New e-money is cooler than bitcoin. What are bitcoins and is it worth getting in touch with. Virtual money: how you can use it

Virtual money, cryptocurrency, bitcoins are not just earnings that seem questionable to many, but also our near future. Already today, the Central Bank of the Russian Federation has begun work on creating a virtual national currency. However, everything in order.

What is virtual currency

Virtual (game) money, cryptocurrency - digital means of payment that are used for payments in virtual stores, as well as in social networks and online games for purchase:

• special gifts, pictures, stickers, rating increase;
• a certain status on the site or in the game, as well as expanding their user capabilities;
• artifacts, weapons, characters, equipment, "lives" in the game, etc.

Already in 2009, the gaming portal Zynga reported that this year alone, virtual money and similar goods were purchased from him for a total of $ 100 million.

In the report "Crypto Money Schemes" (2012) of the European Central Bank, virtual currency is interpreted as a kind of digital means of payment, unregulated by the state, created by the controlled by developers and accepted by members of a certain virtual community.

FinCEN (Financial Crimes Commission) of the US Department of the Treasury under the Bank Secrecy Act provides the following differences between cryptocurrency and real money:

• is not legal tender;
• in most cases does not apply;
• is convertible if it has a real money equivalent.

Benefits of virtual money

Virtual currency has a significant number of advantages over the payment methods we are used to:

• Convertibility... Transferring a certain amount from one cryptocurrency to another is a simple and quick process that you can do on your smartphone without interrupting your work. At the same time, without even thinking about the commission.
• Safety... It is almost impossible to forge, since it is protected by a rather tricky digital cipher. If the user observes all the registration rules, even an experienced hacker will not be able to hack an electronic wallet account in the payment system.
• Availability... Electronic systems, unlike banks, operate around the clock. And you can instantly transfer various amounts of money through them both to your neighbor and to a person on the other side of the globe.
• Rapidity... Electronic money transfers are made almost instantly, regardless of the amount and distance of the addressee from you. However, they are not accompanied by any fees and commissions.

Risks of virtual currencies

At the same time, the list of obvious disadvantages of electronic money is quite extensive:

• For the financial systems of states:
  • the likelihood of terrorist financing;
  • "laundering of money;
  • the risk of committing financial crimes;
  • it can be used as a means of payment when selling prohibited goods.
• For e-wallet owners:
  • disadvantageous rates when converted into real money;
  • fraud in conversion operations;
  • the likelihood of hacking an electronic wallet;
  • inaccessibility of the wallet account in case of loss of the secret digital key to it, PIN-code, etc .;
  • loss of savings due to the bankruptcy of the exchange platform;
  • instability of the cryptocurrency rate;
  • a small number of stores willing to accept this payment method.

Regulation of cryptocurrency

I must say that world governments were not enthusiastic about the growing popularity of virtual currency, responding to it with very harsh methods:

• In 2013, the Central Bank of China banned local operators from serving online exchanges that trade bitcoins (the most famous cryptocurrency today, which we will definitely consider further), which reduced the cost of the latter by 38%.
• In the same year, the Indian Central Bank actually suspended the work on the territory of the state of one of the largest exchanges for operations with virtual money in this country - Bitcoin Buysellbitco.in.
• In 2014, the Central Bank of the Russian Federation called operations to transfer real money into cryptocurrency potentially dubious: in the event of bankruptcy of an exchange platform or loss of access to an electronic wallet, the state will not be able to protect a citizen by law.

Famous world cryptocurrencies

The list of virtual currencies traditionally begins, which was presented in 2009 by a developer hiding under the pseudonym Satoshi Nakamoto. At the beginning of 2013, one bitcoin was valued at $ 20, and in November of the same year - $ 323. At the end of 2013, one bitcoin was equivalent to $ 1000, and in June 2017 - $ 3000.

Such a "frantic" turnover led to the creation of more than 80 clones of this electronic currency, the number of which is steadily growing today:

• zeuscoin;
• worldcoin;
• peercoin;
• hobonickel;
• fireflycoin;
• gridcoin and more dr.

The Amazon online store in the same 2013 distinguished itself by introducing its own currency, Amazon Coins, for its Amazon Appstore and a number of subsidiary applications, the unit of which is equivalent to the United States. However, you can only pay with such electronic coins within Amazon.

