How to Use Bitcoin

Bitcoin is the first digital currency to eliminate the middleman. By avoiding banks and payment processors, Bitcoin has become a decentralized, worldwide market that requires only an Internet connection to participate. Here is how you can get started using Bitcoin.

Steps
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Get some bitcoins with any of these methods:
Buy small amounts of Bitcoin online. If you are buying under $2000 of Bitcoin or are new to crypto currencies try one of the combined wallet / bitcoin traders to get rolling. Examples include Coinbase and Xapo. These sites will allow you to buy a small amount of Bitcoin in exchange for an approximate 1% service charge. Like a bank, they will also store your bitcoin for you on their servers.
Buy large amounts of Bitcoin via a trading exchange. If you are buying over $2000 of Bitcoin, you will want to take advantage of the lower commission rates offered on an exchange. These exchanges operate like a stock market with bid / ask spreads changing 24 hours a day. Creating an account at an exchange is a similar process to opening a new bank account, you will likely need to give them your real name, contact information and send them money. Different countries and currencies have different Bitcoin exchanges that are best to use in each geography:
US Dollars to Bitcoin - Bitfinex, GDAX (owned by Coinbase)
Euro to Bitcoin - Kraken
Chinese Yuan to Bitcoin - BTCC, Huobi or OKCoin
Take money out of a Bitcoin ATMs. Many cities around the world offer a bitcoin ATM where you can trade cash for bitcoin. These ATMs usually charge a 5-8% fee for doing the trade. An up to date list of bitcoin ATMs can be found at CoinATMradar.com.
Buy bitcoin from a live person offline. All over the world it's possible to give someone a wad of cash and have them load some bitcoins onto your phone. Please only trade small amounts of money till you trust your trading partner. See LocalBitcoins for an offline bitcoin dealer near you.
Earn bitcoin. Look for other companies that are willing to hire people in exchange for bitcoin. Or open a store on OpenBazaar (the bitcoin version of eBay) and sell your stuff in exchange for coins.
Mine bitcoins. Download and run a "mining" program (CGMiner, for example) on a custom computer that turns math equations into bitcoin. While profitable mining was possible for individuals in the early days of Bitcoin, it's now in the domain of specialized companies. [1]

2
Set up your first Bitcoin wallet. If you don't feel technically competent, it's perfectly acceptable to ignore the next few steps and just leave your bitcoin in the account where you bought them. In fact, most bitcoin holders do just that. But the beauty of bitcoin is that it's money that no third party needs to control for you. In addition, since exchanges store hundreds of millions of dollars of bitcoin, they are a very attractive target for hackers. So unlike stuffing dollars in your mattress, it's actually safer to store your bitcoins on your own rather than trusting them to an exchange. All the wallets listed here will not give any third-party access to your bitcoins:
Mobile Wallets are Bitcoin wallets that run on your mobile device. Such wallets are portable and practical for in-store use. Mobile devices tend to be less prone to malicious software than are computers, creating a reasonably secure environment for small amount of bitcoin. Some of the best mobile wallets are:
Airbitz
Mycelium
BitPay
Jaxx
Web wallets are convenient and user-friendly, because they are always available online. All you need to do is set up an account and log in. The most popular web wallet is:
Blockchain.info
Hardware wallets are highly secure and mostly foolproof. If you are new to bitcoin and want to store a lot of bitcoin safely, you'd be smart to invest in a hardware wallet. Popular hardware wallets include:
Trezor
Ledger
Paper wallets are very secure for long term storage. While paper wallets are highly hacker resistant, they are cumbersome when it comes time to spend your bitcoins.
Learn how to create and use a bitcoin paper wallet here
Advanced wallets are not a great starting place for beginners. This is the type of wallet for which Bitcoin was originally conceived. You'll have to run a local copy of the blockchain to keep your transactions anonymous. The better known software wallets include:
Armory
Multibit
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Create a public Bitcoin address. Use the wallet you created in the above step to create a public address for you. Think of a public address like an email address in that you can share it with anyone you want to send you email or in this case Bitcoin.
A public bitcoin address will be a long string of seemingly random letters and digits like 16BPS8xb5k36MeNLWmfZ1zpjCqbDhgyaHg.
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Send a small amount of bitcoin to the public address you created above using the "withdraw" or "send" function in the place you bought your bitcoin. You may need to wait 10-20 minutes for a confirmation, but if you did everything correctly you should now see the small amount of bitcoin you sent in your personal wallet. Congratulations! You have successfully moved bitcoin to a wallet that you and only you control!
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Use your bitcoin to invest, shop, donate or give away. The list of things you can do with bitcoin is endless. Here are some ideas to get you moving
Invest. Since there are only 21 million bitcoins that will ever be created, each bitcoin should rise in value over time as long as more and more people continue to use them. To be a bitcoin investor, simply hold your bitcoin and wait.
Buy stuff by finding merchants who accept Bitcoin. Many online stores (such as Overstock.com, Expedia, Dell, and many others) accept bitcoin in the same way they accept credit cards. Depending on where you live you may also have a store near you that accepts bitcoin.
Convert your Bitcoin into gift cards. One easy way to use Bitcoin is to purchase online gift cards from various vendors. Many big companies, including Amazon and Sears, offer gift cards via Gyft, an online marketplace that supports Bitcoin.
Donate it. Many charities including Wikipedia accept bitcoin.
Give some away. One of the joys of bitcoin is giving some to a friend and teaching them how to use it. Now that you have successfully moved bitcoin to your own wallet, you are a bitcoin expert! Grab your friends phone, install a wallet for them and send them a tiny amount of bitcoin to get them started