How to buy and pay with Bitcoin

Posted on 2025-01-14 by Elmar Dott

For many, Bitcoin (BTC) is a pure speculation object with which they only want to make money. However, the cryptocurrency Bitcoin is also ideal for payment. You do not need any in-depth technical knowledge to pay with Bitcoin. Bitcoin can also be bought with relatively small amounts, for example 10 euros. Everything you need to get started is explained in this article in an easy-to-understand manner.

To buy your first Bitcoin, you need a regular bank account, €20 and about 10 minutes of time. Depending on the bank, the transfer of euros until they are credited as Bitcoin can take up to a day. Incidentally, all of elmar-dott.com’s services can also be paid for using Bitcoin.

Before we start the first transaction, we need to create a wallet. Wallet is the English term for purse. This means that a Bitcoin wallet is nothing more than a digital purse. The program with which you can create and manage a wallet is very similar to the typical banking app. Wallets can be easily set up on computers, smartphones and tablets (Android & iPhone/iPad). There are also hardware wallets that work similarly to a USB stick and store the Bitcoins there.

The most important difference between a bank account and a wallet is that the bitcoins stored in your wallet actually belong to you. There is no bank or other institution that has access to this wallet. You can compare bitcoins stored in your wallet with the cash you have in your wallet. So let’s first look at how to create your own wallet. For this we use the free open source software Electrum. The Electrum Bitcoin Wallet was developed in Python 3 and is available for: Linux, Windows, MacOS and Android.

1st step: Create a wallet

After the app has been downloaded and started, we can get started and create our first Bitcoin wallet. First, we give our wallet a name and press Next. We are then asked which wallet type we would like to create. Here we leave it at the default. We then have to create a seed. The seed is 12 randomly created words that we can expand with our own terms/character strings using the Options button. The specified terms (seed) are extremely important and must be kept safe. It is best to write them on a piece of paper.

After the app has been downloaded and started, we can get started and create our Bitcoin wallet. First, we give our wallet a name and press Next. We are then asked which wallet type we would like to create. Here we leave it at the default. We then have to create a seed. The seed is 12 randomly created words that we can expand with our own terms/character strings using the Options button. The specified terms (seed) are extremely important and must be kept safe. It is best to write them on a piece of paper. The seed allows full access to your personal wallet. With the seed you can easily transfer your wallet to any device. A secure password is then assigned and the wallet file is encrypted. We have now created our own Bitcoin wallet, with which we can send and receive Bitcoin.

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In this way, you can create as many wallets as you like. Many people use 2 or more wallets at the same time. This process is called proxy pay. This measure conceals the actual recipient and is intended to prevent transfer services from refusing transactions to undesirable recipients.

In order to convert your own euros into bitcoin, a so-called broker is required. You transfer euros or other currencies to this broker and receive bitcoin in return. The bitcoin is first transferred to a wallet managed by the broker. From this wallet you can already send bitcoin to any other wallet. As long as the bitcoin is still in the broker’s wallet, however, the broker can block the wallet or steal the bitcoin on it. Only when we transfer the purchased bitcoin to a self-managed wallet, as we created in step 1, are the coins in our possession and no outsider has access to them.

The problem that can arise is that these broker services, also called crypto exchanges, can keep a list of bitcoin wallets to which they do not send transactions. To avoid this, you transfer your Bitcoins from the wallet of the Bitcoin exchange where you bought your coins to your own wallet. You can also use multiple wallets to receive payments. This strategy makes it difficult to track payment flows. The money that has been received in various wallets can now be easily transferred to a central wallet where you can save your coins. It is important to know that fees are also charged when sending Bitcoin. Just like with a checking account.

Understanding Bitcoin Transaction Fees

Every time a transaction is made, it is stored in a block. These blocks have a limited size of 1MB, which limits the number of transactions per block. Since the number of transactions that can fit in a block is limited, users compete to have their transactions included in the next block. This is where Bitcoin transaction fees come in. Users offer fees to make their transactions more attractive to miners. The higher the fee, the more likely the transaction will be confirmed faster. The amount of fees depends on several factors:

Network load: When load is high, fees increase because more users want to prioritize their transactions.
Transaction size: Larger transactions require more space in the block and therefore incur higher fees.
Market conditions: General demand for Bitcoin and market volatility can affect fees.

Most wallets calculate fees automatically based on these factors. However, some wallets offer the ability to manually adjust fees to either save costs or achieve faster confirmation.

Bitcoin transaction fees are not fixed and can vary widely. Bitcoin transactions can be confirmed within minutes to hours, depending on the amount of the fees. Bitcoin fees are not calculated based on the value of the transaction (i.e. how much Bitcoin you send), but rather based on the size of the transaction in bytes. The fee you pay is given in Satoshis per byte (sat/byte). A Satoshi is the smallest unit of Bitcoin (1 BTC = 100 million Satoshis).

