I’ve been tracking and occasionally writing about bitcoin for a year, but I’d never actually bought or tried to spend one. Clearly, I wasn’t going to make it out of a weekend at Bitcoin 2013 without changing that.
People here are evangelical about the cyber currency and get really, really excited about showing newbies how easy it is to take the first step away from Ben Bernanke’s printing press.
If you’re not surrounded by Bitcoin advocates, it’s not quite as simple as they’d like: Putting U.S. cash in and getting bitcoins out through an exchange service like Coinbase, BitInstant or
Mt.Gox (hold off on that one for now) requires waiting a few days to link your bank account (Coinbase) or going to a bank or money-transfer point like a convenience store (BitInstant).
If you’re buying directly from a bitcoin holder, though, you can do the whole thing in about five minutes. “I’ll show you how,” said my very patient guide and moneychanger, Julian Tosh of CoinBus.
First step: I needed a software “wallet” to hold my coin. There are dozens if not hundreds of options. Julian recommended I start with BitcoinSpinner, a free, well-regarded Android app with a very simple user interface. (Apple doesn’t allow Bitcoin wallets into the iTunes store, but a few people have made it through with sneaky workarounds. Hint: The “Paytunia” app stores more than just euros.)
Once I had BitcoinSpinner installed, Julian suggested I immediately back up my private key. Bitcoin wallets have two key pieces of information: Your public key, which allows other people to send you coins, and your private key, which gives you access to your stash. It’s literally the keys to the kingdom. Anyone with your private key can spend your loot, and if you lose it, it’s irrevocably gone. The Web is filled with tales of sadness and woe related to lost or hacked private keys.
I backed mine up by copying the private-key QR code to my phone’s clipboard and emailing it to myself. All set.
Next, the purchase. BitcoinSpinner’s interface is very, very easy. It shows your Bitcoin address, your balance, and offers two options: Send Bitcoins and Transaction History. I tapped the QR code icon for my Bitcoin address to make it large and readable.
Julian hovered his phone over mine, opened his Bitcoin wallet software and snagged the code. His wallet offered two transfer options: You can specify an amount in bitcoins or in a traditional currency like U.S. cash. Julian told it to zap me $5. The software ran the conversion on the fly, using Mt. Gox’s rate, and sent me a sliver of a bitcoin: 0.04053244 BTC. (For that, it charged a transfer fee of 0.0005 BTC — about a nickel.)