23.08.17 246 888 0

What are Bitcoins

And is it possible to make money from them?

Since the beginning of 2017, Bitcoin has increased in price by 4 times.

Money that does not exist is worth more than oil and gold. I'll tell you how you can make money on this.

Antonina Asanova

I tried trading bitcoins on the exchange

In May of this year, I tried trading bitcoins. In 2 weeks I earned 30%. Then I lost 15% in a month. While this article is being prepared, I may trade 15% again, or I may lose even more.

Trading cryptocurrency is a risky business. Here's what you need to know if you're a risk-taker.

ATTENTION

What is Bitcoin

Bitcoin is digital money. This currency does not physically exist, there are only special registers that keep records of how many bitcoins someone has and who transfers them where. These ledgers are called blockchains.

This is similar to how cashless payments in banks work: when you pay with a card in a store, you also do not transfer any physical money or gold to anyone. Your transaction is simply recorded somewhere in the bank register.

Bitcoins differ from regular currency in that registers are not stored centrally in banks and payment systems, but simultaneously on all computers that are occupied with bitcoins. Anyone can with all the bitcoins in history.

The registries are protected by cryptography. It is impossible to fake them for everyone at the same time. It is impossible to rewrite data in blocks and say that someone now has millions. Bitcoin is quite secure in this sense. True, there is already an attack that allows you to pay twice with the same bitcoins, so it is impossible to say that bitcoin is absolutely safe.

Where do bitcoins come from?

Regular currency is issued by the government. It is very indirectly connected with gold reserves, but in fact it is not connected with anything - as much as the state needs, it will print as much.

Bitcoins are not associated with any one state. New units of Bitcoin are created as computers on that payment network serve the needs of that same network.

For example, somewhere in China a person paid for pizza with bitcoins. This operation must be recorded in the registries on all computers connected to the Bitcoin network. To record a transaction in the register, you need to seal it with a special signature, like a wax seal. This signature needs to be calculated, which is a complex computer task.

Somewhere in Venezuela there is a computer that services the Bitcoin network. He just figured out this cryptographic signature. As a token of gratitude, the owner of this computer receives a reward in the form of a bitcoin penny.

For a Venezuelan who has set his computer to the mode of calculating cryptographic signatures, it looks like this: his computer is rustling something, and bitcoin pennies are dripping into his account. The computer appears to be mining bitcoins, although in reality it is simply encrypting and sealing other people's transactions. This is called mining - like “mining” bitcoins.

In fact, it is not the bitcoins themselves that are mined, but sealing wax to protect the ledgers. Bitcoins - this is a reward for service.

Mining - separate big topic. In a nutshell: the equipment is expensive, the efficiency is low, you will have to compete with megawatt Chinese mining clusters that are built on the basis of power plants. We will write a separate article about mining.

Why do we need Bitcoin?

Cryptocurrency allows you to transfer money under a pseudonym and without the participation of banks. This is relevant for transactions with people and companies from countries outside the CIS.

For bitcoins you can buy an Airbaltic ticket or a Dell computer. You can even donate funds to a Buddhist temple in Seoul.

Where Bitcoins are accepted for payment - map from Usebitcoins.info

Bitcoins are traded on the exchange and money is invested in them.

Since 2015, Bitcoin has risen in price from $200-300 to $4,000 and continues to grow. This has made cryptocurrencies interesting for investment and speculation.

Success stories fuel interest. In 2009, Norwegian student Christopher Koch randomly bought $24 worth of bitcoins. He remembered the investment 4 years later, when his fortune reached 885 thousand dollars. And I bought an apartment in Oslo with part of the money invested.

Bitcoin wallets are used for transfers and payment for services. They store the digital keys needed for transactions. If you lose your private key, your money is gone forever. They cannot be returned by calling the bank. The Bitcoin system has neither single center, no regulator.

Under a pseudonym is not anonymous

Bitcoin transaction registers contain the entire history of transactions for all times across all wallets. If you bought something bad for bitcoins, and then somehow it became known that this wallet was registered with you, then an interested person will be able to see all your transactions.

For example, if you bought a plane ticket for bitcoins and indicated your personal data when paying, then the interested intelligence agencies will already be able to identify you.

There are, of course, means of completely anonymizing payments, but they are expensive.

It is legal?

The Central Bank and Rosfinmonitoring warned against the use of bitcoins. At the same time, the State Duma is preparing a bill that would legalize the purchase of cryptocurrencies for use abroad and trading in bitcoins.

Until the government regulates the circulation of bitcoins, banks and other companies cannot sell them. Cryptocurrency exists in the world of the dashing nineties. They can be purchased from individuals, online exchangers or trading exchanges.

Important clarification

We provide a basic scheme for buying and selling bitcoins through an exchanger and stock exchange. All examples are in rubles, to make it clear.

There is no universal way. If you have your own recipe for trading cryptocurrency, come in the comments.

