What is Bitcoin in simple words: another electronic currency or a new generation of money? What is Bitcoin. Beginner's Guide What does it mean to mine Bitcoin?

If you are reading this article, it’s easy to guess that you were brought here by your interest in the loudest innovation in the financial world in recent years - cryptocurrencies, and primarily Bitcoin. Let's figure out what Bitcoin is and why there is so much talk about it. And not only on social networks and forums, but also in central banks, special committees and governments of many countries around the world. Join the community and start using new digital money.

Term "cryptocurrency"- a direct translation of the English "cryptocurrency", that is, a virtual currency protected by cryptography. First of all, cryptocurrency is a fast and reliable system of payments and money transfers, based on the latest technologies and not controlled by any government.

Bitcoin, Bitcoin, Bitcoin, BTC

Word "Bitcoin" formed in English from "bit"– the minimum unit of information and "coin"- coin. Following the rules of English-Russian transcription, this term should be translated into Russian as "Bitcoin". This spelling is used by the official website bitcoin.org, Bitcoin Wiki, Wikipedia, the Central Bank of the Russian Federation and other resources. Still a widespread option" Bitcoin" originated from the first translation of the wallet interface based on direct transliteration.

The most common abbreviation for Bitcoin is BTC– usually used in stock trading and financial articles. Cyrillic abbreviation, BTK, did not take root in the community.

What is Bitcoin? This is the first and most famous of the symbol and flagship of the cryptocurrency world, as well as the monetary unit of the same name that circulates within the system. Later in this article we will explain how cryptocurrency works, using Bitcoin as an example.

What is the most significant feature of Bitcoin from an economic perspective? It is a digital commodity with a limited supply, its algorithm is designed in such a way that a maximum of 21 million units can exist in the system, each of which is also called “bitcoin”. The emission schedule is determined programmatically and is known in advance. After the last coins are generated, their number will not change. Bitcoin's economy is built on a deflationary model, which has raised concerns among many economists. But they find no practical justification.

In fact, such a relatively small number of coins is quite enough for everyday payments, since 1 bitcoin is divided into 100,000,000 parts, which are called “satoshi”, in honor of the creator of the system. Sometimes the terms "millibitcoin" (mBTC, one thousandth) and "microbitcoin" (uBTC, one millionth) are used.

Bitcoin emission schedule

Bitcoin began as a concept document published on October 31, 2008 by a mysterious person working under the pseudonym Satoshi Nakamoto. Who the real developer is, one person or a group, is still unknown, despite numerous journalistic investigations. On January 3, 2009, the practical implementation of this concept in program code began. IN 18:45 GMT (22:45 Moscow time) 03.01.2009 The first block in the network, the so-called genesis block, was generated. This day is considered Bitcoin's birthday and is celebrated by communities around the world.

What is the difference?

Features of Bitcoin that distinguish it from other types of electronic and paper money:

Bitcoin mining difficulty chart

Cryptocurrencies in life

Initially, bitcoins were in demand only among mathematicians, cryptographers, and people very passionate about computer and network technologies. Back then, bitcoins simply served as proof that unsecured electronic money was possible. Rather, they can be called an electronic analogue of gold - like gold, bitcoin is difficult to mine, its quantity is limited, and the complexity of mining only increases over time. In the fall of 2009, 1 BTC could already be purchased for 0.8 cents. From then on, the history of stock trading began, in which there were many ups and downs, high-profile bankruptcies and successful projects. Transactions for Bitcoin were at first rare and sporadic. The first and most famous was the purchase, which took place in May 2010 (at that time the equivalent of $25). Since then, the exchange rate has risen above $1000 and fallen back to $150, but that's another story...

Early in Bitcoin's development, the illegal online marketplace Silk Road also created its popularity. Now Bitcoin does not depend on one exchange or pool, and law enforcement officers have learned to deal with illegal activities in cryptocurrencies in the same way as with other economic crimes.

