Full text: http://pastebin.com/yRd6tgJf
Hi, I'm JimKD and this is part 2 of my series on bitcoin for normal people. In part 1, I talked about the basics of bitcoin. If you already know the basics, you can skip it. But if you don't and haven't seen the video yet, please click the button to watch part 1 first. In part 2, I talk about using bitcoin and in part 3, I'll show you how to recover from a failure of your computer.
Unfortunately, the hardest part comes first. Don't worry, it's by far not as hard as making a bank account, does by no means take as much time, and I'm going to explain everything you need to know.
Let's get started! The first thing you need to do is to install a wallet software. I recommend using Electrum. Just go to electrum.org and click on "Download". Choose the version for the operating system you're using in the "Easy Installation" table. I'm using a Linux operating system, so I'm going to use the first entry. But that's just installing a program, I'm sure you have done this many times.
For Linux, you need to install python first if it isn't already installed. Just copy this first line – remember not to copy directly into the terminal – and execute it. A already used python in the past, so nothing's to install but paste this line or type it in anyway, just to be sure you have python on your computer. Now I can move on to the second line. This will actually download and install Electrum.
For Windows and OSX, you have to download the program through your browser and then install Electrum like you usually do. You can find the Android version in the Google Play Store.
After you're done installing, you can launch Electrum. It's going to ask you what to do and you choose "Create a new wallet" and "Standard wallet" as the kind of wallet you want to create. Both is already selected by default. Click on "Next" and it will show you your wallet's seed.
Now there are 2 very important aspects of that seed. First of all, do not show your seed to anyone. Everyone who knows your seed has access to your wallet. Especially, do not make a YouTube video in which the seed is visible. I'll transfer my money out of this wallet before I upload the video.
Second of all, write your seed down. Onto a piece of paper, not on your computer. Because if your hard disk fails, you don't want your money to be gone with it. So take the minute to write it down onto a piece of paper. Double-check all the words.
After your computer failed or you accidentally deleted your wallet file, you can restore your wallet using the seed. But we'll come to this in part 3.
Now click "Next" and you'll be asked to type your seed in. Please really type it in from the piece of paper you wrote it on so you can be sure everything is correct. So for me that's "session sunny lend feed achieve desk devote cube extra plate brief list acid". Now you can set a password. You won't need this password for recovering your wallet. The seed is really everything you need, so you don't have to worry about forgetting your password. The password will stop someone who has access to your computer but doesn't know your password or seed from spending your money. "123456". Please use something stronger. Then click on "Next".
After that's done, you have successfully created a wallet. That's somewhat like your bank account. It enables you to send and receive money.
Now let's get to actually using the wallet. You can see in the bottom left that there currently is no money in the wallet. 0 mBTC. To get some money in bitcoin, you can ask someone who has bitcoin or use a bitcoin exchange. In any case you need to provide them an address to send the money to because an address is what money can be sent to. Click on the tab "Addresses" to see the ones you already have. You can pick any of them and give it to someone else so they can send money to you. I'll pick the first one. Just right-click it and choose "Copy to clipboard". You can now paste this address in an email, a chat, or on the website of an exchange. You can also note for yourself what this payment you want to receive is about. For this, right-click an address and choose "Request payment". Then enter a description. "John gives me my first bitcoins." And enter the amount. 50 mBTC is about 25 euros or 30 US dollars. John is a nice guy and will transfer the money soon, so 1 day is okay. So click on save.
Now this is just a kind of built-in note program. It doesn't send a notification to anyone. You don't need to save a note like this to receive a payment. You just need to give someone the address to pay to. Notes are purely for you and you get this label on the address so you know it's already in use. You can reuse addresses an arbitrary number of times but it's recommended to use a new one every time for privacy reasons. You get more addresses as you use these up, you'll get as many as you need, and addresses are completely free.