Bitcoin Wallets: What are the differences between them?

Satoshi Nakamoto first published their paper on Bitcoin back in 2009, but it didn’t reach real mainstream popularity until recently. Only the users who understand the highly technical mechanics of Bitcoin invested their time in the technology during 2009-13 intermission period. In February of 2013 Bitcoin, and soon cryptocurrencies in general, finally entered the public consciousness. Despite being a four year old technology, many of the core features of the Bitcoin protocol were not polished in any capacity, let alone ready for mass public consumption. The Bitcoin wallet is an excellent example of one such component. Since that first popularity explosion, much expertise has gone into designing and refining the Bitcoin wallet. Today we will be taking a look at the differences in functionality of the three types of wallets as well as comparing their security and usefulness. These types of wallets suit users depending on the way people wish to access their funds, as well as who they want to entrust the long-term security of their accounts.

What is a Bitcoin wallet?

For a majority of Bitcoin users, the first cryptocoin interface they encounter is the wallet. Much like the physical wallet you keep in your back pocket, your Bitcoin wallet serves to store currency that you mine, purchase, or receive from others. Your digital wallet functions in a very similar way to its real life counterpart – however,there is one key difference: Cryptocurrencies are exchanged using addresses not unlike email, with the exception that your Bitcoin addresses are generated randomly on your behalf. Your wallet can hold more Bitcoin addresses then you could ever use, and each address functions as a separate place for you to send and receive money. Think of each address as a separate compartment in your wallet, or as the various different bank cards you own that each have their own individual balances. These addresses are where all transactions are directed, whether they’re yours, or run by the companies you use to collectively hold your money.

Offline Wallets

In the beginning of Bitcoin, there were offline wallets. These wallets operate in the “traditional” wallet style – that is, with all of your wallet data stored only locally on your own personal machine and not in need of a constant internet connection. You do need to be on the internet to receive and send your currency, but you don’t always have to be online. Initial Bitcoin commerce wasn’t possible without at least a basic wallet, and the offline wallet was the simplest solution for early adopters to code up and release to the public, including the one Nakamoto published. As such, offline wallet apps are readily available on both the desktop and mobile platforms. It should also be noted that any damage to your wallet data can quickly render it corrupted, which means your keys (and your cash) are unrecoverable without a backup. This limitation drives fear into the heart of many Bitcoin enthusiasts, some of which can barely keep track of their physical keys, let alone their digital ones. As a result, it’s important to keep many copies of your wallet information secure and safely stored away, even if just on a USB drive behind a safe.

Online Wallets

When hosted, or online, wallets entered the scene, they changed the entire Bitcoin wallet paradigm. Instead of keeping all your wallet information stored locally, a sensible online wallet stores an encrypted copy of your wallet data on their servers with a password you choose. When you want to access your wallet, your data is downloaded and decrypted locally. After you have completed your transactions, the hosted wallet uploads your encrypted wallet to back servers the hosted wallet controls. This relieves the user of the responsibility of backing up their wallet as well as “syncing” their wallet across their devices — all while keeping the users keys protected from abuse on the company’s servers by only doing encryption and decryption operations on the “client side”, aka locally on your machine. Online wallets are most popular on web browser centric and mobile devices, but the nature of this type of wallet makes easy access possible on any networked system. IT also ensure you don’t have to run your computer all day as a node to keep up with transaction activity on the Bitcoin network, and can let your provider handle all the trouble. However, if anything were to happen to the company you use to store your currency, then you’d be out of luck unless they offer a backup service to store copies of your wallet offline.