Today Bitcoin is a modern digital currency that is perfect for payments on the Internet. More and more stores as one of the payment options. The simplicity and convenience of opening a Bitcoin account is attracting more and more people from developing countries to this digital currency. In many countries in Asia and Africa, the Bitcoin network is replacing people with difficult and expensive banking services. In developed countries, POS terminals for paying with Bitcoin in stores, ATMs for cryptocurrencies, and hardware wallets for Bitcoin have become widespread. There has been a real boom in startups that use Bitcoin. It turned out that blockchain technology is suitable not only for financial calculations, but also for distributed storage of data about various assets. There are already several thousand created on the basis of Bitcoin or from scratch.

A little about politics

The attitude of states towards cryptocurrencies is very different. There is both clear encouragement - in Japan, Australia, Germany, the Netherlands, New Zealand, Singapore, various offshores - and serious restrictions that can outgrow prohibitive measures - in Indonesia, China, Ukraine. Only ardent Latin Americans in Bolivia and Ecuador decided to implement direct bans.

Many governments have chosen the observation line with cautious optimism - most of the EU countries, the UK and Switzerland, the US federal government, Canada and countries in Southeast Asia. In most developed countries, financial legislation is being adapted to regulate cryptocurrencies, and this issue will soon be resolved.

Its over 300 times and not planning to stop. Even self-proclaimed experts cannot reveal the secret of Bitcoin. However, this is not stopping investors from investing in what is often called the largest bubble in modern history.

If you happen to ask these investors what Bitcoin is for, you'll likely only get confused looks and raised eyebrows. Gold, for example, is used in mints, in jewelry, as a conductor for high-precision electronics, and as a material for medical implants. Determining the spectrum of Bitcoin use is somewhat more complicated. If Bitcoin is a true commodity, its value must consist of more than just the value of an investment instrument. So what is Bitcoin used for?

As an alternative means of payment

If you spend enough time online, you may have noticed a growing number of projects accepting Bitcoin as a means of payment. Major players in the market, including Overstock.com, Expedia, Newegg, DishNetwork and Microsoft, do not disdain this.

Some companies only accept Bitcoin. Why? Sometimes entrepreneurs do things that go against the grain of traditional financial institutions, be it providing VPN traffic, selling marijuana, or showing adult videos. Since Bitcoin uses a p2p system, such services do not have to worry about blocking their accounts. It makes sense for their users to get themselves a Bitcoin wallet.

In general, Bitcoin has become quite popular. It is accepted by more than 100,000 merchants online and offline, and their number is growing every day.

As an alternative to a debit card

Bitcoin provides opportunities similar to banking services. In some regions, people already have access to Bitcoin ATMs, where they can withdraw funds from their wallet or transfer them to a Bitcoin card. Such cards can become an alternative to debit bank cards. There is even a tangible Bitcoin coin, but it is more of an expensive souvenir than a practical thing.

As a permanent transaction ledger

In January 2009, when Satoshi Nakamoto bought Bitcoin, he left the following entry in it: “The Times of January 3, 2009: Chancellor on the verge of another bank bailout.”

This reference to the modern banking system reflects one of the core elements of Bitcoin. The blockchain records all transactions of this cryptocurrency. More importantly, because records can be entered with third-party data, Bitcoin can be used to exchange information and values ​​that are not related to itself. This mechanism is much better implemented by altcoins like Ethereum, but it was Bitcoin that first proposed this concept.

Instead of fiat currency

Bitcoin is a ready-made solution for those who do not want or cannot use fiat currency, who have lost faith in central banks, live in a country with a deteriorating economy, or in a region where there is no stable currency. Bitcoin's recent hyper-volatility aside, it is currently a good investment and a healthy alternative to fiat currency.

Of course, no one knows what the future holds for Bitcoin. However, the use cases described above are valid for now and, apparently, will be valid for some time to come.

Bitcoin cryptocurrency (an accessible and simple definition) is a decentralized new generation, which was created and operates on the Internet.

BTC is calculated by computers connected to each other around the world. RuscoinsInfo has prepared material about the history and prospects of Bitcoin.

