What is a cryptocurrency: all about new electronic money

Increasingly in everyday life we ​​hear about the mysterious cryptocurrency, about earning Bitcoins, some kind of home farms. So let's see what is it all the same.

What is bitcoin

Bitcoin is a digital payment system in which only electronic money, the so-called bitcoins, are involved. In this system, only cryptocurrency circulates, which is not tied to anything: neither to the world market, nor to the economies of individual countries. She alone. Bitcoin rate depends on the demand for coins.

Bitcoin became the basis for the discovery of other cryptocurrencies. It has 5 main features:

1. Fully decentralized system - that is, no bank, agency or government entity can regulate and influence bitcoin.
2. Anonymity - unlike banking procedures, holders of cryptocurrency coins can conduct transactions without disclosing their name, data, just using the address (code 27-34 characters).
3. Irreversibility - the processes in the Bitcoin system can not be canceled or stopped.
4. Privacy and security - all personal data is stored in an encrypted file, and only the owner has access to it, hacking the bitcoin wallet is excluded.
5. Only direct operations - in the process of transferring coins between participants there is no interference by third parties, the P2P principle is used. Such an operation in the Bitcoin system cannot be traced only if you are not a member of this operation.

In addition to Bitcoin, there are a number of other popular cryptocurrencies.

For example, such as Lightcoin, which is a fork of Bitcoin, is developing steadily and is constantly among the top leaders of the world cryptocurrencies. Or Fezerkoin, whose developers have improved the protection mechanism so that hacking the system is possible only with access to 51% of power.

Bitcoin-based cryptocurrencies are hundreds, but not all are safe and secure.

Cryptocurrency capitalization

If you decide to invest in a cryptocurrency, then you must know what "cryptocurrency capitalization" is, otherwise you can simply lose the wrong investment. New investors, not fully understanding the topic, confuse capitalization with the rate of cryptocurrencies, they are interrelated, but still they are different concepts.

Cryptocurrency capitalization is the total amount of all mined coins multiplied by the value of one coin.

To determine the capitalization of any cryptocurrency you need to know the exact number of issued cryptographs (coins) and the current rate.

Experts in this field claim that the cryptocurrency capitalization cannot be accurately determined, since it is simply impossible to calculate the exact amount of the market value of any cryptocurrency. It is impossible to determine the exact number of lost cryptographs, how many such and where they are, no one knows.

There were cases when digital coins disappeared, were lost, burned together with hard drives, on which all information was stored.

How to make money on cryptocurrency

You can earn a cryptocurrency with or without attachments of finance, using bitcoin taps or bitcoin surfing (browsing the web). If you want to try to earn bitcoins without investing personal money, then the best option would be bitcoin cranes.

Bitcoin taps make money by advertising, you go to the advertiser's website, on which the timer is set, after the time expires, you need to solve the captcha, thereby confirming that you are not a robot, and for that you get Satoshi (bitcoin shares). The number of Satoshei for the transition on advertising averages 24,000 for 10 seconds on the site.

If you are serious about making money on cryptocurrency, then you can not do without investments. The most common way of earning any cryptocurrency today is mining.

Mining

Mining is making a cryptocurrency using a video card, it is considered one of the first methods of mining. It is based on reading and searching for certain parameters to establish a hash with the specified properties. The question arises, what is HASH?

A hash is a number obtained as a result of an electronic calculation of a specific mathematical algorithm. If this value (hash) is less than or equal to the value laid down in the algorithm, then a new block is formed (new coins), and the miner receives the number of bitcoins, which is fixed for the definition of a new block.

There are 3 most common types of mining:

1. Solo mining - the job consists of just one working computer with a powerful graphics card. This method every day loses its effectiveness, and also requires quite large investments at the initial stage, since powerful graphics card is expensive.
2. Participation in pools - connecting your equipment to a common large center, thereby increasing its power and speed of mining.
3. Cloud mining - if you don’t have your own equipment, you can buy a mining speed in the cloud for a certain price in a contractual period. Buying speed in the cloud, you will receive cryptocurrency at time intervals, which will be obtained on the cloud server. But most often it is a hoax.

Trading on the stock exchange

You can also earn on cryptocurrency using exchanges. These are the only systems on which you can exchange electronic money for real or exchange electronic money with each other.

To date, the diversity of exchanges has no boundaries, but they can be divided conditionally into two types based on such important criteria:

• stock exchanges, by which cryptocurrency can be exchanged for world currency (real money);
• exchanges where electronic money can only be exchanged among themselves.

The exchange and resale of cryptocurrency on exchanges are exactly the same. In order to earn, you need to find, buy cheaper and resell more expensive. But not everything is so simple, for the correct cryptocurrency trading on the stock exchange, it is necessary to take into account the main factors:

• graphics;
• warrants for sale and purchase;
• history of transactions;
• the volume of auctions held on stock exchanges.

Only by considering and analyzing all these factors, you can really earn on cryptocurrency exchanges.

What is a token?

The development of any project based on cryptocurrency trading is impossible without the use of tokens. The token in this case acts as the so-called "shares" of the project. The investor invests his finances in the project, and in return receives the same tokens. A token is a digital solvent currency.

