23.08.17 246 888 0

What are bitcoins

And can you make money from them?

Bitcoin has quadrupled in price since the beginning of 2017.

Money that does not exist is worth more than oil and gold. Let me tell you how you can make money from it.

Antonina Asanova

tried to trade bitcoins on the exchange

In May this year, I tried bitcoin trading. Earned 30% in 2 weeks. Then in a month she lost 15%. While this article is being prepared, I may re-trade 15%, or I may lose even more.

Cryptocurrency trading is a risky business. Here's what you need to know if you like this kind of risk.

ATTENTION

What is bitcoin

Bitcoin is digital money. Physically, this currency does not exist, there are only special registries that keep track of how many bitcoins someone has and who transfers them to where. These logs are called blockchains.

This is similar to how cashless payments are arranged in banks: when you pay with a card in a store, you also do not transfer any physical money or gold to anyone. It's just that your operation is registered somewhere in the bank register.

Bitcoins differ from conventional currency in that the registries 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. You can't fake them all at the same time. It is impossible to rewrite the data in blocks and claim that someone now has millions. Bitcoin is pretty secure in this sense. True, there is already an attack that allows you to pay twice with the same bitcoins, so it’s impossible to say that bitcoin is absolutely safe.

Where do bitcoins come from

The state issues the regular currency. It is very indirectly connected with gold reserves, but in fact it is not connected with anything - as much as the state needs, so much it will print.

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

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

Somewhere in Venezuela, there is a computer that runs the bitcoin network. He just computed 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 calculate cryptographic signatures, it looks like this: his computer rustles something there, and bitcoin pennies are dripping into his account. The computer seems to be mining bitcoins, although in reality it simply encrypts and prints other people's transactions. This is called mining - as if "extraction" of bitcoins.

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

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

Why you 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, 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 stock exchange, 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.

Interest is fueled by success stories. 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 required for transactions. If you lose your private key, then the money will be gone forever. They cannot be returned by calling the bank. The bitcoin system has neither a single center nor a regulator.

Under a pseudonym is not anonymous

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

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

There are, of course, means of complete anonymization of 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 will legalize the purchase of cryptocurrencies for use abroad and bitcoin trading.

As long as the circulation of bitcoins is not regulated by the government, banks and other companies cannot sell them. Cryptocurrency exists in the world of dashing nineties. They can be bought from individuals, online exchangers or trading exchanges.

Important clarification

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

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

How to buy bitcoin through an exchange

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

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

I compared the rate on different platforms and chose LocalBitcoins. Buying cryptocurrency took 10 minutes. Another 20 minutes bitcoins went to my wallet.

How to use. Enter in the search the amount for which we want to buy bitcoins. Choose the lowest rate and the appropriate payment method. Most often, they offer an exchange 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 a PC or flash drive.

Minuses. Exchange rates are very high.

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

For larger amounts, the fees are lower. With exchangers, you can agree on individual conditions.

Nobody regulates the market of exchangers 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 buying goods or investing money in bitcoins.

How to buy bitcoin through an exchange

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

To register on a small cryptocurrency exchange, an email address is enough. Large sites require you to enter your name, address, date of birth, and phone 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 selling 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 venues may not have enough vendors. The most significant exchanges are Bitfinex.com, Kraken.com, Bittrex.com.

We write not only about digital money, but also about other investment tools, ways to save on the usual things and save up a financial pillow.

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My experience. The Eksmo exchange approached me. I transferred rubles to her through Qiwi. Although now this method has already been excluded. Money went to the exchange for almost 2 hours. Transfer to bitcoins is instant.

How to use. First, we replenish the account on the exchange. We put rubles on an electronic wallet. On the website of the exchange, we press the button “replenish with rubles”. Choose a payment method, amount and transfer money.

Transferring rubles to the Eksmo exchange

Now we buy bitcoins. On the website of the exchange, we select the currency pair bitcoin-rubles. We find the block "Purchase, BTC" and enter the desired amount.

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

Commission. Exchanges charge 4-6% for entering rubles. Exchanges also charge a fee on every transaction. As a rule, it 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 if you use a dollar or euro card, as well as register in the international payment systems MoneyPolo or ADVCash and replenish through them. In this case, exchanges can credit funds without commission at all.