Deterministic Wallets

A third type of wallet exists exclusive of the other two: The deterministic wallet. The previous two types of wallet operate as variations of each other, where the online and offline wallets manage the same wallet data that is located either on your machine or is shifted to someone else’s. On the other hand, the deterministic wallet generates master root key (consumable by humans in the form of a twelve word passphrase) and hands it to the user. The root key is the only information the user is required to keep track of. Once the root key in input, the deterministic wallet uses advanced cryptographic algorithms to derive new private keys, or addresses, from the original root key. Because the wallet is creating new addresses using the same formula with the same initial conditions each time, all addresses are said to be predetermined from the root key. This handy fact allows you the option to store your wallet backup securely in your brain (via memorization) without the need for the key to exist digitally anywhere — all while still being able to access funds in any of the derived addresses. The portability of this system grants deterministic wallets secure interfaces on your desktop, your mobile phone, and your web browser. This of course still depends on you remembering  a very unique kind of password that may be difficult to recall, or if written down can pose a security threat.

Which should you choose?

Since the invention of the Bitcoin protocol users and developers alike have worked to shape the function and feel of cryptocoin wallets. Today wallets are more robust, packed full of features, and offer security that we couldn’t imagine during the infancy of Bitcoin. Wallets come in many forms and serve many purposes. We’ll share with you next how most popular wallets available compare, and what you can do to pick the one that suits you.

Proof of Stake – How does it work and what are the advantages?

Recently more and more alt coins have decided to integrate a proof of stake system over the traditional proof of work system used by Bitcoin and Litecoin. But why, one may ask? Frankly, the proof of work system is not perfect. A cryptocurrency without proof of stake doesn’t just lack an incentive for users to continue holding on to their coins, but is also susceptible to a 51 percent attack if one party controls a majority of the total mining output. To solve help these problems, some cryptocurrencies, such as NXT, have implemented a 100 percent proof of stake system. Other currencies, such as Dogecoin, have implemented elements of proof of stake to take advantage of its benefits.

What is Proof of Stake?

Like a proof of work system, proof of stake allows miners to verify block chain transactions and solve puzzles in order to receive rewards – which ultimately are the coins you receive.  In a proof of work system, miners complete difficult puzzles using the hashing power of their computer equipment and are rewarded based on how quickly they can solve the mathematical puzzles. The faster the hashrate, the more coins they will receive. Mining in a proof of stake system however is not completely determined by one’s hashrate (or computing power,) but instead by how much of the currency they currently own. If someone owns five percent of the currency, then they can mine five percent of the blocks.

In proof of stake the “mining” that goes on doesn’t necessarily refer to the mining done on currencies such as Bitcoin with powerful computing equipment. Instead, “mining” occurs when transactions take place within the currency, generating fees. These fees are more likely to go to the users with greater stakes in the currency. This creates an incentive for miners to hold onto their coins instead of trading them away as soon as they’re earned.

How proof of take can solve the flaws of proof of work

Although more merchants are accepting Bitcoin, the price has yet to recover from its peak late last year. Though there are many reasons for this, one in particular is because most of these merchants convert their Bitcoins into dollars or other fiat currencies as soon as they earn them. This creates a downward pressure on the price of Bitcoin due to the constant selling of currency that exist the Bitcoin economy. In the proof of work system there is no incentive for merchants to keep Bitcoins and due to its volatile nature many merchants are scared to hold them for longer periods of time. The proof of stake system however gives people an incentive to keep their coins rather than selling right away.

Proof of stake can also solve the very critical risk of 51 percent attacks that haunt both the Bitcoin and other cryptocurrency community. Earlier this summer the Ghash.io pool, controlled by CEX.io, came dangerously close to reaching the 51 percent attack potential. While the company did eventually reduce its network hashing rate and issued a press release noting its intentions to prevent a 51 percent attack, proof of stake would permanently prevent this issue from ever occurring. This is because it is not only very difficult to attain, but would do more harm to the causer of the 51 percent attack than to the rest of the network.

The advantages of a mix of both systems

The proof of stake system is by no means perfect. By giving people an incentive to save their coins it also gives them an incentive to hoard and never spend any coins. This in turn lowers the overall transaction volume, which can hurt the price of the currency as well. Ultimately there must be a healthy median between these two systems that minimizes the flaws of both and maximizes their advantages. But will a currency like Bitcoin ever adopt a proof of stake system? Probably not. This is because changing anything in the Bitcoin protocol as dramatic as a new proof of stake system would make the currency seem weak and unguided. But it is very likely in the future that other currencies will adopt a mixed system between the two methods, much like Dogecoin.

