We have all heard that Bitcoin is called “electronic gold”, “gold coins”, and other allegories. But now these are no longer just beautiful words!
In March of this year, another historical fact was recorded - Bitcoin’s price became equal to real gold, reaching $1,238. Now, at the end of November 2017, the price for 1 BTC is as much as $8,200. The coin is growing at a breakneck pace.
Skeptics argue that this cryptocurrency is just a dummy, not backed by anything. Yes, that's right. But what is gold in its essence? People, come to your senses, it's just metal! He is also not provided with anything. Its value lies only in the fact that society has agreed among itself to consider it valuable. Everyone just believed it. It's the same with Bitcoin. As long as they believe in him, he has power.
Briefly what is the essence of Bitcoin?
Bitcoin (English Bitcoin, from bit - “bit” and coin - “coin”) is a digital currency that can be used to pay on the Internet. You can instantly send digital coins directly to anyone anywhere in the world (“peer-to-peer” - from peer to peer), and this does not require a bank or any other intermediary, which means there are no transfer fees exists!
This is the first and very significant plus - that is, you have already immediately saved up to 30% (comparing, for example, with expensive Western Union transfers) just because you do not pay the bank for its services.
So why is Bitcoin (“cue ball”, BTC) now at the peak of popularity? From the beginning of 2017 until today – November 2017, the most expensive cryptocurrency in the world has grown approximately 8 times. Its cost rose from $950 to more than $8,000 per unit. It’s not for nothing that this currency has received so much attention lately, because it has already become part of our everyday life, and it seems that forever.
Advantages of “digital gold”:
- no commission for transfers;
- transfer speed is instant;
- the currency is international, can be sent and received in any country, it has no borders;
- reliability - the currency cannot be counterfeited, the operation cannot be carried out dishonestly;
- anonymity – the participants in the transaction know only each other’s account numbers, names are kept secret;
- not subject to inflation;
- is a convenient virtual alternative to real money.
The money we are used to is divided, as we know, into 100 parts, and one hundredth is a penny or a cent. Bitcoin can be divided up to 8 digits, which means that even one hundred millionth part can be used in circulation - that is, 0.00000001 BTC. This tiny particle is called after the creator of this currency. This is incredibly convenient, since you can even list minimum amounts with no commissions.
Another interesting fact inherent in the Bitcoin algorithm is that the total number of issued coins is 21 million. When this figure is reached, the program will stop issuing coins forever. Based on calculations, this will happen no later than 2140. Now the number of units produced has already exceeded half.
The reward that users receive for creating a new block becomes smaller over time. Until 2013, it was equal to 50 coins, later it decreased to 25, and now it is only 12.5 BTC. Thus, the excitement is growing, and earning the coveted coins is becoming more and more difficult.
Of course, Bitcoin is a pioneer in the world of cryptocurrencies, but today it has many competitors, such as , Dash, NEM, Monero, NEO, and hundreds of other digital currencies, the total number of which has already exceeded a thousand.
In 2008, someone under a pseudonym created electronic system payments and launched the Bitcoin network, and also released the first version of the wallet of the same name. The identity of this person is still unknown, and there are a lot of rumors about this on the Internet. There are speculations that he is American, or even that it could be a group of people. The lack of information on the Internet has become a source of humor; some have already begun jokingly calling him Santa Claus or even an alien.
But seriously, one thing is obvious - Satoshi Nakamoto is an incredibly rich man, and he no longer needs to support the system. According to his own statement in 2011, he decided to retire.
In 2010, an American from Florida named Laszlo, who became interested in new virtual coins, decided to have fun on a forum of like-minded people and, as a joke, promised his Bitcoins to anyone who ordered him pizza. And such a person was found, buying 2 pizzas in exchange for 10 thousand BTC (about 25 dollars). This became a historical event, because after a couple of months they were already worth 600 dollars, and after six months - more than 2.5 thousand dollars. Now this amount corresponds to 80 million US dollars. This example very clearly demonstrates how fast growth is.
One of the sites informing about cryptocurrency rates even listed the cost of that pizza at the current rate as a separate item, as an illustrative example.
Bitcoin Followers
Roger Werr invested $1 million in Bitcoin in 2011, and after 2 years its value increased 100 times and amounted to $1 billion. Now he is a multimillionaire and is encouraging others to believe in this cryptocurrency. He is called the Jesus of Bitcoin, as his belief in the power of the currency is close to religious. There are many such people - millionaires, entrepreneurs, stockbrokers. The distribution of gold coins in the world is carried out not by a financial organization, but by a public organization - the Bitcoin Fundation, registered in the USA and one of the most influential. He also advises the legislative bodies of world powers.
“One day, 1 Bitcoin could be worth hundreds of thousands, maybe even a million dollars,” says Werr and encourages everyone to join the movement.
For many, the collapse of the MtGox exchange was a huge shock. The exchange operated in the USA, although it was officially registered in Japan. Thousands of people kept their Bitcoin savings on it, since it was the largest in the world (almost half of all BTC transactions were carried out through it), but in February 2014 its website became unavailable. According to the developers, due to an error found in the program, hackers stole more than 750 thousand BTC (at the exchange rate of that time, half a billion dollars). Then 127 thousand people went bankrupt.
But the vulnerability was found not in Bitcoins, which are almost impossible to counterfeit, but in the structure of the exchange itself. After the incident, there were rumors that the organizers themselves profited from the incident. Well, no money in the world is 100% insured against theft.
It is surprising that it is in the United States, against whose financial system Bitcoin is fighting, that this currency has become most widespread. Specialized exchanges appeared, and the installation of bitcoin terminals began, exchanging bitcoins for dollars and vice versa. Some are already even paid in BTC.
Many world-famous companies began to accept this cryptocurrency as payment for their goods or services provided, for example, Lamborghini, Microsoft, Skycraft Airlines, etc.
Also in some countries, Bitcoins can be used to rent or buy housing, buy air tickets, equipment, luxury goods, and even get an education. It is convenient to donate them to charity.