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

Anonymous methods of depositing and withdrawing money are more expensive than legal ones and much more risky. 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 agencies manage to connect bitcoin wallets with real people by IP address or purchase delivery addresses.

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 of 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's also almost impossible to trace them. However, this method of exchange is very risky: on the forums, you can stumble upon scammers and be left without money.

How to sell bitcoin

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

An experience. I withdraw funds from the Eksmo exchange to the card. Of all the withdrawal methods, I choose the cheapest one - the Capitalist.net service. Transfer 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 account number of the “Capitalist”. Then we transfer money to the card "Visa" or "Mastercard".

Commission. You can transfer bitcoins to the exchange wallet without commission. "Capitalist" takes 2.5% for the transfer to the card.

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

How to earn on bitcoins

On the net you can find many educational videos, blogs and forums where they promise an income of 20% per month. The general idea is to buy bitcoins at the minimum rate with minimum commissions and sell at the maximum rate, but also with minimum commissions.

It seems that trading currencies is easy, but it is not worth taking risks right away. The bitcoin exchange rate changes very quickly and dramatically. To get started, try trading with an amount that you don't mind losing. When you manage to earn consistently, you can play for high stakes.

The least risk when trading with the trend. To do this, you need to bring money to the exchange, wait for the moment when the rate has fallen and is just starting to grow. And then buy bitcoins and wait for the rate to peak. With such a strategy, it is safer not to store bitcoins on the exchange, but to transfer them to a separate wallet.

Stock trading is work. Players monitor the exchange rate constantly, check with Chinese exchanges. In order not to miss 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 make money on ICO, Initial Coin Offering is an analogue of crowdfunding or entering the exchange. You invest in a new company, a startup, and for this you receive tokens - a kind of shares. If you are lucky and the company grows, you will receive income.

At the time of this writing, the ICO procedure, like many other things in the field of cryptocurrencies, is almost not regulated and not protected in any way. Companies can enter the ICO without a product and a real business, just to collect money from investors and go 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 exchange rate has grown 40 times over the past year, from $14 to $585. Ethereum and Dash have risen in price by 17 times.

Investments in ICO 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 out of the experiment. In Russia, it is not legalized. None of your rights are reserved here.
2. Take care of protecting your wallet and store your passwords securely. Lost keys cannot be recovered.
3. Check service fees before transferring funds. Transactions can eat up 10%, 15%, and even 20%.
4. Do not transfer bitcoins until confirmation that the currency was transferred to you for them. Cryptocurrency transactions cannot be reversed.
5. If you keep money in bitcoins, follow its course.
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, chances are that someone will make money off of you.

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 you can conduct transactions with this currency. Its main difference from traditional payment systems is that the Bitcoin system does not have any control and processing center - all operations take place exclusively in a network of equal clients.

At the end of October 2008, a message was sent to gmane.comp.encryption.general subscribers by e-mail 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 its owners with the opportunity 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, Neil Town Stevenson described the benefits of creating an uncontrolled cryptocurrency in his novel. And researcher Nick Szabo until 2005 worked on the creation of the Bitgold electronic money system. 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 worldwide.
• There are no intermediaries, digital money is directly sent between users.
• It is impossible to block a transfer, freeze money in a user's wallet, or "roll back" transactions that have already been made.
• 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 bitcoins is determined only by market demand and supply.
• The issuance of bitcoins is severely limited and predictable, it is impossible to “run the printing press” and create a lot of bitcoins.

Thus, bitcoin simultaneously has the properties of ordinary cash, electronic currencies, a money transfer system and "digital gold".

The essence of the Bitcoin cryptocurrency in a simple, understandable language

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

Basically, bitcoin is just a computer program. Only it is located not on some separate computer or server, but immediately on millions of computers that directly communicate with each other through this program.

Torrents work in a similar way. You install a program for yourself, and someone else does the same. After that, you can transfer files directly to each other, without the involvement of any servers, and with little or no control. It is this feature that has made torrents the main hotbed of piracy on the Internet.

This is how the bitcoin system works. Only the task of this program is not to transfer files between users, but to give them "virtual points".