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How will financial firms like JP Morgan soon challenge Bitcoin?

Bitcoin has endured many challenges since emerging back in 2009. Still, the currency is more alive than ever with ever-growing adoption between new consumers and merchants alike. It’s uniqueness as a (mostly) decentralized currency against all odds has attracted the attention of media all over the world. As the currency populi of the world, are the big financial firms and authorities of the world planning to take on the cryptocurrency, challenge it, or even destroy it?

Do financial firms even care about Bitcoin?

Yes. Early this year we saw a number of provocative headlines ranging from JP Morgan’s potential patents for a digital currency to the Goldman Sachs assessment of Bitcoin. Both have spurred volumes of discussion about the topic, though it all boils down to a single fact: They care.

The extent to which they care, however, varies. None of them have, as far as we know, gone out and bought Bitcoins as part of a portfolio or made direct investments in the firms that fuel the currency’s day-to-day operations. Still there is a clear interest in the currency that ranges from distrust to interest, depending on what element of the currency you’re referring to. Based on what most firms are saying though, the true value in Bitcoin is its ability to be a unique identifier without the need for a central server or organization to manage that identification.

What are they doing right now?

Not much. Financial firms have been more or less quiet, and even those like PayPal have bare touched the water in approaching Bitcoin directly or demonstrating a proof-of-concept toward a cryptocurrency or other digital asset system. They are likely monitoring and reviewing the currency’s value as both a currency, as well as learning what Bitcoin had to do the hard ware in recent months. As a currency with no authority to regulate or control the economics within it, Bitcoin has spurred both interest, speculation and criticism by financial firms by the lack of rules that guide it.

What will they do?

It depends. While Bitcoin is a decentralized currency in the hands of the masses with no central “authority” beyond what its developers try to promote for implmentation, financial firms are companies, with specific financial goals and a diverse tool set utilize. As companies with a duty to maximize returns for their returns, firms like JP Morgan, Goldman Sachs and others are watching the Bitcoin community closely for an interpretation of its potential value as a currency, or in more simple terms a “token” system.

Bitcoin is the first demonstration of a system that can identify itself without any specific hardware or a central server or repository to confirm the identity. While this makes it inherently a great currency, many discussions among both the Bitcoin community and financial firms speculate over the many uses as a basis for monitoring rewards, stocks, ownership and other assets. While this influences the “Bitcoin way of life” many community members push onto newcomers, financial firms instead see the value through its potential to be appropriated.

Simply put, financial firms will out-innovate Bitcoin, not destroy it.

Bitcoin isn’t this “super currency” that will bring about world peace and end all economic conflict. The economic status quo is a very bank-dependent system to control inflation alongside financial firms that know the rules of the economic playing field and do their best to utilize and manipulate those rules to maximize returns. Bitcoin however has no rules. Much of its usage cannot be even monitored or tracked against identities, even though the blockchain is public for everyone to see. This creates an environment far too chaotic that financial firms would feel comfortable interacting with.

Still, these firms will challenge Bitcoin. The attractive factors behind Bitcoin are easy to replicate without the chaotic elements. Currencies like Ripple, in a way, do this. Having a currency that is independently verifiable can be implemented in a number of ways pertinent to a financial firm like JP Morgan, including asset management, digital rewards systems and other financial resources to clients. Even if these firms were to use Bitcoin’s foundation as a currency to help make international currency transfers easier (and cheaper) to verify, the ability to merely use the technology behind Bitcoin interchangeable at any scale is much more fruitful than to try and destroy or manipulate Bitcoin. Simply put, financial firms will out-innovate Bitcoin, not destroy it.  With the money and central focus of these firms, accomplishing this task is certainly possible.

