BuySellBitco.in - 0.35 BTC give away to Indian users (Closed)

[buysellbitcoin]

Hi Community,

Buysellbitco.in daily gets lot of questions from new users inquiring about Bitcoins and how to use them. Below are some questions asked by our customers.
Submit your answers and you can win 0.3 BTC for the same if your answer is chosen as best by Benson.

Questions :

1) what makes the prices of bitcoins go high and low, i just didnt understand the concept??

And what is bitcoin address, is it our physial home address, or some email address ??

Where can I use these bitcoins?
Do Indian shoping websites accept them??

I mean tell what is the real advantage and use of buying them???

2) please help me understand the exact role of bitcoin in daily life and how can it replace currency notes and its functioning

3) 1st What is Bitcoin ?

Note : above are real questions asked by customers using our support channel exactly word by word. We answered all of them already but would like to know answers from community. In case you can post answer in Hindi too, we will add 0.05 BTC for the conversion too

Rules :
1) No disputes, No laundry cleaning in public, whatever Benson decides as winner answer will be paid. Full stop.
2) Winner will be decided on Monday 6th May.
3) Put your Bitcoin address below the answer.
4) You can answer one question or all question does not mater. The quality of answer will decide the winner.
5) The answer should be written for general public who sees bitcoin as Internet magic
6) Enjoy

Edit
Benson is also giving away 0.1 BTC for the best answer, so now its 0.2 BTC.. Am I eligible to post answer ?

Edit
infonetenergy is also giving away 0.1 BTC for the best answer, so now its 0.3 BTC.. looks like there are more donors than takers

[1715615556]

1715615556

[1715615556]

1715615556

[1715615556]

1715615556

[1715615556]

1715615556

[1715615556]

1715615556

[Benson Samuel]

I will add 0.1 BTC to this as well

So, the best answer, ie.. elevator pitch, wins 0.2 BTC

[buysellbitcoin]

I will add 0.1 BTC to this as well

So, the best answer, ie.. elevator pitch, wins 0.2 BTC

Great  and thanks for joining in the fun

Edited title to reflect 0.2 BTC now

Thanks,
buysellbitcoin

[infonetenergy]

I would like to contribute 0.1 btc for the winning answer as well.

- indiabitcoin.com

[buysellbitcoin]

I would like to contribute 0.1 btc for the winning answer as well.

- indiabitcoin.com

Great.. thanks
Expecting some one to come up with good answer for this, 0.3 BTC is good amount to spend some time to write answers

Cheers

[drdanishkhan]

OKaaay.. Here goes.. just the basic knowledge for newcomers..

1st What is Bitcoin ?

Bitcoin is a cryptocurrency ie online currency.. bitcoin started way back in 2008 and was created by a pseudonymous developer Satoshi Nakamoto..
He realised that our daily fiat currencies are being manipulated by the world govenments and felt the need for a currency which was un regulated and could not be manipulated by the world banks and so bitcoins were born.. its the currency of the financial revolution as i like to call it.. You gain bitcoins by iether mining it using computers or you can buy and trade them at exchanges like Mtgox.. the real advantage is that bitcoins are totally anonymous and doesnt involve any intermediaries like Banks.. its somewhat like barter system.. peer to peer..

What makes the prices of bitcoins go high and low, i just didnt understand the concept??

Well the prices of bitcoins ideally depends on the supply demand phenomenon..
However the recent price swing have many contributory factors

Factors which led to an increase in the prices of the bitcoins recently being :
1. Growing media attention..
2. EU crisis.. Greek economic collapse and austerity measures etc
3. Wider acceptability ie. bitcoins being accepted as a form of payment in some parts of the world
4. Increase in the number of people who are realizing the approaching financial collapse and have lost faith in the fiat currencies and are investing in     cryptocurrencies as they are less likely to be manipulated and are anonymous.. after all why should the government care where i spend my hard earned cash..
5. Growing Infrastructure.. like the upcoming bitcoin ATMs..
6. there is a fixed amount of bitcoins 21 million so the supply is fixed as more and more institutions adopt bitcoin the demand will increase.. so will the prices in the future..