The main differences between Bitcoins and classical money

• Bitcoins are not backed by anything

BTC are not debt obligations (like ordinary money) and, in fact, are not backed by anything material. The price of bitcoins directly depends on supply and demand, i.e. how much currency people need. You can draw a parallel 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, however, the price will not fall to complete zero, because. It's still metal and you can make something out of it. Nothing can be done from bitcoin in the absence of demand, therefore, the price for it can theoretically fall down to zero.

• No single center

As I said above, all data of the payment system is stored in open source on the carriers of system users. There is no regulator of the system (like, for example, the central bank) who could influence the price of the currency, the number 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 (21 million coins) is initially known. Not only the maximum number is programmed, but also the emission dynamics (issue 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 the 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 of the network:

Bitcoin Blockchain Principles

Decentralization.

There is no central network control authority, the network is distributed to all participants, each computer that mines bitcoins is a member of this system. This means that no central authority has the ability to dictate the rules to bitcoin holders, as, say, it was in early 2013 in Cyprus. And even if some part of the network goes offline, the payment system will continue to work stably.

Limitation.

The supply of bitcoins is limited (by definition), its extraction is difficult and labor-intensive (it is miners), and it cannot be just taken and printed in the right amount, 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, then the cryptocurrency will simply remain in circulation and will periodically change course.

Easy to use.

You need to go through seven steps of hell in order to open a current account for a company in our banks, or maybe you will be refused without explanation. For bitcoin, this is not a problem, it will take you 5 minutes to create a bitcoin wallet and start using it right away. No questions, no commissions.

Anonymity.

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

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 did not say that this is your address, then no one will ever know that it belongs to you. For complete anonymity, one bitcoin address is usually used for a single transaction.

The commission is negligible.

Your bank can safely deduct $50 international money transfer fees. Bitcoin is not. 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, they will fly in a matter of minutes after the bitcoin network processes the payment.

Irrevocable transactions.

After sending bitcoin to the addressee, it is impossible to return them. 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?

NONE. This currency is not printed by the central bank and does not work according to its rules. Banks can print as much money as they want to cover the public 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, mine bitcoins at any time. Bitcoin mining occurs by using the computing power of a computer in a distributed network. When transferring bitcoins, transactions are 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, this is a digital currency! 1 satoshi is 0.00000001 btc (named after the creator)

What is bitcoin backed by?

National currencies used to be usually backed by gold or silver, now GDP. Theoretically, you could come to any bank in the country and exchange your paper money for the equivalent of gold and vice versa. Bitcoin is not backed by anything, it's pure mathematics.

Any person around the world can run a bitcoin mining script on their computer and feel like a mini-central bank. The source code of the script is published in open form, everyone can see how it works.

We have all heard that Bitcoin is called “electronic gold”, “gold coins”, and other allegories are also given. But now these are not just beautiful words!

In March of this year, another historical fact was recorded - Bitcoin was equal in price to real gold, reaching $ 1,238. Now, at the end of November 2017, the price for 1 BTC is as much as $8200. The coin is growing at a frantic pace.

Skeptics argue that this cryptocurrency is just a dummy, not backed by anything. Yes, that is right. But what is gold in its essence? People, come to your senses, but it's just metal! He is also not provided with anything. Its value lies only in the fact that society has agreed among themselves to consider it valuable. Everyone just believed it. Same with Bitcoin. As long as they believe in it, it has power.

Briefly what is the essence of Bitcoin

Bitcoin (eng. Bitcoin, from bit - “bit” and coin - “coin”) is a digital currency that can be paid on the Internet. You can instantly send digital coins directly to any person anywhere in the world (“peer-to-peer” - from peer to peer), and this does not require a bank or any other intermediary, which means that there are no transfer fees exists!

This is the first and very significant plus - that is, you have already saved up to 30% right away (comparing, for example, with expensive Western Union transfers) just because you do not pay the bank for its services.

So why is Bitcoin (“bitok”, BTC) now at the peak of popularity? Since the beginning of 2017, and until today - November 2017, the most expensive cryptocurrency in the world has grown by about 8 times. Its cost has risen from $950 to over $8,000 per unit. It is not for nothing that so much attention has been paid to this currency lately, because it has already become part of our everyday life, and it seems that forever.