How to buy Bitcoin through an exchanger

Internet exchangers work on the same principle as street ones that exchange euros and dollars. They buy bitcoins at a price below the exchange rate, and sell them at a higher price. They make money on the difference.

There are many popular exchangers: Bestchange.ru, Okchanger.com, Localbitcoins.net. There you can exchange rubles for major cryptocurrencies.

I compared the rate on different platforms and chose Localbitcoins. Buying cryptocurrency took 10 minutes. It took another 20 minutes for the bitcoins to arrive in my wallet.

How to use. Enter in the search the amount for which you want to buy bitcoins. We choose the lowest rate and suitable payment method. Most often, exchanges are offered to Sberbank and Qiwi account holders.

If the seller agrees to the deal, he reserves the required amount. When you transfer rubles to him, he will send bitcoins to your wallet. Now you can buy something or transfer coins to a more secure wallet on your PC or flash drive.

Minuses. The rate at exchange offices is very high.

Commission. Localbitcoins charges a withdrawal fee of 0.00039629 BTC. I invested a thousand rubles and received bitcoins worth 826 rubles. Transactions absorbed 17.4%.

For larger amounts the commissions are lower. You can negotiate individual terms with exchangers.

No one regulates the exchange market on the Internet. No one guarantees the security of transactions. If in doubt, do not transfer money or try to exchange a small amount first. Take into account the huge commission of exchangers when purchasing goods or investing money in bitcoins.

How to buy Bitcoin through an exchange

Exchanges are online platforms for trading cryptocurrency. Sellers and buyers of bitcoins meet there. If there are more sellers, the rate falls. If there are more buyers, it grows.

To register on a small cryptocurrency exchange, all you need is an email address. Large sites require you to enter your name, address, date of birth and telephone number. The larger the amount you change, the more personal data you will have to disclose.

At the end of July, the largest exchange that worked with rubles, Btc-e.com, closed. There are smaller exchanges left: Exmo.me, Livecoin.net, Cex.io. When choosing, pay attention to two points: the currency sale rate and the money input system. Some exchanges accept Yandex Money and Qiwi.

If you need to exchange several thousand dollars, choose a large exchange. Smaller sites may not have enough sellers. The most significant exchanges are Bitfinex.com, Kraken.com, Bittrex.com.

We write not only about digital money, but also about other investment instruments, ways to save on common things and accumulate a financial cushion.

Subscribe to T-Z VKontakte so as not to miss articles

My experience. The Eksmo exchange suited me. I transferred rubles to her through Qiwi. Although this method has now been eliminated. It took almost 2 hours for the money to arrive on the exchange. Transfer to Bitcoin is instant.

How to use. First, we top up our account on the exchange. We put rubles on online wallet. On the exchange website, click the “replenish rubles” button. We choose a payment method, amount and transfer money.

We transfer rubles to the Eksmo exchange

Now let's buy bitcoins. On the exchange website, select the bitcoin-ruble currency pair. Find the block “Purchase, BTC” and enter the required amount.

Minuses. Exchanges sometimes block withdrawals for 1-2 days after replenishing your account. This is explained by the rules of payment systems. Information about blocking is indicated on the money entry page.

Commission. Exchanges charge 4-6% for entering rubles. Exchanges also charge a commission on each transaction. As a rule, this is 0.1-0.3%. There is also a commission for withdrawing bitcoins - 0.001 BTC. As a result, out of a thousand, 805 rubles remain.

You can save money if you use a dollar or euro card, as well as register with the international payment systems MoneyPolo or ADVCash and top up through them. In this case, exchanges can credit funds without any commission at all.

To choose the most convenient and cheapest exchange method, you will have to register on several services. Decide in advance where you will write down your passwords.

Anonymous methods of depositing and withdrawing money are more expensive than legal ones and much riskier. Using bitcoins is like walking down the street wearing a mask, but with transparent pockets. The system does not reveal the owner of the wallet, but all transactions are recorded on a public blockchain. Sometimes government services manage to connect Bitcoin wallets with real people by IP address or delivery addresses for purchases.

To achieve anonymity, users transfer money several times between new Bitcoin wallets, use the anonymous Tor network and Bitcoin mixers - for example Coinmixer.se. In the mixer, transactions from different users are split and mixed. As a result, it remains a mystery who transferred how much and to whom. The service costs 1-3% of the amount.

On Localbitcoins and forums you can find a person who will exchange bitcoins for cash. It is also almost impossible to track them. However, this method of exchange is very risky: you can stumble upon scammers on forums and be left without money.

How to sell bitcoin

Let's say that since you bought bitcoins, their rate has increased so much that it has outgrown all your costs for commissions and transfers. It's time to sell bitcoins and take the money you earned. In this situation, you can use exchangers again or withdraw money through the exchange.

