FAQ – Forepost – Australia
FAQ – Forepost – AustraliaWhat is Bitcoin? Introduced in 2009 by an anonymous developer/group of developers going by the pseudonym Satoshi Nakamoto, Bitcoin* is the world’s first decentralised digital currency. This means that unlike traditional currencies such as the Dollar or the Yen, which rely on a central bank to be issued, bitcoins depend on a cryptographic system of peer-to-peer networking based on open source software known as the Bitcoin protocol to be generated, transferred and recorded within their network. The process of generating new bitcoins is called miningв, and consists in utilising a special bitcoin mining software to solve a complex algorithm. The difficulty of the mining process is automatically adjusted according to the number of algorithms being solved in order to ensure bitcoins are being generated at a predictable and steady rate. The reference to the action of extracting minerals from the Earth is due to the fact that bitcoin miners employ electricity and computing hardware to generate, or extract’, bitcoins from the system. Much like the world’s resources, the number of bitcoins in this algorithmic mine is not infinite but restricted to a limited supply of 21 million coins. Every transaction is accompanied by the digital signature of the coin’s owner. These electronic signatures are sequentially logged in a decentralised, public database called the block chainв, so each bitcoin has a specific history of digital signatures from the moment it is mined throughout the chain of its transactions. Bitcoin founders favoured the model of distributed computing as opposed to relying on a trusted third party to overcome the double-spending issue that digital currencies are exposed to as non-physical entities. Miners are required not only to generate bitcoins, but also to verify transactions, which means that the lack of a central authority is compensated by a distributed system of self-verification operated by the community of users. This is also the reason why the system of transactions is public, so that it can be accessed by anyone for verification purposes. Though the transactions are entirely public, they take place between alphanumeric identifiers, or addresses, and do not explicitly state the identities of the users who send or receive the payment. This is what gives transactions their perceived anonymity. The BTCв currency symbol is often used to mark Bitcoin values. * The term bitcoinв is used both for the tokens themselves (lower case) and the infrastructure (upper case) within which these tokens are generated and managed. What are the alternatives to Bitcoin? Here is an overview of main alternative cryptocurrencies in circulation. Note that most of the listed cryptocurrencies are traded in bitcoins, which means you first need to buy bitcoins and then buy these currencies using bitcoins. Ripple [XRP] Unlike other main cryptocurrencies listed here, Ripple is not based on the Bitcoin protocol. A distinguishing factor of this cash system is that it is not only a currency but also houses its own exchange platform. While the Bitcoin block chain only registers executed transactions, Ripple’s public database also records all offers to buy and sell the currency. This means that the network can also function as an exchange platform for other currencies or commodities. Litecoin [LTC] A P2P online currency based on the Bitcoin protocol and launched in 2011. Compared to the Bitcoin protocol, Litecoin enables users to mine its tokens effectively by means of consumer-level hardware. Blocks are generated at a faster rate (every 2. 5 minutes as opposed to Bitcoin’s 10 minutes) which means Litecoin’s block chain allows for a higher volume of transactions. Peercoin [PPC] Released in 2012 and based on Bitcoin, PPCoin is the first known cryptocurrency to operate on a hybrid Proof of Stake/Proof of Work system to generate new coins. As mining progresses, the yield of Proof of Work blocks decreases and the generation of new coins progressively relies on Proof of Stake block generation. This feature is indicated as a way to achieve long term energy efficiency, as Proof of Stake blocks involve less energy consumption. PPCoin has a centrally broadcasted checkpoint and therefore is not decentralised like other cryptocurrencies. Dogecoin [Doge] Launched at the end of 2013, Dogecoin is an open source P2P cryptocurrency that can be used to trade with other crypto/traditional currencies as well as to buy goods or services. Its peculiarity compared to other cryptocurrencies is that of being used to tipв internet users that upload or distribute quality content. Nxt [NXT] Nxt announces itself as the Next Generation of Cryptocurrencyв. Unlike other altcoins, it is not based on Bitcoin’s protocol and it is the first 100% Proof of Stake currency, which means that none of the mining, or forgingв, is carried out on the network. Forging Nxt coins does not require extensive computing power so the currency promises to be energy efficient. Ntx also introduces the concept of colored coinsв, with a view to expanding the boundaries of the trading system to include actual property. Mastercoin [MSC] Mastercoin is an open source effort conducted by users of the Bitcoin community. It is described as a type 2 decentralised applicationв because it utilises Bitcoin as a baseline protocol to build new user layers and store all its transactions on, thus drawing from the security and stability of the Bitcoin network. It will allow anyone to create and exchange their own currency or tokens for virtually any type of financial asset. Namecoin [NMC] A peer-to-peer alternative DNS (Domain Name System) based on Bitcoin technology which allows users to register and transfer arbitrary names, as well as carry out transactions in Namecoin currency. It represents a substitute for DNS which is secure and highly resistant to censorship. What can I do with Bitcoins? SPEND. As a peer-to-peer system of electronic cash, Bitcoin can be used to send payments directly from one party to another without going through an intermediate institution such as a bank. The acceptance of Bitcoin as a form of payment for goods or services is growing among individuals and businesses alike. Companies such as Virgin Galactic, Zynga, WordPress and Reddit, as well as an increasing number of brick and mortar businesses, all accept payment in bitcoins. Two major differences compared to other payment systems are that all Bitcoin transactions are irreversible by design and present negligible fees, as these are not calculated as a percentage of the transaction amount. INVEST. Bitcoin can also be purchased for investment purposes. Compared to gold it is easier and faster to transfer, verify and secure and as a decentralised cash system it is not subject to arbitrary rules imposed by a central authority. That said, Bitcoin represents a young economy and as such should be regarded as a high risk asset, whose value is subject to volatile market behaviour. Where can I get bitcoins? Besides mining or obtaining bitcoins as a form of payment, there are a number of options for buying the currency directly. Due to the high degree of risk for the seller, Paypal or credit cards are not generally used as a channel for selling bitcoins. These are mainly traded on exchange platforms such as Mt Gox, Bitstamp or BTC, where trades are conducted by matching a buy order (the price at which the buyer wishes to purchase bitcoins) to a sell order (the price at which a seller is willing to offer the bitcoins they have). Bitstamp is a Bitcoin marketplace based in Slovenia. Trades can be made 24/7 and they advertise transaction fees for as low as 0. 