btcthinker

Bitcoins are just cryptographically signed accounting entries in a public ledger. The ledger is distributed (torrent style) to participating bitcoin user/nodes, so there are multiple identical copies of the list all over the internet. This allows each user to independently verify every transaction that has ever occurred.

A bitcoin user may have several wallets, which are just cryptographic signatures that allow them to sign transactions on the ledger (i.e. transfer/spend their bitcoins). The wallet is usually stored on the user's computer or on an online wallet service.

For anybody interested in getting into Bitcoin or just learning about them, I would recommend the stackexchange for Bitcoin as an excellent resource for some really high quality answers on may of the commonly seen questions: http://bitcoin.stackexchange.com/questions?sort=votes

If I get paid in Bitcoins, what happens?

You got paid with Bitcoins... that's about it and you're one lucky person!

Where do I get the money and how do I use it?

You can mine it, but mining is very difficult now and requires expensive specialized hardware. Or you can buy it on one of the many exchanges (just like you would with any other currency):

• In person: www.localbitcoin.com
• Online exchange: www.mtgox.com, www.bitstamp.net
• Coin brokerages (you can pay for Bitcoins at Wal-Mart): www.coinbase.com, www.bitinstant.com, etc.

What is the value of a bitcoin?

There are two ideas of value which one may have about Bitcoin:

1. The value of Bitcoin in terms of its utility.
   
2. The value of Bitcoin in terms of its exchange rate . As of posting this comment, the exchange rate is about $47.50 per BTC.

There are multiple factors that affect the value of Bitcoin, just to name a few:

• It can be used as a payment method: no transaction fees, (pseudo)anonymously, non-reversible transactions and quick processing times (between 10 and 60 minutes).
  
• It is also used as a store of value, because of its limited supply nature.
  
• It empowers the users with political freedom from governments who are bad at setting a good monetary policy or even oppressive governments.
  
• It gives people financial freedom by taking away the power of the big banks over monetary policy and artificially low interest rates.
  

How do you earn them, the website says you can earn a very small account by doing surveys, but doesnt that give spammers free reign?

Earning them is a matter of working for somebody who is willing to pay you in Bitcoins or you can buy them at an exchange. I wouldn't trust anybody to give me free anything, let alone money, so I would exercise caution when you hear "earn free dollars" or "earn free bitcons." Common sense FTW!

Why should I trust bitcoins to be my payment method instead of Paypal? How will I explain it in the simplect terms to a non internet guy?

Bitcoin is the closest you will ever get to a cash transaction on the internet: this reduces fraudulent transactions which are a plague to online retailers who have to deal with chargebacks all the time. Furthermore, you are completely free from the political pressures a government can exert on a payment processor like PayPal. For example: with PayPal it is perfectly OK to donate money to the KKK, but not to WikiLeaks!

If someone sends me a bitcoin, can my ewallet be deleted by physical actions?

Easily, but most ewallet services have numerous backups to ensure that your wallet is safe no matter what.

Can I convert my bitcoins into my local currency as I suppose only major stores in US accept bitcoins as of now?

Yes, but you would have to find somebody to exchange them locally, visit www.localbitcoins.com or ask around on the IRC channels for people willing to trade locally.

Are bitcoin transfers tracked by custom and taxencies?

Not yet, but even if they tried to it would be very difficult for them to establish the identity of address holders.

Is there an eligible age below which it is illegal to set up an account?

No, just as there is no eligible age for holding a dollar bill in your hand or no eligible age for exercising free speech.

Depends how much you want to buy and how you want to buy them. It all just boils down to what are the fees you're going to experience.

Funding your online exchange account will incur you a $30 wire transfer fee from most US banks or if you're in Europe you can transfer the money for free in the SEPA zones. Exchanging the money will cost you about another 0.5%, so if you want to keep your fee around 1.5% (for US users), then you must exchange more than $3,000. If you haven't setup an online exchange account, it may take several days for the whole process, but you can go on cruise control after that. I frequently exchange Bitcoins and the money gets transferred quite quickly into my bank account (1-3 days now).

If you're want to use a broker, then you will experience about 5% fees (if I calculate things correctly) and you will be able to pay for your Bitcoins at many local stores or by utilizing many standard payment methods. It's probably one of the fastest ways to get Bitcoin.

Finally, if you're looking for really fast and anonymous purchase of Bitcoin, you could go local, but the exchange rates tend to be high there. It is totally understandable for the exchange rate to be higher, because the person has to meet you face to face and take time away from their busy schedule to accommodate the sale.

[Edit] P.S. The websites that I mentioned in my previous post are all good places to get Bitcoin. I use MtGox, my friend uses BitStamp as exchanges... all great stuff.

Read all the questions and answers in this AMA :).