If you haven’t yet grasped what Bitcoin is and don’t understand what the fuss is about or what the value is, then I suggest you read What is Bitcoin
This post assumes that the reader knows about Bitcoin and is keen to know how to acquire Bitcoin.
How do you get Bitcoin? 3 ways.
1. Buy Bitcoin from an exchange or from someone who has it
2. Mine Bitcoin. Either set up your own mining rig or join a mining pool.
3. Earn Bitcoin. Offer a service or a product in exchange for Bitcoin.
Buying Bitcoin. Buying Bitcoin from an exchange or from another person is the fastest and easiest way to acquire Bitcoin. All you need is a Bitcoin wallet and the cash to pay for it. In Malaysia, there are several exchanges that will sell Bitcoin to you. Such as Coinbox.biz, Coinhako.com and Luno.com.
At this time of writing (August 2017) the only functional exchange for Malaysians is Luno.com. Coinhako.com and Coinbox.biz have had their Malaysian bank accounts closed by the authorities since February of this year and to date, have not been able to receive funds from Malaysian bank accounts.
Another option is to buy Bitcoin from an individual. You can find sellers on sites like localbitcoins.com. However, like in any trading with an individual that you have never met, there are risks associated with dealing with individuals. After all, to purchase Bitcoins, you would have to pay them first and then hope that they stick to their word and credit your Bitcoin wallet with the agreed upon amount of Bitcoin.
I have bought Bitcoin from individuals before. That individual was introduced to me and vouched for by a friend I trust. So, its not as if buying from another person is a total no-no. Get recommendations from people you trust.
Also, you may want to note that similar to banks when selling or buying currencies, there is a Sell/Buy rate. The Bitcoin price you see online is just a reference price. Exchanges and individuals will slap on some additional fees and incorporate it into the price. So their buying price would be lower than market and their selling price would be higher.
Mining Bitcoin. Since Bitcoin is a digital product, we don’t have to put on pit helmets and carry pick axes to mine Bitcoin. It’s just a simple and familiar way of describing how to get Bitcoin by solving an algorithm.
For a more detailed explanation of how Bitcoin mining works, you can refer to this video.
So in simple terms, whenever our “mining rig” (essentially a computer specially designed to mine Bitcoin) solves a mathematical problem, we get rewarded with Bitcoin. The reward was 50 Bitcoins when mining first started, but there was a built-in halving mechanism incorporated into the software to account for the increased power of computers. As such, the current reward is 12.5 Bitcoins and since it is programmed to halve every 4 years, then next milestone, 2020, will see the rewards reduced to 6.25 Bitcoins when a computer solves the mathematical problem.
With the right setup a person can mine for Bitcoin. However as you can guess, mining machines don’t come cheap. So for the small investor to be able to mine Bitcoin, there are collectives that combine their cash or their machines to form a “Pool”. Everyone that participates in the pool, will earn Bitcoin that will be divided based on their shares (portions) in the pool. If you put in more money or supply more computing power, you have a larger share of the rewarded Bitcoin.
There are other technical issues to be aware of when mining. Utility cost (to power the computer, to keep the machines cool, internet access) and profitability.
There are individuals who continue to mine on their own, but pools are becoming more popular as the specific requirements for mining rigs have made it almost impossible for the individual to buy and make money off having their own rig. Instead, pools combine many mining rigs together in one location to really maximise economies of scale.
Earning Bitcoin. Earning Bitcoin is the easiest to understand. Instead of exchanging your goods or services for cash, you ask for Bitcoin. As simple as that. In this way, you can accumulate Bitcoin by providing your service or offering your products, Several merchants in Malaysia accept Bitcoin as payment and you can google them by searching for “bitcoin accepted in Malaysia”.