20%. It offers the ability to make Instant Orders, with orders being processed immediately, and Limit Orders, which allow users to define the specific price they wish to buy or sell bitcoins for. Mt Gox holds a prominent position among the Bitcoin exchanges as it is the oldest operating trading platform with the highest daily volume of trades. Obtaining bitcoins through this channel involves creating an account, verifying your identity with a photo ID and proof of residence, funding your account, buying bitcoins and withdrawing funds from your account. If you are located in Australia, you can buy bitcoins through forepost. com. au. We do all the hard work of finding the best route, which often involves converting to a foreign currency intermediately and searching among the many marketplaces that are out there to locate which one has the best rate of the time. We hold accounts in all major markets, and our sophisticated algorithm is constantly watching market conditions to find the best deal for you in real time. Just visit our quote page to get started. How do I get a Bitcoin? Obtaining bitcoins through Forepost. com. au involves a few simple steps. First, you need to get a quote by entering the amount in AUD of bitcoins you wish to buy, your Bitcoin wallet address, email address, and any one of Australia’s Big Four – Commonwealth Bank, ANZ, NAB or Westpac you wish to deposit your funds in. After that, you can simply go to a local branch of your chosen bank to make a cash deposit in the amount stated in the quote. Please note that if the deposit is not made within the time frame indicated in the quote, the quote itself will expire and no longer be valid**. Once the deposit is made, Forepost. com. au will transfer the bitcoins to the designated wallet address and issue a confirmation email to the email address indicated in the order. It is important to retain the receipt of your bank deposit until you have received confirmation of the funds being transferred to your address. **For deposits made after quote expiry, see: What if I Miss my quote deadline? вWhy should I go to the branch? can I use electronic transfer instead? Electronic transfer using Paypal or credit cards is not the favoured channel of payment due to the risks it poses to the seller. While the Bitcoin transaction is irreversible, both credit card and Paypal payments are reversible and as such expose the seller to fraudulent chargebacks that cannot be contested. What is a Bitcoin wallet address? A wallet address is an identifier made up of 27-34 case-sensitive alphanumeric characters that is used to receive Bitcoin payments. When a payment is sent, the amount of the payment is reassigned to the payee’s address. The process of generating a new address can be done offline and in batches, it is fast and free of cost and an individual can have multiple addresses. A higher number of addresses translates into increased privacy and therefore it is advisable to use an address only once and generate a new one for every transaction. Addresses typically contain one or more private keysв, which are secret numbers that enable users to unlockв the wallet and access and spend bitcoins. As stated above, every transaction within the Bitcoin network is permanently stored in a public database called the block chain. This means that information on transaction amounts and address balances can be viewed by anyone, but the funds in an address can only be accessed by the holder of the private key or keys. What is the bitcoin transaction ID? Every new block that is mined holds a sequential record of all the confirmed transactions that have occurred in the system up to that point. This comprehensive, publicly accessible log is one of the prime features that contribute to the security of the Bitcoin network, making it extremely difficult to produce false data. A transaction ID is a portion of data which transfers the ownership of an amount in bitcoins from one address to another. The data includes a reference to previous transactions it has been object of (input), the amount in bitcoins that is being transferred, and the destination address (output). Finally, the payer uses their private key to digitally sign the transaction, which within seconds is broadcasted on the Bitcoin network and subsequently verified by a miner. Where can I get a Bitcoin wallet? A Bitcoin wallet, also called Bitcoin client, is an application that runs on a computer or smartphone and that enables users to manage their funds and conduct transactions with other users in the Bitcoin network. Wallets can be installed locally on a computer desktop, on a mobile device or hosted by a third party directly on the web. Since wallets contain the private keys required to access the funds within, special care must be paid towards safeguarding your wallet against loss, theft, or human error. It is advised to keep keys in external storage devices or even in paper records. We recommend using MultiBit as a desktop wallet option. Multibit features easy installation across all main desktop operating systems and secure storage through encryption of private keys on the user’s local device. Its usability extends internationally thanks to its localisation in multiple languages and it allows for multiple wallets. Multibit wallet is defined a thin clientв as it does not store a comprehensive copy of the block chain and is thus lightweight and quick to synchronise. What if I miss my quote deadline? A certain amount of time is factored in to allow for acknowledgement and processing of the deposit. This means that if in that small gap of time the quote you obtained has officially expired and the Bitcoin market price has not changed dramatically, your purchase order will still be processed. In general however it is advisable to request a new quote if you are likely to miss the deadline for making a deposit. As stated in the terms and conditions, all orders placed through the website are subject to confirmation and acceptance by Forepost. com. au. If a quote has expired and the deposit is not made in the time frame specified in the quote, Forepost. com. au reserves the right to cancel the order. The current order validity period is 2 hours. Before processing the cancellation you will be informed and given the option to receive either a refund or a new quote adjusted in accordance to the updated exchange rate. If you opt for a refund, we will request bank account details and immediately proceed to refund your order via an online transfer. Please note that it normally takes one business day for the funds to appear in your account.