In Russia and in the countries of the former USSR, you can use BTC to make purchases on Amazon, Ebay, and purchase applications on App Store, pay on various websites and online stores, and even get legal advice. With this cryptocurrency you can buy tickets to various entertainment events, for example, cinemas, theaters, concerts, etc. Some advanced shops and cafes, flower delivery services and even taxi services accept it. But of course, so far in our country these are all special cases and rather exceptions to the rules, which are implemented only by some organizations, following the fashion trend in order to stand out from their competitors. And we are not yet talking about such a widespread prevalence as in the USA, Japan and Western Europe.
In many countries around the world, authorities do not treat cryptocurrency very well, since it is independent in nature. And this is inconvenient for power structures that are accustomed to keeping everything under their control. It is believed that such means of payment contribute to the shadow economy, and digital income cannot be recovered.
In Russia, the government discourages the use of cryptocurrencies, believing that it may facilitate money laundering and terrorist financing. But so far there is no law either allowing or directly prohibiting the circulation of Bitcoins.
The uncertain status of digital money in most countries of the world, which have not yet decided how to regulate their circulation, somewhat slows down investors, causing them to doubt. But despite this, people with the firm intention of getting Bitcoins cannot be stopped.
The anonymity of the system can play a cruel joke on society, as it provides ample opportunities for everyone indiscriminately, including the criminal world. There is a well-known example of the illegal online store Silk Road in the USA, which sells drugs and uses the anonymous Internet network Tor, which is not indexed in the Internet. search engines, and for payment the Bitcoin network. He sold psychotropic substances: LSD, marijuana, heroin, as well as pornography and other prohibited goods. The FBI seized his accounts, which contained about 30 thousand BTC, equal to 25 million dollars.
Another criminal project operated in the same way, which invited visitors to “chip in” money, and specifically Bitcoins, to order killers to kill various well-known political figures. Through this site, performers could accept an order and receive their reward for its execution, and the creators of this resource could receive a commission from this amount.
In addition to the well-known individual mining, where you rely only on yourself and your own equipment, there are 2 more ways to mine crypto:
- Mining pools. Since it is very difficult to carry out successful mining alone, especially if you are a beginner, you can join together in interest groups, so-called pools. You can connect your PC to a data center (pool) and make sure that by working together, finding new blocks is much faster and more efficient, although the reward earned will have to be divided among all participants in the process.
- Cloud mining. The idea is to increase the mining speed for a certain amount and for a certain period of time, in return receiving Bitcoins mined on a cloud server. Pros this method are that you do not need to control the process of mining crypto coins, or incur costs for the use of electricity and equipment.
Where can you buy Bitcoin:
- large and small exchanges;
- private online exchangers, usually offering small amounts with minimal interest;
- ordinary users, acquaintances or strangers, met on the Internet;
- special bots in messengers;
- if you have your own website or online store, do you provide any paid services or you sell goods - you can start accepting payment for your activities also in cryptocurrency, indicating your bitcoin wallet or the QR code that was created there in promotional materials;
- You can also win BTC coins in a casino, or place bets on various competitions, thereby increasing your capital.
It’s difficult to do, since the situation can change in the most dramatic way: today everyone is a fan of Bitcoin, but tomorrow some more advanced, technologically advanced and convenient tool will be invented, and investors will move there. Now there are so many bright minds of programmers, mathematicians and analysts working in this area that technological leaps are simply inevitable. But whether the next stage of development will benefit Bitcoin or not remains a mystery.
Predicting the growth of the exchange rate in the coming years, analysts are conditionally divided into 2 main camps:
- Skeptics believe that the value of Bitcoin is artificially inflated to incredible limits, and this “bubble” will burst sooner or later. They are also confident that the growth of the token will at least stop, and soon its value will begin to fall. Their main argument is that the authorities of most countries are against the legalization of cryptocurrencies. Another argument “against” is that if the crypto is stolen or lost, no one will compensate for your losses. Therefore, it is necessary to raise the question of increasing the security of electronic wallets.
- Optimists who firmly believe that Bitcoin’s growth may have no limits, and fuel this belief among the entire population. They predict figures reaching up to 200 thousand dollars per 1 BTC, and they consider this not fantastic, but quite real prospect, which may come true in a dozen years. The main thing is that this crypt is not moved by competitors.
We can also highlight the position of realists, who are not so susceptible to general insanity, but also are not ossified conservatives in financial matters. More or less adequate forecasts indicate that the exchange rate at the beginning of 2018 will remain at around 10 thousand dollars. It is possible that it will not take off as rapidly as before, but sharp collapses in gold coins are not expected. Bitcoin's capitalization will be comparable to the strongest national currencies. And here a life-or-death struggle between traditional currencies and cryptocurrencies will begin, as world domination will be at stake.
Cryptocurrency is a digital currency that has significant differences from real money. The former are code based on a special chain of blocks called a blockchain. This feature allows any cryptocurrency to be maximally protected from hacking. It can only exist on the Internet.
To mine coins, specially built farms with large computing power are used. They are necessary to solve blocks from the blockchain, for which they give cryptocurrency.
The very first and most popular of them is Bitcoin. Appeared in 2009 thanks to the efforts of Satoshi Nakamoto. Until now, no one knows who this person is, which once again confirms the security of the crypt as a whole.
Until a certain time, I could not find good value for myself, and those programmers who knew about the system and the coin did not believe in their success, but later there was a real “boom”, after which the whole world learned about Bitcoin. Today, hundreds of thousands of transactions take place every day.
In order to store bitcoins somewhere, you need to create a wallet that has a public address and private key. The first is the wallet number, you can transfer funds to it (an analogy can be drawn with any electronic wallet services, such as YaD, WM, Qiwi, PayPal), and the second is the password, which is known only to the owner of the address.
Transactions are carried out using blockchain - a chain of blocks that cannot be hacked. Information is transferred from one block to another, which allows you to create not only a secure coin, but also a decentralized one - one of the biggest advantages of any cryptocurrency, because it becomes beyond the control of any government.