Factors leading to decrease in prices:
1. DDOS attacks on various exchanges
2. Human psychology.. whenever an exchange is hacked or people perceive threat there are massive panic sells that cause the prices to drop because people wan to save as much as possible..
3. The fear of government intervention is also one of the factors that led to panic selling.
4. Greed and Hoarding.. Most people today are not willing to use there bitcoins as currency because they believe that the value per coin will rise in the future so its being treated like a stock.. since there is hoarding of bitcoins there wont be enough for exchange and the prices in due course will fall..

But we need to realise the true intent of bitcoins.. If the majority believe in bitcoin and its potential as an alternate non manipulative currency bitcoin shall flourish otherwise it will fail..
Today the prices are more or less speculative..bitcoin is a highly volatile market and as many wise people say.. invest only the amount which you are willing to lose.. and i would strongly advice all the same.. Do not be greedy.. bitcoin is not a get rich quick scheme as many believe, its a form of revolution and our stand against the fake fiat currencies..

Where can I use these bitcoins?

In India sadly there arent many merchants or traders willing to use bitcoin owing to the massive price swings.. However in US many small merchants and traders have started accepting bitcoin as the form of payment.. you can buy snacks like pizzas and coffee with bitcoins. and as the days pass more and more merchants will start accepting bitcoins and then perhaps someday it may replace the fake fiat currencies of the world..

Do Indian shoping websites accept them??

Sadly none of the indian shopping websites accept bitcoins as a form of payment at the moment.

What is the real advantage and use of buying them???

Well this is a question best answered yourself.. I bought bitcoins because i strongly believe that cryptocurrencies will replace the fake fiat currencies in the near future and therefore have bought some.. Its my stand against the manipulative financial banks who will in due course of time rob us of our hard earned money like what they did in EU..

Please help me understand the exact role of bitcoin in daily life and how can it replace currency notes and its functioning

First one must realise that the whole world economy is at the brink of collapse.. the world governments are in debt.. the value of the paper currency is getting reduced as more and more money is being printed and put into circulation.. so the basic fact is we are earning the same amount of money but the value of that money has decreased so now we are able to buy less good for the same amount of money.. to put it in simple terms evrything is getting costlier.. once the financial markets collapse i believe cryptocurrencies will replace the fiat currencies as the dominant form of payment for goods and services.. you can already buy snacks and stuff in US with bitcoins.. as more and more merchants adopt bitcoins it will eventually replace the currency notes.. Bitcoin is anonymous and doesnt rely on the banking system but is highly volatile.. once the markets settle down and theses price fluctuations normalize we can hope to see them being used in daily life.. in India however this may take a long long time..

I hope i was able to answere the questions properly and now the newcomers have some basic knowledge about bitcoins.. i sincerely hope we Indians realise the true potential of bitcoin and start accepting them in our daily life soon.. Best of luck to all bitcoiners !!

[Benson Samuel]

Superb effort on that piece.

drdanishkhan has set the benchmark.

[subvolatil]

Just because i think it  needs  improvement.  a bit of history and a short  explanation .

1st What is Bitcoin ?

Bitcoin is a   what you can call  a  new  type of  online  currency. A  crypto currency. This crypto currency was propose  in the late  90's by  a  group  known as cyherpunks who  mainly discussed about  cryptography and security and among them was,  for a currency that would  be  totally  anonymous and  free from the control of  large banks and governments. around  the late  2008 this guy named  "Satoshi Nakamoto" wrote a  rocking  paper  describing this  concept of a a P2P payment  system  that would  use the  concept  discussed  by the early  cypherpunks.
What bitcoin allows you to do is  to send  money to people,  make purchases, just like  real cash, only difference is this is online . Bitcoin in most ways  behave  like  hard cash . you can  give it to person to person,  you can  loose it, and  destroy it.
In simple terms  you can  do  with bitcoins what you can  with  hard cash, and much more.

And what is bitcoin address, is it our physial home address, or some email address
Well Bitcoin adddress is  different  from any other address system you may have encountered before, A bitcoin address consists of two addresses the public  address and the private  address.  Like the name  suggests the public  address is public and can be  distributed  to any one  and every one  without  any fear. the private address is the one you keep  very private and secret and  dont  even tell that to any one at all. You keep it so secret, that no one can access it.
A bitcoin address is a hash of a  public portion of a public/private ECDSA keypair.
and looks like this  - 31uEbMgunupShBVTewXjtqbBv5MndwfXhb.