Experience. I am withdrawing funds from the Eksmo exchange to my card. Of all the withdrawal methods, I choose the cheapest one - the Capitalist.net service. Transferring from the exchange to the card takes less than a minute.

How to use. Register with Capitalist. In the exchange wallet, select the withdrawal of rubles and enter the “Capitalist” account number. Then we transfer the money to a Visa or MasterCard card.

Commission. You can transfer bitcoins to an exchange wallet without commission. “Capitalist” charges 2.5% for transfers to a card.

Do not transfer bitcoins before they send you rubles for them. Bitcoin transactions cannot be reversed.

How to make money on bitcoins

On the Internet you can find many training videos, blogs and forums that promise an income of 20% per month. The general meaning: buy bitcoins at the minimum rate with minimal commissions and sell at the maximum rate, but also with minimal commissions.

It seems that trading currencies is simple, but you should not take risks right away. The Bitcoin exchange rate changes very quickly and dramatically. First, try trading with an amount that you don’t mind losing. When you can earn money consistently, you can play big.

There are the least risks when trading with a trend. To do this, you need to deposit money on the exchange, wait for the moment when the rate has fallen and is just starting to rise. And then buy bitcoins and wait for the rate to reach its peak. With this strategy, it is safer not to store bitcoins on the exchange, but to transfer them to a separate wallet.

Trading on the stock exchange is work. Players constantly monitor exchange rates and check with Chinese exchanges. To avoid missing rate fluctuations, you can download the Bitcoin Paranoid app. As soon as Bitcoin starts to fall or rise, the alarm will go off. Bells can be placed on Bitcoinwisdom.com.

You can also earn money through ICO. Initial Coin Offering is an analogue of crowdfunding or going public. You are investing in new company, a startup, and for this you get tokens - something like shares. If you are lucky and the company grows, you will receive income.

At the time of writing this article, the ICO procedure, like many other things in the field of cryptocurrencies, is almost unregulated and not protected in any way. Companies can launch an ICO without a product or a real business, simply with the goal of collecting money from investors and walking off into the sunset. Therefore, invest in companies at your own risk.

They are also investing in new cryptocurrencies. In addition to Bitcoin, there are several hundred of them. The Monero currency exchange rate has increased 40-fold over the past year, from $14 to $585. Ethereum and Dash increased in price by 17 times.

Investments in ICOs and new cryptocurrencies are high-risk. To assess the prospects of a startup, you need to understand blockchain technologies and business.

Remember

1. Cryptocurrency is a risky business. Bitcoin is still not beyond the scope of the experiment. It is not legalized in Russia. No rights of yours are protected here.
2. Take care to protect your wallet and save your passwords securely. Lost keys cannot be recovered.
3. Check out the service fees before transferring funds. Transactions can eat up 10, 15, and even 20%.
4. Do not transfer bitcoins until you confirm that you have been transferred currency for them. Cryptocurrency transactions cannot be cancelled.
5. If you store money in bitcoins, monitor its exchange rate.
6. Start trading with an amount that you don’t mind losing.
7. Professional Bitcoin trading is a full-time job. If someone promises guaranteed income without effort, most likely that someone will make money for you.

Interest in cryptocurrency not only does not subside, it grows every day.

Let's start with a little theory. First, let’s answer the question “What is Bitcoin?” in simple words»?

To describe Bitcoin in simple words, it is an anonymous payment system that uses the currency of the same name. It uses a blockchain system that combines transactions into one large system.

If you boil it down to simple things, this is the essence of bitcoins. To ensure that the system is secure, methods are used cryptographic protection information. They do not allow anyone but you to access your wallet.

The most interesting thing is that this system completely copies real money with the only exception - there are no intermediaries. You transfer money directly from one wallet to another. Transfers are carried out in a maximum of 10 minutes and there is no one who could find out to whom and why you are sending money.

On the one hand, this is the currency of the future. On the other hand, something frightening. Let's take a closer look at how it works, what its strengths and weaknesses are, and how to make money on it.

How did Bitcoin come about?

He appeared in a rather interesting way. In 2008, developer Satoshi Nakamoto presented to everyone who subscribed to him the idea of ​​his own payment system, in which everyone would be equal. In the letter, he spoke about the ideas that came to his mind, and also asked interested people to help in their implementation.

In 2009, the program was completely written and Satoshi posted the source code online. After this, users began to transfer currency to each other, exchange it for real money, and thus began the operation of this system.

Since then, some programmers and miners have changed the system several times, improving it. This is possible because anyone can make changes to this system with the consent of most other users.

The first exchange of bitcoins for money took place in 2009. The exchange rate was as follows: 5050 bitcoin for 5.05 PayPal dollars. The exchange of currency for real goods took place in March 2010: a user offered to bring him two pizzas for 10,000 bitcoin.