Blockchain operation consists of five stages:
- Decide on the network within which the transaction will take place.
- The operation enters the network, after which a new block is formed, which has a connection with the previous block. This creates a chain of blocks.
- After creating a new block, information about it is distributed to all nodes of the system, which makes it possible to enter the block into the database.
- After this, the block receives its place in the chain, as well as a private key, which gives access to information only to its owner. Everyone else can only find out general information about the operation performed.
- Now the block is a full-fledged part of the entire chain.
What is a Bitcoin address
A Bitcoin address is an alphanumeric account identifier that can be interpreted as a QR code. Each address has an owner, but there is no information about him. Anyone can get an address, you just need to set it software for BTC.
The address will be used as a wallet in the systems electronic money. Unlike them, identity verification is not required here, which allows you to make the owner anonymous.
What can you do with virtual money?
Bitcoins allow you to make transactions. The transfer of funds can be aimed not only at the exchange of large amounts, for example between global companies. BTC can pay for something ordinary person, For example:
- restaurant;
- hotel;
- Internet;
- goods;
- utilities, but only in some parts of the world;
- car rental and much more.
The development of Bitcoin allows us to find more and more places where crypto is accepted. But if this type of money is inconvenient for a person, then he can easily exchange it for USD or Euro in an online exchanger that works with coins.
Also, some people make money on Bitcoin. There are many exchanges that allow you to trade cryptocurrency just like real money. If you have enough experience and knowledge, you can get a large influx of funds, but you can easily go bankrupt.
How to earn them
There are several ways to earn money. Each of them has its pros and cons, so you should carefully consider all methods.
Mining (classic, cloud)
Mining is the extraction of currency using computing power. This is the first method used by enthusiasts to obtain virtual coins. For the classic version, the user will need a real farm consisting of a large number of video cards, processors or other components.
Such an event was especially profitable at the beginning of the journey.
The fact is that the number of bitcoins is limited, and to prevent people from “mining” all the coins today, the problems that must be solved by computers are constantly becoming more complex, making mining less profitable every year.
When taking into account everything necessary to build a farm (expensive equipment, cooling system, supply of sufficient electricity), many abandon the idea of creating their own mining point. It simply ceases to generate significant income.
Cloud mining is mining that uses rented power on some large farm. The client simply pays for the rental of the power he is interested in, which produces a certain coin, for example Bitcoin, and then waits for the receipt of funds.
In fact, such services are located mainly in countries with cheap electricity and cold climates, which allows saving on cooling costs and increasing the efficiency of the farm.
Buying and selling
All cryptocurrencies have a feature - instability. Bitcoin can drop several thousand dollars in one day and then rise to a value that exceeds that amount. Thanks to this, many traders are moving from the world of forex, securities and real currencies to crypto.
The system of making money on purchases is very simple:
- The user tries to buy BTC as cheaply as possible.
- When the rate rises, BTC is sold.
Thus, the user receives a profit expressed in monetary value. But there are a large number of scammers in the exchange industry, so before choosing the exchange on which you will work, you need to familiarize yourself with its reputation.
Bitcoin futures
Futures are a financial instrument that has its origins in a derivative. A derivative is an agreement between the parties to a transaction based on the future value of an underlying asset. To complete a transaction, you will need an underlying asset, which in this case is Bitcoin.
Futures are the most common type of derivatives transaction. This is a forward contract that allows you to buy or sell N-amount of an asset at a fixed price up to certain point time. When the period expires, an obligation to buy and sell between the parties must be completed. Selling the futures themselves is permitted until they expire. The futures are transferred as part of the full value.
The average futures price varies around 10-15 percent of the total transaction amount. Such a transaction allows you to receive a relatively high income compared to ordinary purchase and sale.
The cost of Bitcoin is 10,000 USD, but the trader expects a further increase to 14,000 USD, so he enters into a futures contract for 1 month with 10 percent collateral. This made it possible to purchase BTC at the market price.
As soon as the price reaches 14,000 USD, the contract can be sold to another market participant, receiving additional funds (in this case, 10% of 14,000 USD = 1,400 USD). But you can also keep the contract if forecasts indicate a further increase in value.
But provided that the price has not reached the specified point (in this case - 14,000 USD) after the expiration of the contract, the transaction is closed at the market price. This prevents you from losing more money than was invested in the contract.
Advantages and disadvantages of cryptocurrency
Cryptocurrency, like any phenomenon, has its pros and cons.
Advantages:
- Cash coins can be obtained through mining. In this case, classic or cloud mining can be used. Today, the second method is more preferable, since the threshold for entry into it is much lower than when purchasing your own computing power.
- Transactions are completely anonymous, and access to the wallet number does not provide any information about its owner.
- The coins are completely decentralized thanks to the blockchain system, which does not have a specific place of existence. This allows you to get rid of the influence of politics and any state on the crypt.
- Each cryptocurrency has a limited circulation (a limited number of blocks that can be generated), which prevents over-issuance from occurring in any case.
- The cryptocurrency is well protected thanks to a unique electronic code. This allows you not only to protect yourself from thieves, but also from counterfeit coins.
- Transactions have minimal fees. The only option to lose funds during a transfer is to use banks and other third parties (for example, exchangers that allow you to get fiat money for bitcoins - real currencies: euros or rubles).
Flaws:
- Losing the wallet password or the wallet itself means a complete loss of money. This is a negative side of security, since only the owner of the address has access to the password.
- High volatility has a negative effect on the exchange rate of coins - it can quickly soar and fall just as quickly. This makes any crypto completely unpredictable. The USA and China have a particularly strong influence.
- Cryptocurrencies may be prohibited by various legal structures, or restrictions may be placed on transactions with cryptocurrencies.
- With each block mined, it becomes more and more difficult to obtain the coveted reward. This is due to the limited number of available coins in the system.