Bitcoin cryptocurrency is a payment system in which, unlike the usual VISA or Mastercard systems, it is not fiat money (dollars, euros, rubles), but digital currency (BTC). Cryptocurrency is not controlled by banking or government agencies. The rates of digital coins are influenced by the market, depending on changes in the relationship between supply and demand. This is the main criticism of Bitcoin and similar coins - the unstable exchange rate. You can lose a fortune overnight by investing incorrectly. But there are no intermediaries in the blockchain.

How it works? In fact, blockchain is just blocks of records. These records inform everyone about the transfer of funds and exchange for other cryptocurrencies. Sound scary? But at the same time, no one can reveal the real name, address, or number of coins used. Records in the blockchain cannot be falsified, blocks cannot be deleted, each block is assigned a serial number.

The Bitcoin cryptocurrency has its own blockchain, built according to its own principles: there is a reward for those who create these blocks (for miners).

BTC Decentralization: Does It Benefit Cryptocurrency Holders?

Cryptocurrency is not regulated or controlled by any organization. Users have equal rights, regardless of nation, citizenship, or other criteria. Traditional payment systems issue cards of different levels: VIP, Platinum, Gold. There is also a division of users by levels on platforms or YandexMoney. Users face restrictions and limits on transactions. Bitcoin removes boundaries and barriers between token owners.

Decentralization has become the key idea of ​​all cryptocurrencies since, but in fact it has not been fully implemented anywhere. Behind altcoins there are large teams that control their development. Bitcoin has no such thing: Satoshi Nakamoto may not even exist. But at the same time, large investors control the market: if, for example, they suddenly decide to sell all the bitcoins in their account, the BTC rate will collapse. Therefore, it is beneficial to keep coins and not sell them immediately after purchase; this contributes to stability and growth of the exchange rate.

Is Bitcoin cryptocurrency completely anonymous?

When making Bitcoin transfers, users do not provide personal information. And in bank transfers and on the payment cards themselves there is the full name of the recipient. From this you cannot find out anything about the owner of the tokens, except the wallet address (character set). Of course, if you don't follow security measures, there is a risk that hackers will take your funds. It is enough not to leave your address and key (password) on open resources, and not to transfer it to third parties.

The anonymity of cryptocurrency in 2019 is often criticized; Bitcoin has been called almost a means of payment for terrorists, drug dealers and thieves. But in fact, statistics show that criminal transactions are more often carried out with fiat (cash dollars, euros) than with cryptocurrency. There is no way to know the wallet address in a BTC transaction, but you can still trace the path of the coin.

Bitcoin transactions are irreversible

The operation carried out with cryptocurrency is irreversible and cannot be blocked, suspended or cancelled. Of course, theoretically it is possible - through a rollback, but practically it is unlikely and will lead to a split in the community. That is, if you transfer bitcoins to someone by mistake, you will not get them back. Please check your Bitcoin payment details very carefully.

Bitcoin Network Security

The cryptocurrency storage system is almost impossible to hack; developers try to prevent vulnerabilities in advance. The loss of tokens is due to the fact that users incorrectly stored private keys and passwords from crypto wallets. At the same time, the cryptocurrency exchange on which you exchanged your bitcoins may be hacked. This is not the fault of the cryptocurrency, but a vulnerability in the operation of the site.

No intermediaries

Bitcoin transactions go directly from one user to another. The services of a third party - the banking system or other service - are not needed. Operations with tokens can only be carried out by the owner. This is especially important for large transfers; if you were to make it through a bank and in fiat, the commission for the services would be very high. The bitcoin cryptocurrency is aiming for mass adoption and daily payments. The BTC blockchain will allow you to buy real estate, a car, jewelry without intermediaries, but at the same time completely legally and with the ability to prove your rights to purchase.

Bitcoin cryptocurrency: history of creation

Bitcoin cryptocurrency is often called the first in history. But this is not so, it was created based on the example of previous experiments.

It is impossible to say exactly when the first cryptocurrency appeared. Cryptographers have been developing it for many years. Complex mathematical calculations were used as a basis.

Based on this experience, an anonymous user (Satoshi Nakamoto) together with Hal Finney came up with the idea of ​​the Bitcoin cryptocurrency in 2008. The network protocol with a brief description of the new payment system was published by Satoshi, for which he received recognition as.