How Bitcoins Work

Bitcoin is a payment system. This means, first of all, its functionality is to translate cash between wallets of participants. For this purpose they are used crypto graphic keys, which are stored on computers, and transaction blocks, which are collected by miners.

The idea is something like this: you have bitcoins, you want to transfer them to someone, and you open a transaction. You can open it with your own key, based on the previous transfer of bitcoins.

After you create a transaction, you need to specify the output - private key or the wallet address of the person you want to send the transfer to. After you specify everything, the transaction is queued for block creation.

Blocks – several transactions combined into one large cell. Miners must calculate the header code to ensure it does not exceed a certain number.

Miners are rewarded with bitcoins for creating blocks. And on top of that, they get a commission for creating a block by using their computer resources to generate the header hash.

This is enough smart system, because it automatically monitors the speed of block creation. The system increases or decreases difficulty to approximate time it took 9-11 minutes to create 1 block. If blocks are created faster, the difficulty will increase, and if blocks are created slower, vice versa.

Advantages and disadvantages of Bitcoin

Now let's summarize a little everything that was said above and try to highlight the pros and cons of cryptocurrency.

Pros:

• Complete anonymity of transactions;
• Lack of a single issuer;
• Lack of regulation by any state;
• System participants have uniform rights.

These advantages make bitcoin a real currency of the future. But at the same time, the state insists that there are a number of disadvantages that also need to be paid attention to.

Minuses:

• Inability to track money transfers;
• Possibility to transfer money abroad;
• System vulnerability.

Cryptocurrency is becoming ideal for money laundering, withdrawal of capital from the country and other illegal transactions. That is why its legal status in Russia is now not fully determined. And so many countries are seriously concerned about where increased anonymity on the Internet might lead.

But for the average user, bitcoin has only one drawback - binding to one wallet. If you suddenly lose access to a computer with an electronic wallet, and there is, say, 1,000 bitcoins on it, then you will never access it and will not be able to do anything about it.

Why has Bitcoin become so popular?

To understand why bitcoin used to cost less than 1 cent, but is now trading at around 4 thousand dollars per coin, let’s talk about history.

Let's start with 2009. On January 3, the first block was generated. Reward – 50 bitcoin. On January 12, the first transaction took place. On October 5, the first Bitcoin to dollar rate is formed: 1,309 BTC to $1.

2010: The first Bitcoin exchange opens on February 6th. On May 22, a user under the nickname Laszlo offers a deal: exchanging 10,000 bitcoins for 2 pizzas. By mid-June, the cost of Bitcoin is $600. On November 6, their capitalization is $1 million. On December 6, an exchange instrument, a call option, was applied to Bitcoin for the first time.

2011: February 9, bitcoin trades at $1 per coin. On March 27, March 31 and April 5, England, Brazil and Poland recognize it as the official world currency. On April 16, TIME publishes a note about bitcoin. On June 2, the rate is 10 US dollars per 1 BTC. After 8 days – already 31 dollars. November 25 – cryptocurrency conference in the Czech Republic.

As you can see, history has quite interesting events. First, ordinary users, then entrepreneurs, and then governments began to recognize this currency and reckon with it.

Already in 2013, the rate was $600 per piece. That same year, one of the presidents of a large company was arrested on charges of money laundering through Bitcoin.

In 2015-2017, there was a real boom in cryptocurrency, which continues to this day. Many authoritative sources began to talk about it as the technology of the future. The Americans officially recognized this currency, and along with them almost the rest of the world (with the exception of a number of eastern countries, including Russia). But the popularity of bitcoin was not made by world governments and multimillion-dollar arrests. Now the cost of Bitcoin to the ruble ranges from 180 to 250 thousand rubles per 1BTC.

It was thanks to those people who mined bitcoin on their home computers, that guy who bought pizza for 10,000 bitcoins and those who tried to exchange bitcoins for material things that cryptocurrency became so popular.

These people started the same chain that continues to this day. Cryptocurrency is becoming popular because of those who now mine it, because of the investors who invest money in it, and because of the technology itself for instantly receiving currency without the knowledge of the state.

Therefore, the more people talk about bitcoin, the more popular it becomes and the more more interest causes.

How to create a Bitcoin wallet

Bitcoin continues to gain popularity, and more people are wondering how they can create their own bitcoin wallet. This is quite a responsible matter, because the account will contain real money. Let's figure out how to create and manage your wallet as safely and conveniently as possible.

You can create it in 3 different ways:

• Using the original program;
• Using third-party, more subtle programs;
• Using online services.

Official client– a large program that contains transaction data, graphic keys and a lot of other things that are not useful to the average user. Perhaps it is the most secure of all, but at the same time, if you lose access to your computer, it will simply be impossible to restore your account. Such a program weighs more than 50 GB on the computer. Bitcoins can be withdrawn with this program only through the exchange.

