The Beginner's Guide to Bitcoins & Tor Network (2024)

Internet users familiar with the underground community are likely to have heard the phrase “deep web”. It combines a set of websites and communications technologies which apply solely to the Tor network. This collective open-source software has blossomed into a revolutionary idea in just a few years.

On a similar note the bitcoin currency has also been gaining some attention. Although these two ideas are not correlated, they do fit together in the subject of underground web technology.

So, Through this guide, I’d like to introduce you to the topic of bitcoins, how they work, and their connection with the Tor network. Let’s first clarify what Tor is really about.

Read Also: 4 Ways to Own Bitcoins Online

The Tor Project

The original Tor network project isn’t as underground as it used to be. The open-source software was an effort to provide a new layer of Internet protection between the user and the remote website server, thus providing you with a sense of security. This is accomplished by using 3 different relay proxies which re-direct you along a random path in the network.

Similar to Bit Torrent, users of the Tor network will keep their computers running 24/7 as a relay service. This means when you go to access a website on Tor it’ll pass your request through 3 different computers (called nodes).

This level of encryption ensures that no single computer within the proxy chain can determine your physical location and requested content. The official Tor FAQ contains more technical details if you’re interested.

This is crucial for users who prefer to keep their location and privacy unknown, individuals like whistleblowers or abuse victims. The fact that a wider variety of people now use Tor increases the level of security, helping you hide among the many other faceless users who are on the network.

Getting Started

To access this network of proxies you only need to download their package software. If you visit the Tor project downloads page you’ll notice a listing for the most popular Operating Systems including Linux, Windows, and Mac OSX. The software is bundled as a zip archive without requiring any installation.

The Beginner's Guide to Bitcoins & Tor Network (1)

After opening, just double-click the Tor icon to start up relay services, and shortly after, a new web browser should launch in the Gecko/Mozilla engine. It’s basically a shell script of Firefox which runs under custom proxy settings for Tor.

The entire network behaves as one interconnected and fluid proxy server farm. It’s important to note that you can access regular HTTP websites via proxy, but the load times are immensely slower. The real benefit of using Tor is to gain access into the onion routing network. Within this chasm of the deep Internet lies the hidden websites so often discussed around the watercooler.

Onion Routing

This new technology is used within the Tor network to communicate hosts with darknet websites. These are still HTML/CSS pages which have been hosted on servers specifically targeting an .onion DNS address.

This TLD (Top-Level Domain) is actually similar to other country codes such as .us, .co.uk, .es and others. However, you are not accessing the same websites, as through an HTTP/FTP connection.

The Beginner's Guide to Bitcoins & Tor Network (2)

The most intriguing part of the Onion routing network is within their unique URL addresses. Instead of human-readable strings such as hongkiat.com these appear as randomly generated numbers and letters. So for example, to visit “The Hidden Wiki” you would enter the following in browser:

http://kpvz7ki2v5agwt35.onion/wiki/index.php/Main_Page

This redirects to a Wikipedia-style site focusing on everything Tor-related.

To get a better idea of how Tor websites are designed and created, check out some of the other examples I’ve provided below.

  • TorStatusNet Microblogging – http://lotjbov3gzzf23hc.onion/
  • Tor Web Design Guidelines – http://wf4df37hrebhwzts.onion/
  • Freedom Hosting – http://xqz3u5drneuzhaeo.onion/
  • MyBitcoin – http://xqzfakpeuvrobvpj.onion/
  • BitLaundry – http://yhngvp3q5h4s7d3e.onion/
  • BitLotto – http://jpjyhljziw2glwfg.onion/lotto/index.html
  • Simple PM – http://4v6veu7nsxklglnu.onion/SimplePM.php
  • Anonymoose Chat – http://c2hluuzwi7tuceu6.onion/

Introduction to Bitcoin

Let’s take a break from Tor for a moment and examine the underground currency, bitcoin. Bitcoins behaves just like any other monetary system; it can be exchanged and traded for Dollars and Euros. It is not too difficult to comprehend with a bit of reading but I feel that this video really clears up some of the confusing areas for beginners.