How can Bitcoin effectively handle these challenges?

This doesn’t mean Bitcoin is necessarily doomed. There are numerous ways Bitcoin can remain attractive and competitive with the right mindset of its users and core development to support it.

Remain spendable. At its core Bitcoin is a currency that is inherently deflationary and treated by many less as a currency and more as a asset. This mindset is not necessarily a wrong interpretation, but it is one that ultimately hurts Bitcoin’s ability to compete and attract adoption. At the same time the complex and chaotic “pump and dump” activity prevalent from large stakeholders in the currency hurts Bitcoin’s spendability. The very founder of Bitcoin – an unknown individual – likely holds an eighth of all Bitcoins. While it is ideal that Bitcoin ultimately gravitates away from a few key stakeholders and into the hands of the masses, this overall issue of spendability is one Bitcoin users – especially firms and exchanges –  must bear in mind for the currency to fare better and remain attractive to newcomers.

Remain attractive to merchants. Merchant adoption goes hand in hand with the spendability of Bitcoin. As individual mining continues to become a unlikely case for just about anyone without a major financial investment, Bitcoin firms need to continue promoting the grassroots usage of Bitcoin as a day-to-day currency for seamless, safe and secure transactions. Bitcoin cannot be successfully marketed as a miracle drug for the economy, nor can it be marketed as a safe investment opportunity. It can however be marketed as a safe and reliable currency for transactions worldwide without reliance on a central bank or authority. Merchants need to know of Bitcoin’s benefits and cost-savings, especially as other digital fiat payment methods become more and more popular.

Promote Transparency. Being a currency powered by the masses will always keep Bitcoin ahead of the creations of other financial firms. At the same time though, these masses remain relatively unknown, with far too many stakeholders with assets great enough to dangerously manipulate the currency. Bitcoin’s best bet in competing with the financial firms is to develop ways to combat these stakeholders and their ability to manipulate Bitcoin on the market. Financial firms can replicate a Bitcoin-like currency with complete control of its assets and distribution, giving it a far greater advantage in stability. Bitcoin gains a lot from being a currency without a core agency in control, but it also must find a way to shake off the unofficial manipulators to remain viable as it finds competition not from fellow blockchain-based cryptocurrencies, but from a currency structure designed and endorsed by major financial agencies.

How will the Satoshi Nakamoto Dox affect the market?

On September 8, the administrator and owner of Bitcointalk.org, theymos, announced that satoshin@gmx.net “had been compromised.” We’re still not quite sure what the true extent of the compromise has been and whether one or several hackers have gained access to the account. There are however some important things to say about what affect this will have on the Bitcoin market both in the short term and long term, and what vigilance is necessary for the coming months.

What we know so far

Theymos received an e-mail from the account once maintained by Satoshi Nakamoto, the pseudonym for the creator(s) of Bitcoin, that more or less sounded nothing like what Nakamoto would say. The e-mail was also the first sent to him in nearly four years, since Nakamoto’s departure from the Bitcoin community in 2010.

From there, the rest gets hazy. Depending on whether you ask Forbes, WIRED or VICE, a hacker (or potentially several hackers, or even Satoshi Nakamoto himself) got in contact with the press. One hacker claims that his goal was at first to do it because he could, but that he later realized he could also blackmail Satoshi for Bitcoins.  The hacker wanted 25 Bitcoins in order to release the information he had about Satoshi Nakamoto, but the entire ordeal seems to have evaporated over the last two days.

Right now, things have grown quiet once more. The gmx.net and P2P foundation accounts remain compromised, but no updates from the press have yet come from the hacker. We have no idea whether or not the hacker released any information about Satoshi Nakamoto’s real identity, or whether any of his other personal accounts have also been compromised.

What are the risks to Bitcoin?

This doxxing of Satoshi Nakamoto’s e-mail account has had several immediate consequences. For one, the integrity of the (mostly deprecated) Bitcoin Sourceforge project had been compromised. The project had since been restored and Satoshi’s account removed, but it nonetheless created a bit of a frenzy alongside the chaos of hacker e-mails, interviews with VICE and other mayhem.

