User:Burrito/Using Bitcoin

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This is a draft.


  • New screenshots
  • How to start the client in Testnet mode
  • Testnet faucets

Current releases of Bitcoin Core have a different user interface than the versions used in this article.

This article could use an update. See the discussion for this article for more.

Even when this article gets updated, it is likely to get oudated again very quickly.

This page is a detailed tutorial to help new users understand and use bitcoin. After you read this page, you'll know the basics of what bitcoin is, how to get and install the Bitcoin Core client, where to get coins, and how to use the client to send and receive transactions.

If you want to ignore all the details of how the system works, and just want to start using it, see the Getting started page instead.

What is Bitcoin

Bitcoin is a distributed digital currency based on strong cryptographic principles. Each group of transactable coins is assigned to the owner's public key, and is transferable via cryptographically signed messages.

Getting started

In this section, you'll learn where to get the client, how to install it on different operating systems, and download the block chain.

Download and install the client

First, download the bitcoin client from . Choose the appropriate link depending on your operating system, and install in the usual manner. For Windows, easiest is probably the executable installer. For Linux, note that the tar.gz contains the binary build, in addition to the source, so if you run a recent distribution, you should be able to just run the binary without compiling yourself.

Issues with Linux package repositories

Be warned that the version of Bitcoin Core in some package repositories are severely out of date and thus may be harmful to use. For Debian unstable (Sid), users should use the package from the 'unstable' repository. For Ubuntu and derivatives, please use the PPA link on Please see this guide for details on how to use the PPA. Users of any Linux distribution can also choose to use the static binary or to compile from source (both are in the 'tgz' file on the download page), although updates will not be automated. Please refer to this page for the latest version number.

Starting the client and connecting to the network

Bitcoin is initializing by establishing a connection to other clients and downloading the blocks.

Bitcoin comes with a GUI client called "bitcoin", and a CLI (text-mode) client called "bitcoind". It is probably more user-friendly to start with the GUI, so launch the bitcoin client.

When you start for the first time, your bitcoin wallet will be created automatically, and the client will attempt to establish connections to other nodes on the network and start downloading the bitcoin block chain. You must get all of the blocks in the chain before sending/receiving transactions. Click here to see the current number of blocks in the chain. This download may take as long as several hours. Using the bootstrap.dat file is a more efficient method for initial sync, but is optional.

At this point, it is recommended to encrypt your wallet before receiving any bitcoins. Encrypting later may leave earlier addresses vulnerable to theft in the case that the system is compromised. This can be done from the Settings menu using the Encrypt Wallet function.

Client features

Your first bitcoin address (you can have as many as you want - we'll talk about addresses later) shows in a text box at the top. Right below it is your total bitcoin balance, which, of course, to start with will be zero. There is a list box below it showing all your transactions, which can be variously filtered with tabs, which again will be empty to start with.

The status bar at the bottom will display some important information if you hover your cursor over its icons. You will see the encryption status of your wallet, then the number of bitcoin nodes your client is connected to, and finally, the number of blocks your client has in its chain.

Using bitcoin

In this section, you will learn about bitcoin addresses, sending and receiving transactions, the block chain and transaction confirmations.

Bitcoin addresses

In order for someone to pay you, they need to know your Bitcoin address.

You can create as many new addresses as you like. Using a different address each time helps to preserve your anonymity.

Bitcoin addresses include a checksum, which means that it is generally not possible for transactions to be sent to an address with a typo in them - the address would be invalid.(Though with care you can craft a valid but nonexistent address.)

Generating bitcoins

In order to generate bitcoins, you will need to perform bitcoin mining. As of 2014, the competition for bitcoin mining has become intense, sop you are only likely to achieve anything with specialized hardware.

Buying Bitcoins

Bitcoins can be bought from individuals, on trading exchanges or from other online services. See the main page about Buying bitcoins for more information.

Points to remember

  • You don't need to be online to receive bitcoins.
  • You can create as many new addresses as you like. Using a different address for each transaction helps keep you anonymous, and will help you with accounting too, allowing you to distinguish between what different transactions were for.
  • You can be anonymous with adequate precautions.
  • You cannot send BTC to an invalid address. Typos are not a worry as the payment will refuse to send.
  • The wallet file holds the keys that allow spending and thus the computer should be protected from the risk of loss and theft.
  • Leaving Bitcoin Core open improves connectivity for the network and ensures that you don't fall behind on the block chain. Also see the FAQ about port forwarding


Block chain

The block chain is a never-ending story of every transaction throughout the network from day 1 (genesis). The first time you run Bitcoin, it is downloaded and verified on your computer. Every new transaction is added to the end of this chain and verified by the network to be valid.


Whenever you send money in Bitcoin, you are actually sending a cryptographically signed message, associating this money with the recipient's address. This effectively transfers ownership to the recipient. Once they own the bitcoins, they are free to transfer it to another person.

A wallet is a collection of addresses. You can create as many new addresses as you wish; not reusing addresses makes you more anonymous, because then people cannot see how many bitcoins you received. Your wallet contains the secret keys used for spending that money, and must be backed-up regularly. If you lose control of the wallet then you no longer possess the money.


New coins are mined through generating hashes. These generators (called miners) are rewarded for the computationally intensive task of incorporating your transactions into the block-chain. This reward halves every 210000 blocks, or approximately every 4 years. The reward will keep halving until it effectively reaches zero, at which point 21 million coins will be in circulation.

In addition to the standard block reward, the miner also receives the sum of the transaction fees for their block.

See also