Cryptocurrency: what is it and how to make money?

Hello, dear readers!

The concept of “cryptocurrency” is now widely known. This technology, which has emerged from nowhere, is capable of generating a huge income. In this article you will learn in simple words all the important information about cryptocurrency. So, cryptocurrency: what is it and how to make money using this technology?

In recent years, the world has experienced a full-fledged financial crisis and a war of sanctions. The consequences affected all developed countries. America, European states, our country and many other countries each year are not counted billions of dollars!

Such things do not pass without consequences. As a result, we have seen a sharp increase in the euro against the dollar, the fall of the British pound, the depreciation of the Swiss franc. What to say about the rates of national currencies of Russia, Belarus and Ukraine? To date, there is no such currency in which you can be sure one hundred percent.

However, technology does not stand still. While chaos reigns in the financial sector, its electronic currency has appeared on the Internet. And not even one, but dozens …

The history of the creation of cryptocurrency

Modern technology is a miracle. Various useful things appear from nowhere and help us in life.

It is difficult to imagine, but 15-20 years ago there were no smartphones. People called each other only by stationary “city” telephones.

Today everything has changed. It is hard to imagine a person without a “mobile phone”. Using cell phones is very convenient. Therefore, even the most conservative people are used.

Cryptocurrency is another technology that can change our world for the better. This concept appeared a few years ago. However, the technology turned out to be very useful and in demand in various fields. Starting from daily payments and ending with the protection of national interests.

What is cryptocurrency
University of Cyprus accepts to pay Bitcoins

The history of the creation of cryptocurrency began with the creation of Bitcoin. Bitcoin is the very first cryptocurrency. She is the most popular and most expensive today.

Who and why came up with bitcoin

It all started in the midst of the financial crisis of 2008 …

That year a group of enthusiasts decided to create a universal payment solution that would not depend on politics.

October 31, 2008 on one of the sites for programmers an article appeared in which a promising electronic calculation system was described by certain bitcoins. The article was titled Bitcoin: A Peer-to-Peer Electronic Cash System.

On January 9, 2009, the first version of the bitcoin wallet was released and the first bitcoins appeared. In fact, the first crypto-money.

Bitcoin Creator - Satoshi Nakomoto
For a long time, it was believed that the creator of bitcoin is Japanese Satoshi Nakamoto

For several months, there have been some refinements of this system. There are a number of different settings and support for the popular linux operating system.

At that moment, bitcoin was still known only to a group of its developers and testers. Therefore, the system developers decided to somehow attract the attention of the public.

In November 2009, a forum was opened about bitcoin calculations. People became interested. The popularity of bitcoins began to grow. In addition, new ideas for improving the first cryptocurrency were born in the discussions.

For 2010, developers have found and eliminated several cryptocurrency vulnerabilities. Security has been increased and bitcoin sending speed has been increased. After that, the number of bitcoin wallets began to grow rapidly.

Already in May 2010, the first exchange of bitcoins for real goods took place. Then, American Laszlo Khanech traded 10,000 bitcoins for two pizzas for fun. In fact, it was the first use of bitcoin as money.

In fact, it turned out to be the most expensive pizza in history. After all, now for 10,000 bitcoins you can get almost a hundred million dollars!

Gavin Andersen - curator of the bitcoin project

Beginning in 2012, the Bitcoin Foundation, an American company, oversees the development of bitcoins. The main developer of this company is Gavin Andresen. That it is now possible to consider the project manager.

In recent years, the popularity of bitcoins has increased dramatically. Hundreds of thousands of people buy them to earn on the growth rate .

How did cryptocurrency appear

Bitcoin spread in just a year and a half. Noticing such a success, many developers started creating new cryptocurrencies. Most of them, in fact, copy bitcoin technology and only slightly modify it. However, there are really interesting cryptocurrencies, the use of which is thought even by the governments of many countries.

To date, it is known about the existence of more than 250 different cryptocurrencies. Venezuela has its own cryptocurrency, Belarus will soon be there. Even the famous TV presenter Olga Buzova is releasing her cryptocurrency. Perhaps this causes only emotion. But the most interesting thing is that the “Buzovsky” cryptocurrency will most likely make good money.

The most common cryptocurrencies

Currency nameCurrency codeYear of creationThe course on January 01, 2018
BitcoinBtc20098,017 USD for 1 BTC
LitecoinLTC2011161 USD for 1 LTC
EthereumEth2011737 USD for 1 ETH
RippleXRP20110.0043 USD for 1 XRP
Bitcoin CashBch20171.49 USD for 1 BCH
DashDASH2012703 USD for 1 DOGE
DogecoinDOGE20130.006 USD for 1 NXT

How does the cryptocurrency

Where does cryptocurrency come from? Obviously, this is not ordinary money. They are not issued by central banks. They do not depend on the monetary policy of a particular state.

The release of new cryptocurrency takes place in digital form. Anyone can literally mine cryptocurrency.

The production process of a new cryptocurrency is called mining. In order to engage in mining using the computing power of the computer.

What is cryptocurrency mining

The word “mining” came to us from English. Literally translated as “mining”. Only the extraction of cryptocurrency is made not in the mine, but at the computer.

Download a special program, configure it and the computer itself will produce a new cryptocurrency. True, computers need powerful ones for this, otherwise we will get one conditional bitcoin for years.

Any cryptocurrency, in fact, is a sequence of unique encrypted blocks of information. Simply put – a specific sequence of characters.