However, since Satoshi exited the world of Bitcoin about four years ago, it’s unlikely that Bitcoin’s core development has been affected much at all. The Bitcoin Foundation hires and maintains the people who develop it, and since being brought onto Github Satoshi’s accounts have had no control or access to the code. The only assets compromised have also since been fixed.

While not directly related to Bitcoin financial security, there is a possibility that Satoshi Nakamoto’s identity can be revealed (known as doxed) from the e-mails and account information within the gmx.net account he owned. With thousands of e-mails, some of which dating to the origins of Bitcoin in 2009, it’s easy to belief enough information is within the account to identify in some sense who Satoshi was. The hacker who gained access to Satoshi’s account claims to have his identity now, though there’s no telling what that hacker will now do with that information, such as sell it anonymously for a profit. Satoshi’s identity however plays no direct threat to Bitcoin, especially given the lack of any relationship between the Bitcoin Foundation and Satoshi Nakamoto. If a hacker were to compromise the Bitcoin Foundation’s team members, that would be a much greater risk than an e-mail dox. However, since his e-mail account is compromised, most of his other accounts (including the P2P Foundation, where he posted “I am not Dorian Nakamoto” back in March) are at worst also compromised or at best assumed as such. This leaves only Satoshi’s PGP public key as the only way to verify his identity in the future. The Bitcoin community is also equally chaotic in response to this identity crisis, with a number of fake images claiming to be Satoshi accounts and fake “donate to Satoshi” Bitcoin addresses circulating the Internet alike.

A more direct factor on the safety of Bitcoin financially meanwhile stems from Satoshi Nakamoto’s “fortune” of Bitcoins, and whether their control has been compromised too. When Nakamoto first developed and mined Bitcoin, he, like many others, mined the currency and drew a large amount of Bitcoins that he has since owned. There are some good estimates out there of just how many Bitcoins Satoshi owned, several of which coming in around 1 million Bitcoins. Needless to say, a million Bitcoins in today’s value, let alone last year’s peak Bitcoin price, is a whole lot of cash.

But if any amount of these Bitcoins were to be compromised, their introduction into the market is by far a great risk to its stability and integrity. Since Satoshi’s assets equate to nearly one eighth of all Bitcoins in existence, it’s needless to say anyone in control with but a fraction of those coins has not just a great fortune, but a great opportunity to control the prices of Bitcoins on the market.

What happens now?

For now, there’s little the Bitcoin community can do but speculate. At the very least, there’s no way to know for sure how deep this compromise goes and what it will do to the value or stability of Bitcoin in the months to come. It’s important to ground these hypotheticals though with the fact that there are too many unknowns currently at play, and any conclusion about the viability of the currency because of this remains ungrounded.

In reality however, it’s worth noting that Bitcoin has remained a very resilient currency despite rather extensive market manipulation. A consequence of the nearly laissez faire trading environment of Bitcoin has been the aggressive trading (some called “pump and dumps”) across many exchanges in the last few years, not to mention the rapid price changes that came after the Bitcoin media blitz last year. Bitcoin has been a currency very capable of surviving dramatic prices shifts and chaotic activity on the market – including the entire debacle with Mt. Gox. The currency has many more unknowns on the table regarding its usage for malicious goods and services, the nature of BTC-E as an exchange and so on. And yet despite all the unknowns, billions of dollars in fiat currency remain entrusted through Bitcoin’s value.

Still, this doesn’t mean Litecoin and other altcoins could gain attention from the weeks that follow. The core reality is that we now know far less about the core stability of Bitcoin because of this incident. Until we know more about the security of Satoshi Nakamoto’s identity or his assets, these floating concerns can, at any moment, hurt the value and potential of Bitcoin as a currency. Litecoin’s origins, meanwhile, are as clear as day to the masses, its founder a contributor to development even today.