Bitcoin is a promising direction, but very unstable. It is for this reason that countries are not ready to accept crypto as equal to regular currencies. Because of its apparent simplicity, the concept of Bitcoin can become known to every person, but in fact, behind the simplicity of any crypt there is a blockchain, the capabilities of which are still not fully known.
Hello, in this article we will talk about the virtual currency - Bitcoin.
Today you will learn:
- How to earn bitcoins with and without investments.
- What to do with bitcoins.
- How much do they earn?
Working ways to earn bitcoins
First, watch a 3-minute video that literally tells you about the Bitcoin cryptocurrency:
Earning bitcoins using a computer is becoming more difficult. Just a few years ago, when Bitcoin was just beginning its “promotion,” it was possible for anyone to earn the average salary of an office worker. Now, with the advent of the big one, we have to come up with new ways real earnings coins.
Mining
Mining- This is currency extraction using a video card, one of the first ways to earn cryptocurrency. It has its drawbacks, although it is considered the most reliable and profitable.
About two years ago, you could earn money thanks to a video card, which did not require any expenses. The whole point was that the currency “hunter” built gold mines in a game form, extracted gold and exchanged it for real money.
Now, in order to earn money, you need to create or buy a special computer configuration with an expensive video card. Not only will the configuration cost a lot of money, but you will also have to pay twice as much for electricity. That is why mining, as an unprofitable method, goes down a step from the top every month.
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Advantages of mining on your own computer |
Disadvantages of mining on your own computer |
| 1. It is possible to sell equipment at a discount at any time. 2. Complete minimization of speculation. 3. You choose which currency to “hunt” for. 4. Automatic earnings of bitcoins. |
1. Equipment handled in this manner has a high risk of breakdown. Added to all this is the low likelihood of warranty service. 2. Noise and double the electricity use. 3. It is not possible to create large farms in your own apartment. 4. Due to Internet outages, work is completely interrupted (even if it has lasted for several days), and the farm has to be started again. |
The offer of mining among “hunters” is considered only if it is possible to pay half the cost of electricity or not pay for it at all.
Cloud mining
The essence of cloud mining is that you don’t have to spend money on a computer, video card, and so on. You are offered to rent computing power for remote servers. However, cloud mining has been almost completely “attacked” by scammers who successfully hide after receiving the rental payment. So be careful with this.
The purchase of capacity occurs in hashes. The computer unit increment system is identical to bytes. It is advisable to purchase Giga or Terahashi. This is a more reliable option.
The average cost of one Gigahash depends on the exchange rate. For example, in 2016, 1 bitcoin cost about $650. 1 Gigahash cost 0.0006 bitcoins ($0.47). This will be enough for a stable income of 1 bitcoin per week.
Investments
Bitcoin appeared in 2008 and its cost was negligible. In 2017, the cost increased a million times. An investment carries some risk. With a long-term investment in cryptocurrency, it is possible for the price to rise, stop, or fall.
After several years, many people regret that they did not contribute, for example, in 2013. It was at the end of this year that the price began to rise, which later rose “to the skies.”
Bitcoin farm
Mining farm – a chain of computers that perform calculations around the clock, 365 days a year. The farm's work is what you provide. specific program the computing power of your computer. The video cards built into the farm operate at the limit of their capabilities.
Farms occupy a pyramid position. They are beneficial only to those who started doing this at the time of the birth and “promotion” of cryptocurrency. Many people, having learned that a mining farm brings in $1,000 a month, spend fortunes on it, but what happens then?
Perhaps in the first month the farm will give you the desired money. But the fact is that over time, the computing power requested by the program and servers increases. And the power of your farm remains the same as in the first month. As a result, earnings will decrease.
In the best case, the owner of such a device begins to try to fix something, but nothing works, and therefore he has to sell the farm.
Next, the second pitfall: your farm worked hard, for example, for about six months or a year. You bought it for 100,000 - 150,000 thousand rubles, and in a year its cost due to constant work will be about 60,000 thousand rubles.
But does anyone make money on these farms? Yes, on the computing power of those who buy up hangars and completely fill them with farms. They invest several million and buy about hundreds of thousands of video cards. This brings income, but newcomers who have stepped on the second pitfall make money only by selling these same mining farms.
To avoid getting hooked by those who sell farms, ask yourself: why is he selling it if it generates income? True miners who know all the intricacies and nuances of making money will not dare to decide to sell what generates income.
How the farm works and what you get paid for
Bitcoin is a decentralized unit. It does not have a single server or developer who would do this. That is why when you download special mining software, you turn your computer into a particle of the server. And there are quite a lot of people like you. If you put all these particles together, you get a powerful server.
To give people an incentive to stay part of the server, the system pays rewards in the form of virtual currency. That is, miners receive money for donating the power of their computer to the system.
Remember that it is impossible to quickly earn bitcoins, and it is also impossible to earn them simply by placing a farm on the windowsill and minding your own business. This is a kind of investment in which you need to wait for payback, you need to constantly work on it, delve into new subtleties and monitor the rate of virtual currency daily.
Earning bitcoins without investment
It is quite possible to make money on Bitcoins from scratch, but it will take a lot of time. On at the moment exists huge amount servers that offer free currency, more precisely, Satoshi (one hundred millionth of a Bitcoin). All you have to do is enter captchas, go to websites or watch videos. In general, a full-fledged job.
Where to earn bitcoins
Free Bitcoin servers are called Bitcoin faucets. The amount of earnings is low, but you also do not perform complex tasks. Initially, faucets were created to “promote” currency, but now they are the easiest and most popular way to make money. Plus, there is a referral program on all servers. By attracting partners, you receive additional income.
Several ways to earn currency without investment:
- Bitcoin collection.
The easiest way to get bitcoins. The registered user is asked to either enter a captcha or view an advertisement, and after the action is completed, they are paid from 50 to 200 satoshi.
Typically, such faucets have a timer for entering a captcha or viewing an advertisement. On some sites, the entry can be repeated every five minutes, while on others it can be repeated every hour. Experienced “hunters” suggest setting up 10 – 20 servers for coin mining, because it is very difficult to get even an average income from one such faucet.