Now, the bitcoin currency has a few benefits. Notably there is no central banking group which manages and loans out these coins. They are created through computer processing – theoretically nothing more than time and GPU compression. This also means no central authority is issuing “clearing” for bitcoin transactions. Thus instead of waiting 2-3 business days for a bank you can transfer bitcoins between addresses in just a few hours.

Collecting and Exchanging Coins

Although it is an exciting endeavor, the average btc user does not spend time mining for bitcoins. The process is too intense for a single computer and you likely won’t find the payoff worthwhile.

Professional miners work together in pools and will sometimes run a series of rigs setup with dual video cards (Graphics Processing Units) for the highest turnout rate.

But for the majority of beginners it’s unrealistic to jump into this right away. The much simpler method of collecting bitcoins is to transfer in your own cash, or alternatively provide service work.

A lot of btc users are willing to trade coins for Internet marketing, web design, development, and similar odd jobs. But moving cash into your bitcoin address (or wallet) is also just as simple.

The Beginner's Guide to Bitcoins & Tor Network (3)

Read Also: Everything You Need to Know About Bitcoin

How are Bitcoins Spent?

The ultimate goal is to use this alternate currency and hold our reserve coins in some type of wallet. Then we can use a unique wallet ID (or bitcoin address) to shop where bitcoins are accepted. This coin archive can either run through a desktop software or a third-party browser solution.

The Beginner's Guide to Bitcoins & Tor Network (4)

Those who value ultimate safety and security will want to keep their bitcoin assets local, i.e. in their computer. But I feel more comfortable using online wallets, as I have direct access to my accounts from any computer.

Now putting aside the possible earnings from buying and selling the currency itself, you can purchase a lot of things with bitcoins!

The Beginner's Guide to Bitcoins & Tor Network (5)

But if you truly want a catalog of shops, you cannot go wrong with the official bitcoin trade wiki. This includes a detailed list of physical and digital items you can purchase with no shortages of URLs. These categories include clothing, video games, books, electronics, and so much more.

Read Also: 14 Best Bitcoin Wallets For Secure Bitcoin Storage

Anonymity with Bitcoins and Tor

On the surface it appears that these two topics don’t have much in common. But there are a lot of underground networks within the Tor project which discussed bitcoins as the next level of our world economy.

It’s difficult to say where things will go from here at this point, but it’s certain that the underground community have created an astounding system. And both of these technologies are only in the early stages of adoption and development.

The Beginner's Guide to Bitcoins & Tor Network (6)

I feel the problem with a lot of monetary solutions is a general lack in privacy and security. I would not imply that PayPal is an unsecured website, but it’s difficult to understand why only a handful of people are allowed to control that website’s policy.

In the bitcoin marketplace, digital exchanges are held between buyer and seller. Purchasing through the Tor/Onion network adds an extra layer of security.

Read Also: The Good, The Bad And The Ugly Of Bitcoin Security

Resources on Tor/Onion Routing

Resources on Bitcoin

Conclusion

The underground Tor network and bitcoin marketplace are just two examples of emerging technologies. We may be at the verge of a technological breakthrough in restructuring how we access and trade currency through the Internet. I’m an early adopter of both these ideas and will be following the news closely on future developments!

The Beginner's Guide to Bitcoins & Tor Network (2024)

FAQs

What is Bitcoin answers? ›

Bitcoin is a cryptocurrency developed by an unknown person or a group of unknown persons using the name Satoshi Nakamoto. It was first used in 2009 after being released as an open-source software. The bitcoin record uses Blockchain technology. Learn about Draft National Strategy on Blockchain in the linked article.

How fast can you make money with Bitcoin? ›

Day trading Bitcoin may offer the possibility of making $100 a day, but it comes with high risks. Bitcoin's price can be unpredictable, and successful day trading requires extensive knowledge, experience, and constant market monitoring.

What is the Bitcoin beginners guide? ›

  • Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network.
  • New Bitcoins are created as part of the mining process, as a reward to people whose computer systems help validate transactions.
  • Buying Bitcoin exposes you to a volatile asset class.
Mar 11, 2024

How do I make money from Bitcoin? ›

Additionally, you can earn interest by lending your Bitcoin or by depositing it in interest-bearing accounts. Accepting Bitcoin as payment for goods or services, participating in affiliate programs, and engaging in Bitcoin faucets for small rewards are other ways to earn.