You can find out how many Satoshi you get for €1 on coincodex.com and the current transaction fee can be found on bitinfocharts.com

Notes on the anonymity of Bitcoin

When you pay with Bitcoin, you send coins from your wallet to a recipient wallet. This transaction is publicly visible. Basically, when you create a wallet using software such as Electrum, the owner of the wallet is not stored. Nevertheless, conclusions about the owner of a wallet can be drawn from the transactions. Using multiple wallets can make it more difficult to assign them to a real person and conceal money flows. But 100% anonymity cannot be guaranteed. Only cash offers absolute anonymity.

Nevertheless, Bitcoin has some advantages over cash. If you travel a lot and don’t want to keep your money in your bank account, you can easily carry very large amounts with you without them being found and confiscated when crossing borders. You are also fairly well protected against theft. If you save your wallet in an encrypted file on various data storage devices, you can easily restore it using the seed.

2nd Step: Buy Bitcoin

Before we can start using Bitcoin, we first need to get our hands on Bitcoin. We can do this quite easily by buying Bitcoin. Since Bitcoin can be worth several thousand euros depending on the exchange rate, it makes sense to buy parts of a Bitcoin. As already mentioned, the smallest unit of a Bitcoin is Satoshi and corresponds to one μBTC (1 BTC = 100 million Satoshis). The easiest way to buy BTC is via an official Bitcoin exchange. A very easy-to-use exchange is Wallet of Satoshi for Android & iPhone.

With this app you can buy, receive and send Bitcoin. After you have installed the Wallet of Satoshi on your smartphone and the wallet is set up, you can also buy Satoshis immediately via bank transfer with just 20 euros via the menu.
A very practical detail is that you can also use the Wallet of Satoshi to buy Bitcoin using other currencies such as US dollars. This is excellent for international business relationships, where you no longer have to deal with all sorts of exchange rates. Since I consider Bitcoin to be an alternative means of payment, it makes sense for me to always leave an amount of 200 to 500 euros in the Wallet of Satoshi. Anything above that is transferred to the Electrum Wallet. This is purely a precautionary measure, because Wallet of Satoshi is based on the Lightning Network and is a private provider. True to the motto, it is better to be safe than sorry. This strategy also saves transaction fees, which can add up to a considerable amount, especially for micro payments of a few euros.

3rd Step: Pay with Bitcoin

In order to pay with Bitcoin, you need a valid wallet address. This address is usually a long, cryptic character string. Since things can quickly go wrong when entering it manually, this address is often given as a QR code.

To make a payment, for example, via the Wallet of Satoshi to any Bitcoin wallet, either the character string or, better yet, the QR code is required. To do this, open the application, press the send button and then use the camera to scan the QR code of the wallet where the Bitcoin should go.

For example, if you send Bitcoin to the Wallet of Satoshi, all transactions are completely transparent. That’s why you can also send Bitcoin to an anonymous wallet. In step 1, I showed in detail how the Electrum wallet is created. Now let’s look at how we get to the wallet’s address. To do this, we go to the Wallet entry in the Electrum menu and select the Information item. We then get a display like the one in the following screenshot.

The master public key is the character string for our wallet to which Bitcoins can be sent. If you press the QR symbol in the bottom right of the field, you will receive the corresponding QR code, which can be saved as an image file. If you now make transfers from a Bitcoin exchange such as the Wallet of Satoshi, the exchange does not know who the owner is. In order to find this out, complex analyses are necessary.

Stability in the crisis – business continuity & disaster recovery

Posted on 2024-10-21 by Elmar Dott

The phrase: it’s better to have than to have had is something we have all experienced first-hand, whether in our professional or private lives. If only we hadn’t clicked on the malicious link in the email or something similar goes through our heads. But once the damage has been done, it’s already too late to take precautions.

What is usually just annoying in our private lives can very quickly become a threat to our existence in the business world. For this reason, it is important to set up a safety net in good time for the event of a potential loss. Unfortunately, many companies do not pay adequate attention to the issue of disaster recovery and business continuity, which then leads to high financial losses in an emergency.

The number of possible threat scenarios is long. Some scenarios are more likely to occur than others. It is therefore important to carry out a realistic risk assessment that weighs up the individual options. This helps to prevent the resulting costs from escalating.

The Corona pandemic was a life-changing experience for many people. The state-imposed hygiene rules in particular presented many companies with enormous challenges. The keyword here is home office. In order to get the situation under control, employees were sent home to work from there. Since there is no established culture and even less of an existing infrastructure for home working in German-speaking countries in particular, this had to be created quickly under great pressure. Of course, this was not without friction.