If you have or is well promoted social network, then this method is just for you. You can leave affiliate links to Bitcoin faucets where a certain number of people will see them. Thus, we are back to the referral system again. For referrals, that is, partners, the service determines your percentage.
- Automatic earnings on faucets.
Earning money from a machine is the most best option to search for virtual currency. This is a fairly simple method that is suitable for those who want to make a profit without any action at all. In order to earn money, you just need to install it on your computer special application STARTAVTOBET, and it will bring you money automatically.
What to do with earned bitcoins
If you have earned your first bitcoin, then the question arises: what to do with it? Before you start working, any server you want to register on will offer to open a wallet with which it cooperates.
This is absolutely the same system as, for example, if you paid your child’s tuition through a university partner bank: minimal commission or no commission at all, and the money will be received one hundred percent. Many Bitcoin faucets withdraw earnings automatically if you enter your wallet number.
After the first cryptocurrency has been successfully earned, it must be withdrawn. Many advanced “workers” advise not to wait for the rate to double or increase, but to withdraw the amounts immediately, because there is a huge risk of “burning out”.
Bitcoin withdrawal
It is legal to withdraw bitcoins to an electronic account. Unfortunately, this currency cannot be cashed out, but there have been cases when it was used to pay in online stores.
The following ways to receive cryptocurrency are available:
- You can withdraw through exchanges.
Exchange systems have flooded the Internet. They allow users to engage in a system of purchases and sales, as well as cryptocurrency conversion (conversion is the ability of currencies to exchange among themselves). The commission on exchanges is minimal, but you need to wait until there is a buyer for your product.
A popular exchange is a great chance to quickly exchange a coin. The most reliable exchanges are those that, after registration, ask you to make a deposit and undergo verification, and only after that provide full list operations.
- Exchangers.
The most reliable and proven method by many people. Almost instant payments to your desired wallets. But of course, the exchanger requires a fee for its operations.
- Forums.
This is perhaps the most unsafe method of exchanging currency. It is being built through the forum on full confidence strangers to each other. And here the chance of becoming a participant in a dishonest deal increases.
On specialized forums it is possible to find a specific person with whom you will make a transaction, but this will take some time. The advantages of this option are zero commission and instant exchange.
How much do you earn on bitcoins?
How more people will mine or register on bitcoin faucets, the less you will earn. Imagine a circle that is divided into ten equal parts. A circle is information that you need to process, and for this processed circle you pay 20 bitcoins.
There are ten people like you, and when you process this circle, one tenth of all the money will end up in your wallet. Now imagine that a thousand more people find out about this circle, which means that now the reward will be a thousand times less.
The Bitcoin exchange rate is not backed by anything and is extremely unstable. It changes almost every hour. This happens because its fall and rise depend only on two factors: buying and selling.
Example. If one person decides to sell ten bitcoins, the rate will fall quite low, and if he decides to buy them, the rate will increase. It also depends directly on the news. If a well-known news newspaper writes that they want to block the cryptocurrency, then the rate will be almost equal to the minimum.
When considering mining as an option for making money on cryptocurrency, the daily income will be about 600 rubles per day. And this is at the most powerful gaming computer. If you take a computer of average power, then the maximum income will be 50-60 rubles.
Alternative ways to make money on Bitcoins
People don’t really want to wait for their cloud mining to take off or for a certain amount of Satoshi to be collected on a Bitcoin faucet.
In order to earn 1 bitcoin per week, you can use the following methods:
- Take advantage of cryptocurrency doublers.
Doublers operate on the “invest - get twice as much” system. In this case, you need to be careful and not jump into the pool headlong. Beginners who invest large sums to receive what they think is the same cryptocurrency are left with nothing.
In case of “victory” over the doubler, it is recommended to use only those servers that offer small percentages (2-3% per day). There is no need to “scroll” the money several times either. It’s better to do it once, withdraw and invest further amounts. This will be more reliable, and you definitely won’t get burned out.
The operating principle of doublers is based on the arrival of newcomers to the system who invest money. In this case, payments to existing participants continue. But such servers later turn into scams and are forgotten.
Earning money from honest services is not built on the principle of a pyramid, like future scams, but on the principle of deposits in official financial institutions, where they pay a small percentage on the account balance. In order to earn 1 bitcoin per week, you need to invest 15.
- Casino.
There are small lotteries or casinos on Bitcoin faucets. With an accumulated amount of several hundred Satoshi, you have the opportunity to win at the casino and earn currency for free.
- Exchange.
Traders no longer want to earn one bitcoin a week. They want the same results in a few days or even hours. Trading takes place according to the standard market system: we buy cheaper and sell more expensive.
The exchange rate does not depend on any influences. The main task of a trader is not to panic when the rate begins to decline rapidly. Just wait until the price rises again and sell. For your patience you will receive very decent money.
Bitcoin is a global cryptocurrency and digital payment system. This unit is the first decentralized digital currency. This system works without a central repository or single administrator. Where it came from It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open source software source code in 2009.
The system is peer-to-peer, and transactions are carried out between users directly, without an intermediary. All transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain.
Where do Bitcoins come from? They are created as a reward for a process known as mining. They can be exchanged for other currencies, products and services. As of February 2015, more than 100,000 businesses worldwide accepted Bitcoin as payment. This cryptocurrency can also be considered as an investment. According to research conducted by the University of Cambridge in 2017, there are 2.9-5.8 million unique users using code encryption, the majority of whom use Bitcoin.
Terminology
The word "bitcoin" was first mentioned in a white paper published on October 31, 2008. The name of the term comes from the English words “bit” and “coin”. Single Agreement on correct spelling this name does not exist. In some sources it is written with capital letter, according to other sources - with lowercase.
