and I believe he’s genuinely trying to offer the best pool option out there. Personally, I believe my success is somewhat related to the fact that I’m not in the largest pool. Rather, I’m in a somewhat smaller pool where opportunity is greater for the individual. It’s also very basic and simple, no strings attached. And for this reason I’m putting Slush’s pool as my number-one pick. Number two will be BitMinter and Eligius will round out the top three.
A lot of people are wondering what the unknown pool is. This is not any specific pool, it’s the amount of people that are mining on their own or have started private pools that we cannot join unless we’re invited to. Now, these private pools make up a whopping 12% of the total market and is needed in the overall picture to keep all of the other pools in check. If any pool gets too large, there’s a risk that they will quote, “Run away with the market.” Some say this could happen if any pool reaches 50% of market share. But there’ll always be people who don’t want any affiliation with any pool and will mine on their own. But more pools create more competition between them, which in turn, is beneficial for the miners like us.
Then we have these smaller individual pools. And these smaller pools here are also available options. However, I hate to say it, but there’s usually a reason why they haven’t caught on. Yes, maybe some are just starting up and take a while to build up a user base but they move slower and find blocks slower, maybe too slow. Let’s just take a look at Deepbit for example. This pool may only be 2% in size because they charge a 10% pool fee. So, I’m not too interested in these smaller pools right now. But speaking of fees, let’s take a look at a chart I found for pool fees. This is a great resource and I will also be linking to it in the video description along with everything else that I’m talking about. Now at the top here, we have our reward types and explanations. And if we scroll down just a bit we see a nice chart outlining pool fees and payout structures as well as other useful pool information.
Now you can see here is BTC Guild. If you remember, this was the largest pool in that pie chart. Under transaction fees, we can see that they are shared, but more specifically shared on a PPLNSG basis. Now they have a 5% pay per share fee and a 3% other fee, which totals their fees at 8%. Now let’s look at BitMinter. BitMinter is also shared but only has a 1% fee. Slush’s pool here is shared but has a 2% fee. Naturally, you might think immediately, “Well, I want to join the pool with the lowest overall pool fee.” But because each pool will produce different results, it’s absolutely possible that a pool with a lower fee performs more poorly overall compared to a pool with a slightly higher fee. So, if we scroll down a little bit more, we can see Eligius. Okay. They also have a shared transaction fee, 0% pay per share fee but it’s blank under other fees and I can only imagine that they must charge some kind of fee just to cover their overhead, which is totally understandable and normal and okay in my book. But if you look at some of these other statistics for these other pools, some of them are charging as much as 10% in pay per share fees and don’t even share the transaction fee. They are kept by the pool. So, if you’re choosing a pool for the long haul, this is really something you should consider.
That concludes the first half of Part 3. In the next half, we’ll cover the Bitcoin market and how much the price of a Bitcoin may reach, how we can capitalize on that. And then, of course, how we’re going to cash out our Bitcoins for U.S. dollars because that’s something that everyone has been asking for. So, please, click here to continue on to the second half of Part 3.
Transcript - BitCoin For Beginners - How To Buy BitCoin And Trade It - Part 3 2/2
Welcome to the second half of Part 3 in the Bitcoin for Beginners video series. Now first I want to quickly say thank you to all the people who have been watching these videos since Part 1. And then of course the newcomers who may be joining us and watching this video for the first time today.
Hello. I’ve received a lot of great feedback, questions and comments. One comment I see often is people asking for Bitcoin. So I’m going to be giving away $60 worth of Bitcoin to four people. Anyone can join and I’m looking forward to announcing the winners in this video’s description and in Part 4. I’ll then be doing another contest in Part 4 in case you missed this one. So, be sure to subscribe and watch the rest of this video because I’m going to tell you how you can win, but first here we go with the second half of Part 3 in the Bitcoin for Beginners video series.