Although there are rumors that Satoshi Nakamoto is a whole group of developers, and not just one person, because no one has ever seen him. There are concerns that Satoshi Nakamoto has a huge amount of bitcoin left in his account. If for some reason they are sold from the exchange in a short time, this will collapse the Bitcoin rate (creating too high a supply). Perhaps the Bitcoin cryptocurrency will no longer recover from such a blow.

Reasons for creating bitcoin: decentralization, accessibility, security. According to the creators, the Bitcoin cryptocurrency will become a currency for fast and cheap transfers.

Bitcoin cryptocurrency: significant events in 2018

In December 2017, Bitcoin literally went crazy. Shortly after the introduction, the price of BTC rose to a high of $19,202.80, but a correction soon began. The biggest obstacle for bitcoin remains the struggle for mass adoption and use as a means of payment.

2018 turned out to be difficult for both BTC and other cryptocurrencies. Although it started out quite well: on January 7, the total capitalization of the cryptocurrency market reached a record high of $829 billion.

Then it seemed that the Bitcoin cryptocurrency would only grow, as many experts said. 11 months later, the cryptocurrency market capitalization is $130 billion. It is not difficult to calculate that during this time the market lost almost $700 billion.

This year was the most unsuccessful for, which lost 94% of its record value, as well as for, and, whose price fell by 93%. The leader of the cryptocurrency market, Bitcoin, lost 71% in 2018, which puts it in 13th place on the list of cryptocurrencies that have fallen in value the most.

Bullish trend in 2019 - what is its probability?

Many are still waiting for the Bitcoin cryptocurrency to grow to at least ten thousand dollars per token. Or better yet, before its previous peak of 20 thousand. There were people who bought on the wave of popularity, paying $10,000 - 15,000 for 1 BTC. Of course, given that in February 2019 it was trading at $3,000 - 4,000, investors want their money back.

Cryptocurrency experts argue that changing trends (upward and downward) are cyclical. This means that after a long fall and stagnation (the bear market of 2018), there must be growth. And the courses at the end of February 2019 confirm this. It is unlikely that the growth will be as rapid as at the end of 2017. But still, the Bitcoin cryptocurrency can reach the levels of early 2018.

How does blockchain work on the Bitcoin network?

The basis of the BTC network is the blockchain. These are blocks that contain records of all completed transactions. Visually, you can imagine recording each transaction on a separate sheet, which are combined into book chapters (blocks), forming the book itself (blockchain).

To carry out a new operation, it is necessary to process all the blocks available in the blockchain. It is not possible to make changes to entries that have already been made. The blockchain is open: users have access to view records. Thus, the blockchain is a huge open database in which records of all ongoing transactions are stored in encrypted form.

Blockchain is the basis of cryptocurrency; it allows you to save the desired information for a long time, without worrying about thefts and hacks. Blockchains are often implemented in medicine, education, and archives to confirm the accuracy of information and record the exact time of records.

Bitcoin price for 2019, forecast and prospects for cryptocurrency from RusCoinsInfo

The BTC rate has been showing steady growth over long periods of time. In the long term. Experts’ confidence lies in the differences between bitcoin and fiat money. The Bitcoin cryptocurrency is currently poorly suited for daily payments (high commissions during network congestion, long transaction approval times, poor network scaling).

But Bitcoin has become a good investment option for the long term. Growth is expected by mid-2019, and with it the growth of the entire cryptocurrency market.

Features of the Bitcoin network

All modern cryptocurrencies have adopted something from Bitcoin: the idea, the blockchain, the consensus algorithm. Therefore, it is with BTC that you need to start getting acquainted with cryptocurrency.

Bitcoin cryptocurrency: electronic form

Digital currency only has an electronic form. There is no paper or other equivalent for the Bitcoin token. This eliminates the possibility of counterfeiting and the appearance of counterfeit coins. The user does not risk receiving fake BTC. Of course, you can store wallet addresses on paper. This is the most secure way to protect yourself from hackers.

Bitcoin price formation

Fiat currency quotes are directly dependent on the economic and political situation in the country. depends on the presence or absence of demand. The political situation can only have an indirect impact on the bitcoin rate. In fact, even a careless tweet or news story can affect the BTC price.