Units
The unit of account for this cryptocurrency system is Bitcoin. Since 2014, the tickers used to represent this unit are defined as BTC and XBT. At the same time, the components of Bitcoin used as alternative units are millibit (mBTC) and satoshi. Named after the creator of the cryptocurrency, Satoshi is the smallest amount in Bitcoin, representing 0.00000001 or one hundred millionth of a BTC. A millibit is equal to 0.001, or a thousandth of a Bitcoin.
How did Bitcoin come about?
The history of some events will help you understand what kind of currency Bitcoin is and where each Satoshi comes from.
August 18, 2008 was registered domain name bitcoin.org. In November of that year, a link to a document signed by Satoshi Nakamoto entitled "Bitcoin: A Peer-to-Peer Electronic Cash System" was sent to a cryptography mailing list. Nakamoto implemented the Bitcoin software and released it in January 2009. The identity of the inventor remains unknown, although many claim to know this man personally. Where do bitcoins come from from now on?
In January 2009, the Bitcoin network emerged after Satoshi Nakamoto mined the first block in the chain, known as the genesis block, for a reward of 50 bitcoins. One of the first supporters and miners of this cryptocurrency was programmer Hal Finney. He downloaded the software the same day it was released and received 10 bitcoins from the world's first transaction.
In the early days, Nakamoto, according to experts, mined 1 million bitcoins. Before leaving cryptocurrency mining, the creator of the system handed over control to Gavin Andresen, who later became the lead developer at the Bitcoin Foundation.
First difficulties
From that moment on, it became generally known how Bitcoin was mined, which the attackers took advantage of. On August 6, 2010, a serious vulnerability was discovered in the cryptocurrency protocol. Transactions were not properly verified before they were included in the blockchain, allowing users to bypass economic restrictions and create an indefinite amount of Bitcoin. On August 15, this vulnerability was exploited, with over 184 billion BTC created in a single transaction and sent to two addresses on the network. Within a few hours, this operation was discovered and erased from the log after the error was corrected, and the network forked to an updated version of the cryptocurrency protocol.
On August 1, 2017, Bitcoin split into two derivative digital currencies - classic (BTC) and cash (BCH). This allowed us to solve the problem of how to bring bitcoins into physical form.
How does it work now?
A blockchain is a public ledger that records transactions. New system solution does this without any trusted central authority: blockchain maintenance is performed by a network of communication nodes running software. Where does Bitcoin come from?
In simple words it can be explained like this. Transactions of the payer of form X send Y bitcoins to recipient Z, which are broadcast to this network using the available software applications. Network nodes can review transactions, add them to their copy of the ledger, and then broadcast those entries to other nodes. The blockchain is distributed database data - each network node stores its own copy of the blockchain.
About six times an hour, a new group of accepted transactions is created - a block that is added to the chain and quickly published to all nodes. This allows cryptocurrency software to determine when a certain portion of Bitcoin has been spent, which is necessary to prevent double spending in an environment without central control. Whereas a regular ledger records transfers of actual resources that exist separately from it, the blockchain is the only place that seems likely to have Bitcoins in the form of unspent transaction outputs. This is what Bitcoin mining is based on. Where does the money come from? They are recreated on the blockchain as a result of the above operations.
Operations
Transactions consist of one or more inputs and outputs. When a user sends bitcoins, they assign each address and the number of units of currency sent to that address on output. To prevent double spending, each input must reference a previous unspent output on the blockchain. Using multiple inputs corresponds to using multiple “coins” in a cash transaction. Since transactions can have multiple outputs, users can send Bitcoin to multiple recipients in one command. As with cash transactions, the amount of deposits (cryptocurrency units used for payment) may exceed the intended payment amount. In this case, an additional output is used that returns the change back to the payer. Any input that is not included in the transaction output becomes a transaction fee.
Transaction costs
There is no transaction fee required. Miners can choose which transactions to process and prioritize those who pay a higher amount. The rates are based on the storage size of the generated transaction, which in turn depends on the number of inputs used to generate it. In addition, priority is given to old unspent inputs.
Possession
On the blockchain, bitcoins are registered to addresses. Generating a BTC address is nothing more than choosing a random valid private key and computing the corresponding address. This calculation can be completed within a second. But the reverse (calculating the private key of a given Bitcoin address) is not mathematically feasible, and so users can tell others and publish the address without compromising its corresponding private code. Moreover, the number of the above keys is so large that it is extremely unlikely that anyone will figure out a pair of them that is already in use and has funds.
To be able to spend bitcoins, the owner must know the corresponding closed code and sign the transaction in digital form. The network verifies the signature using the public key.
If a private key is lost, the Bitcoin network will not recognize any other evidence of ownership. Then the money becomes unusable and is simply lost. For example, in 2013, one user claimed to have lost 7,500 BTC ($7.5 million at the time) when he accidentally threw away hard drive containing his private key. Maybe, backup his data could prevent this.
Where does the money come from?
Bitcoin mining is an accounting service performed using computing power. Miners keep the blockchain consistent, complete, and unchangeable by repeatedly validating and reassembling newly broadcast transactions into new group, called a block. Each block contains a cryptographic hash of the previous one using the SHA-256 hashing algorithm, which links them together. This allows us to answer the question of where bitcoins come from for dummies.
To be accepted by the rest of the network, new block must contain a so-called proof of work. It requires miners to find a number called a nonce, and when the contents of the block are hashed along with it, the result is numerically less than the network's target difficulty level. This proof is easily accessible for verification from any node on the network, but at the same time extremely labor-intensive to generate.
The proof-of-work system, along with the blockchain, makes it extremely difficult to modify the blockchain, since an attacker must change all subsequent blocks for changes to one of them to be accepted. Even with a complete understanding of where bitcoins come from, it is impossible to counterfeit them.
As miners work continuously and their numbers grow, the difficulty of modifying a block increases over time.
Bitcoins in circulation
How to mine bitcoins? The successful miner in the new block is rewarded with newly created Bitcoin and transaction fees. As of July 9, 2016, mining was 12.5 newly created BTC for every block added to the chain. To receive the reward, the special transaction must be included in the payments processed. Where do Bitcoins come from? All existing BTC were created precisely in such operations.