These issues remain long-term concerns for the currency. In the short term it’s likely we’ve seen the worst of this ordeal come and go in a matter of hours. The longstanding effects, will instead join a host of others, likely to be forgotten by the community at large until the chaos unfolds once more. Until then though, worrying about the Satoshi dox is about as useful as worrying about the impending heat death of the Universe. It’s a real threat, but one that little can be done about and is essentially now a part of the core reality of Bitcoin.

For Merchants: Getting started with Crypto Currencies like Bitcoin and Litecoin

If you’re a merchant, or own a business or storefront, you may have heard about accepting Bitcoins, Litecoins, Dogecoins or any other sort of crypto currencies out there. You may also be wondering what in the world these things are and why they matter. We’ve put together here at CoinManual a short beginners guide for getting started with Cryptocurrencies, including these iconic coins, as well as some important information you’ll want to know.

What are Crypto Currencies?

At their core, cryptocurrencies are digital coins (meaning they are stored online) that are exchanged between people, businesses and other organizations spend and receive. There are many types of cryptocurrencies, the two most popular being Bitcoin and Litecoin.

Just like a regular currency, it has a value based on who trusts it. For example, the United States is trusted by many nations and so its currency, the U.S. Dollar, is used extensively. Cryptocurrencies are trusted for a multitude of reasons including:

  • There is a technology involved called a Blockchain that (from a very basic standpoint) verifies the authenticity of the currency. This means that no counterfeit coins can exist.
  • A limited number of coins are generated each day, and those that receive them use equipment worth thousands (and even million) of dollars to do so.
  • Over the last five years, millions of people have exchanged billions of dollars to hold assets in cryptocurrencies like Bitcoin and Litecoin.
  • It is much cheaper and faster to send and receive cryptocurrencies than it is to send and receive other currencies like the U.S. Dollar

This trust has been growing exponential and now includes major companies such as Overstock and Dell, who support the cryptocurrency Bitcoin. This guide will go over the reasons why these businesses (among thousands more) accept Bitcoin as a payment option, why you should consider to do the same and, if interested, how to accept Bitcoin or Litecoin.

What are Bitcoin and Litecoin?

There are dozens of cryptocurrencies, but the two we’ll discuss in this guide are Bitcoin and Litecoin. Bitcoin is by far the most popular and widely accepted cryptocurrency. It is the original one, created in 2009 and has an immense value. If you added up the value of every Bitcoin, they’d be worth the equivalent of more than $7 billion.

Litecoin is meanwhile a less popular, but still well-known cryptocurrency. It runs on the same technology behind Bitcoin but has a different identification, just as the U.S. Dollar and Australian Dollar operate different, can be exchanged for one another, and are backed by different people. It still is counterfeit-proof and has the same elements of trust as Bitcoin.

Both currencies are distinct from one another – a Bitcoin cannot be mistaken for a Litecoin. They both have different values and there are different amounts of them that exist. Both, like all cryptocurrencies, cannot be duplicated or forged. They are both considered to be legitimate and trustworthy concerns.

What is with all the Bitcoin and Litecoin hype?

Bitcoin and Litecoin received  a lot of attention in late 2013 because they became extremely valuable. Their prices inflated and received widespread attention on media sites such as Forbes and CNN. When the prices dropped in early 2014, the attention subsided. However, Bitcoin is not stock in a company. Bitcoin does not succeed by having a higher or lower price. In the long term, Bitcoin will eventually have stable and consistent prices, but more importantly none of this affects you as a merchant. Whether a single Bitcoin is worth $1000 or $10, you can accept it for whatever equivalent value you want in dollars, pence or any other currency of your choice. Using a merchant provider allows you to take advantage of this.

Are Bitcoin and Litecoin safe? What are the risks?