Bitcoin emission and inflation

The volume of any national currency in circulation is controlled by the central bank or government of the country. Theoretically, it can be assumed that under a number of circumstances, an infinite amount of fiat money will be printed, which will lead to its depreciation. In the Bitcoin network, the final number of coins is limited to 21 million. Assuming that the demand for cryptocurrency will increase, its price can only rise, because someday there will be nowhere to get new ones.

Bitcoin storage wallets

There are many solutions for storing BTC coins. Basically can be divided into:

• Local;
• Mobile;
• Browser;
• Hardware.

The wallet solves a specific problem. The official local wallet for the Bitcoin network is Bitcoin Core. The program requires significant computer resources, since it downloads and stores the entire blockchain, periodically synchronizing it.

Local wallets, which do not require downloading the entire blockchain are also called “thin”. Popular ones include, and.

Mobile wallets- These are applications installed on smartphones or tablets. Often mobile versions have desktop programs.

Browser Bitcoin wallet no need to install on your computer or smartphone. Access to cryptocurrency is carried out through an Internet browser. This solution is convenient, but not always safe. It is not recommended to store large amounts of money on a browser wallet.

Bitcoin hardware wallet- safe storage option. The device looks like a flash drive and does not have a permanent connection to the Internet, which makes it almost impossible to hack.

Must read:

Will Bitcoin's 2017 growth be repeated in the future?

2018 turned out to be an extremely unsuccessful year for Bitcoin; many experts who predicted a further increase in the value of the first cryptocurrency have curbed their ardor and are now giving more restrained forecasts. However, some have not changed their optimistic opinion about the BTC rate for 2019.

For example, BitPay Chief Commercial Officer Jeet Singh:

Bitcoin cryptocurrency will grow to $50,000 by the end of 2019.

John McAfee, a well-known crypto enthusiast, said:

Bitcoin will undoubtedly grow, but not in 2019, but in 2020. Approximately $1 million per 1 BTC by the end of 2020.

Galaxy Digital Capital CEO Mike Novogratz:

Bitcoin cryptocurrency is unlikely to exceed $9,000, although previously I was expecting a figure of $40,000.

Renowned analyst Willy Woo:

Bitcoin will not recover until mid-2019.

Kay Van-Petersen and Jacob Pouncey, analysts at Saxo Bank:

Bitcoin in 2019 may even drop to $1,000.

What Russian-speaking politicians say about Bitcoin

In 2019, competent regulation is very important. Cryptocurrency will only develop in those countries that create a well-thought-out regulatory framework. How do CIS politicians feel about Bitcoin?

Vladimir Putin:

We must take advantage of new technologies in banking. It is important not to pile up obstacles, but to take into account the risks.

Dmitry Medvedev:

Where is the limit of this cryptocurrency race? Perhaps this is a dead-end branch of the cyber revolution. Many Internet companies of the 90s disappeared in the early 2000s.

Alexander Lukashenko:

There are competent people in Belarus who are ready to deal with this issue. If everything goes well, then it’s a plus for us. If not, then I know who to ask.

Forecasts are a thankless task, no matter how many times they have not come true. For example, most of the optimistic forecasts for 2018, which appeared during the December 2017 hype, turned out to be failures. Who knows whether the forecasts of those who now predict Bitcoin growth or decline in 2019 will come true.

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 coin, we have to come up with new ways to actually earn 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 on 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 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 exchange 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. At the 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. The earnings are not high, 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:

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 a 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 the special STARTAVTOBET application on your computer, 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 exactly 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 they provide a full list of transactions.

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 built through a forum on the complete trust of strangers in 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 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:

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.

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.

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.

More than nine years have passed since Bitcoin was announced to the public. Many of those who then invested in an unknown digital currency have become dollar millionaires today. And although today the community’s attention is increasingly directed to new promising alternative coins (altcoins), Bitcoin remains the first cryptocurrency that sets the trend for the entire market. It is a locomotive and the rate of all other cryptocurrencies so far depends on its rate.

