Bitcoin for Preparedness
With so many Prepper websites offering tools, equipment and other survival supplies it is highly likely that some of your Prepper shopping will take place online. Preppers do not like leaving a trail, whether it be a physical trail or an online one, and purchasing products on the internet tends to leave a trail through PayPal transactions, bank transfers etc. Bitcoins may be a potential solution to this.
What is it?
Bitcoin is a digital form of currency. Bitcoins are not physically printed or made. You can’t hold, touch or see Bitcoins. It is a payment system based on mathematical proof.
Bitcoins are created or “mined” by a network of people. As Bitcoin is based on maths, the Bitcoin protocol says that only 21 million Bitcoins can ever be created by miners. These Bitcoins can be broken down into smaller values. The smallest possible amount is one millionth of a Bitcoin (this is known as a Satoshi – after the founder of the currency).
Think about your PayPal account or even your bank debit card. Most people are comfortable using either of these for making purchases or deposits. No physical currency is exchanged, only bits and bytes that represent money.
Bitcoin is similar to this, with one difference. Only you and the other side of the transaction know it has taken place. Your bank, PayPal, or any other financial intermediary have no knowledge of the transaction.
How can you get Bitcoins?
You have two options for getting your first amount of Bitcoins. Your first option is to mine them yourself. This is done by getting your computer to solve a set of difficult mathematical problems and the products of these sums are Bitcoins.
This may sound simple (letting your computer do all of the work), but as more and more Bitcoins are mined the maths gets more complex. The computers needed to solve it are getting more and more advanced. So without a very substantial amount of money, mining Bitcoins is not an option.
The second and more realistic option is to buy them from someone who has already mined them. To do this you first need to set up a Bitcoin wallet online.
This is effectively a file which holds digital money. Once this has been set up you receive an address which is a long series of numbers and letters (34 characters). This is what you give out to people who are going to send you Bitcoins. It is like the sort code and account number of a bank account.
Once you have this number, you can then buy Bitcoins online. There are a number of websites where you can do this. Enter the amount you want, complete a bank transfer with the real world currency equivalent amount and then you receive your Bitcoins.
How to Spend It
To spend Bitcoins involves using the 34 character address of the person or shop you are paying. Basically you would access your Bitcoin wallet, instruct it to pay the appropriate address and your Bitcoin balance will adjust accordingly.
One word of warning though. Bitcoin transactions are non returnable. Once it has left your wallet, it is gone forever! Think of it as cash. Once you put the paper money into the person’s hand, you’re not going to get it back!
Advantages of Bitcoin
There is no central authority figure in the Bitcoin network. This means that you are in complete control of your money.
It is possible to send and receive Bitcoins from anyone, anywhere in the world at any given time.
Payments can be made without giving up your personal details. All that is shared is your Bitcoin address. This protects against identity theft.
Transactions either have no fees or very low fees.
The Bitcoin network is very hard to cheat or con so currency theft is low.
Disadvantages of Bitcoin
Relatively few people and businesses know about Bitcoin, meaning places to spend it are few and far between (although this is growing rapidly).
Bitcoin is still in its infancy and some features are still in development.
High volatility as there is a limited amount of coins available and demand rises each day. Volatility is expected to decrease as Bitcoin gets older.
All transactions are irreversible. If you make a mistake or change your mind . You cannot get your Bitcoins back.
Just as with your debit or credit card, the risk of hackers getting into your account is very real. This has happened in the past and will likely happen again in the future.
For preppers looking for additional privacy when purchasing or bartering online. Bitcoin has its advantages, but care still needs to be taken to ensure your money is safe and secure.