Third party programs– simple versions of the same wallets, only lighter. They do not contain block chains or third-party information that the user does not seem to need. But there is still a link to one wallet and computer, which is quite inconvenient. The wallet program weighs about 7 GB.

Online wallets – the best option for the average user. You create a wallet for yourself online, register and use it like regular electronic money. The advantage is that no verification is required from you.

Conclusion: create wallets in online services. There they will take a small commission, about 1% from each operation, but at the same time, firstly, you will be able to restore your account without any problems, and secondly, you will not be tied to one computer. These services are also distinguished by increased attention to security, because their servers store data about wallets and transactions of registered users. In our opinion, online services are the best option.

Before moving on to questions of making money, you need to say right away: free bitcoins are a myth.

How to earn bitcoins

The easiest way to earn cryptocurrency is to mine Bitcoin using your computer.

But now the power required to mine them has gone beyond the limits of a single home PC. Something more interesting is required - mining farms. They can be made either from special equipment designed exclusively for Bitcoin mining, or from ordinary video cards and several configuration programs.

Special mining equipment is expensive, but extremely effective. Some machines allow you to earn up to 1.2 bitcoins per day, which translated into rubles is approximately 220,000 thousand. But such machines are not cheap - from 300 thousand to 1 million rubles, and this is without configuration and additional equipment. In total, such an installation can cost you 3-5 million. But the mining result is truly amazing.

Those who do not have that kind of money are forced to build their own farms to earn money. Typically, these are 4-12 video cards that are interconnected and use computing power to solve the problem of transferring funds.

Why video cards? Everything is quite simple. With the advent of the Ethereum cryptocurrency, many people switched to GPU mining because this is the only way for them possible way mining due to the complexity of the code and power requirements. And besides, video cards show the best performance among all other parts. They overtake the processor and HDD, which makes the video cards the best for regular farming currency mining.

For those who do not have a farm, but have a desire to earn money, there is another option - mining in pools. Pools are an association of several miners. After the operation is completed, the bitcoin reward is divided in proportion to the contribution. But it is still impossible to earn bitcoins in mining without investments.

The approximate payback period for a video card is now 100 days, if you do not take into account electricity costs. If we take into account all the costs, we get a figure of approximately 130-140 days.

Total: we have a profitability rate of around 0.7% daily, which is quite good considering that the risks during mining are minimal. But you don't have to spend money on a farm. You can also buy borrowed capacity. Let's talk about cloud mining.

Cloud mining

Cloud mining – rental of equipment capacity. That is, you pay money and rent a certain part of the farm. Let's say 1/100 of it. And accordingly, every bitcoin mined by this farm will be divided among all shareholders and sent to their wallet. In this case you will receive 1/100 bitcoin. It’s really more convenient for the average person to mine bitcoins.

Cloud mining is an interesting way. It is quite promising and reduces almost all risks to a minimum. You just pay a minimum amount, which often does not exceed $100, and buy yourself a share in some farm.

This is convenient both for the company - it does not work with risky cryptocurrency, and for users who do not need a Bitcoin farm as such.

But despite the fact that the risks are minimal, they exist. It all lies in the honesty/dishonesty of the company that provides farm power. After all, no one is stopping her from simply paying the interest, which drips at first, and then taking it and hiding with the money received in an unknown direction.

That is why, before you start cloud mining, make sure to look at reviews about the company you are starting to work with. Then read its story, see how interesting and stylish the site is designed.

You need to look at the profitability that the company promises. Above 200% per annum - you can safely close it and leave to look for another one. The most reliable service now is HashFlare.

Independent purchase

In addition to mining, there is another, rather banal way to earn money - buying currency on the exchange.

Bitcoin exchanges appeared back in 2012, when the popularity of cryptocurrency was just beginning to unfold. Then there were large exchangers who themselves dictated the Bitcoin rate.

Time passed, they turned into full-fledged trading platforms, requiring registration, verification and even allowing you to receive money. An ideal place for those who want to make money on cryptocurrency price fluctuations.

The most popular and largest Bitcoin exchange in the world is Bitfinex. This is one of the very first giants to withstand hacker attacks and cope with the influx of visitors. Unlike MtGox, which suffered colossal losses due to a hacker attack and could not even pay the debts of its users.

If you want to buy bitcoins for rubles, it is better to use exchangers.

How much does bitcoin cost?

This is quite an interesting and at the same time understandable question. The pricing mechanism is similar to other currencies - supply and demand are analyzed and the average price, at which people are willing to buy and sell their bitcoins. Only with the latter, unlike world currencies, everything completely depends on the market mood.

If previously the price of 1BTC was in most cases determined by an exchange or a well-known converter, now, due to the fact that many people want to trade Bitcoin, only the market decides how much this asset is worth.

No bank in the world can directly influence how much a cryptocurrency will cost. Only indirectly and only carefully, otherwise the Bitcoin market will completely collapse and leading Western investors will also find themselves in a hole.