The protocol specifies that the reward for adding a block will be halved every 210,000 blocks (roughly every four years). Eventually, it will decrease to zero and the 21 million Bitcoin limit will be reached. From now on, each miner will be rewarded only for transaction fees. This will make the task much more difficult
In other words, Bitcoin inventor Nakamoto established a monetary policy based on artificial scarcity at the very beginning, limiting the possible number of units of the cryptocurrency to 21 million. A certain number of them are released approximately every ten minutes, and the rate at which they are generated will be halved every four years until all are in circulation. After this, the most pressing question will be how to withdraw bitcoins and how to use them as a means of payment.
Online storage
A cryptocurrency wallet stores the information needed for a Bitcoin transaction. They can be thought of as a place to store BTC, but due to the specific nature of the system, they are inseparable from the transaction block chain. Therefore, a cryptocurrency wallet can be thought of as a functionality that stores digital credentials for mined bitcoins and allows the user to receive and spend them. BTC uses which generates two cryptographic codes - public and private. At its core, such a wallet is a set of these keys.
There are several types of cryptocurrency wallets. Software ones connect to the network and allow you to spend bitcoins in addition to credentials confirming ownership. Such wallets can be divided into two categories: full-fledged and lightweight clients.
The former verify transactions directly on a local copy of the blockchain (more than 136 GB as of October 2017) or a subset of it (about 2 GB). Due to its size and complexity it is not suitable for everyone computing devices. If you are interested in such a task as mining Bitcoins, you will need just such a wallet.
Light clients, on the other hand, consult full clients to send and receive transactions without requiring a local copy of the entire chain. This simplifies operation and allows them to be used on low-power, low-bandwidth devices (such as smartphones). However, when using a light wallet, the user must trust the server to a certain extent. When using such a client, the server cannot steal bitcoins, but it can report faulty values. When using both types of software wallets, users are responsible for storing private keys in a secure location.
Online services
In addition to software, there are online services called online wallets that offer similar functionality but may be easier to use. In this case, the credentials for accessing funds are stored with the online client provider and not on hardware user. In this case, a server security breach could lead to the theft of BTC.
Confidentiality
Bitcoin is pseudonymous, which means that funds are not tied to real-world objects, but rather to cryptocurrency addresses. Their owners are not identified, but all transactions on the blockchain are public. In addition, transactions can be linked to individuals and companies through "use idioms" (BTC from several sources indicating that inputs may have a common owner).
To enhance financial privacy, a new Bitcoin address can be generated for each transaction. For example, hierarchical deterministic wallets generate pseudo-random "rolling addresses" for each operation from a single cycle, while only one key phrase to restore all relevant private keys. This is especially true in cases where cryptocurrencies are illegal. Thus, the news constantly says that Bitcoin will be banned in Russia in the future. Currently, BTC websites are regularly blocked.
Financial research has also shown that through the BTC exchange, various entities can prove their assets, liabilities and solvency without revealing their addresses. According to experts, this cryptocurrency resembles cash located on
However, electronic exchangers where BTC can be exchanged for other traditional currencies may require some of the user's personal data.
Interchangeability
Wallets and similar software technically treat all bitcoins as equivalent, establishing a basic level of fungibility. The researchers noted that the history of each BTC is recorded and publicly available on the block ledger, and some users may be reluctant to accept cryptocurrency units coming from untrusted transactions that could damage interoperability.
Blocks on the blockchain are limited to one megabyte in size, which creates challenges for processing transactions such as increased fees and delayed processing that cannot be accommodated within it. August 24, 2017 maximum throughput block size was increased, but transaction identifiers remained unchanged. This became available with the introduction of the SegWit service, which also enables the implementation of the Lightning network, designed for scalability with instant transactions.
Classification today
Bitcoin is a digital asset designed to be used as a currency. Whether it is a currency or not is still disputed. Where it comes from As with classic common denominations, it is related to supply and demand, as well as availability. As more people consider cryptocurrencies viable, and even consider them as a replacement for physical money, their value will increase. And in conditions of artificially created scarcity, price growth will be observed as all BTC are mined.
According to The Economist, Bitcoins share three main qualities with real-world currency: they are hard to earn, limited in supply, and easy to verify. Economists define money as a value, a medium of exchange, and a unit of account, and agree that Bitcoin meets all of these criteria. However, it is best used as a medium of exchange.
According to research conducted by the University of Cambridge, 2.9 million BTC have been spent and exchanged since 2017, and there are 5.8 million registered unique users using the cryptocurrency wallet.
If mining is not efficient, is there anything that can be done?
How to earn bitcoins without resorting to mining? The most obvious way is trading on exchanges, which is similar to the well-known currency trading. Since the BTC rate constantly fluctuates, significant profits can be made due to the difference in rates. You can buy and sell Bitcoin in Russia on various international exchanges, either independently or through financial brokers.
You can withdraw bitcoins through the same exchangers, purchasing any currency or electronic money for them.
What are Bitcoins and is it worth getting involved with them?
Bitcoins have been called the currency of the future, but what are Bitcoins and is it worth getting involved with? People were divided into two camps. There are those who believe in this peer-to-peer payment system and actively use the currency of the same name. And there are those who consider Bitcoin to be another bubble and believe that it is only a matter of time before Bitcoin depreciates or disappears altogether. This virtual currency already has millions of fans around the world, but there are also those who know nothing about bitcoins. This is where the main potential of the system lies - it works as long as people believe in it and as long as they use it.