To get a cryptocurrency you need to calculate a new unique sequence of blocks. As soon as we start the program for mining, the computer begins to calculate a new sequence.

As soon as the computer finishes the calculations, information about it is transferred to a specialized data warehouse. And while you get one unit of cryptocurrency. For example, one new bitcoin.

If we talk specifically about bitcoins, then there is a special limitation on their production. The fact is that the more bitcoins already mined, the more difficult it will be to obtain (calculate) new ones. In addition, the release of new bitcoins is limited. That is, at some point, new bitcoins will no longer be extracted. You can only buy existing ones. And, it will happen by 2031.

Separately, I note that the mining of cryptocurrency requires a large number of independent calculations. Technically, graphics processors (video cards) do the best job with this task. For this reason, the rise in popularity of cryptocurrency has caused a rush demand for powerful graphics cards in 2017. The most “heaped up” models have risen in price twice as people bought them for mining en masse. Now, fortunately, the situation has become calmer. The hype around the video cards is gone.

Cryptocurrency wallet

bitcoin wallet blockchain
Blockchain is the most popular and reasonably safe bitcoin wallet.

You can keep cryptocurrency on special electronic wallets. Today, there are several dozen different wallets. Some of them are installed on a computer / phone, others work online. That is, through some website on the Internet.

Purchase and sale and transfer of cryptocurrency are carried out  either directly through transfers between the purse owners or through special exchangers .

Due to its popularity, cryptocurrency is already possible to pay in many online stores and even in regular stores.

Bitcoin payment card

Now you can even issue a payment card tied to your crypto wallet. This card can be used in any store or ATM. Conversion from cryptocurrency to ordinary money will automatically occur at the current rate.

Simply put, if we have a wallet with bitcoins, we can issue a card tied to the balance of this wallet. With this card, we can go to a regular store and buy, relatively speaking, sausages, bread and milk. Well, or something larger.

Cryptocurrency rate for today

Digital currencies are independent of geopolitics. They are not affected by oil production or sanctions. To date, the rate of cryptocurrency stacks exclusively according to the laws of economics. So, it is all about supply and demand. Well, since the demand for cryptocurrencies is consistently high, their rate is constantly growing.

In addition, the course may be affected by speculation. So, in 2013, bitcoin market makers achieved a huge jump in the course. Then, in just one month, the cost of Bitcoin increased from $ 200 to $ 1000 for 1BTC.

By the way, lately the price of bitcoin has also increased significantly. Over the past couple of years, the course has grown tenfold.

Advantages and disadvantages of cryptocurrency

Thanks to digital technology and the absence of a camp affiliation, cryptocurrency has several advantages over conventional currency:

  • Transparency . By virtue of its technology, cryptocurrency wallets store the entire transaction history. Any user can see the balance and all transactions of any crypto-wallet, knowing his number.
  • Security . Cryptocurrency can not be faked.
  • Anonymity . No binding to name and address. Banks and tax authorities do not control the movement of cryptocurrency.
  • Independence . Cryptocurrency turnover is beyond the control of state authorities and regulators .
  • Convenience . It is much easier to open an electronic wallet than a bank account. At the same time, the speed of operations with cryptocurrencies is much higher, and the commission is lower.

The disadvantages include:

  • Uncertain legal status . In some countries, cryptocurrencies are fully legalized. And in some, for example in Russia, the laws on cryptocurrency are still being discussed.
  • Use in the shadow economy . Criminals use cryptocurrencies for settlements between themselves. So they avoid the attention of supervisory authorities.

How can I make money on cryptocurrency

There are three proven ways to make money on cryptocurrencies:

  • Mining That is, the production of new cryptocurrency, with a view to its subsequent sale;
  • Investment in cryptocurrency. That is, the purchase for a period of one month or more for the purpose of subsequent resale, when the course grows.
  • Trading That is, the speculative cryptocurrency trade.

Mining we reviewed. Therefore, we dwell on other possibilities.

Cryptocurrency investment

Richard Branson says bitcoin is the best investment.
Well-known billionaire Richard Branson considers bitcoin the best investment

Everything is very simple. Set up a crypto wallet. We buy one or another cryptocurrency in anticipation of its growth. After a while, we sell cryptocurrency.

It is most convenient to buy cryptocurrency in electronic exchange offices. I recommend to use only the most proven of them. Among those, I refer  xhange or 60cek .

In this article you can see the whole process of buying cryptocurrencies on the example of Bitcoin.

I recommend first of all to pay attention to the most popular cryptocurrencies. Their course is more stable and in the long term grows steadily.

Cryptocurrency trading

Brokerage companies usually provide the most popular cryptocurrencies for trading. For example, FXOpen allows us to trade bitcoins and lightcoins for dollars, euros and rubles.

Liquidity is usually provided by some of the largest online stock exchanges. For example – “BitStamp”. In other words, trading is done using ECN technology. That is, the second side of transactions is not the broker itself, but other traders. All honest.

In general, cryptocurrency trading is a super-profitable option for those who are ready to try their hand and are not afraid of high trading risks.

For most investors (and especially for beginners), I would recommend not trading, but ordinary investments. This is much simpler, but the return on investment in cryptocurrency can also be high. I myself invest now in bitcoins, etriums and ripple. And, just last year, these cryptocurrencies brought me more than 700% profit!

I would be grateful to your questions or your opinion about what a cryptocurrency is and how you can earn money on it in the comments .

I wish you all a profitable investment!

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