Therefore, cryptocurrency is worth as much as how many people in the world can transfer bitcoins to other people. That is, everything depends on supply and demand in the market.

Is it worth investing in bitcoins?

Whether it is worth investing your money is a very controversial question. Most experts advised spending all of your available funds in cryptocurrency starting in 2012-2013. At that time, blockchain technology was just developing, but a growth trend was already visible. It could be noticed that since 2011, Bitcoin has consistently shown growth of at least 50% per annum.

But what happened now? Why are all the world's financial experts wary of the prospects of this cryptocurrency?

In fact, many traders familiar with technical analysis can easily find the answer to these questions. You just need to look at the charts to see that the rate now resembles a classic bubble pattern. And if this is a bubble, it will definitely burst.

This was already the case in 2002, this was the case in 2007, and this will be the case in 2018-2019. The overvalued currency will now simply lose all its positions that it gained due to active PR from the media, the Internet and world economic centers.

Of course, conspiracy theories are not something you should rely on, but there is still some opinion that in order to get rid of a currency that is truly inconvenient for states, the Central Bank can use its resources and simply bring it down.

That is why the issue of investments still remains not fully disclosed. On the one hand, bitcoins are promising, but soon their resource will be exhausted (it is difficult to calculate exactly when, but the most optimistic forecast is 2030), and then the price of bitcoin will inevitably increase.

There is one BUT. The position of cryptocurrency as a whole is very precarious due to the position of world authorities. Despite the fact that right now many economic ministries are positive, there may be several precedents of financing illegal activities that will be made public, and everyone will suddenly decide that anonymous currency is dangerous, and this will lead to an inevitable downfall.

On the other hand, blockchain technology itself is a rather interesting and progressive thing that can be used in . Many companies are planning to introduce this technology into their activities. That is why the cryptocurrency may not live, but the technology itself will be popular, and therefore, the more popular the technology, the higher the interest in its components.

Expert opinions

As for bitcoin, you should trust only the opinions of experienced traders who engage in technical analysis. According to 90% of them, Bitcoins have now formed a typical bubble figure, which led to a correction to 3.2-3.8 thousand dollars from almost 5 thousand. Many crypto investors were glad that the correction was so minor and started buying/selling them again.

But investors' optimism is not shared by experienced traders. They believe that if Bitcoin does not urgently test the psychological ceiling of $5,000 and breaks through it, there will be a very strong pullback that will not be limited to $3 thousand.

Therefore, if everything continues to go as it is now, the Bitcoin rate may fall to 2.2 thousand dollars, which will entail significant losses and disposal of this cryptocurrency. And who knows where this rally will lead virtual currency. And all because they talk about him too much and overestimate him.

And yet the prospect of earning virtual currency with a yield of approximately 1% per day - this is something real. But now let's move from specific numbers to general prospects.

Despite the fact that many financial experts are trying to sell everyone the departing train called bitcoins on the wave of hype, the prospects for this currency are very vague.

The volatility of the market is simply enormous, which will inevitably lead to the fact that these investments may become too risky. Who needs an asset whose price depends solely on demand? And this is not an ordinary currency, which is backed by the GDP, military power and authority of the country. And not even those that have company property behind them. It's just a set of data. Essentially, value is the price of a product that can be offered for it.

And one more, but very important note. The price is also formed based on the fact that there are large players who collect bitcoins in their wallets. And if one of them wants to throw them out for auction, there will be a collapse. And depending on the decision of a person whose name you don’t even know is a dubious pleasure for a competent investor.

If you are looking for a promising way to make money on cryptocurrencies, pay attention to cloud mining and investing in alcoins. New promising currencies appear with enviable regularity, and one or two or three of them took off after some time.

Like, for example, ether, which appeared only in 2014, but has already managed to take second place in popularity, after bitcoins. And such projects will appear, your task as an investor is to wait and buy them on time.

Bitcoin and Cryptocurrency Outlook

Now we have nothing but a vague rumor that the Central Bank released into the network about the legalization of cryptocurrencies in 2018. Currently, the Ministry of Finance and the main bank of the country continue to scare people, remain silent regarding the position on cryptocurrencies and close Bitcoin exchangers that can convert currency into rubles.

On the other hand, the position of the world's financial centers in the USA, Japan, China and Europe gives a clear understanding that throughout the developed world, cryptocurrency has been accepted, albeit with restrictions. In these countries they will try to control it by legalizing exchange offices and supervising the issuance of these funds. Everything is quite logical - if you have a lot of bitcoins, then please report where you got them.

The government needs Bitcoins in Russia because of its crackdown program, but at the same time, the government cannot go against the trend in Europe. Therefore, if you are dealing with bitcoins in Russia, take into account that this bubble may soon burst (the probability is about 70%) and that they will soon become legal, which may still raise the rate slightly to 2.5 thousand dollars, as this happened with Japan.

