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Some more essential bitcoin information

To answer a few questions I got in the last few days about BitCoins:

How do I sell bitcoins in exchange for USD?

You can use the CoinCard service.

How should I secure my bitcoins?

The bitcoin wiki has a very good article about this. Let me summerize:

  • Find your wallet file:  %APPDATA%\BitCoin\wallet.dat
  • Encrypt it (several options are pointed at in the article, I used TrueCrypt)
  • Backup the encrypted wallet, delete the original
  • You should probably maintain two accounts, one that is encrypted and one open. Keep most of your money in the encrypted account.
  • Preferably, the encrypted wallet should only ever be opened on a computer where you’re reasonably sure no spyware/keyloggers are running. For large amount of bitcoins, I recommend a freshly installed computer with nothing except bitcoin running (and perhaps an encryption/backup software).

I encourage you to read the original article.

What are transaction fees?

In short – in the future, you might elect to pay minimal transaction fees to help speed up the processing of your bitcoin transactions. (should be very negligible, not at all like the huge fees charged today by credit card companies, banks and PayPal). Today, in practice, even without paying transaction fees payments are usually cleared within a few minutes.

Read the full story in the wiki.

How should I buy my bitcoins?

I still recommend Mt. Gox, and haven’t checked out other options. If you want to do the research and try out the alternatives, be my guest (and please tell me about it!)