The main competitor of bitcoin on exchanges is litecoin, a project of software engineer Charlie Lee. According to the creator, transactions with his brainchild are 4 times faster than with bitcoin.

What is Bitcoin?

To understand the peculiarities of all cryptocurrencies, consider, for example, the virtual currency bitcoin, since all the others are, in fact, its copies.

Bitcoin (eng. bit - "bit", "unit of information", coin - "coin"), and also bitcoin, btk, btc is a digital currency that works and is used only on the Internet. However, you can buy quite real goods, services for it, and also exchange it for real money. Bitcoins can be bought or sold on global exchanges just like other currencies.

The btk is distinguished by the following:

• Decentralization... No virtual currency bank, no institution in the world controls bitcoins.
• Emission... Bitcoins are only issued digitally. Moreover, their emission is not the traditional printing of Central Bank banknotes, but "extraction" (mining) by ordinary users around the world. The script for issuing bitcoins can be run by anyone on their PC - it is in the public domain.
• Security... Unlike real money, BTC is not backed by either gold or silver.
• Limitation... The bitcoin code allows you to "mine" a maximum of 21 million units of this currency. However, it is divided into components ad infinitum. The smallest unit is named after its creator - Satoshi. It is equal to 0.00000001 btc.
• Using... Opening a bitcoin wallet in the payment system of the same name is a matter of 5 minutes for both an ordinary user and a legal entity.
• Anonymity... Setting up a Bitcoin wallet does not involve entering any personal information - neither name nor email.
• No commission for translations.
• Instant translations.
• Irrevocability of a transaction... After sending bitcoins to a certain addressee, only he can return the currency back.
• Transparency... If you tell someone the address of your bitcoin account, then this citizen can familiarize himself with the entire history of your transfer transactions.

Pros and cons of bitcoin

We have placed information on the advantages and disadvantages of the virtual currency - bitcoin - in the table.

Finally, let's talk about the prospects for cryptocurrencies in our country.

Russian virtual money

In the summer of 2017, the Central Bank of the Russian Federation began developing the virtual currency of Russia. This was initiated by a meeting between Russian President V.V. Putin and V. Buterin, the creator of the Ethereum cryptocurrency, which the Kremlin calls the second most important after bitcoin. It is predicted that the new Russian cryptocurrency will be based on the development of Buterin.

It will be possible to speak about the first achievements of the project only in 2-3 years. So far, the Bank of Russia is determining the principles for regulating electronic money.

Virtual currency is the money of the future. But already today the excitement around it does not subside, and quite tangible material value is growing before our eyes, as can be seen from the example of bitcoin. Against this background, the government and the Central Bank of the Russian Federation predict to implement a project to create a national cryptocurrency.

Nobody asks Bitcoin holders for passport details or the source of the funds. Therefore, thousands of people buy anything with them, anywhere, without fear of the fiscal authorities or the police.

What is Bitcoin?

Bitcoins are a decentralized electronic currency that does not have a single emission center, which can be used completely anonymously through secure Internet protocols.

The system appeared in 2008, when a certain Japanese programmer (or a group of programmers - no one knows) under the pseudonym Satoshi Nakamoto wrote a report on the value of new money: their amount does not have any clear limit, but for "mining" each new virtual coin, you need to spend a significant amount of computing power. Computer power is value... This means that the bitcoins mined by them using a special algorithm can also be valuable.

Bitcoin creator - an idealist who dreams of using a new electronic currency, not backed by the guarantees of any state treasury, to lay the foundation for a new world free from the influence of governments and corporations. This new society should be structured as it seems to reasonable engineers who believe that the world of the future should not be based on power institutions and capitalists, but on computer technology and the true freedom that the anonymous Internet provides.

So far, however, this new world is very far away: the entire volume of issued bitcoins is only 8 billion dollars - this is so little that theoretically any financial cartel can get control over the exchange rate, which will buy them all.

To earn bitcoins, that is, to engage in so-called mining, you need to download a free application (for Windows, OS X, Linux) and run a complex process of solving a resource-intensive mathematical problem on your computer. The more powerful the computer, the higher the probability of mining bitcoins. and the longer he is busy with this process. New money is generated by the network node whenever a solution to the next problem is found. The computer solved it - the user received 25 bitcoins.