In general, the prospects for cryptocurrencies are not very vague, but they still depend on too many factors that are quite difficult to take into account. And although market sentiment can be predicted, the reaction of the global financial backroom cannot. Therefore, you need to carefully monitor the situation.

Remember that when working with bitcoins and investing money in them, you must devote 24 hours, 7 days a week, 365 days a year. Only then will you be able to achieve truly impressive results, because the market is quite volatile, which means there is an ideal opportunity to make money on price fluctuations.

Conclusion

The bitcoin cryptocurrency is quite an interesting milestone in the development of the global economy. On the one hand, we get a promising currency that is not tied to any bank in the world, and on the other, a time bomb that is just waiting for one major player to bring down the entire market.

But if you are an ordinary investor who is interested in the cryptocurrency market, then here you will find high profits associated with high risks.

For those who are trying to find free earnings: there is no way to get Bitcoin without investments.

But remember that now is not the most favorable time to invest in bitcoins, thereby trying to accumulate them. There are many alternative ways like investing in exchanges, buying places in cloud mining and other, more stable options for making money on cryptocurrencies.

The clouds are gathering over Bitcoin, so take a closer look at this very promising, but also terribly overvalued market.

Bitcoin (BTC) is the world's first decentralized digital currency. This currency is fundamentally different from all previously created electronic currencies and payment systems. It is not tied to any physical assets or "official" currencies, and the price of the digital coin - Bitcoin - is governed solely by market supply and demand.

Bitcoin is a worldwide payment system through which transactions with this currency can be carried out. Its main difference from traditional payment systems is that the Bitcoin system does not have any management or processing center - all operations take place exclusively in a network of peer clients.

At the end of October 2008, at email subscribers of the resource gmane.comp.encryption.general received a message from a sender named Satoshi Nakamoto. The message contained a description of the essence and properties of the created cryptocurrency called Bitcoin.

It was explained to subscribers that the new virtual currency is reliably protected from fraudulent transactions, does not depend on any organizations, and provides the opportunity for its owners to use it anonymously. All information about the new cryptocurrency was also posted on bitcoin.org.

However, the history of bitcoins, or rather the prerequisites for its creation, were known much earlier. Even 10 years before Bitcoin appeared, the advantages of creating an uncontrolled cryptocurrency were described by Neal Towne Stevenson in his novel. And researcher Nick Szabo worked until 2005 to create a system electronic money Bitgold. He argued that the virtual currency would not be subject to inflation. In addition, it will be impossible to fake and steal.

Key Features of the Bitcoin Network

• There is no concept of “registration”; anyone can participate in the network.
• A Bitcoin wallet is not tied to the user’s identity; anyone can create an unlimited number of wallets and details.
• Cheap, anonymous and unlimited money transfers around the world.
• There are no intermediaries, digital money is directly sent between users.
• It is impossible to block a transfer, freeze money in the user’s wallet, or “roll back” already completed transactions.
• Bitcoins can be stored on your computer, on your smartphone, in an online wallet, on a special device, or in a secure safe.
• There is no controlling organization, the price of Bitcoin is determined only by market supply and demand.
• The release of bitcoins is strictly limited and predictable; it is impossible to “run the printing press” and create many bitcoins.

Thus, Bitcoin simultaneously has the properties of ordinary cash, electronic currencies, a system money transfers and “digital gold”.

The essence of the Bitcoin cryptocurrency in simple, understandable language

This is a new generation of decentralized digital currency, created and operating only on the Internet. No one controls it; currency is issued through the work of millions of computers around the world, using a program to calculate mathematical algorithms.

Essentially, Bitcoin is an ordinary computer program. Only it is not located on any single computer or server, but on millions of computers at once, which directly communicate with each other through this program.

Torrents work on a similar principle. You install a program on yourself, and someone else does the same. You can then transfer files directly to each other, without the involvement of any servers, and with virtually no control. It is this feature that has made torrents the main breeding ground for piracy on the Internet.

The Bitcoin system works exactly the same way. The only task of this program is not to transfer files between users, but to give them “virtual glasses”.

The main differences between Bitcoins and classical money

• Bitcoins are not backed by anything

BTC are not debt obligations (like traditional money) and, in fact, are not backed by anything material. The price of bitcoins directly depends on supply and demand, i.e. How much do people need currency? A parallel can be drawn with gold, the price of which directly depends on demand. If at some point no one needs gold, then the price for it will collapse, although the price will not fall to complete zero, because It’s still metal and you can make something out of it. If there is no demand, nothing can be made from Bitcoin, so its price could theoretically fall to zero.

• There is no single center

As I said above, all payment system data is stored in open code on the media of system users. There is no system regulator (such as the central bank) who could influence the price of the currency, the quantity of new units issued, and other factors.