We left off talking about mining pools in the first half. Now let’s take a look at the market price of Bitcoin and how we can capitalize on that. On Thursday, November 28, 2013 the price of one Bitcoin finally reached over a $1000 per coin. Now whether it will continue to rise or drop significantly tomorrow is uncertain. But I think there is still room for this price to grow. $2000 per coin doesn’t sound as crazy as it might have just a few months ago. Well, I’m not here to make predictions I’m just trying to point out the opportunity we’re all faced with today while realizing the risks of tomorrow on the morning of the 28th and you can see it continued to spike up. We went as high as 1200 and then we dipped, had a spike and it looks like we may be coming back for another return to that 1200, 1250 and beyond. Now how do we capitalize on all this money that’s being made with Bitcoin? How can we make some money and get a slice of the pie? How can we exchange our Bitcoin for real money? I’m going to show you a few ways we can take advantage of Bitcoin including trading the currency, cloud mining and buying stuff with Bitcoin. Now we can mine Bitcoin with our computers like I’ve been showing you how to do in the previous parts or we can trade the currency like a stock in the stock market. I’m going to refer to this as buying and selling or investing. So let’s simplify this.
If we can acquire Bitcoin at price X, let’s just say a $1000 which is roughly today’s market price, and then sell that Bitcoin if it reaches price Y, let’s just say $1100. So, in this scenario we would make $100 per coin or lose $100 per coin if you reverse the numbers. I know the first thing you’re thinking is “well, wait I don’t have a $1000 to risk losing gambling on Bitcoin”. And I’d say you don’t need a $1000 that’s just the price of one Bitcoin today. You can purchase half a Bitcoin or .3, .2. For example, maybe you have a $100 from your recent paycheck and you want to invest only $100 into Bitcoin. Then you would purchase only .1 Bitcoins. The point I’m trying to make here is that you can still make money with smaller investments in Bitcoin. So make sure to invest with what you’re willing to lose or at least lose 50% of. That leads us to the next question. How do I buy only a $100 worth of Bitcoin? Or if you already have Bitcoin and you just need to sell it or exchange it I’ll get to that in just a moment. But we first need to purchase a $100 worth of Bitcoin so we can sell it later at a higher price and make a profit and we can do that using Coinbase.
Now I’ve showed Coinbase before. Coinbase is one of the largest and most trusted sources for buying and selling and for protecting our Bitcoin, let’s just say, from hackers. I’ve already created an account with Coinbase and I’m already logged in you can see that here. Now if you already have Bitcoin and all you need to do is send it to your Coinbase account you can click on account settings and then you can click on Bitcoin addresses and you can create a new Bitcoin address. Send all of your coins to Coinbase. Now you’ll also need to connect a bank account and you can do that by clicking on Buy/Sell and clicking on limits and verifications. I’ve already done that and so now we’re going to click on Buy/Sell and we can enter the amount that we want to buy and we can just enter in 1, but if we enter in 1 that’s a $1000 that’s the price of a Bitcoin today. But what we want to do for this example is only buy a $100 worth of Bitcoin. So we’ll enter in .1. That’ll change these numbers down here. You can see that my payment method is the bank account that I’ve already linked. You can see that .1 today equals just over $100. If we needed to get it to a $100 perfectly we might have to go .098 possibly. That’s close maybe .097 but we’re just going to round as close as we can so a $101.50 is close enough. And all we need to do is enter that amount here. We’ll click on buy Bitcoin, that’ll bring up this splash screen. So, I’ll just quickly click on confirm and that’s all I need to do. We have now bought a $100 worth of Bitcoin. I can now sell this $100 worth of Bitcoin if the price goes up and realize a profit. It’s that simple.
Now, for those of you who want to participate in my free Bitcoin giveaway contest, here’s how to play. Step one, leave me your usual comments or questions or spam but be sure to ask for your share link. When you ask me for a share link I will then reply to your comment with the link that you’ll need to use to share this video. If you do not use the link that I give you, you cannot win. Step two, take the link I give you from your comment and post it on your Facebook, Twitter, Google plus, LinkedIn or wherever you want to share it. The top four people with the most followed link will receive $15 in Bitcoin. I will send you the coin in two weeks to any address that you specify when the contest is over. The contest will end December 17th, 2013. So, this will be a lot of fun and you’ll be able to take what you’ve learned in my videos and apply it in real life with your own Bitcoin. Anyone can enter and anyone can win. If nobody asks for a share link in the comment section below it’s going to be extremely easy for the top four people to win. So make sure you comment.
