[CBT Nuggets] Bitcoin Basics [2014, ENG]

The magic, the mystery. Learn what Bitcoin is, how it works, and how to use it in this groundbreaking course with Keith Barker.

1. Welcome to Bitcoin (00:02:31)
In this brief video, Keith provides an overview of the course, and welcomes you along with the millions of others who are interested in this new de-centralized, crypto-currency called Bitcoin. We are happy to have you join us for this course.

2. What is Bitcoin? (00:35:13)
"It's a bird, it's a plane..." Bitcoin is a currency (a form of money), as well as a set of protocols (a set of rules that make the Bitcoin network operate) that enables people like you and me to use Bitcoin (the currency) to purchase goods and services while the verification (done by the Bitcoin network) of each transaction and a history of those transactions (called a block-chain) is verified and maintained by the computers participating in the Bitcoin network. In this video, Keith walks you through some traditional examples of what was has been used for money in the past, some of the pros and cons of each method, and then introduces Bitcoin as an international, government-independent currency and system that is protected by cryptography. This video covers "What is Bitcoin?" and the logic and methods used by the Bitcoin currency and Bitcoin network.

3. Bitcoin: Setting Up and Using a Wallet (00:33:26)
Traditional wallets come in different sizes and colors, but have the same basic purpose, and that is to hold something (sometimes even money . In the case of the digital de-centralized currency used in the Bitcoin community, a "wallet" is used to store BTC (Bitcoin currency). In this video, Keith walks you through the setting up a wallet and a simple transaction using Bitcoin (both the currency and the network). You'll also see a demonstration of how a QR code can simplify this process.

4. Multi-Factor Authentication (00:18:24)
"Give me a Multi!"..."Give me a Factor!"..."What do you get?":" Multi-factor! Yeaaaa" (and the crowd goes wild). To improve security, we can use more than a single method (single factor) to verify who an individual is before allowing access to our online Bitcoin wallet. Requiring multiple authentication methods (which is "multi-factor authentication") can enhance security, and is often used for high security environments like a data center or other restricted area. In this video, Keith demonstrates some of the options available to implement this feature for online wallet security, including using Google Authenticator.

5. Protecting Files Through Encryption (00:24:38)
Sensitive files, sitting on a computer hard drive, are very valuable to both the owner of that data as well as a potential attacker or thief. An example of sensitive data would be the private key in Bitcoin, which is part of the wallet. In this video, Keith walks you through how to create a new logical volume on your computer, using the open-source software named TrueCrypt. A new volume is encrypted, and any files you place into this volume become encrypted as part of the process. Using this technique, anyone stealing the volume file electronically, (or physically), won't also have access to your sensitive data because it is hidden away (encrypted) in the protected volume.

6. Using and Securing the Original Bitcoin Client (00:21:43)
E-wallets are a nice convenience, but if we don't want to involve or use a 3rd party service, such as blockchain.info, we can manage and store our wallet on our own computer using the original Bitcoin client software. In this video, Keith walks you through where to get this software, and then how to store the data files (including the wallet file which contains the private key information) in a secure encrypted volume.

7. Paper Wallets (00:31:47)
The private keys used in the Bitcoin world are used to authorize (digitally sign) the sending of Bitcoin (the currency, BTC), to other addresses. These private keys should be encrypted regardless of where they are being stored (on our own computer, or in the cloud through a provider). One alternative to keeping the keys stored electronically (encrypted or otherwise) is to print out the keys on paper (the "paper wallet"). In this video, Keith walks you through the creation of a "paper wallet" as well as some techniques such as onscreen keyboards that may add security to the process of using them.

8. Brain Wallets (00:16:58)
Another inventive approach to managing private keys is to create private keys and their associated addresses based on a pass-phrase. This way, if the owner of BTC wanted to avoid storage of the keys in either digital or paper form, the pass-phrase could be used with a utility to regenerate the keys (based on the pass-phrase), which would then allow the owner to use those keys to transfer Bitcoin. In this video, Keith demonstrates the creation and use of a "Brain Wallet."

9. Backing Up and Restoring a Wallet (00:18:42)
The best time to backup and perform a "test" verification of a Bitcoin wallet is when 1) there isn't too much at risk; and 2) before some critical failure where large amounts of money is at stake. In this video, Keith walks you through the process of backing up and restoring an e-wallet.

10. Going Mobile (00:11:58)
Making BTC easy to use, such as paying for a dinner at a restaurant that accepts Bitcoin as payment, can be done through integration of the client into mobile devices such as iOS and Android. In the video, Keith walks you through how to "pair up" your mobile device with your e-Wallet account to make it easy to scan a QR code and perform a BTC transaction wherever you are.

11. Bitcoin Mining (00:32:21)
Somebody's getting paid to build and maintain Bitcoin's block chain, why not you? It is a good question, and in this video, Keith walks you through the role a "Bitcoin Miner" (a computer using its processor power to validate and build the block chain) plays in the Bitcoin network. Keith discusses the evolution of processing power for Bitcoin mining, and a some ideas about how to participate in a mining pool to increase the possibility of earning BTC for mining.

12. Merchant Services with Bitcoin (00:12:17)
How will the transition go for merchants that begin accepting Bitcoin? Time will tell. There is a manual method that can be used, as well as a new service industry that is emerging to assist in making Bitcoin transactions quick and painless for both the business and the customer. In this video, Keith explains some of the processes that need to be done to accept Bitcoin, as well as an example of a 3rd party merchant service to assist in the transaction.

13. Current Trends in Bitcoin (00:09:06)
What does the future hold for Bitcoin? That is a good question. Based on some current trends, and the short track history of Bitcoin, the actual results are anyone's guess. In this video, Keith discusses some of the trends with Bitcoin, including many which are being driven by individuals and companies who's awareness and confidence in Bitcoin are causing an positive effect regarding the price of this digitial crypto-currency.

14. Bitcoin Chat: Mining Theory (00:30:15)
In the first of our "fireside chats" about bitcoin, we discuss the meaning of the term "bitcoin mining," talk about what a "proof of work" is, and how various technological shifts in the field have affected difficulty. Then we look towards the future and discuss what ASICs are going to do to the hash rate and the viability of the blockchain as we move from mined block rewards to transactions fees.

15. Bitcoin Chat: Mining Practice (00:31:29)
In this chat, Dan shares the practical wisdom that he has acquired in mining, and provides an in-depth look at the equipment and expertise needed to get started with GPU and FPGA mining. We cover hardware, software, power use and everything in between, and give you an insider's look at the actual mining rigs that we have set up here at CBT Nuggets!