• Limited amount of currency

The source code of the system is programmed in such a way that the maximum number of coins in the system is initially known (21 million coins). Not only the maximum quantity is programmed, but also the dynamics of the issue (the release of new coins), which is now 25 coins every 10 minutes. Coins are distributed among the so-called miners, who ensure the functioning of the system with the provided computing power. Every 4 years, emissions are halved.

Thus, the payment system has a deflationary structure, which contributes to a constant increase in the price of the cue ball.

How the Bitcoin system works

For a general understanding of the basic principles of the Bitcoin network, watch this video:

To understand in more detail all the details of the Bitcoin protocol, you can watch this video with a more complete technical description network operation:

Bitcoin Blockchain Principles

Decentralization.

There is no central network control authority, the network is distributed among all participants, each computer that mines bitcoins is a participant in this system. This means that no central authority has the ability to dictate rules to Bitcoin owners, as, for example, was the case in early 2013 in Cyprus. And even if some part of the network goes offline, the payment system will continue to operate stably.

Limitation.

The supply of bitcoins is limited (by definition), its extraction is complex and labor-intensive (it is carried out by miners), and it cannot simply be taken and printed in the required quantity, like ordinary money. According to the algorithm that ensures the viability of the cryptocurrency, no more than 21,000,000 bitcoins can be mined, after which their mining will stop. It is difficult to predict what this will lead to, but if there is no financial collapse, the cryptocurrency will simply remain in circulation and will periodically change its rate.

Easy to use.

You need to go through seven steps of hell to open a current account for a company in our banks, and maybe you will be refused without explanation. For Bitcoin this is not a problem, you will need 5 minutes to create a Bitcoin wallet and start using it immediately. No questions asked, no fees.

Anonymity.

Yes Yes. It is completely anonymous and at the same time completely transparent. You can create an infinite number of Bitcoin addresses without being tied to a name, address or any other information. However, see the next point.

Transparency.

Bitcoin stores the entire history of transactions that have ever taken place, this is called a sequential chain of blocks or. The block chain knows everything. Therefore, if you have a publicly used Bitcoin address, then anyone can see how many Bitcoins you have in your account, if you have not reported that this is your address, then no one will ever know that it belongs to you. For complete anonymity, they usually use one Bitcoin address for a single transaction.

The commission is negligible.

Your bank can easily write off a $50 fee for international money transfers. Bitcoin - no. Although in 2017, due to the geometrically increasing number of transactions, the commission increased significantly.

Translation speed.

You can send money anywhere and to anyone, it will arrive in a matter of minutes after the Bitcoin network processes the payment.

Irrevocable transactions.

Once Bitcoin is sent to the recipient, it is impossible to return it. Only if the recipient himself does not want to do this.

The most frequently asked questions about Bitcoin

Who created Bitcoin?

The developer of the program calls himself Satoshi Nakamoto, he proposed an electronic payment system, based on mathematical calculations. The idea was to exchange coins without any central authority, electronically, more or less instantly, at the lowest possible cost.

But who prints bitcoins?

NOBODY. This currency is not printed by a central bank and does not operate under its rules. Banks can print as much money as they want to cover the national debt, thereby devaluing their currency.

On the contrary, the emission of bitcoins is possible only in digital form and anyone can start mining or, as they say, mining bitcoins at any time. Bitcoin mining occurs through the use of computer computing power in distributed network. When transferring bitcoins, the transaction is processed by the same network, thereby turning bitcoin into an independent digital payment system.

How many Bitcoins can there be?

There is a limitation in the Bitcoin code; a maximum of 21 million bitcoins can be “mined”. Despite this, Bitcoin can be divided indefinitely into smaller parts, it’s a digital currency! 1 satoshi is 0.00000001 btc (named after the creator)

What is Bitcoin backed by?

National currencies used to be backed by gold or silver, now they are backed by GDP. Theoretically, you could go to any bank in the country and exchange your paper money for the equivalent of gold and back. Bitcoin is not backed by anything, it is pure mathematics.

Anyone around the world can run a bitcoin mining script on their computer and feel like a mini-Central Bank. Source code The script is published in open form, everyone can see how it works.

Hello, in this article we will talk about the virtual currency - Bitcoin.

Today you will learn:

1. How to earn bitcoins with and without investments.
2. What to do with bitcoins.
3. 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 is the extraction of currency 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.

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 way a farm works is that you provide a specific program with the processing 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 downloading a special software For mining, you turn your computer into a server particle. 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 this moment There are a huge number of 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. Earnings are low, but so are you complex tasks you don't comply. 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:

1. 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.

1. Automatic earnings on faucets.

Making money on a machine is the best option for finding 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:

1. 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.

1. 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.

1. 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?

The more people mine or register for 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 with 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 gain a certain amount of satoshi on bitcoin faucet.

In order to earn 1 bitcoin per week, you can use the following methods:

1. 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.

Earnings on honest services it 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.

1. 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.

1. 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.