What makes the prices of bitcoins go high and low, i just didnt understand the concept??

Ok price fluctuation in the market  for  bitcoin is almost the same  as any  open market  rate  fluctuation, many factors  determining  the rate and prices, just like in the stock market  prices  change to  environmental, social, and economical  changes the same with  bitcoins.
an  example  would be the recent  European financial crisis that hit  Greece and Cyprus, increased  demands for the  Crypto currency and increased  prices.
So  many factors  put in to  fluctuate market  rates.
    
Where can I use these bitcoins?

you can  use  bitcoins  with people and business  that accept  bitcoins.  as a new currency there are not many  brick and mortar  stores that accept bitcoins, but there are  online  services that may be purchased  with bitcoin.  and like  any  new  currency  the  growth is  slow  but  then number of  people and businesses  acepting  bitcoin  is increasing  exponentially .

Do Indian shoping websites accept them??

There are no major  online  shopping websites  that accept bitcoins in India, how ever that  would be  changes  as more  businesses  are looking  at alternative  methods of payments, and  bitcoin  is places to  be a perfect  online  transaction system.

What is the real advantage and use of buying them???

Why  because  the money  is with you. Because it  is  secure. it  cannot be manipulated by one  person, bank, or government. It does not care about  boundaries (there for being a  true  world currency). And  did i  mention that it  cannot be  printed  like  normal fiat  currency an  inflate the market.

Please help me understand the exact role of bitcoin in daily life and how can it replace currency notes and its functioning
For a  simple  reason that Bitcoin is  safe from  outside manipulation,  safe from double spending problem.  it  gives people  a alternative to Fiat currency. what bitcoin gives, is freedom  form the  economical  uncertainty we  face in the current  debt  payment  system.  

Send me the love here - 1HC6HXRrD6FhpTYmJZCXLkXMnpgTzJFmxj

[tryingtobeperfect]

Good one...
Been very busy. Will give my try 2maro:)
Regards

[legendster]

1) what makes the prices of bitcoins go high and low, i just didnt understand the concept??

I will try to keep things SIMPLE and in retrospective of a common man especially in INDIA who knows a little bit about how a currency works and how a normal forex trading works.

First why price rises : The price for any given currency won't remain the same.

Lets say I have 100 Green colored bucks (not mentioning any particular currency) AND lets say I want to sell these and get 120 RED colored bucks NOW because you are buying it from me and I am demanding a profit (of +20 red colored bucks).
THIS Profit level is determined by me as I am the seller and this is what I think I can make off of my green colored bucks.
KEEP IN MIND that initially the green & the red bucks were equal in value but as soon as I sell it at this price my Green Bucks become +20 more valuable than the buyer's Red bucks.
FOR the price of the currency to actually move up (or for me to actually sell my green bucks at this profit) there needs to be MORE BUYERS WITH RED BUCKS than sellers like me with GREEN BUCKS... ONLY THEN the price of my Green bucks move UP.

NOW why does the price of a currency fall ?

Simple if there are more sellers than buyers for my currency the price will fall.

The same logic can be applied to the Bitcoins as well considering the fact that Bitcoins are also a CURRENCY.

SINCE Bitcoins are fairly 'new' as a 'self sustaining currency' there are a lot of speculations that play into the factor of rising it's value or crashing it, market speculations etc etc.. JUST like a normal currency.

Remember that Buyers are people that want something that is in a limited supply. So when the demand is High AND the supply is low (or constant) the price rises higher.

In Bitcoins case the supply is always limited atleast till 2140 so it's value can be comparable to Gold.

And what is bitcoin address, is it our physial home address, or some email address ??

No not a physical home address but YES a lot alike and almost similar to an email address. Only difference here is that you get only payments as transaction and no 'emails'. These addresses can easily be generated by a Bitcoin wallet for free of cost. And you get your very own personal Bitcoin wallet that you can host on your computer from www.bitcoin.org

Where can I use these bitcoins?
Do Indian shoping websites accept them??