The system does not have a single center (the entire network transfers data between computers directly, as is the case with torrents and other peer-to-peer networks), and a complex algorithm is designed in such a way that no more than 10.5 million bitcoins are created every four years of the system's existence. The amount of money created is halved every four years... Thus, this digital money has real value: since the resource is limited, but in demand, you can calculate its real value based on the balance of supply and demand.

As the number of people trying to generate new bitcoins grows, the tasks that need to be solved for computers become more complex, and therefore require more and more computing power. In fact, it all resembles a lottery: the longer you “play” and the more powerful your computer, the more chances of success... And as long as there is demand for cryptocurrency, it has real value.

The demand is still growing steadily: since Bitcoin does not have any administration, and all transactions on electronic money transactions and their exchange for real dollars are anonymous, the currency is in demand among a very wide range of Internet users, from geeks and professional investors to all sorts of criminals hiding here taxes or buying drugs with this money. All this fits perfectly into the general logic of an ideal world, according to advanced IT specialists: without borders, without a limit in the person of the state, without any prohibitions, etc. Also, anonymity should ensure the complete security of all transactions, and since there is no single emission center for bitcoins, no country in the world can control the release of this money or, for example, start the inflation process in order to solve their financial problems at the expense of currency holders. In this sense, the Bitcoin currency, which is not controlled by anyone except its direct users, is a great alternative to dollars, euros or rubles.

Over the past two months, the rate of electronic currency has changed dramatically more than once. At the beginning of November 2013, one bitcoin was given $ 300, at the beginning of December - $ 1200, and after the Central Bank of China banned financial companies from conducting operations with bitcoins, the rate fell to $ 900.

Norwegian student Christopher Koch bought $ 27 worth of bitcoins in 2009. For this money, he managed to purchase 5,000 units of virtual currency. In April 2013, Koch cashed out the money, raising a total of $ 885,000.

An American with the nickname Laszlo in May 2010 bought two pizzas with onions, sausages, mushrooms and tomatoes for 10 thousand bitcoins. He was interested in paying for real goods with virtual money. At that time, 10 thousand bitcoins were equal to 50 dollars. Laszlo ate two pizzas, and on November 19, 2013, when the cryptocurrency rate reached its peak, he wrote a heartbreaking post that if he had saved his virtual money then he would now have a fortune of $ 9 million.

Virtual for real

The real world began to reckon with electronic currency as well. The University of Nicosia (Cyprus) became the first university in the world to accept bitcoins as tuition fees. And the US Federal Reserve System began to show interest in the system. But the regulator says so far that it has no control over the system. Moreover, during the hearings in the US Senate, bitcoins were recognized as a "legal medium of exchange."

Contrary to the trend, the Thai government has gone, which has banned the use of cryptocurrencies due to the inability to control the circulation of this virtual money. But this does not prevent two electronic exchanges for exchanging and buying and selling digital money, Bahtcoin and Coinmill, from working in the country at once.

To exchange virtual money for real, you need to use one of the many exchangers. The most popular of them is the Japanese exchange MtGox, which instead of bitcoins sends real money to a bank account at the exchange rate at the time of the transaction.

Do bitcoins have real value?

No. But real money does not have it either: the United States abandoned the gold standard back in the 1970s, and now the value of dollars is determined solely by trust in the US Federal Reserve and its policies. The situation is similar with almost all currencies in the world. But if the real value of traditional money is determined by financial institutions, then there is no regulator, except for the users themselves. Therefore, you can certainly trust the system.

What is the reason for the growing popularity of Bitcoin?

With the mistrust of millions of people in traditional financial and state institutions. The scandals with WikiLeaks and the revelations of Edward Snowden show that the authorities of all countries of the world, without exception, do not always work for the interests of their citizens. And the financial crisis of 2008 once again showed that the global financial system is by no means a stable institution.

What can you buy with bitcoins?

There is practically nothing in Russia. But this is for now. But from the United States you can order anything: even electronics, even clothes, even any other goods.

Why don't governments ban them?