Despite the apparent popularity of the cryptocurrency topic, less than 1% of the world’s population uses Bitcoin and other cryptocurrencies. Cryptocurrencies still cannot be called a mass phenomenon. To better understand what Bitcoin is, how it works and how to use it, we wrote this instruction.

What is Bitcoin?

Bitcoin was first introduced to the community in 2009 as an open source project. The open source of a product means that anyone can see how it works, copy it for themselves and change it as they wish. Bitcoin is the world's first cryptocurrency. Very briefly it can be described as digital currency that exists only in electronic form.

Bitcoin is decentralized. You've probably heard this term. Decentralization means that Bitcoin has no control center. There is no single coordinating body that would manage the operation of the entire system. There is no emission center that would single-handedly control the issue and circulation of new coins, as happens in the banking sector. But nevertheless, the Bitcoin network works clearly and there is order in it.

All a user can do on the Bitcoin network is send a transaction to another user. This transaction will be recorded on the blockchain, which is essentially a huge ledger. This ledger records information about every transaction that has ever taken place on the Bitcoin network, dating back to the very beginning of its existence. Blockchain (block chain - chain of blocks) consists of blocks that are organized according to the Merkle Tree (Hash Tree) principle. This technology is used in part to prevent changes to databases and to find damaged files. If even one file in the chain is damaged or changed, the blockchain will protect the remaining files in the ledger from corruption.

Instead of a Central Bank that prints money and controls the financial system, on the Bitcoin network, everything is controlled by code. This code determines how many new coins will be issued and where they are located. It is he who guarantees that the transaction on the network will be completed.

There are currently about 17 million bitcoins in circulation. As already mentioned, there is no emission and control center. Everything is controlled by code. The total number of coins provided in the Bitcoin blockchain is 21 million BTC.

21 million is a fairly arbitrary limit, because one bitcoin can be divided into almost infinitely small parts. Its smallest particle 0.00000001 bitcoin is called satoshi. It is named after the creator of Bitcoin.

It is believed that Bitcoin is a new generation of money. It was originally created as a deflationary currency, as opposed to classic inflationary ones. Inflation is used by governments and banks as a hidden taxation to redistribute wealth. Many believe that Bitcoin and blockchain in general will help ordinary people gain more financial freedom from central banks and money-printing politicians.

How Bitcoin works

One of the key features of Bitcoin as a digital currency is its very strict transaction verification process, which reduces the risk of fraud to zero. In Bitcoin's decentralized architecture, transactions are verified by miners. They also update the blockchain by adding new blocks to it. Once several transactions are verified, they will be recorded in a block, which will be added to the blockchain.

What is mining?

Instead of a single server that verifies all transactions, the Bitcoin network allows the average user to verify and confirm transactions. Such users are called miners. In simple terms, mining is the computational process of confirming transactions and recording them in a block. In addition, the computational process of creating a block occurs according to an algorithm called Proof of Work (confirmation by action or proof of work). POW means that in order to create a block, it must be verified that a minimum amount of energy was expended to do so.

Calculations are based on Proof of Work (POW), or proof that a minimum amount of energy was expended to obtain the correct answer.

Computational work is performed not by people, but by machines—special mining equipment.

The built-in reward mechanism pays miners compensation for each new block in the chain. The way Bitcoin's code works is that this reward "halves" every four years. Currently, the block reward is 12.5 bitcoins.

The computational complexity for Bitcoin mining is growing very quickly along with the number of unmined coins. Currently, calculations are only possible on powerful hardware called ASIC (Application-Specific Integrated Circuit). An ASIC performs the same tasks as a regular CPU processor, except that it is designed to perform only one type of calculation. ASIC can mine bitcoins and nothing else.

Bitcoin mining currently requires financial costs (purchase of equipment) and other resources (room, cooling, electricity). If you are new to the game, then you will face acute issues with launching farms, their placement and maintenance. All this will require initial capital.

What is a Bitcoin transaction and how does it happen?

It seems that the Bitcoin network is complex. In fact, for the average user everything is much simpler. To transfer funds to another user, you only need to know his wallet address and nothing more.