Advantages of "digital gold":

• no commission for transfers;
• transfer speed - instant;
• international currency, you can send and receive in any country, it has no borders;
• reliability - the currency cannot be counterfeited, the operation cannot be carried out dishonestly;
• anonymity - the participants in the transaction know only the account numbers of each other, the names are kept secret;
• not subject to inflation;
• is a convenient virtual alternative to real money.

Usual money is divided, as you know, into 100 parts, and one hundredth is a penny or a cent. Bitcoin, on the other hand, can be divided up to 8 digits, which means that even one hundred millionth part can be used in circulation - that is, 0.00000001 BTC. This tiny particle is called after the name of the creator of this currency. This is incredibly convenient, as you can transfer even the minimum amount in the absence of commissions.

Another curious fact embedded in the Bitcoin algorithm is that the total number of issued coins is 21 million. When this figure is reached, the release of coins by the program will stop forever. Based on calculations, this will happen no later than 2140. Now the number of issued units has already exceeded half.

The reward received by users for creating a new block becomes smaller over time. Until 2013, it was equal to 50 coins, later it decreased to 25, now it is only 12.5 BTC. Thus, the excitement is growing, and earning the coveted coins is becoming increasingly difficult.

Of course, Bitcoin is a pioneer in the world of cryptocurrencies, but today it has many competitors, such as Dash, NEM, Monero, NEO, and hundreds of other digital currencies, the total number of which has already exceeded one thousand.

In 2008, someone under a pseudonym created an electronic payment system and launched the Bitcoin network, and also released the first version of the wallet of the same name. The identity of this person is still unknown, and a lot of rumors about this go around the network. There are suggestions that he is American, or even that it may be a group of people. The lack of information on the Internet has served as a reason for humor, some of them have already started to call him Santa Claus or even an alien.

But seriously, one thing is clear - Satoshi Nakamoto is an incredibly rich man, and he no longer needs to support the system. By his own statement in 2011, he decided to retire.

In 2010, an American from Florida named Laszlo, who was fascinated by new virtual coins, decided to have some fun on a forum of like-minded people, and for the sake of a joke he promised his Bitcoins to those who order pizza for him. And such a person was found, having bought 2 pizzas in exchange for 10 thousand BTC (about $25). This was a historic event, because after a couple of months they were already worth $600, and six months later - more than $2.5 thousand. Now this amount corresponds to 80 million US dollars. This example demonstrates very clearly how fast growth is.

One of the sites informing about cryptocurrency rates even brought out the cost of that pizza at the current rate as a separate item, as a good example.

Bitcoin followers

Roger Verr invested 1 million dollars in Bitcoins in 2011, and after 2 years their value increased 100 times and amounted to 1 billion dollars. Now he is a multi-millionaire and agitates others to believe in this cryptocurrency. He is called the Jesus of Bitcoin, as his belief in the power of the currency is close to religious. There are many such people - millionaires, entrepreneurs, stockbrokers. The distribution of gold coins in the world is not carried out by a financial, but by a public organization - the Bitcoin Fundation, registered in the United States and one of the most influential. He also advises the legislatures of world powers.

“Someday 1 Bitcoin could be worth hundreds of thousands, maybe a million dollars,” says Werr, and encourages everyone to join the movement.

For many, the collapse of the MtGox exchange was a huge shock. The exchange worked in the USA, although it was officially registered in Japan. Thousands of people kept their savings in Bitcoins on it, since it was the largest in the world (almost half of all transactions with BTC were carried out through it), but in February 2014 its website became unavailable. According to the developers, due to a bug found in the program, hackers stole more than 750 thousand BTC (half a billion dollars at the exchange rate of that time). Then 127 thousand people went bankrupt.

But the vulnerability was found not in Bitcoins, which are almost impossible to counterfeit, but in the very structure of the exchange. After the incident, there were rumors that the organizers themselves profited from what had happened. Well, no money in the world is 100% safe from theft.

Surprisingly, it is in the United States, against the financial system of which Bitcoin is fighting, that this currency has become most widespread. Specialized exchanges appeared, the installation of bitcoin terminals began, exchanging bitcoins for dollars and vice versa. Some are already even paid wages in BTC.

