The topic of bitcoins has become incredibly popular over the past few years. Many people have heard about the possibilities of earning on crypto-currencies, but it’s hard to imagine how this system works. In this article we will describe what bitcoin is, the history of its occurrence, as well as the advantages and disadvantages of electronic money. So, let’s talk about bitcoin currency. Bitcoin is a digital currency that works only through the Internet. The emission of such money is produced by millions of computers around the world. New bitcoins are formed by calculating mathematical algorithms.
Bitcoin – where did this crypto currency come from: bitcoin trading and mining?
Over the past few decades, scientists who are engaged in cryptography have studied the possibility of creating a unique decentralized payment system. The world’s first Bitcoin crypto currency was created in 2008 by Satoshi Nakamoto (a pseudonym for a person or a group of people, perhaps even an entire corporation). The new e-currency was conceived by the creators of more sophisticated than the modern traditional money. Bitcoin should have been: increased protection from fraudulent transactions, independence from financial institutions and the ability to use money anonymously. In October 2009, bitcoin received for the first time the value of relatively real money (dollar). The price directly depended on the energy consumption of the computer for the crypto currency.
The Airbitz crypto currency wallet is an application that offers a wide range of functions for handling digital money. It features ease of use, a clear interface in the absence of many unnecessary or complicated options, and also gives you the opportunity to use the client both on Android and on the iOS platform.
What is bitcoin in technical terms and how does it work: about cryptocurrency in a nutshell
In simple terms, bitcoin is a computer program. In this program, I register users and communicate with each other. It gives electronic money simply because the user keeps it on the computer. To extract bitcoins, a lot of faucets were also produced, for example Aliens bitcoin. The emission of virtual money (bitcoins) is limited. The program can only release 21 million bitcoins, and makes it difficult to obtain new crypto-currencies if too many new users are connected to the system.
In order to obtain a crypto currency, you do not need to solve mathematical problems yourself. The program itself generates tasks of varying complexity and solves them independently – it is for this process that virtual money is issued. During the decision of tasks the computer should spend capacities of the processor. Due to the fact that the bitcoin miners become more and more every day, mathematical tasks become more complicated. In order for the first person to get bitcoin, he must first solve the mathematical problem, and this requires a more powerful technique than the other users. Powerful computers that miners use to solve problems are called “mining farms”. After the mining of the crypto currency, the miners exchange them for real money on special electronic exchanges.
What is electronic money provided?
If in the past national currencies were provided with gold, they are now backed by GDP (gross domestic product). Bitcoin, however, consists of pure mathematics and is therefore not provided with anything.
Advantages and disadvantages
In comparison with conventional money, bitcoins have a number of advantages. Benefits:
- Simplicity. To open an account in modern banks, you need to spend a lot of time and effort. Creating a bitcoin-wallet takes only 5 minutes and you can immediately start using it.
- Decentralized system. Every computer anywhere in the world that produces bitcoins has equal rights along with the rest of the system’s participants. That is, there is no centralized authority capable of dictating its laws and rules to the owners of bitcoins. No one can control the transfers made in the system, even the president himself.
- Anonymity. The user can create any number of bitcoins-addresses and bitcoins-wallets without any binding to the address.
- No commission for transactions. If the bank takes a commission for money transfers (especially high fees for the transfer of money in foreign currency), then the crypto currency is free of this shortcoming. There is no commission for the transfer, since officially nobody owns this service.
- Transaction speed. You can send electronic money in minutes to anyone in any country.
- Crypto currency is prohibited by the legislation of many countries. The government of only a few countries has a positive attitude towards digital currencies, an example of such countries is Japan and Belarus. At present, there are no clear and universally recognized standards of legal and tax regulation for crypto-currencies.
- Criminalization. The newest means of payment, which do not obey the official regulators, aroused increased interest among representatives of the criminal world. They own a considerable amount of electronic money.
- There is no way to review the transaction. Thanks to the new electronic system, transfers have become quick and cheap, but there is no possibility of withdrawing money sent to the wrong address.
- High Volatility. Due to the fact that bitcoin is not provided with anything, it is capable of setting record volatility indicators. Cases were recorded when just a day the rate of the Crypto currency decreased by a quarter.
Information propaganda. Unfortunately, the enemies of decentralized standards are trying with all their might to undermine the image of the crypto currency, which greatly affects the exchange rate fluctuations.
By many characteristics, all altcoins are similar to real money, but it has distinctive features that make it more popular. He can also participate in various market transactions, there are ways to make profit from them. The only advice – remember the risks. All about cryptocurrency you can read on additional specialized resources and in articles of analysts.