You can spend these bitcoins at any merchant's store that accepts Bitcoins. Currently there are a very few number of international websites where you can buy with bitcoins but no Indian ones.
Its almost like paypal that is until RBI banned them. It is new it will take time to find acceptance.

I mean tell what is the real advantage and use of buying them???

To be honest there is no real advantage in buying one currency against another unless you know that there is a huge boost to the value of that particular currency coming in the near future. With Bitcoins the Price has risen from mere cents to $200+ over the small life time it has lived so far and there is still more to come. But if you really get to the core of the coins then I can say bitcoins are great because there is no Third-Party Seizure which means that even the governments can’t freeze someone’s wealth, and thus the Bitcoins owners will have complete freedom to do anything they want with their money. The next great thing about bitcoin is that there are No Taxes here, other than voluntary donation; there is also no way to track a transaction other than a publicly announced bitcoin wallet address that links the owner of the wallet to all the transactions that occur on it.

But the most alluring fact to any merchant should be that in the bitcoin world there are No Risk of “Charge backs”.

I mean isnt this the reason why people / merchants hate Paypal or credit cards ??

I think these reasons are more than enough to describe how cool Bitcoins really are.

2) please help me understand the exact role of bitcoin in daily life and how can it replace currency notes and its functioning

I personally dont think Bitcoins will ever replace the paper currency. I mean just because the Internet exists doesnt mean no one uses the SW radio or the Post or paper-mail (bills/home posted bank statements/letters etc) .

But it WILL take over the online world very very soon. Just imagine you can send your money from one country to another without paying ANYONE in between not even the governments. This way if you want to buy something in USA being in India, you will be paying for the EXACT price of that commodity & nothing extra (other than the shipping offcourse )

But again in terms of a common man : An Indian worker working in Dubai can send money directly to his home without paying ANY KIND OF TAXES.

3) 1st What is Bitcoin ?

Bitcoin is the future of finances online and perhaps offline.

Quote me if you want to.

I m going to quote www.bitcoin.org

Bitcoin is a digital currency, a protocol, and a software that enables

    Instant peer-to-peer transactions
    Worldwide payments
    Low or zero processing fees
    And much more!

Bitcoin uses peer-to-peer technology to operate with no central authority; managing transactions and the issuing of bitcoins is carried out collectively by the network. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment systems.

If I DONT Win, just Donate I know you love me 1BrKv9h8RE5ovoJDDpJ6yaQom2RTYDbdNA

[Benson Samuel]

When does the contest end buysellbitcoin?

[buysellbitcoin]

When does the contest end buysellbitcoin?

Monday morning you will choose best answer

Regards

[rezurect]

What is Bitcoin? BTC
Bitcoin is a “digital currency” invented in 2008 by a cryptographic expert who went by the pseudonym Satoshi Nakamoto, and is absolutely brilliant it in its design. It exists only in computers, minted at a regular rate by a network of machines around the world (you can too), and its value isn't regulated by any government.
If you don't know why some intelligent folks are excited about the Bitcoin concept, you should take the time to understand. Bitcoin is a new form of currency that is accepted worldwide and can never be debased by politicians trying to get re-elected or countries trying to pay off huge debts.  In a world in which the value of paper money is constantly ravaged by inflation, that's a very attractive attribute. Also, the world is very much ready for a "global" currency. Bitcoin satisfies that need.
Bitcoins are like cash in that they aren't tied to your identity, and transactions made with Bitcoins are irreversible and untraceable. But they're like credits in a manner that they aren't physical. Bitcoins are a peer to peer system. Bitcoin allows me to transfer currency to you online, for free.

Is it secure? Can Bitcoin be hacked?
The Bitcoin algorithm was presented as a scientific paper and peer reviewed like any other scientific paper, the paper was widely accepted and is the sole fundamental of Bitcoin. The algorithm of Bitcoin has been designed so that it is resistant to quantum computers which have not been built as of yet.