The functionality of the token is more extensive than that of cryptocurrency:

• for tokens you can purchase services, services, and so on;
• in a closed ecosystem serves as a currency;
• is an indicator of the redeemed part of the investor in a project, enterprise;
• acts as a reward for doing something.

The main types of tokens:

1. Appcoins - used as an internal currency in mobile platforms, games and other computer projects. Appcoins are in demand for financial transactions within the project.
2. Accumulation coins - used as an auxiliary currency. Developed to attract investment in the project, bring a good passive income, if you invest in a project for a long time.
3. Token share - acts directly as shares. The rate of tokens within the project depends on the demand for them on the exchange.

Despite the short period of existence of this model of digital currency, it was able to establish itself as a fairly effective way of making money.

What is landing?

Landing has recently become another way to make money on cryptocurrency. This process is very similar to private banking. Landing is an investment in any cryptocurrency for a certain period of time, with a daily profit of 1% of the deposit.

Landing is based on an Internet platform with so-called robots, which automatically earn digital currency, thereby increasing your profits. You acquire cryptocurrency coins and invest in some kind of Internet platform that will pay a specified percentage of earnings on your coins for a certain period of time. After the end of the deposit time the investments are returned to you, and you can again put them into circulation.

This way of earning began to develop less than a year ago, but has already become popular, since it does not require in-depth knowledge in this area, a special powerful technique that is expensive, etc. The main thing is to choose the right cryptocurrency, in which landing you want to invest.

Mining Farm

We have already considered the main types of mining cryptocurrencies and now we will study in detail the very first way to make money. These are the so-called "farms", which actually earn cryptocurrency coins.

A cryptocurrency mining farm is a powerful computer (something like a computer) for solving a single task - mining. The algorithm contains the process of selecting certain hashes and assembling them into one logical chain (block). The one who before the others generates a block that has not yet been collected, receives a fixed amount (reward).

With the increasing demand for mining, the requirements for the capacity of the equipment used are becoming tougher. So, at the very beginning of the formation of cryptocurrency, there was enough of a personal home computer for selecting hashes, and today, in order to make some money on this, you need to assemble a technique (farm) from several powerful parts.

A variety of components for the assembly of the farm is very large. You need to rely on the final result that you want to achieve. This affects the number of farms, their capacity and investments that will be required to start earning.

To create a home farm, you need only 4 of the most costly basic parts:

1. Motherboard - acts as a "brain" of the entire farm. Experienced miners advise when choosing a motherboard to pay particular attention to the speed of work and the required number of active PCІ ports.
2. Hard disk - it will store all the information about your farm, this mining program itself, passwords, digital wallets for cryptocurrency, and so on. It is necessary to choose a hard disk with a capacity of 100 gigabytes, since the only digital wallet weighs 25 gigabytes, it depends on the cryptocurrency, which will be mine.
3. Several video cards are the power of your farm, the speed of mining of cryptocurrency coins will depend on the number and parameters of the selected video cards. Choosing a suitable video card, pay attention to its cooling system and performance (hashes generation rate).
4. The power supply is one of the most important components of the entire farm. Provides power to the farm. One motherboard consumes an average of 300 kW, but you should not use the power supply at full capacity due to voltage drops, etc. Therefore, miners are advised to take a 750-watt power supply, if not enough, then several blocks are connected together and evenly distribute the load between them.

Earnings on cryptocurrency with the help of home farms for mining gradually lose their effectiveness and popularity due to the high costs directly to build the farm itself and a very long payback period, not to mention profit.

Pros and cons of cryptocurrency, attitude in Russia

Innovative digital currency, which is used as a tool for financial transactions, has many advantages. However, the small part of the deficiencies that is present in it greatly influences the popularity of its use.

So, let's start with the advantages of cryptocurrency:

1. Digital currency is available to everyone at any time. In the process of using a cryptocurrency, you can be completely calm and confident that no one has the right to earn earned coins.
2. Anonymity - when making transfers, transactions from your cryptocurrency digital wallet, personal data is not disclosed, just one code is enough.
3. Coins of any cryptocurrency can not be faked, each block is a unique chain of hashes that can not be copied.
4. The digital system cryptocurrency can not influence external factors. It is completely decentralized, which eliminates control over transactions.

Disadvantages of cryptocurrency:

1. Due to the decentralized system, national banks are not able to track the extraction of cryptocurrency coins, which creates some risks.
2. Irreversible processes - transactions with the transfer of coins can not be undone.
3. Cryptocurrency exchange rate does not have stability.

Earnings on cryptocurrency is gaining popularity, but it has its pros and cons. The positive side of earnings is accessibility (anyone can try to earn, even without investment), freedom (you are not tied to a specific place, you can work from anywhere in the world).

However, there are also disadvantages that are mainly associated with large investments, the knowledge that will be needed if you decide to build your farm, and, of course, the lack of a guarantee that it will not depreciate in a year.

From the following video you will learn what bitcoin is and how officials in Russia treat it:

Reviews

Watch the video: The future of money. Neha Narula (April 2024).