I’ve seen pictures of coins that say Bitcoin and notes that say Bitcoin, but are Bitcoins real? It depends.
A Bitcoin promissory note or coin is digital cryptocurrency you can send on the Bitcoin network. It is only good if it has a valid wallet address and password for the amount it claims to be. More importantly, when you take custody of that Bitcoin wallet address, it’s important nobody has seen the wallet password before you, and you trust the source providing the note. It’s also important to know the current exchange rate for Bitcoin to $US.
Think of it this way, let’s say I owe you some money. To pay with Bitcoin, I can either send a certain amount of Bitcoin to a wallet ID you created, or I can give you access to a Bitcoin wallet with the money I owe you.
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The second is akin to receiving a physical Bitcoin coin or note, you get a wallet and password combination. Paying in Bitcoin is similar to a payment by cashiers check and as soon as you get it, you can call my bank and immediately confirm the check is valid using a tool like Blockchain (just search the wallet ID). Also, if I send a payment via Bitcoin to a provided wallet id, there’s no way I can renege on those funds. In my opinion, the big advantage sending Bitcoin versus another source like Paypal is funds can be transferred to anyone who has access to the Internet, securely and usually for $0.05 or less per transaction. Sometimes free from my experience. You don’t need a bank account, you can just go to Blockchain.info and enter my check information, which is the wallet id tied to the Bitcoin coin or note to validate the funds exist. It’s also important you send a little money somewhere to validate the password works, otherwise you won’t be able to get at your Bitcoin.
Now let’s assume I paid you with a Bitcoin coin or note consisting of a wallet id and password. If the wallet id, funds, and password check out, you want to cash that “check” before anyone can move the funds out of the account. Cash the check by sending that money to a new wallet id you create and you alone know the password to. Once you move the funds to your new Bitcoin wallet, then you’ve successfully cashed that Bitcoin hardware (my check) out and you alone have access to the funds.
What if I have a coin or note with a scratch off password?
First test the Bitcoin wallet id using Blockchain.info to ensure the expected amount of funds are present. Then test the password by sending some of those funds to be sure the password works. Ideally, you should send all the funds within a wallet to a secure wallet only you know the password to. If you worry about getting hacked or digital compromise, Blockchain can tell you how to setup a secure paper wallet here. Good luck, and once you are comfortable with Bitcoin, you won’t want to go back!
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