What is Bitcoin backed by?
Lets look at our national currency, Indian Rupee is backed by gold.  All currencies are backed by gold or similar assets. Lets look at gold.
What is gold backed by? What decides the value of gold? Demand and supply.
What decides the value of Bitcoin? Demand and Supply. Like gold the amount of Bitcoins is limited, only 21 million Bitcoins will be ever produced.
The value of Bitcoin can be equated to how the value of gold is estimated.
So the "fundamental" value of Bitcoin can only be estimated the same way the fundamental value of, gold can be estimated — which is guessing at what someone will be willing to pay for it at some time in the future. The whole premise of Bitcoin is that only a finite amount of it will ever be created. This is in stark contrast to standard currencies, the supply of which is continually increased.

What causes the price of Bitcoin to fluctuate?
Bitcoin is in its infancy,  a free market currency whose price or value is determined by the demand and supply.  A multitude of factors could in theory affect Bitcoin prices, nobody in the current scenario can conclude that only a few factors affect Bitcoin, I will try to explain only “a few” that have had a considerable impact on Bitcoin prices recently, many more may be yet to be known.
Like gold prices that fluctuate due to a variety of factors, some of the factors which have been observed till date are listed below:

Media Exposure
The initial growth of the Bitcoin ecosystem and prices was attributed to media articles, familiarizing it to more people. The world’s supply of Bitcoins is essentially fixed, but because people in the media keep talking about it, demand keeps rising. This leads to higher prices—and as prices go up, people who currently hold Bitcoins develop greater and greater expectations for the currency.  Today, the excitement around Bitcoin is still confined to a tiny segment of the population — technology aficionados, monetary idealists and speculators. The potential for exposure is large.

Eurozone Crisis
A direct correlation between the Cypress bailout and Bitcoin price was observed. Some of the investors in Europe moved their investments into Bitcoin around the time of the Cypress bailout. This resulted in a huge cash flow into the Bitcoin ecosystem.

Hoarding
Demand crisis: Like any currency, Bitcoin is traded on exchanges,  Bitcoin holders  hoard their stash, which further reduces supply, which in turn boosts the price and sparks yet more media attention—and the cycle continues till profit selling takes place like in any currency.

Fear of Govt intervention
There is nothing illegal about Bitcoin . Cash is as anonymous and not tied to identity. But could government grow increasingly interested in defending its paper-money monopoly? We've already seen hints of this. But because the market is already huge and global ,there will be growing attempts to control it, tax it and regulate it.

Trading Exchange outages
Trading exchanges like MTgox which handles almost 70% of trade have  seen trading halted due to DDos's, but such events are seen to be temporary and the a price fall due to a DDos is usually recovered when trading resumes to normal levels, leaving only a temporary effect. Smaller exchanges have been hacked due to insecure design of the sites . The interim crashes could be sharp and scary. The Bitcoin algorithm, system and framework itself is preternaturally sound.  As with any new creation, there are glitches and vulnerabilities that still need to be worked out in trading exchanges.

Vendor acceptance
Bitcoins remain very much a niche payment method. In accepting the currency there is a small circle of large Internet companies’ participating in the system. Others include WordPress, which will sell you everything from Web hosting to CSS packages in exchange for Bitcoins. WikiLeaks and 4chan are part of a growing list of online organizations that accept Bitcoin donations. As vendor acceptance improves the value of Bitcoin as a currency improves.

Free market currency
Being in its infancy, Bitcoin will see wild price swings till it becomes established as a currency. The market is still in a price discovery stage and is expected to stabilize at a certain point, where its value and place as currency is usable in daily life.

Where are Bitcoins stored? And what is a Bitcoin address?
Bitcoins can be stored on your computer using  a wallet software (equivalent to the wallet in your personal pocket) which is open source and can be downloaded, or in an online wallet. Both methods provide you with an address which you use similar to a paypal address. Send the address to people from who want you to receive Bitcoin from. You can mine Bitcoin or buy them from trading exchanges. To store them you can use Software, Mobile or Web wallets.
Download a wallet: http://bitcoin.org/en/choose-your-wallet

Where can I use these Bitcoins?
So what can you actually buy with Bitcoins? It turns out that once enough different companies accept Bitcoins that you could use them to buy almost everything you might need. Want to buy clothing, homemade cosmetics or train tickets? Bitcoins can do all that, and more.
More than a 100 small organizations have started accepting Bitcoins. It is expected that it is just a matter of time before real world adoption increases. E commerce websites are expected to join suite. Sadly no Indian shopping websites have started accepting Bitcoin yet, and may take a long time.