What are Bitcoins
Bitcoins (Bitcoin, BTC) are a digital currency that is completely decentralized and anonymous. The term “bitcoin” also refers to a peer-to-peer payment system, for settlements within which conventional units, also called bitcoin, are used. Digital currency can be used to pay online. Through special exchanges, you can exchange bitcoins for real currency (dollars, euros, rubles, etc.) at a rate that is formed according to the principle of supply and demand. You can see the history of changes in the Bitcoin exchange rate on the chart:
Common currencies are rubles, euros, dollars, etc. exist both in the real world and on the Internet. The difference between Bitcoins is that they exist only on the Internet. You can't touch bitcoins, you can't get a coin or a banknote. There is not a single Central Bank of the world behind bitcoins and not a single state is responsible for it. It is a completely decentralized currency that exists only in digital form. You will learn more about what Bitcoins are in the following video:
The “emission” of new bitcoins occurs at the expense of computing resources. Anyone can create a Bitcoin; all they need to do is run the mathematical calculation process on their computer. This process is called mining, from the English word “mining”. These days, this requires much more power than it did 3-4 years ago. The more bitcoins are created, the more difficult it is to create new ones. This is the main difficulty in mining new bitcoins. You can calculate the approximate profitability of Bitcoin mining using the mining calculator on our website.
The total number of bitcoins is limited, there can only be 21,000,000. Limitation in quantity and power computer technology currency stability is ensured. This is a kind of analogue of the gold standard, previously used for real currencies. 21 million Bitcoins is just a matter of whole units, but the currency can be divided up to 0.00000001. This is the minimum value, which in professional circles is jokingly called “Satoshi”.
Satoshi is not only 0.00000001 BTC, it is also the nickname of the person who created bitcoins. It is still not known for certain who exactly created this currency. We only know the person's nickname - Satoshi Nakamoto, but no one knows who is hiding behind it. There are many rumors, even to the point that the creator of the network lives in Russia, and behind the Japanese nickname there is a person of a completely different nationality.
How to open a wallet
Using Bitcoin starts with creating a wallet. This will take no more than 3 minutes. You don't need a passport or a visit to the bank. A regular computer with Internet access is sufficient. On the website https://blockchain.info/ru/wallet/ you need to click on the “Create My Wallet” or “Create Your Wallet” button and enter the required data. At the next stage, you will be shown your secret “key” to restore access.
Remember this phrase. You won't see her again. After you confirm email, you will be able to use your wallet. To do this, you need to log into your account on blockchain.info, where you will see your BTC wallet. If you still have questions, watch the detailed video instructions on how to create a Bitcoin wallet:
How the technology works
You don't need to understand technical details to use Bitcoin. It is important to understand three basic terms:
- Wallet balance;
- Transactions;
- Confirmations;
Your wallet balance is public information. Anyone can look into any wallet. A public collective ledger is maintained that displays all chains of transactions (blocks), also called blockchains.
To make a transaction between two wallets, you will need a secret private key. This is how each transaction is signed - this is a guarantee that the wallet was used by its owner. All transactions are public and irreversible. It takes time to complete a transaction as the transaction is processed and subsequently confirmed by the network. This process is called confirmation.
Transaction confirmation usually takes place within 10 minutes. Computers connected to the network calculate the transaction and include it in the overall record of all blocks. All processes are based on strong cryptography. This is why Bitcoins are often called a cryptocurrency. No one is able to control or influence the blockchain, for example, it is impossible to tamper with data or reverse a transaction.
Mining
Mining is the process of obtaining bitcoins. The process is built on the computing power of computers, which are used to solve mathematical problems. The result of mining is obtaining a new block of bitcoins. With each mined (calculated) block, the difficulty increases. Obtaining a block in 2010 required fewer resources than calculating a block in 2016.
Required for mining specialized software, distributed in free format. You will also need powerful computing resources. Mining on a regular computer or laptop has long lost all meaning.
The question is whether it is worth mining today, everyone must decide for themselves. If you have access to powerful devices, then you can try, even though the returns are low. You should consider that there are costs associated with maintaining computer equipment.
In 2016, miners unite into networks called pools. This allows you to jointly calculate one block, and subsequently divide the received bitcoins among all pool participants. This is one of latest methods, how to mine bitcoins at home.
Control and risks
Bitcoin is simultaneously not controlled by anyone, but at the same time controlled by anyone. The very principle of the system allows anyone to view any transaction. Roughly speaking, you can look into any person’s wallet and find out not only how much money is there, but also where it came from. If you don't know who the wallet belongs to initially, then you won't know who you just visited.
Complete anonymity of Bitcoin is possible, but only if several important conditions. Bitcoin is anonymous, but your experience on the Internet is not. The wallet registration itself must be done anonymously. To do this, they use Tor and other means to maintain their anonymity on the Internet. Transactions must also be protected from theft of your personal data, for example, system administrator your network.
Anonymity of bitcoins is possible, but only with the proper level of skills in maintaining anonymity. For complete anonymity, as a rule, one wallet is used for only one transaction. The more transactions are made through one wallet, the higher the chance of figuring out who it belongs to.
Governments of various countries, including Russia, have repeatedly encroached on Bitcoin. But full-fledged decentralization allowed the system to survive all oppression. In Russia there is a law about money surrogates, which includes Bitcoin. So far, Bitcoin is not so strong that it is feared and fought thoroughly, but in the future problems may arise with this currency.
If the state does not control the currency, then it cannot influence it. Loss of control and influence is one of the most dangerous phenomena for any state. Potential risks for users are that all bitcoins may be banned in the country. You will not be able to access your wallet in your country. Or their use will be made illegal with very real penalties. Bitcoin users can be called the weak link in this chain.
Personal risks for you – losing bitcoins. They are difficult to steal, but if you voluntarily transfer them to a criminal, you will not be able to get them back. Transactions cannot be reversed, and there is no regulator on the network who will judge your dispute. Complete anonymity can play a cruel joke on you, because you won’t even know who you transferred your money to.
The risk of currency depreciation should not be ruled out. Today 1 BTC costs 760 US dollars. There were times when 1 BTC was cheaper than 1 USD or more than 1000 USD. Such a large amplitude of the exchange rate is not only a potential chance to make money, but a serious indicator of riskiness. If you bought BTC for 760 yesterday, and a week later its price dropped to 380 USD, then you lost exactly twice.