Today, there are many programs and applications that allow you to safely store cryptocurrency and make transactions for other users without any problems or difficulties.

On the Bitcoin network, each wallet address is a string of 34 upper and lower case letters and numbers. For example 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa. This address is called the Public Key. You can share this address with other users so that they can send you bitcoins.

To manage your wallet, you must have a Private Key. The private key consists of 64 characters and confirms that you are the owner of the wallet. Whoever has the private key can make transactions. That's why never, under any circumstances, give your private keys to anyone.

Bitcoin storage wallets

So you have some (or a lot) of Bitcoin or any other cryptocurrency. Cryptocurrency cannot be put in a pocket or a regular wallet. Therefore, you need to clearly understand several key terms applicable in the crypto world:

1. Cryptocurrency exchange. This is a platform for exchanging and trading cryptocurrencies (Bitcoin, and others). Can also be used for storage, but it is not 100% safe.
2. Cryptocurrency wallet. Essentially, it's like a bank account that only you control.
3. Hardware wallet. A gadget that allows you to store cryptocurrency even without an Internet connection. It is considered the safest way.
4. Public key. This is your wallet address. You can share this address with other users. Knowing the public key, you can send bitcoins to it.
5. Private key. This key allows you to create transactions and send them to the network. Whoever owns the private key also owns the bitcoins that are in the wallet. Never, under any circumstances, give your private keys to anyone.

Now that the basic terms are clear, we can describe the structure of cryptocurrency wallets.

If you see news that a hacker hacked something and stole bitcoins, most likely we are talking about hacking a cryptocurrency exchange. Since it is almost impossible to hack the Bitcoin network. The likelihood of the blockchain being hacked is almost zero, and many experts seriously say that the Bitcoin blockchain cannot be hacked.

Cryptocurrency exchanges are another matter. Probably the most striking example would be the hacking of the Tokyo exchange MtGox in 2014. Unknown people stole 850,000 BTC from exchange wallets for a total of more than $350 million. unknown persons hacked the platform and gained access to wallets through it. Therefore, we can talk about hacking the site itself, but not about hacking the Bitcoin blockchain.

Many analysts believe that MtGox has become a sacred victim for the development of Bitcoin and the blockchain. Using his example, many sites understood what security really means in the cryptocurrency world.

Although many storage platforms are considered very secure, news of hacking attacks has some users feeling paranoid.

Advantages of hardware wallets. A hardware wallet for storing cryptocurrency is usually a USB device. This device allows you to store private keys offline without transmitting them to the Internet. Your private key is only in your hardware wallet and cannot be stolen (unless your device is physically stolen)

Hardware wallets are so secure that there are many stories of people losing them and being unable to regain access to the hundreds or thousands of bitcoins stored there. For this reason, many users prefer to store bitcoins in a “paper wallet.” Literally, this means that your private key is written down on paper and you manually enter it to complete the transaction.

Why use Bitcoin?

Very often Bitcoin is called the future world monetary system and here's why:

• • It is decentralized. Money belongs to people, not banks. Bitcoin appeared in 2008, immediately after the global financial crisis, and instantly attracted the attention of those who were disillusioned with the existing financial system. The idea of ​​decentralization has captured the minds and hearts of those who view politicians and bankers who print money with distrust. Now a new ideology is being formed, which is called cryptoanarchism. That is why .
  • Freedom. Anyone can conduct a cross-border transaction of millions and billions of dollars, pay for any goods and do not need to wait for confirmation and approval from the bank.
  • Safety. To send money you do not need to have a passport or confirm your identity. Unlike banks or traditional payment systems, where strict verification is required. This minimizes the risk of losing personal data.
  • Low cost of money transfer. Banks or payment systems like PayPal charge huge fees for money transactions. For example, PayPal charges up to 6% per transaction. On the Bitcoin network, the transaction cost is much lower, and with the launch of new updates, it should decrease even more.
  • Immutable registry. The Bitcoin blockchain is a public ledger that cannot be changed or tampered with. The community has accepted the new technology and trusts it because blockchain is a mathematical software code. It excludes the human factor and cannot be corrupt, unlike officials.