Many world-famous companies have begun to accept this cryptocurrency as payment for their goods or services, for example, Lamborghini, Microsoft, Skycraft Airlines, etc.

Also, in some countries, you can rent or buy housing for Bitcoins, buy air tickets, equipment, luxury goods, and even get an education. It is convenient to donate them to charity.

In Russia and on the territory of the countries of the former USSR, you can use BTC to make purchases on Amazon, Ebay, purchase applications on the App Store, pay on various websites and online stores, and even get legal advice. For this cryptocurrency, you can buy tickets for various entertainment events, such as cinema, theater, concerts, etc. It is accepted by some advanced shops and cafes, flower delivery services, and even taxi services. But of course, so far in our country these are all special cases and rather exceptions to the rules that only some organizations implement, following the fashion trend, in order to stand out from the competition. And we are not talking about such mass prevalence as in the USA, Japan and Western Europe.

In many countries of the world, the authorities do not treat cryptocurrency very well, since it is independent in its essence. And this is inconvenient for power structures, which are used to keeping everything under their control. It is believed that such means of payment contribute to the shadow economy, and digital income cannot be foreclosed.

In Russia, the government does not approve of the use of cryptocurrencies, believing that it can facilitate the laundering of proceeds from crime, as well as the financing of terrorists. But so far there is no law either allowing or directly prohibiting the circulation of Bitcoins.

The uncertain status of digital money in most countries of the world, which have not yet decided how to regulate their circulation, somewhat slows down investors, making them doubt. But despite this, people with a firm intention to get Bitcoins can no longer be stopped.

The anonymity of the system can play a cruel joke on society, as it provides ample opportunities for everyone indiscriminately, including the underworld. There is an example of an illegal Silk Road online store in the United States that sells drugs and uses the anonymous Internet network Tor, which is not indexed in search engines, but the Bitcoin network for payment. He traded in psychotropic substances: LSD, marijuana, heroin, as well as pornography and other illegal goods. The FBI seized his accounts, which contained about 30,000 BTC, equal to $25 million.

Another criminal project acted in the same way, which offered visitors to “throw in” money, and specifically Bitcoins, to order killers to kill various well-known political figures. Through this site, performers could accept an order and receive their reward for its execution, and the creators of this resource could receive a commission from this amount.

In addition to the well-known individual mining, where you rely only on yourself and your own equipment, there are 2 more ways to get crypto:

1. Pools for mining. Since it is very difficult to carry out successful mining alone, especially if you are a beginner, you can join interest groups, the so-called pools. You can connect your PC to a data center (pool) and make sure that by working together to find new blocks is much faster and more efficient, although the reward earned will have to be divided among all participants in the process.
2. cloud mining. The idea is to increase the speed of mining for a certain amount and for a certain period of time, in return for receiving Bitcoins mined on a cloud server. The advantages of this method are that it is not necessary to control the process of mining cryptocoins, to incur costs for the use of electricity and equipment.

Where can you buy Bitcoin:

• large and small exchanges;
• private Internet exchangers, usually offering small amounts with a minimum percentage;
• ordinary users, familiar or unfamiliar, met on the Internet;
• special bots in messengers;
• if you have your own website or online store, you provide any paid services or sell goods, you can start accepting payment for your activities in cryptocurrency as well, by indicating your bitcoin wallet in promotional materials, or the QR code that is there created;
• you can also win BTC coins in the casino, or bet on various competitions, thereby increasing your capital.

It is difficult to do, because the situation can change in the most dramatic way: today everyone is a fan of Bitcoin, and tomorrow they have invented some more advanced, technologically advanced and convenient tool, and investors have fled there. Now there are so many bright minds of programmers, mathematicians and analysts in this field that technological leaps are simply inevitable. But whether the next stage of development will benefit Bitcoin or not remains a mystery.