So, like I said I’m really looking forward to giving back to you guys. You guys are awesome. We’re going to keep going with this and I’ll be announcing the winners in this video’s description and in Part 4 when we do another $60 Bitcoin giveaway contest just in case you missed this one.
So, in Part 4 I’m going to go over cloud mining in a little bit more detail where we can do that. I’m also going to show you how we can do some online shopping with Bitcoin to buy things, especially like I’ve been saying gift cards, because people have been asking for that. So make sure to subscribe and I’ll be seeing you in Part 4. Good luck.
Transcript - BitCoin For Beginners - Cloud Mining & Cloud Hashing - Part 4
Hello and welcome to Bitcoin for Beginners Part 4. Now, we left off in the second half of Part 3 talking about the market price of Bitcoin and some of the ways we can buy and sell this virtual asset. In Part 4, we’re going to talk about Cloud Mining. What it is, where we can do it and then my final review of whether it’s profitable or not. But before we get started we have to announce the winners of last week’s free Bitcoin giveaway contest. I want to first thank everyone for participating. So many people entered the contest it was unbelievable and it was so much fun interacting with all of you. Like I said before this will be a great opportunity for you to apply what you’ve learned in these videos with your very own Bitcoin. So, the contest involved the share link which I had asked you to use when re-sharing this video. The results are in and it is now time to announce the four winners that will each receive $15 in Bitcoin.
And the winners are Soulragepage, tusingresosxinternet, Kris P and there’s a tie for fourth place between Ernesto Del Frade and Alexander Parsan. Congratulations everyone and thank you for participating. If you missed out on this contest we’re having a free Bitcoin giveaway contest Round 2 in this video. But instead of share links this time we’re going to do something a little different that I think will be more fun and interactive for everyone and like always anyone can enter and anyone can win. But before I get into the video contest details let’s get started with Part 4 of the Bitcoin for Beginners video series.
Cloud Mining or Cloud Hashing. What is it? Where can we do this? Does it make sense to even do it? These are all great questions and they actually came from you guys. Now some people can’t afford to buy their own mining equipment, especially when it can cost hundreds or thousands of dollars or maybe they just don’t know how to run the equipment properly for one reason or another. So Cloud Mining is essentially buying the power or the hashing speed that a mining rig generates. So you’re not actually buying the physical computer and the parts and the components. You’re buying a portion of the speed that the mining rig is mining at. Think of it as a car. A car can go a 100 miles per hour but it’s going to cost you $20 to go one mile per hour and therefore $40 to go two miles per hour. Now with a car you’d be paying for the distance it can carry you. But with Cloud Mining you’re paying for the speed at which you can mine Bitcoin at. The more speed you buy the further you can go or the more Bitcoin you can make. Now let’s apply this to a mining rig. Let’s just say I have a super mining rig and you want to cloud mine with me. I’ve decided to offer mining speed to you at one gigahash for $20. So you can pay me $20 to have my machine mine Bitcoin for you at the speed of one gigahash per second. Now that’s yours and whatever profits it makes is yours to keep. So that sounds pretty good. You don’t have to pay for any of the equipment but you’re now mining Bitcoin at one gigahash per second using the cloud. However, a car needs gas to keep moving and a mining rig needs power to keep mining. So, instead of only paying me $20 once for the one gigahash per second we will enter into a contract together. Like a cell phone contract, which you will have to renew on a yearly basis or however long I decided to be.