Here is a small list of known Top 20 Bitcoin accepting organizations:
1   Wordpress
2   Pirate Bay
3   Reddit
4   Internet Archive
5   4chan
6   eztv.it
7   Lumfile
8   Filecloud
9   Torrent Leech
10   LewRockwell
11   OKPay
12   Slysoft
13   LAIMC
14   WrapBootstrap
15   Tor Project
16   What.CD
17   Erowid
18   Wikileaks
19   MtGox
20   GoldMoney

Indian sites:
http://buysellbitcoin.com
http://indiabitcoin.com
https://rbitco.in
http://http://www.bitocean.in

Source: https://en.Bitcoin.it/wiki/Bitcoin_Ladder
The official list of Bitcoin accepting organizations can be found below:
https://en.Bitcoin.it/wiki/Trade
https://en.Bitcoin.it/wiki/Business_and_organizations_that_%22also_accept_Bitcoin%22,_but_do_not_revolve_around_Bitcoin

What is the real advantage and use of buying Bitcoins?
Strengths:
Non-discriminating: Single Global currency
Increasing popularity.
Can be exchanged with conventional currencies.
Secured by intractable cryptography.
Limited number of coins to be produced (cap at 21 million), no inflation.
For Bitcoin, no third party is required as a clearing house like banks, unlike when dealing with conventional currency.: No exchange commissions or taxes.

Opportunities:
To replace global currencies or take a portion of the market.
Become a relevant currency for global online trade.

Role of Bitcoin in daily life?
Fiat paper currencies are a relic of a past age. It has proven to be a spectacular failure, giving rise to inflations and unending booms and busts. As technology progresses, markets look for an alternative. A single global digital currency is certainly in our future. Bitcoin is just the most successful example of that so far.
Bitcoin can be easily used for international transfers without paying commissions to third parts like banks and cutting down transaction times for bank wires  from days to hours for a Bitcoin transaction. Bitcointalk.org has an Indian community where you can find Indians using Bitcoins in transactions. Bitcoin can be used as a currency for Investment or Trading in India till vendor acceptance reaches critical levels to take off. Being an early adopter has advantages. Simply put, since 2009 there has been no asset class on the planet which has increased in value more than Bitcoin. As entrepreneurs and investors, that makes Bitcoin extremely relevant. As an entrepreneur Bitcoins can help you reach out to an international clientele, its single window payment allows customer reach to any country without the hassles of international wire transfers.

Final thoughts
It is always prudent on your part to view Bitcoins objectively and arrive at its value in your life. In my view, Bitcoin is the Internet, applied to Money. We need to remember that Bitcoin is not a stock, a company, or even a regular commodity. It is a technology. That technology is a payment system that is evolving into a real currency. Right now, its most spectacular use is in transferring funds from one person to another. It’s as easy as sending a text message on a phone. We live in a digital age. We need a digital currency.


Additional Info:
For the academically inclined:
http://codinginmysleep.com/khan-academy-bitcoin-videos/

<iframe width="640" height="360" src="http://www.youtube.com/embed/Y-w7SnQWwVA?feature=player_embedded" frameborder="0" allowfullscreen></iframe>

[Amitabh S]

Here is my go at it:

1 What is Bitcoin?

Bitcoin is a peer-to-peer (P2P) digital currency. The word "P2P" implies that there is no cental controller. Bittorrent is another example of P2P technology. In bitcoin, the entire network of connected clients collectively act as the controller of bitcoins. Unlike bittorrent (which uses tracker sites to connect), Bitcoin uses a different bootstrapping mechanism (see bootstrapping)

Bitcoins can be generated ("mined") if you have a very fast computer or purchased for fiat. The difficulty of mining is collectively adjusted by the network to maintain a pre-determined rate of generation (25 bitcoins every 10 minutes on average).

In short, bitcoin is a payment system with its own currency and
- no central controller
- instant transfers across globe
- censorship resistant

2 what makes the prices of bitcoins go high and low, i just didnt understand the concept??

