Here is info from Bitstamp, the exchange I've opened an account with for trading Bitcoins, (See my earlier post for basic info and references explaining the Bitcoin digital currency.)
WHAT IS BITCOIN?
Bitcoin is a digital currency created in 2009, based mainly on a self-published paper by Satoshi Nakamoto. Bitcoin enables rapid payments (and micropayments) at very low cost, and avoids the need for central authorities and issuers.
WHAT IS BITSTAMP?
Bitstamp is an European Union based bitcoin marketplace. It allows people from all around the world to safely buy and sell bitcoins.
HOW DOES IT WORK?
We take cash deposits on one side and bitcoin deposits on the other side of the trade. Then we allow our customers to exchange their cash for bitcoins or vice versa.
ARE YOU SELLING BITCOINS?
No. We are providing a service. You are always buying bitcoins from another individual who is selling them. All we do is provide a safe and simple environment to trade. We guarantee that buyers get their bitcoins and sellers get their money at agreed price.
HOW TO START?
It's easy, fast and free to open an account. Click open an account, fill out the form and log in. Then you have to fund your account. Click deposit in the main menu and select a type of deposit you wish to make. There are two main choices. Bitcoins you wish to sell or currency you wish to spend on buying bitcoins.
HOW TO TRADE?
After you successfully funded your account it is time to trade. Click trade in the main menu. There are two types of orders: instant and limit orders. Instant orders are very simple to use, but limit orders give you the power of setting the price you wish to pay or get for your bitcoins. It is up to you to decide which one to use. We recommend instant orders for people who would like to make a trade as soon as possible and limit orders to people who have experience in market trading.
HOW DOES INSTANT ORDER WORK?
Instant orders are the fastest and the simplest way of trading. Click instant order in trade section and the system will give you two choices: SELL or BUY bitcoins. Click one of them and we will ask you: "how much money do you wish to convert to bitcoins" or "how much bitcoins you wish to sell?" Enter a number and click buy/sell button. That is it.
WHY IS MY INSTANT ORDER STILL OPEN?
When you place an instant order, we add an order at the current bid or ask price (depending on the type of the order). If there is not enough bitcoins available at that price, your order will remain open until someone sells or buys additional bitcoins at that price. Our trading engine will then reposition your order every 10 minutes to the current order book offer.
WHY DOESN'T INSTANT ORDER BUY ALL THE BITCOINS AVAILABLE IN THE ORDER BOOK, REGARDLESS OF PRICE?
Because instant orders are designed to be used by people who are not familiar with market trading and could end up paying unreasonably high prices when buying large amounts of bitcoins in times of low market liquidity. It is our opinion that it is better to wait some time for your order to get filled than risk that scenario.
HOW DOES LIMIT ORDER WORK?
When you place a limit order you decide what price you wish to pay or get. Your order will then be added to the order book and will be waiting for someone to accept it.
WHAT IF I MAKE A MISTAKE AND INSERT A LIMIT ORDER TO BUY BITCOINS AT $50/BITCOIN INSTEAD OF $5/BITCOIN?
This is a common mistake in the markets and can cause great damage to your account balance and bitcoin market volatility. If you try to commit an order with price greater or lower than 20% of the current market price, our system will ask you for additional confirmation. We will allow you to place any order, but you will be asked if you are sure you want to do that.
WHAT IS ORDER BOOK?
Order book is a list of all open sell and buy orders at the moment. You can buy or sell bitcoins at those prices instantly.
HOW MUCH DOES IT COST?
Bitstamp charges a trading fee from each party of successful trades made through the market. The amount of the fee will vary based on a 30 day trading history. The rate for new accounts and those with the lowest volume is 0.5%. Refer to the fee schedule to determine discount levels. The fee that was charged appears in the account history next to each trade.
IS IT SAFE TO USE BITSTAMP?
Yes! Our main priority is to keep clients personal data safe and secure. We take great precautions around security of our system and are constantly monitoring for any suspicious activities. However we can not provide security for bitcoins stored on users computer, so it is important to take additional steps to ensure that your bitcoin wallet remains protected from users other than yourself.
HOW LONG DOES DEPOSIT USUALLY TAKE?
A bank wire transfer typically takes 2-5 business days to reach our account. SEPA deposits must go through additional step of converting funds to USD, which can in some cases delay deposit for additional day. International deposits are processed and credited right upon receiving.
WHO PAYS THE WITHDRAWAL FEE?
Not regarding to withdrawal method, a fee will be displayed before executing the withdrawal and deducted from amount. SEPA withdrawals are charged with fixed 0.90€ fee once your funds are converted to EUR. Minimum amount for SEPA withdrawal is $10.00. International withdrawals are charged with 0.09% fee, minimum fee is $15.00. Minimum amount for international withdrawal is $50.00.
HOW LONG DOES WITHDRAWAL USUALLY TAKE?
SEPA zone transfers usually take 2-3 business days. For clients outside SEPA zone it takes up to 5 business days
Its very easy to open an account - just go to https://www.bitstamp.net and apply online. On that site you can also see the most recent trades and trend charts of Bitcoin trading prices.
The $300 I've directed to my account should be there tomorrow. I'm anxious to jump into this and start trading right away. Traded values go up and down a lot - just in one day - so it should be good fun! I ought to be able to make quite a few trades before losing the full $300
5-7-13 Update: Big disappointment today - the $300 that Bank of America said (5 days ago) they'd wired to my Bitstamp account had not yet arrived. So much for their advertised 2-5 days for international wires transfers. I tried to give B of A a piece of my mind, but they seriously short their customers on service - automatic telephone system run-around to an absurd level. (They have lost touch with why they exist. If you deal with their stock I recommend you sell it short. They really ticked me off!) Well, maybe my $300 will arrive tomorrow.
5-10-13 update Bought my first Bitcoin! Here's the transaction information (this was done via their instant trade option - I just specified I wanted to spend $140 toward the purchase of BTCs and the transactions at the current exchange rate occurred automatically):
They charged me $15 for the cash deposit I made to my account. Earlier my bank had charged $45 for the wire transfer to Bitstamp. So right from the get go I lost $60. But the 1/2% trading fee is not bad at all. So now my account balances are $144.98 plus 1.176 BTC. The $345 gamble has begun - hurrah!
5-24-13 Update I just sold the 1.17 Bitcoins that I had bought 5-10-13 for $140:
Sept 12, 2013 update:
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