The Hobbit

how did bilbo discover the power of the ring

gollum told him

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This is an interesting question. Iā€™m going to sound like an uber-nerd but here is the story. Bilbo finds the ring while getting lost in the goblin tunnels where Gollum happens to live. In the first version of The Hobbit, Gollum gives up the ring playing the old riddle game. Later Tolkien fleshed out the trilogy and realized the power the ring had to have. He revised the story to have Gollum chasing Bilbo out of the tunnels. It is here when Bilbo slips on the ring and discovers its powers of invisibility.