Now my contract basically says that I’m letting you borrow one gigahash per second mining speed from me on a yearly basis. So that means you will need to renew this contract and pay me $20 a year to have my machine mine for you at the speed of one gigahash second. Now, not all cloud mining companies are like this. Some allow you to buy the mining speed for a onetime payment and some offer smaller monthly payments. After you purchase the contract from me and you agree to my terms, my machine will start mining for you and you can sit back and collect the Bitcoin it mines. This is called Cloud Mining or Cloud Hashing. Let’s quickly take a look at some of the popular cloud mining companies that we can choose from. Now the first one that I’m going to show you, and these are in no particular order, is cloudhashing.com. Now if we go to cloudhashing.com, we can just click on personal contracts and we can see the contracts that they are offering us. Now they have a silver, gold and platinum contract. Now their silver contract is a one-year contract. Their gold and platinum contracts are two-year contracts. Now let’s just take a look at this silver contract. The silver contract is for four Gigahashes per second. And it’s a one-year contract. Now this is for $275 that we need to pay them upfront. Now if we do the math on that $275 divided by 12 months is $22 a month. But we’re getting four gigahashes so divided by four they’re charging us five dollars per gigahash. So, these are the numbers that we would want to really make sure we understand before we get involved with Cloud Mining and Cloud Hashing.
The next company I want to show you is minercloud.com. Now we can just go to minercloud.com and we can scroll down on their main page to see which contracts they offer and for how much. Now just like cloudhashing.com, minercloud has three contracts as well. They have an $89 per year, a $139 per year and a $329 per year. And we can see how many gigahashes per second they’re offering for each price. Just like we did before, we can do the math again. So here’s my calculator and I can do $89 a year divided by 12 months. That’s $7 a month for one gigahash per second. Now it’s just a few dollars more than the previous company I showed you which was five, but this is a smaller upfront cost. It’s only $89 and we could order multiple contracts. CEX.IO is by far the most popular cloud mining platform out there. Now if we look at the Bitcoin hashrate distribution GHash.IO, which is CEX.IO’s pool, we can see that they have 20% of the total mining market. So they’re really big. Now CEX.IO works very similarly to the other companies I just showed you. They offer contracts and they offer contracts by the gigahash per second. So their prices are a little bit higher. Now we can see it, they’re offering their gigahashes at .07 Bitcoins, but how much is that in U.S. dollars? Well, today I can just go over to Coinbase and type in .07 which is equivalent to $48. So they’re charging $48 a gigahash whereas these other companies are offering gigahashes at $5 and $7.
Now this company CEX.IO does allow you to buy and sell these contracts and you can terminate the contract at any time. So they do offer you some added flexibility. Another benefit of CEX.IO is they don’t only mine Bitcoin for you, you can cloud mine other types of virtual assets. CEX.IO is more expensive but they have a calculator that will allow us to estimate our mining profit. So let’s take a look at that. So here’s the CEX.IO estimate your mining profit calculator. On the left hand side we can put in our parameters and on the right hand side we can see our payout schedule and our monthly profit. Now these numbers can be confusing and let’s go through them one at a time. Hashrate, this is the amount of gigahashes per second that we’re going to purchase.
Now remember on CEX.IO right now each gigahash is worth $48. So, that’s pretty expensive so let’s only purchase one gigahash per second for $48. Maintenance fee and pool fee is at 3%. Those are reasonable numbers we’re going to keep them at 3%. Now network stats, current difficulty. The current difficulty is 908.35, they’ve just rounded some decibels, but the difficulty increase per month isn’t going to be as high as 50. Now remember the higher the difficulty increase per month the less amount of coins that we’re going to make. So we can just quickly look back at the difficulty history and see what the difficulty increase percentage has been for the last few months. And we can see that it’s been fluctuating between 20, 29, 32, 41, 46, 30, 16, 28. So I think a reasonable number to put in here would be 35%.
Now under conversion, the conversion rate right now is not $142 for one Bitcoin, 681 for the price of one Bitcoin. Now the conversion increase per month is asking us what percent increase is Bitcoin going to be worth each and every month. So let’s just leave this at zero because anything positive in this box here will be just better for us. So let’s assume that the price of Bitcoin is going to stay at 681. We’ll click on calculate and we can see now we have our numbers in the right hand side for the mining payout schedule. So under monthly profit we can see that the first month we’re going to make .02 Bitcoins, then .01, then .01, .01 but by the fifth month we’re not going to make any more Bitcoin. You can see that we no longer will make Bitcoin after five months by only purchasing one gigahash per second. So, let’s first figure out how much .04 Bitcoin is today if the price does not increase. Let’s go to Coinbase put in .04. Now, .04 is only worth $28 but it cost us $48 to buy one gigahash per second. So in five months we haven’t even been able to make our money back let alone make some profit.
