What do you get when you buy bitcoin

In most countries you will need to pay some kind of tax if you buy bitcoins, sell them, and make a gain. Bitcoin Advantages and Disadvantages. So, where can you buy Bitcoin?

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It just sounded cooler with that. In this guide, we will go through the step-by-step tutorial on how to buy Bitcoins. Buh or questions immediately pop up — where and how do I buy them safely? And where do I store them? We want to protect you against all the scams that come with booming markets, in this case, Bitcoin.

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By using our site, you acknowledge that you have read and understand our Cookie Policy , Privacy Policy , and our Terms of Service. This question seems to me to be such an obvious question, that it must be answered somewhere. As I understand it is necessary to buy bitcoins using dollars or some other currency. Where do those dollars etc. The money goes to the party that sold it to you — that party owned the bottle before you owned it.

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By using our site, you acknowledge that you have read and understand our Cookie PolicyPrivacy Policyand our Terms of Service. This question seems to me to be such an obvious question, that it must be answered what do you get when you buy bitcoin.

As I understand it is necessary to buy bitcoins using dollars or some other currency. Where do those dollars yoh. The money goes to the party that sold it to you — that party owned the bottle before bbuy owned it. You might be able to trace ownership of that bottle all the way back through gte supply chain, to the point at which it was manufactured.

It probably had several prior owners before you got it. If you purchase from a market exchange like Mt. Bitcounhere’s how that works. Gox, like most market exchanges, operates using deposit accounts. To sell 10 bitcoins you must have deposited 10 BTC to your account with the exchange. Then when you withdraw your BTCs, the exchange will send that amount of bitcoins from the exchange’s wallet to yours.

When the seller withdraws the USDs or whatever currency the coins were sold forthe exchange will send those funds. This generally occurs through wheen banking system, with the funds eventually arriving in the seller’s bank account. There are other whne of bitcoin sellers — direct sellers, who have an inventory of bitcoins that they purchased previously, or will make a trade behind the scenes to be able to deliver your order. So the dollars from your purchase goes to them in exchange for the bitcoins they owned.

Then there are other types of trades which involve risk. These include financial derivatives where you may speculate on bitcoins using cash but until you actually withdraw those bitcoins to ylu own wallet, you only own a claim against those bitcoins or against a financial position on bitcoins.

Vo that is an example where there is not a simple buying and selling of bitcions at a certain price. Now every bitcoin in existence originated from mining. Mined coins arrive 50 at a time about once every ten minutes. They are earned by a mining operator or mining pool and distributed to the mining operators who were mining. To mine, one must buy expensive hardware, expend the effort to build and operate the equipment, and purchase the electricity expended during mining.

The mining operators can then deposit their bitcoin proceeds to bitconi exchange to sell them and receive cash in exchange. It’s like bictoin you buy anything. When you trade your dollars for somebody else’s eggs, you get the other person’s eggs, and they get your dollars. You can then sell whar eggs to somebody else if you like — then you get their dollars, and they get your eggs. If you are able to sell your eggs for more than you paid for them, you make a profit. Instead of buying eggs, it is possible to mine them using a device commonly known as a ‘hen’.

Hens make eggs out of thin air, and are effectively a license to print money since the eggs they make can be traded for dollars. They do require fuel to run, which costs money. Miners need to determine whether their earnings from mining what do you get when you buy bitcoin is enough to offset the fuel costs.

Unlike eggs, however, there is a fixed limit of 21 million bitcoins that will ever be created, which yok them relatively scarce, and helps give them value. Home Questions Tags Users Unanswered. Where do the dollars go? Ask Question. Asked 7 egt, 4 months ago. Active 2 years, 6 months ago. Viewed 40k times. When you buy a bottle of soda at the convenience store, where does the money go? Bitcoins are gdt a commodity that works the same way. Stephen Gornick Stephen Gornick So eo the case of an exchange like Coinbase, do they hold a «pool» of Bitcoin that they hold and sell to people?

Chris Moore Chris Moore 14k 5 5 gold badges 56 56 silver badges 81 81 bronze badges. Heh, this is a great way of explaining it!

Chris How does this work in the case of exchanges like Coinbase? Directly to people who are currently selling if you don’t count the minor exchange fees. Featured on Meta. Update: an agreement with Monica Cellio. Linked 0. Related 4. Hot Network Questions. Question feed. Bitcoin Stack Exchange works best with JavaScript enabled.

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Confused by cryptocurrency? Here’s how to buy Bitcoin for the first time

If you want to try Coinbase but with much higher volume, this platform is the way to go. Coinbase’s buying limits. Bitcoin vs. This is further evidence to why Coinbase is a leader in digital currencies in the United States. The cryptocurrency markets have calmed down a bit since that record high, but many Bitcoin evangelists still claim Bitcoin to be the currency of the future. Coinmama is an all-in-one exchange and digital wallet that makes it easy to buy Bitcoin and a limited list of additional currencies in U. Securities and Exchange Commission requires users to verify their identities when registering for digital wallets as part of its Anti- Money Laundering Policy. Buy Bitcoin Worldwide is for educational purposes. Purchases with a credit or debit card add on a 2. But if you do want to send your coins to another wallet, Square does offer that feature.