Bitcoin and Litecoin are as safe, if not safer than accepting cash or credit cards. This is because the digital currencies are uniquely signed and impossible to duplicate. This means that no one can send you a counterfeit Bitcoin or Litecoin. There are risks, like any currency, but in a day-to-day operation of accepting Bitcoin and Litecoin you will actually have less to worry about when accepting Bitcoin or Litecoin as opposed to accepting cash and credit cards. It is also impossible for users to reverse charges and take back the currency they send you once you accept payment.

Accepting these digital currencies is a lot like accepting cash, but is also completely digital like accepting a credit card. This means your customer gets the benefit of a quick and painless transaction, while you skip the trouble of chargebacks, fraud alerts and other concerns related to accepting credit cards.

In the long term, there are discussions about the regulation of Bitcoin and Litecoin, but these have to deal less with merchants and businses owners, but instead with the exchanges. In reality, these regulations will offer more legitimate and safer businesses to conduct your Bitcoin business with, meaning a safer operation for you and your customers.

Are there any fees?

Yes, and no. It depends on how you accept Bitcoin and Litecoin. You can either accept Bitcoin and Litecoins to a personal wallet, or accept them through a merchant provider.

Personal Wallet: You accept Bitcoins and Litecoins and you keep them stored as Bitcoins and Litecoins

The only fees when using a personal wallet are the transaction fees, which are set by the Bitcoin and Litecoin network. These fees cost, at most, mere pennies for even the largest of transactions. It’s like having practically no fees. You will have to later take the cryptocurrency and exchange it to dollars or spend it at other businesses at accept Bitcoin or Litecoin.

Merchant Provider: You accept Bitcoins and Litecoins and you immediately convert them into your local currency, such as the U.S. Dollar.

Merchant Providers typically charge about one percent – a fraction of what a typical credit card company charges in fees. Merchant providers allow you to instantly turn the cryptocurrencies you accept into your local currency at the market price, saving you the hassle of exchange it later. However, exchanging it into the local currency also means you cannot take advantage of the low-fee benefits of paying others in cryptocurrencies.

How do I get started?

If you’re interested in at least seeing what the fuss is all about with Bitcoin and Litecoin, getting started costs nothing and is easy. Depending on whether you want to setup a wallet or a merchant provider, both are easy and available choices for most businesses.

Getting a wallet: Visit the Bitcoin or Litecoin website to learn more about each currency and how to setup a wallet account that stores the currency. We don’t recommend this if you aren’t very tech-savvy.

Getting a merchant provider: Depending on what country you live in there may be a merchant provider available for you to choose from.

If you live in Australia we recommend you reach out to Coinjar, who provides $5 when you sign up, as well as an easy way to accept Bitcoin and pay just 0.5 percent in fees.

If you live in the U.S. we recommend Coinbase for Bitcoin and GoCoin for Litecoin and Bitcoin. Both charge about one percent in fees – which is still a fraction of what you’d pay in credit card fees. All of these providers will instantly turn your cryptocurrency into dollars that you can often get in your bank account by the next business day.

Be sure to also add yourself to a free Bitcoin Directory  or two so people in your neighborhood know you accept Bitcoin and other cryptocurrencies. It may also help to put up signage advertising that you accept Bitcoin and/or Litecoin. If you do a lot of business in credit cards, even just a handful of customers paying instead with Bitcoin could save you a lot of fees in the long run. There are many more ways to take advantage of Bitcoin, Litecoin and other cryptocurrencies, but this is just a short taste of how the currencies work and how you can accept them without any fuss.

Merchants matter – You matter.

In closing, let us note that (believe it or not) you merchants are the most important part of Bitcoin and Litecoin’s success. As more merchants choose to accept cryptocurrencies as a form of payment, more people will ultimately learn about the currencies, choose to adopt them and subsequently pay in Bitcoin and Litecoin. While millions already use Bticoin and Litecoin, the numbers have a long way to go for mass adoption. It depends on merchants at least trying to accept Bitcoin and Litecoin for this to be an ultimate success. We hope more businesses choose to accept Bitcoin and give it a try. It costs nothing to try and it could even bring you new customers, let alone save you cash on credit card fees.