So this is one of the reasons why I’m not a big fan of cloud mining because you would have to keep purchasing gigahashes every month or however quickly you want in order to try and make your money back, but you’ll never actually get the money back. Now this may be because CEX.IO charges so much money per gigahash and it might be profitable if the gigahash per second that they’re selling wasn’t $48 and was only $10. Now this is one of the reasons why I have decided not to go with CEX.IO. However, if I had to choose a company to cloud mine with I would choose cloudhashing.com. To me, they’re kind of like the underdogs. They’re the smaller guys and they offer a better price per gigahash. Now there is one thing that I do want to point out and that’s their terms and conditions. Now under their mining product in their terms and conditions they break down the percentages that they take from your profits. We collect 10% of the Bitcoin you make for management fees for operation of the pool. They also collect 30% of the Bitcoin we make which is reinvested into their mining rig. So, this is something to consider. But even still that they take this much out of our profit I would still go with them because their cost per gigahash is so much lower than CEX.IO.
So remember, cost per gigahash is the key to cloud mining and making your money back and then making a profit. Don’t forget to factor in all the maintenance fees and any hidden costs that might be associated with each company. Now, for those of you who want to participate in my free Bitcoin giveaway contest Round 2 here’s how to play. Step one, comment on this video in the comment section below. Step two, like the comments you see from other YouTube users. You can like as many YouTube comments that you want to. The top five most liked comments from different YouTube users will receive $15 in Bitcoin. I will send you the coin in two weeks to any address that you specify when the contest is over. The contest will end on December, 31st 2013. So like I said earlier I think this will be a lot of fun and it will put the contest in the hands of the YouTube users because you all will be deciding who should win the contest. If only a few people like other people’s comments it’s going to be extremely easy for the top five comments to win.
In Part 5, I’m going to go over online shopping with Bitcoin and what types of goods we can buy and where we can shop online using our Bitcoin. So, make sure to subscribe and I’ll be seeing you in Part 5. Good luck.
Transcript - TOP 6 Gift Card Websites Using BitCoin - Website Reviews - Online Shopping - Part 5
Hello and welcome to Bitcoin for Beginners Part 5. In Part 4, we went over cloud mining or cloud hashing. In Part 5, we’ll take a look at where you can spend your Bitcoin online. I’m going to be going through some gift card reviews for some websites where you can purchase gift cards using your Bitcoin. But before we get started, I wanted to congratulate last week’s winners in Round 2 of the Free Bitcoin Giveaway Contest. Now the winners had the most likes on their YouTube comments and that was a lot of fun. Some of those comments were hilarious. Thank you to everyone who participated.
Now we’re going to have another contest in this video, but I’ll get into that a little bit later. And first, let’s continue with Part 5 of the Bitcoin for Beginners video series. People are buying all sorts of things with Bitcoin from houses to electric cars, to small islands. People are even buying their way into space using Bitcoin. But for most of you, you’re not looking to buy a house, you’re looking for every day goods and services like food and retail items. So where can you spend your Bitcoin and actually buy these things that you want or need. You need resources, you need real things and this is what I want to show you.
I am going to start with a few cool things that I found and then get into the Walmart, the Best Buy, the Amazon.com, the Target gift card options for the US customers as well as people who reside in Europe and Australia.