Predicting the growth of the exchange rate for the coming years, analysts conditionally divided into 2 main camps:

1. Skeptics believe that the cost of Bitcoin is artificially inflated to incredible limits, and this "soap bubble" will burst sooner or later. They are also confident that the growth of the token will at least stop, and soon its value will begin to fall. Their main argument is that the authorities of most countries are against the legalization of cryptocurrencies. Another argument "against" is that if the crypt is stolen or lost, no one will compensate your losses. Therefore, it is necessary to raise the issue of improving the security of electronic wallets.
2. Optimists who firmly believe that the growth of Bitcoin can have no limits, and fuel this belief and the entire population. They prophesy figures up to 200 thousand dollars per 1 BTC, and consider this not a fantasy, but a very real prospect that can come true in some ten years. The main thing is that this crypt is not moved by competitors.

You can also highlight the position of realists, who are not so subject to general insanity, but also are not hardened conservatives in financial matters. More or less adequate forecasts indicate that the exchange rate at the beginning of 2018 will be around $10,000. It is possible that it will not take off as rapidly as before, but sharp collapses of gold coins are not expected either. The capitalization of Bitcoin will be comparable to the strongest national currencies. And here the fight will begin not for life, but for the death of traditional currencies with cryptocurrencies, as world domination will be at stake.

Bitcoin - what is it?

Bitcoin 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 asset or “official” currencies, and the price of the digital coin, bitcoin, is governed solely by market supply and demand.

Bitcoin is also a worldwide payment system through which you can conduct transactions with this currency. Its main difference from traditional payment systems is that the Bitcoin system does not have any control and processing center - all operations take place exclusively in a network of equal clients.

Features of the Bitcoin system

• There is no concept of "registration", anyone can participate in the network
• The wallet is not tied to the user's identity, everyone can create an unlimited number of wallets and details
• Cheap, anonymous and unlimited money transfers worldwide
• There are no intermediaries, digital money is directly sent between users
• It is impossible to block a transfer, freeze money in a user's wallet, or “roll back” transactions that have already been made
• Bitcoins can be stored on your computer, on your smartphone, in an online wallet, on or in
• There is no controlling organization, the price of bitcoins is determined only by market supply and demand
• The issuance of bitcoins is severely limited and predictable, it is impossible to “run the printing press” and create a lot of bitcoins

Thus, bitcoin simultaneously has the properties of ordinary cash, electronic currencies, a money transfer system and "digital gold".

How does Bitcoin work?

A series of articles on our portal explains the various aspects of Bitcoin technology as far as possible without complicated technical jargon:

• Bitcoin Math: and

Also, for those who want to understand the technical aspects of the system thoroughly, we have published a translation of the original article by Satoshi Nakamoto.

Well, or you can understand the basic principles of the functioning of the network by watching this video:

Or, to understand in detail all the details of the bitcoin protocol, spending 20 minutes viewing a more complete technical description of the operation of the network:

There are other educational videos on our youtube channel, subscribe.

How to properly store bitcoins?

If you are already a happy owner of several coins, the issue of their reliable and safe storage is very relevant. In this series of articles, we will describe all the best practices for collateralizing bitcoins:

Which one is correct: Bitcoin or Bitcoin?

From the point of view of the rules of the Russian language, it is more correct to write and speak exactly bitcoin. The spelling "bitcoin", which is sometimes found, is technical jargon, from the same opera as "point", "cisca", "window", "user" and "hardware". And that's why:

1. For those who are “firsthand” with the English sign: it is the diphthong that sounds in the original [ɔɪ] , that is, "oh" - " bitcoin”, there is no mythical “Bitcoin” there.
2. Rules for transcribing foreign words in Russian. Worcester in Russian Worcester, not Worcester, Southwell is Sazl, not Southwell. The same rules apply to direct borrowings: action, not action, image, not image, and so on.
3. Wikipedia transliteration rules: oi, oy, -oid [ɔɪ] oops, except for the suffix -oid point →point android → android.
4. Transcription rules from English into Russian, according to R.S. Gilyarevsky and B.A. Starostina: diphthong [ɔɪ] written as "oh".
5. All similar borrowings from English into Russian, as well as the transcription of names / titles, use exactly “oh” - boiler, spoiler, joystick, pointer, West Point, Zoidberg.
6. Similar localizations in other languages ​​\u200b\u200bwith Cyrillic writing (Mongolian, Bulgarian, Macedonian) - all use “ bitcoin».
7. For those who still doubt, there is a test word " bitcoiner". Bitcoiner, bitcoin economy, bitcoin are the same root words, is it logical?