But it does not always have to be a drastic event. Even a mundane power failure or a power surge can cause considerable damage. It does not have to be a building fire or a flood that leads to an immediate standstill. A hacker attack also falls into the category of serious threat situations. That should be enough. I think the problem has been explained in detail with these examples. So let’s start by addressing the question of what good precautions can already be taken.

The easiest and most effective measure to implement is comprehensive data backup. To ensure that no data is lost, it helps to list and categorize the various data. Such a table should contain information about the storage paths to be backed up, approximate storage usage, prioritization according to confidentiality and category of data. Categories include project data, expulsions, email correspondence, financial accounting, supplier lists, payroll statements and so on. It is of course clear that in the context of data protection, not everyone in the company is authorized to read the information. This is why digestible data must be protected by encryption. Depending on the protection class, this can be a simple password for compressed data or a cryptographically encrypted directory or an encrypted hard drive. The question of how often a data backup should be carried out depends on how often the original data is changed. The more often the data is changed, the shorter the data backup intervals should be. Another point is the target storage of the data backup. A completely encrypted archive that is located locally in the company can certainly be uploaded to a cloud storage after a successful backup. However, this solution can be very expensive for large amounts of data and is therefore not necessarily suitable for small and medium-sized enterprises (SMEs). Of course, it is ideal if there are several replicas of a data backup that are stored in different places.

Of course, it is of little use to create extensive backups only to find out in an emergency that they are faulty. That is why verification of the backup is extremely important. Professional data backup tools contain a mechanism that compares the written data with the original. The Linux command rsync also uses this mechanism. A simple copy & paste does not meet the requirement. But a look at the file size of the backup is also important. This quickly shows whether information is missing. Of course, there is much more that can be said about backups, but that would go too far at this point. It is important to develop the right understanding of the topic.

If we take a look at the IT infrastructure of companies, we quickly realize that the provision of software installations is predominantly a manual process. If we consider that, for example, a computer system can no longer perform its service due to a hardware error, it is also important to have a suitable emergency aid strategy in hand. The time-consuming work when hardware errors occur is installing the programs after a device has been replaced. For many companies, it makes little sense to have a redundant infrastructure for cost reasons. A proven solution comes from the DevOps area and is called Infrastructure as a Code (IaaC). This is mainly about providing services such as email or databases etc. via script. For the business continuity & disaster recovery approach, it is sufficient if the automated installation or update is initiated manually. You should not rely on proprietary solutions from possible cloud providers, but use freely available tools. A possible scenario is also a price increase by the cloud provider or changes to the terms and conditions that are unacceptable for companies, which can make a quick change necessary. If the automation solution is based on a special technology that other providers cannot provide, a quick change is extremely difficult.

Employee flexibility should also be taken into account. Purchasing notebooks instead of desktop computers allows for a high level of mobility. This of course also includes permission to take the laptop home and log into the company network from there. Teams that were already familiar with home office at the beginning of 2020 were able to continue their work from home almost seamlessly. This has given the companies in question a huge competitive advantage. It can also be assumed that large, representative company headquarters will become less and less important as part of the digital transformation. The teams will then organize themselves flexibly remotely using modern communication tools. Current studies show that such a setup increases productivity in most cases. A colleague with a cold who still feels able to do his work can come to work without worrying without his colleagues running the risk of being infected.

We can already see how far this topic can be thought of. The challenge, however, is to carry out a gradual transformation. The result is a decentralized structure that works with redundancies. It is precisely these redundancies that provide sufficient room for maneuver in the event of a disruption compared to a centralized structure. Redundancies naturally cause an additional cost factor. Equipping employees with a laptop instead of a stationary desktop PC is somewhat more expensive to purchase. The price difference between the two solutions is no longer as dramatic as it was at the turn of the millennium, and the advantages outweigh the disadvantages. The transformation to maintaining business capability in the event of disruptions does not mean that you immediately rush out and buy all employees new equipment. Once you have determined what is necessary and useful for the company, new purchases can be prioritized. Colleagues whose equipment has been written off and is due for replacement now receive equipment in accordance with the new company guidelines. This model is now being followed in all other areas. This step-by-step optimization allows for a good learning process and ensures that every step that has already been completed has actually been implemented correctly.

Talents wanted

Posted on 2024-10-09 by Elmar Dott

Freelancers who acquire new orders have been experiencing significant changes for some time now. Fewer and fewer companies have direct contact with their contractors when they are commissioned. Recruitment agencies are increasingly pushing their way between companies and independent contractors.

If specialist knowledge is required for a project, companies are happy to call on external specialists. This approach gives companies the greatest possible flexibility in terms of cost control. But freelancers also benefit from this practice. They can focus exclusively on topics in which they have a strong interest. This avoids being used for boring, routine standard tasks. Due to their experience in different organizational structures and the variety of projects, independent contractors have a broad portfolio of unconventional solution strategies. This knowledge base is very attractive for clients, even if a freelance external employee is initially more expensive than their permanent colleague. Freelancers can bring positive impulses to the project due to their diverse experience, which can overcome a standstill.