Now the first place I want to show you is really just for kicks. It’s called pizzaforcoins.com. And pizzaforcoins.com will work for the United States, the United Kingdom which is temporarily disabled, Australia and soon Canada. So you just select where you live and they will allow you to purchase pizza from Domino’s, Pizza Hut or Papa John’s. And so basically what you do is, you choose the establishment where you want to order your pizza from, you pay them for the order you place your order on their website and then they will place the order with Domino’s and then Domino’s will deliver it to your house. So, the point is it’s just a way for you to purchase Domino’s Pizza or Pizza Hut or Papa John’s pizza using Bitcoin. There’d be no other way for you to do that really. You’d have to either exchange your Bitcoin into cash and order it that way but these guys allow you to do it directly through their website. So I just wanted to point that out. Kind of cool!
The next place I want to show you is BitcoinShop.US. So, once again, only for US residents only but this is a huge website. They have a lot of categories that you can purchase items with Bitcoin. Now I just want to point one thing out with websites like BitcoinShop.US and BitcoinShop.US and that is all of these products have a markup. So, all of these products are going to cost a little bit more money because you’re using Bitcoin than if you’re using dollars or euros. So, just to give you an idea let’s just take this chromecast here. If I were to buy this chromecast off of BitcoinShop.US, you could see that it’s going to cost me .047 Bitcoins. If I head over to Coinbase and I punch in .04 I’ll get the exchange rate. That’s $38, $39 after my fees. Now I use Coinbase as my exchange, as my bank. I recommend them but that’s just another story. They are simple and easy to use. But you could see here that .047 is worth $39. But if I were to just search Google for the chromecast you can see that I can buy it off of eBay for $21. So $21 versus 39 that’s about an 80% markup to purchase the chromecast off of BitcoinShop.US. Now, I’m not saying that all of their products are going to have an 80% markup. This is just a great example of how some of their products, if not most of them, there is a markup. So, just something to look out for. I just want to point out before you start purchasing things with Bitcoin and not realizing how much they’re worth. Basically just do the conversion before you make a purchase.
Coinmap.org. Coinmap.org is just really cool because we can search the world of places that accept Bitcoin and Litecoin. In the top right hand corner we can select these two currencies and we can select any of these countries. We can zoom in on this map and we can see all of the places that accept Bitcoin. Now these aren’t all of the places but these are the places that are registered on coinmap.org. So, I could take Spain for example and we could just zoom in to Madrid and basically see the establishments that accept Bitcoin in Spain. And you can do this with your country. So, I encourage you to go to coinmap.com, check out your backyard and see if any places are accepting Bitcoin or Litecoin where you live. So, this is really cool. I wanted to just point it out because it pertains to everybody.
Now let’s get into the best part of this video. I am going to review the six best places to purchase gift cards using Bitcoin. Now the reason why you want to purchase gift cards or you would purchase gift cards is because right now you can purchase gift cards using Bitcoin and then use those gift cards to purchase other goods from places like Walmart, Target, even places like McDonald’s, Burger King just to name some of the most popular establishments that you can buy gift cards for. Now there’s a huge variety and there are quite a few websites that allow you to do this but I’ve compiled a list of the top six and I am going to go through them right now.
The first website that I want to show you and this is ranked number 6 and this is giftcardbtc.com. Now giftcardbtc.com is – I have ranked number 6 because it doesn’t have much of a selection. We can only order Amazon gift cards and that’s it. Not a huge following if I click on their Twitter. You know they only have a thousand followers. So they’re not that large of a company and I would feel better going with a company that has a larger following. It’s just – I think credibility goes hand in hand with that. I can read other people’s comments and experience with the company. So, this company giftcardbtc.com looks great. You know I think it’s great that they’re offering this as a service but I believe that they come in sixth place out of the websites that I reviewed.
The next website I want to show you, number 5 is, itradebtc.com. Now itradebtc.com is number 5 because there are downloadable gift cards and you can basically pay in Bitcoin and then download the gift card in pdf form. Now this is great and this is one of the best things going for itradebtc.com. However, the reason why they are fifth is because the gift cards that people want the most which I believe are the gift card credit cards like these Visa prepaid credit cards, they’re out of stock. And they’ve been out of stock for quite some time. I hope they re-up their stock on these gift cards but it’s just the simple fact that the best cards that they offer they’re out of stock.