How to get Bitcoin for free? ›

How to earn free cryptocurrency: 11 easy ways
  1. Sign up with an exchange. ...
  2. Crypto staking. ...
  3. Free NFTs. ...
  4. Learn and earn. ...
  5. Crypto savings account. ...
  6. Crypto lending. ...
  7. Get cash from a brokerage. ...
  8. Participate in an airdrop.
Jun 28, 2024

Is Bitcoin real money on Cash App? ›

You can own bitcoin by buying it with money you already have on any exchange or app that offers it. You can buy, sell, send, and receive bitcoin on Cash App. You can also auto-invest a percentage of your paycheck into bitcoin or even round up your Cash App Card transactions and turn the spare change into bitcoin.

How can I make $100 dollars a day with Bitcoin? ›

If you're new to crypto day trading, here's what you need to know to make money. The most effective way to make $100 a day with cryptocurrency is to invest approximately $1000 and monitor a 10% increase on a single pair. This approach is more realistic than investing $200 and tracking a 50% increase on the pair.

Can you make a living off Bitcoin? ›

There are quite a few choices you have when it comes to investing in Bitcoin. You could make money with Bitcoin by investing in startups, companies, stocks, or even blockchain development itself. Blockchain-based startups are a very popular choice when it comes to investing in a cryptocurrency-related field.

How long does it take to send $100 in Bitcoin? ›

A Bitcoin transaction typically takes about 10 minutes to be confirmed after sending. This is the average time it takes for a new block to be mined and added to the blockchain, which includes the transaction. However, this can vary depending on network congestion and the transaction fee you choose to pay.

How much should I invest in Bitcoin as a beginner? ›

How much should I invest in cryptocurrency as a beginner? Never invest more than you can afford to lose. At Stash, we recommend holding no more than 2% of your overall portfolio in any one crypto in order to limit crypto-specific risks.

Does Bitcoin really work for beginners? ›

Bitcoin as a form of digital currency isn't hard to understand. For example, if you own a bitcoin, you can use your cryptocurrency wallet to send smaller portions of that bitcoin as payment for goods or services. By contrast, the way Bitcoin actually works is very complex.

How do I start Bitcoin for the first time? ›

Visit a cryptocurrency exchange website. Create an account and verify your identity as required. Follow the website's instructions to buy your bitcoin (BTC) or other digital asset. Your bitcoin will appear in your exchange account.

How do you get your money from Bitcoin? ›

A: To transfer Bitcoin to a bank account, sell your Bitcoin on a crypto exchange for fiat currency. Link your bank account to the exchange, complete identity verification, and then withdraw the fiat cash to your bank account. Withdrawal times and fees vary depending on the exchange.

Does Bitcoin pay real money? ›

However, it's still possible to make money with Bitcoin. You can trade it, lend it, hold it or earn it. Returns aren't guaranteed on this volatile asset; just as you can make money as the price goes up, it's also possible you could lose money if the price goes down.

Can Bitcoin make you a millionaire? ›

While this is a lower-bound scenario, we can use it as a baseline to show what it takes for investors to become Bitcoin millionaires. Assuming an annualized return of 30%, one would need to invest roughly $85,500 annually for five years to hit millionaire status. Over 10 years, this number falls to around $18,250.

What is Bitcoin in simple words? ›

Bitcoin (BTC) is a cryptocurrency (a virtual currency) designed to act as money and a form of payment outside the control of any one person, group, or entity. This removes the need for trusted third-party involvement (e.g., a mint or bank) in financial transactions.

Is it worth buying Bitcoin? ›

For that reason, while current market conditions are favorable for anyone considering buying Bitcoin, it is an asset you should purchase only at your own risk. Because while Bitcoin may have the potential for significant returns, you may also lose most of your investment.

Is it safe to invest in Bitcoin today? ›

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What is bitcoin cash and how does it work? ›

Bitcoin Cash is a decentralized peer-to-peer electronic cash system that does not rely on any central authority like a government or financial institution. As such, it represents a fundamental redesign of the very nature of money.

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