Bitcoin prices are based on demand and supply. Since the number of bitcoins are limited, there is limited supply. Demand is based on a combination of speculation and need. Silk road is one place where bitcoins are always needed as it is the only accepted currency. External events also affect the prices. For example, if major exchanges get hacked or closed down, prices go down because people start losing trust in the currency and panic selling.

The reason prices are so high is because there are exchanges that allow seamless conversion between btc and fiat. Without a reliable way to convert bitcoins, the prices will likely go down.

If you have a lot of bitcoins or fiat, you can make the prices go low or high by dumping or buying bitcoins at exchanges.

There is no one "current price" of bitcoins. Each exchange has its own rate, though most of the time, the rates are very close to each other. Most people use MtGox for the default exchange rate as it has the largest trade volume.

3 And what is bitcoin address, is it our physial home address, or some email address ??

A bitcoin address is like an email address. It is definitely not physical. It is actually the base58 representation of the SHA256 hash of a public key.
It is called an address because bitcoins are attached to that string. Anyone knowing the private key can spend those bitcoins.

A wallet stores the private keys. The public keys (and addresses) can be generated from the private key, but not the other way round.

   Private key    --easy-->    public key    --easy-->    address
   Private key    <--hard--    public key    <--hard--    address

4 Where can I use these bitcoins?

Bitcoins can be used for buying virtual goods such as web hosting, other virtual currency (LTC, SLL), real goods (bitcoinstore.com, bitmit, etc)
 
5 Do Indian shoping websites accept them??

AFAIK as of now no Indian sites accept them. This should change soon.

6 That is the real advantage and use of buying them???

Advantage: investment (prices will mostly go up), no central authority can control your money. No bank can close your account, and of course use as currency to buy stuff.

7 The exact role of bitcoin in daily life and how can it replace currency notes and its functioning

If bitcoin is an investment, you can see it make a difference in your daily life when you get rich (or broke) due to bitcoin.
As bitcoin prices stabalize, we will see more and more people, shops accepting bitcoins. Bitcoins have a lot of advantages over fiat:
-You dont need to go to an ATM to get money
-You dont need to wait several days when doing online transfers
-Payments are irreversible (can be a disadvantage too)
-You can send money across international borders instantly, privately
-You don't need zillions of documents and address proofs to have a bitcoin address
-You don't need to worry about leaving bitcoins in your shirt pocket before giving it for washing

[Benson Samuel]

When does the contest end buysellbitcoin?

Monday morning you will choose best answer

Regards

Alright, I will lock the topic tomorrow morning.

[buysellbitcoin]

Thanks to all the submissions. Feels really good when people take time to involve in discussions. Thanks all for providing the detailed answers. Almost of them had something that we can use for New user tutorial

@Benson, please send BTC address for sending the 0.1 BTC.

Note : Best answer chosen by Benson can submit Hindi version to claim 0.05 BTC for conversion too. 

Cheers

[legendster]

Yeah & dont forget to PUBLICLY announce who won

[Benson Samuel]

Locking the thread now.

Winners will be announced by tomorrow. There is Too much to read.

[Benson Samuel]

I would like to thank everyone for taking part in this contest. A special thanks to buysellbitcoin who kickstarted this event as well.

I read each of the answers comprehensively and looked for traits of ease of explanation, complete info provided, presentation & simplification of concepts.

Based on these stats, I would single out rezurect and Legendster as the best entries as per my judgement. I did feel that all the entries justified a prize, however all we have is 1.

I would pick rezurect's answer as the winning answer for this contest. The winning prize is 0.3 BTC and 0.05 will be added for a translation to Hindi.

I am keeping this thread open for feedback and confirmations for the winning entry and for the Hindi translation as well.

One question that everyone got wrong was the presence of online stores in India. We do have bitocean.in and rbitco.in stores that accept Bitcoin for physical goods. These are the most important building blocks of the Indian ecosystem.
Not having an exchange is a small short-term problem. Adding services and stores to work around BTC is a quick solution to several problems including the lack of an exchange.

Winning payout will be made in few hours once the discussions slow down.

[Benson Samuel]

Someone had also mentioned an example of INR being backed by Gold.

This article will shed some light on how weak the INR is. And no, it is not backed by Gold completely.

http://seshnath.blogspot.in/2011/04/us-dollar-indian-rupee-and-gold.html