Weaknesses and problems of Bitcoin

Despite all the obvious advantages of Bitcoin, it has a number of significant problems that the community is currently working on solving.

Perhaps one of the main obstacles to the global use of Bitcoin by civilization is its abnormal volatility (rate fluctuations). But this is not the main problem, there is something else:

1. Partially outlawed. It is impossible to talk about complete legalization as a completely illegal status of cryptocurrencies. Bitcoin is rather in the “gray” zone. Up to a certain point, big governments remained on the sidelines. This has led to the technology becoming quite advanced. Now the adoption of blockchain for governments and regulatory authorities is tantamount to a loss of power and control. However, the price of Bitcoin is still very sensitive to news of regulations and bans. This is skillfully used by speculators and manipulators. The adoption of cryptocurrency at the legislative level is only a matter of time. The question is who will be the first to harness the new technology and extract the maximum benefit for their state.
2. Cryptocurrency exchange hacks. As already noted, hacking an exchange does not mean hacking the blockchain. However, the market still reacts to such news, although to a lesser extent. Cryptocurrency exchanges, in turn, are developing and improving their security systems, recognizing the risks.
3. Volatility. This is one of the reasons why traders and stock speculators became interested in Bitcoin. Those who view Bitcoin as a speculative instrument are mainly trying to predict future price behavior. But the cryptocurrency market is unpredictable now. One thing is certain: in the long term, the price of Bitcoin will only rise.
4. Weak adoption of technology by business. Bitcoin's high volatility is the biggest obstacle for businesses to accept Bitcoin as a means of payment. A growing number of users and a more stable exchange rate would significantly increase business interest in Bitcoin as a means of payment.

Another problem is that although many have heard about Bitcoin, only a small part of users understand what Bitcoin is, how it works and what opportunities it brings to civilization. Instructions like this should help people expand their knowledge of the technology and ultimately grow the community.

The larger the community, the stronger Bitcoin. The more people know and use Bitcoin in everyday life, the stronger and more stable its price will be. This benefits everyone except speculators.

How to buy Bitcoin

In the early years of Bitcoin, there were no reliable cryptocurrency exchanges. Their number began to increase along with the growing popularity of cryptocurrencies in general. There are a lot of really good, community-oriented marketplaces on the market right now.

Today the situation is such that many cryptocurrency exchanges receive huge investment injections from venture investors. These sites are monitored quite strictly and comply with the laws. This indicates their relative stability and security. We have a detailed article about where you can buy Bitcoin for rubles. But now we will briefly talk about the two most reliable exchanges where you can:

Who created Bitcoin?

It is believed that the creator of Bitcoin is Satoshi Nakamoto. But the identity of this person has not yet been established. According to one version, Satoshi Nakamoto lives in Japan. He was born on April 5, 1975. But there are a number of investigations that claim that this is not even one person, but a group of programmers who are well aware of the field of programming and cryptography. This group is geographically dispersed throughout the United States and Europe.

It is believed that Satoshi Nakamoto created the first block (Genesis block) in the Bitcoin blockchain. There is also a version that Nakmoto was single-handedly involved in Bitcoin mining at the very beginning and mined an impressive amount, which is still in his account.

Despite the fact that the identity of the creator of Bitcoin has not been officially established, this does not prevent the technology from developing. Hundreds and thousands of new cryptocurrencies are appearing, and governments are constantly making attempts to “ride” the technology in one way or another.

Conclusion

Bitcoin is still a very young digital currency and technology. But nevertheless, it is increasingly finding application in all spheres of life. This technology fundamentally changes the understanding of monetary relations between people. The more people learn about Bitcoin's potential, the greater and faster its adoption by businesses and governments.

Bitcoin is the flagship of all other cryptocurrencies. Understanding its potential leads to the discovery of amazing new uses of blockchain technology in our world.

The old monetary system, full of crises and contradictions, seems like a lumbering old dinosaur in front of the new transparent blockchain architecture. Bitcoin opens the door to a world without intermediaries in the form of outdated financial institutions and corrupt officials. Welcome to the new era of cryptocurrencies.