The next website that I want to show you is number 4 and that’s bitcc.herokuapp.com. Not sure how that’s supposed to be pronounced but here’s the address. And this pertains to people in Europe. Now you can buy a Visa prepaid debit card all the way up to €100 and you can see here that they have little bit of information about these cards. Some of these cards will not be anonymous. Some of these are 90% percent anonymous. This one’s a 100% anonymous. So, for the people who live in Europe this can be a fantastic option for you if you’re looking to dump Bitcoin into gift cards or prepaid debit cards. If you head over to their Frequently Asked Questions page you can see that you can add this money to your PayPal account. So, that’s huge for a lot of people I know.
Number 3 is going to be egifter.com. Now egifter.com is great. They’re a little bit larger. They offer what I’ve noticed is a lot more food options for gift cards you can see T.G.I. Friday’s here. I know they also have Chili’s. So, egifter.com is just a great website. They have a huge selection of gift cards and you can basically just browse their gift cards and, like I said, they have a lot of gift cards pertaining to food. Here’s an Applebee’s card. I believe this is going to be only for the United States but you can see that they don’t have the Walmart gift card which is huge. So, that’s one of the reasons why I’ve ranked them as number 3.
Moving forward, number 2 is going to be giftcardzen.com. Giftcardzen.com is number 2 because you can be in the United States or in Europe and when you go to Giftcardzen it should recognize where you’re from and it will tell you that you can either buy electronic gift cards or physical gift cards or both or one of the other. So, giftcardzen.com is great. And the reason why giftcardzen.com is number 2 is because they have a huge selection of Target and Walmart gift cards. Another reason why they’re number 2 is because when you buy the gift card here’s a $900 Target gift card. It’s an electronic gift card which means they’ll email you the pdf gift card which is instant. But you’re only paying 848. So, in this case you’re saving a little bit of money. So, Giftcardzen allows you to purchase these gift cards at a discount. So I think that’s great. They allow gift cards up to over a $1000. So, if you’re trying to really get rid of some Bitcoin and exchange it into cash this is a great way to do it using gift cards at your favorite retailer. So, Target and Walmart they carry just about everything that’s why I’m showing you these two retailers. But if we go back to Giftcardzen we can search all of them and we can see that they basically have a huge offering of gift card options.
Moving forward the number 1 gift card website that I found is only available for the US. But it’s number 1 because it is definitely the most widely used, widely trusted and you can find the most information about it and that’s gift.com. Huge shout out to gift.com. You can see here on their main page these are some of the most popular gift cards JCPenney, Regal for movies, Burger King, CVS, which I like. But we can just browse their gift cards and we can see all of the places that they offer. They don’t offer any Walmart gift cards. You would have to go to Giftcardzen to do that. But they do offer Target, which is almost just as good. So if you’re trying to find the safest way, most legit way, the most proven way to purchase gift cards using Bitcoin it’s going to be through gift.com. If you live outside of the United States go ahead and try giftcardzen.com. Both of these guys are really good in my opinion. So Gift’s going to take the number 1 spot. They also offer amazon.com gift cards, another popular gift card. And they offer amazon.com gift cards up to $2000. So, huge, huge limits and gift.com has a massive social media following. We can just click on the Facebook gift.com, 15,000 likes and we can read other people’s comments and experiences with Gift.
So, that wraps up the gift card review with gift.com taking the number 1 spot. Giftcardzen coming in second and egifter rounding out the top three.
Now let’s get into the contest for this video. This is going to be Round 3 of the Free Bitcoin Giveaway Contest. Here’s how to play. Step one, like this video and share it on your social media platforms. Step two, comment on this video. The top four YouTube comments that have the most likes will receive $15 in Bitcoin. I will send you the Bitcoin in two weeks to any address you specify when this contest ends. The contest will end February 7th, 2014. Once again, this should be a lot of fun. And while you’re at it let me know of a video you’d like to see me create and I’ll give you and your company a shout-out or promote your cause.
Thank you for watching. I really hope you enjoy this one and I’ll be sure to see you in the next video.