Among other things, the correct spelling bitcoin Authoritative sources confirm:

Why, despite all this, some, even quite literate people, still use the jargon “Bitcoin”? The fact is that it was he who was originally used in the Russian localization of the first bitcoin client (Bitcoin-Qt). It is clear that it is difficult to demand deep knowledge in phonetics and linguistics from early translators - enthusiastic geeks who promoted the use of cryptocurrency at the very beginning of its journey (for which they are honored and praised!) - well, they translated as best they could. And as a result, many early bitcoiners got used to using this wrong tracing paper because they saw it first. And from them, others learned the wrong spelling - as a result, this jargon is still quite common, although the correct spelling is actively replacing it.

Increasingly, from the news or from the Internet, we hear or read about bitcoins. As usual, many of us receive only fragments of information, often already distorted and overgrown with mythical components. Let's try to figure out what bitcoins are and what are the principles of its operation.

The word "Bitcoin" (or "Bitcoin") comes from the English Bitcoin, which in turn is formed from

• bit - "bit" and
• coin - "coin".

The transcription of the word "bitcoin" as "bitcoin" is used on the official website above, as well as on Wikipedia. By the way, articles on such a world-famous source of knowledge as Wikipedia, any user.

There is also an abbreviation for BiTCoin - this is BTC or the same in Russian letters - BTC, but we do not use the latter.

Bitcoins are considered the money of the future. They began to be recognized all over the world, there are large companies that are already accepting payments for their services or for the equipment sold in bitcoins.

When did bitcoin appear

Let's go a little deeper into the recent past and talk about the origins of bitcoin. Bitcoin appeared in 2009.

Who invented bitcoin is not known for certain, as such official sources do not exist, but authorship is attributed to some anonymous inventor (or group of inventors) Satoshi Nakamoto. Some sources claim that he is a mathematician, but as it turned out, there is no person with that name on the planet at all.

According to another version, this cryptocurrency was invented by a secret society that decided to popularize the virtual currency. Members of this society have an initial advantage in obtaining it, and with the appreciation of bitcoin against other world currencies, they can reap huge economic benefits. It is up to everyone to consider this fact or fiction, our task is to provide as detailed coverage of the situation regarding bitcoins as possible.

We’ve sorted out the stories a bit, let’s get back to bitcoin itself.

What is bitcoin and what is satoshi

Bitcoin is a cryptocurrency, that is, a monetary unit that cannot be touched by hands, like ordinary money or gold. At its core, bitcoins are just a collection of numerical values.

One bitcoin can be divided into parts, as, say, a dollar can be divided into cents. By the way, the minimum part of bitcoin is called Satoshi in honor of the creator of the entire system:

• one satoshi is equal to 10 to the minus 8 power of one bitcoin (one hundred millionth of a bitcoin or 0.00000001 bitcoin), and some even use the term "cent" in relation to such a satoshi,
• 100 satoshi or one millionth of a bitcoin is called a microbitcoin,
• One thousandth of a bitcoin is called a minibitcoin and is equivalent to 100,000 Satoshi.

In simple terms, bitcoin is an object. Let's pretend it's a gold coin. So, everyone who somehow owns at least one Satoshi has this gold coin, but at the same time, this person can not dispose of the entire coin, but only the part that belongs to him, that is, only one Satoshi. I hope that at this stage everything is clear, if not, then it will be easier further.

Imagine an ideal coin that cannot be counterfeited, copied or banned. Such a coin, which can be paid at any time. In addition, it will not tear and it will not wear out, as happens with paper money. This is what bitcoin is.

Bitcoins are limited in their production, there can be no more than 21,000,000 of them.

Why do we need bitcoins and their concept

At the moment, bitcoins do not belong to any state in the world, which means that they cannot depreciate with geopolitical changes or the influence of one country on another.

Moreover, bitcoins are not tied to any GDP of any country or all countries in general. This is exactly the concept of bitcoins. It says that there should be such money that can belong exclusively to you, it will not be possible to fake it, and you can instantly transfer the required amount of it at your request by paying for services or goods in any part of the world, with the Internet.