Unfortunately, for some time now, companies have no longer been making an independent effort to recruit the specialists they need. The task of recruitment has now been outsourced to external recruitment agencies almost everywhere. These so-called

I actually find the idea of having my own agent who takes care of my order acquisition very appealing. It’s like in the film and music industry. You have an agent who has your back and gives you regular feedback. This gives you a picture of the technologies that are in demand and in which you can develop further. This allows you to improve your own market relevance and ensures regular commissions. This would actually be an ideal win-win situation for everyone involved. Unfortunately, what actually happens in reality is something completely different.

Instead of recruiters building a good relationship with their professionals and encouraging their development, these recruiters act like harmful parasites. They harm both the freelancers and the companies looking to fill vacancies. Because business is not really about finding the most suitable candidate for a company. It’s all about offering candidates who fit the profile you’re looking for at the lowest possible hourly rate. Whether these candidates can really do the things they claim to be able to do is often questionable.

The approach of recruitment agencies is very similar. They try to generate a large pool of current applicant profiles. These profiles are then searched for keywords using automatic A. I. text recognition systems. Then, from the proposed candidates, those with the lowest hourly rate are contacted for a preliminary interview. Those who show no major anomalies in this preliminary interview are then suggested to the company for an interview appointment. The recruitment company’s profit is enormous. This is because they pocket the difference between the hourly rate paid by the client and the hourly rate paid to the self-employed person. In some cases, this can be up to 40%.

But that’s not all these parasitic intermediaries have to offer. They often delay the payment date for the invoice issued. They also try to shift the entire entrepreneurial risk onto the freelancer. This is done by demanding pointless liability insurance policies that are not relevant to the advertised position. As a result, companies are then given vacancies for supposedly skilled workers who are more likely to be classified as unskilled workers.

Now you might ask yourself why companies continue to work with intermediaries. One reason is the current political situation. Since around 2010, for example, there have been laws in Germany aimed at preventing bogus self-employment. Companies that work directly with freelancers are often put under pressure by pension insurance companies. This creates a great deal of uncertainty and does not serve to protect freelancers. It only protects the business model of the intermediary companies.

I have now gotten into the habit of hanging up without comment and immediately when I notice various basic patterns. Such phone calls are a waste of time and lead to nothing except annoyance at the audacity of the recruitment agency. The most important indication of dubious recruiters is that the person on the phone is suddenly completely different from the one who first contacted you. If this person also has a very strong Indian accent, you can be 100% sure that you have been connected to a call center. Even if the number shows England as the area code, the people are actually based somewhere in India or Pakistan. Nothing that would underline the seriousness.

I have registered on various job portals over the many years of my career. My conclusion is that you can save yourself the time. 95% of all contacts made via these portals are recruiters as described above. These people then have the scam that you save them as a contact. However, it is naive to believe that these so-called network requests are really about direct contact. The purpose of this action is to obtain the contact list. This is because many portals such as XING and LinkedIn have the setting that contacts see the contacts from their own list or are offered them via the network function. These contact lists can be worth a lot of money. You can find department heads or other professionals who are definitely worth writing to. I have therefore deactivated access to the friends list for friends in all social networks. I also reject all connection requests from people with the title Recruitment without exception. My presence in social networks now only serves to protect my profile name against identity theft. I no longer respond to most requests to send a CV. I also do not enter my personal information on jobs, studies and employers in these network profiles. If you would like to contact me, you can do so via my homepage.

Another habit I’ve picked up over the years is to never talk about my salary expectations first. If the other person can’t give me a specific figure that they’re willing to pay for my services, they’re just looking for data. So that’s another reason to end the conversation abruptly. It’s also none of their business what my hourly rate was in previous projects. They only use this information to push the price down. If you are a bit sensitive and don’t want to give a rude answer, simply quote a very high hourly rate or daily rate.

As we can see, it’s not that difficult to recognize the real black sheep very quickly by their behaviour. My advice is, as soon as one of the patterns described above occurs, to save time and above all nerves and simply end the conversation. From experience, I can say that if the brokers behave as described, there will definitely be no mediation. It is then better to concentrate your energy on realistic contacts. Because there are also really good placement companies. They are interested in long-term cooperation and behave completely differently. They provide support and advice on how to improve your CV and advise companies on how to formulate realistic job offers.

Unfortunately, I fear that the situation will continue to deteriorate from year to year. The impact of economic development and the widespread availability of new technologies will also continue to increase the pressure on the labor market. Neither companies nor contractors will have any further opportunities in the future if they do not adapt to the new times and take different paths.