There are already people who use bitcoin mining as their only source of income. And some are paid exclusively in bitcoins.

Now one bitcoin is equal to about $5,000-7,000.

Bitcoin calculator online

For example, on November 7, 2017, one thousand rubles can buy 0.002797 bitcoins:

1 bitcoin can be bought for approximately 430 thousand rubles, while the rate is constantly changing depending on various circumstances and market conditions.

Pizza for bitcoins

There is an Internet legend according to which one person ordered 2 pizzas and paid 10,000 bitcoins for it, which is currently more than 70 million dollars! As you understand, if this is true, then a person bought the most expensive pizza in the world.

The story of buying pizza for bitcoins in May 2010, in particular, is given in the video:

Documentary about Bitcoin (Bitcoin) and what is money?

Similarities and differences between bitcoin and euros and dollars

Very often, bitcoins are compared with euros or dollars, but such a comparison is erroneous. Yes, you can buy bitcoins for dollars or euros.

But it is more appropriate to compare this cryptocurrency with gold or silver, since both of these resources, material (gold, silver) and virtual (bitcoins):

• similar in terms of mining difficulty,
• have unique qualities
• and are also limited in their stocks.

The difference is that the virtual currency (bitcoin) is not mined by human labor, but by the work of so-called mining farms.

What is bitcoin mining?

On such farms, special devices that consume electricity work, and due to this, a computing process is created, thanks to which bitcoins are obtained.

There is only one way to get new bitcoins: as a reward for solving certain equations of an extremely high degree of complexity. At the same time, the amount of remuneration for solving the tasks set is gradually decreasing.

Initially, in 2009, a reward of 50 bitcoins was provided for solving the set computational problems. In 2012, the reward was reduced to 25 bitcoins. In 2016, the amount of remuneration became 2 times less: 12.5 bitcoins.

And so on, the amount of remuneration will decrease by 2 times every 4 years - this is the so-called decreasing geometric progression. By 2031, the reward will be reduced to zero, and the total number of bitcoins that will be put into circulation in this way will be exactly 21 million.

Hence, such a high resistance of this cryptocurrency to any political and economic situations, it simply does not depend on them in any way. All further emission of bitcoin has already been calculated in advance by mathematicians.

So, in mathematical terms, bitcoins are an extremely difficult mathematical process, more precisely, this is the solution of complex mathematical equations.

Purely technically, the receipt of cryptocurrencies is directly related to their mathematical structure. When bitcoins first appeared in 2009, they could only be obtained in sufficient quantities thanks to a medium-powered home computer. Where were we then?! Why not deal with this unusual currency, the price of which has risen thousands of times over this time? One can only complain about this!

And when this cryptocurrency received wide publicity and demand, a huge number of people, as well as some large companies, launched the process of mining (from English mining - production) of this virtual currency. Now the main computing power for the extraction of cryptocurrency is concentrated in China, as this country, among other things, maintains its own state currency. There is information that it is planned to create a similar center in our country, this project is so interesting.

As a result, the situation at the moment is developing in such a way that it is already difficult to even dream of receiving such an amount of bitcoins without serious expenses for expensive equipment and electricity.

For more information about the mining process and how you can earn bitcoin on your home computer, see the video below. In it, in particular, it is reported that the cost of a home computer for mining is about 360,000 rubles. To earn one bitcoin, you need to solve a very complex mathematical equation using a powerful PC, and this takes time and high electricity costs. On such a PC, you can earn about $ 17 per day with the help of mining. The cost of an expensive computer, as well as electricity, can pay off in about a year. At the same time, cryptocurrency rates change constantly: up and down, and there are no guarantees of reliability.

Video " About Bitcoin in Russia»

To understand what bitcoins are, if you wish, you can buy yourself a small amount of Satoshi. To do this, you need to create an electronic wallet, as well as free up about 150 gigabytes of free space on your computer. This volume is the coin we talked about above. And then this coin will belong to you, and only you.

Cryptocurrency has become a huge breakthrough in electronic payments. During the entire existence of the bitcoin system, a vulnerability was discovered in it once, as a result of which the mining process was subject to a rollback for one day, which did not particularly affect the stable growth of the exchange rate and the popularity of this currency.