It is impossible to ban Bitcoin and instantly stop using the system. Defeating cryptocurrency is possible only at the cost of a full-scale cyber war and real criminal prosecution of users. So far, not a single government in the world is engaged in this, because the number of Bitcoin users in each individual country is relatively small, and therefore there is no real threat to the existing order in the world.

Is the collapse inevitable?

The future of Bitcoin may be very bleak. The Financial Times notes that the advantages of the system - in particular the complete absence of inflation - can lead to its destruction. As the demand for the currency continues to grow, and there is no opportunity to increase its emission, the price of bitcoins will keep getting higher and higher. Sooner or later, this will lead to the fact that most of the virtual money in circulation will be concentrated in a small number of people. And then the bulk of users will simply lose interest in the system, because so that prices for goods and services do not decrease as the popularity of the system grows, more and more funds need to be put into circulation. And there is simply no opportunity for a quick emission of money.

In addition, the United States and other powerful countries of the world may legally restrict the use of bitcoins. This will almost certainly happen once the number of users of the system is so large that many people would prefer to keep their money in bitcoins rather than in the form of deposit accounts in real banks. However, limiting Internet users will not be so easy: for this, the authorities will have to admit that they are ready to monitor Internet users' computers. In the current legal framework in the United States, this is absolutely impossible to imagine.

No one has an unequivocal answer to the question about the future of bitcoins, but the system makes political experts think: is our world with its states and currency systems really as stable as it seemed to us until now? Probably not.

Today, all network users know about cryptocurrencies that can be used to pay on the Internet, and if you have not yet had time to learn about cryptocurrency, we have one. And although at the moment there are already more than a dozen different electronic currencies, the express analysis of which you can see here, nevertheless the palm of leadership among virtual money is confidently held by the very first cryptocurrency - bitcoin. In 2009, when bitcoin appeared, the cost of one virtual coin was $ 1, and now it is relevant.

What bitcoin looks like

Since Bitcoin is a virtual currency, it does not look like ordinary paper money and coins, but rather like an electronic file. Each monetary unit is a numerical function that satisfies the conditions specified in the initial system code. Therefore, to understand what bitcoin is, it is enough to see its code written in the Wallet.dat file.

To understand in detail what the essence of Bitcoin monetary units is, you need to understand the hashing and cryptography processes. But today, beginners do not need to learn these complex concepts, since all processes are performed by software, and in order to earn and use bitcoins, it is not necessary to delve so deeply into programming.

It is enough for network users to know that bitcoin that can be used to pay on the network is the sum of the source code (hash function) - the so-called bitcoin address or public key that can be transferred to another user. This hash is calculated automatically from the original key of the currency, and this process does not work in the opposite direction. Therefore, any participant in the Bitcoin system can publicly declare their public keys, but until he transfers them to another user, no one will be able to calculate their source code, which means they cannot get access to their cyber coins.

Bitcoin coins

Despite the fact that Bitcoin is a cyber currency, today it would be a mistake to say that this money is only in digital form. The fact is that there are already quite tangible bitcoin coins made of metal. These coins are issued by both individuals and companies that have their own bitcoin wallets.

The very process of issuing such coins is as follows:

1. A coin of original design is cast from any metal
2. On one side of the coin, the denomination is applied - 0.1 btc, 0.5 btc, 1 btc, 10 btc, etc.
3. Then, a unique bitcoin address is generated for each coin, which is applied to it and covered with a hologram
4. On top of the hologram, the first 8 characters of the public key are written so that the buyer of the coin can verify its authenticity.

Bitcoin metal coins are simply carriers of unique Bitcoin addresses and in fact have no advantages over Bitcoin in electronic form.

Emission of new bitcoins

One of the main differences between Bitcoin and other financial systems is its decentralization. This means that the system has no owner, no administrators, and no centralized management. Bitcoin is owned by all participants in the system, and each network user can theoretically be engaged in the issue of this currency.

Emission, or more precisely, Bitcoin mining. In order to generate a new block of bitcoins containing 25 coins, complex calculations are performed using special software to find the source code that would fit the conditions of the system. In simple terms, we can say that the codes of new Bitcoin are simply selected by iterating over random numbers and comparing them with the initial conditions.

Mining bitcoins on a computer and ASIC: the profitability of "farming" activities in 2017-2018

At the very beginning of the system's existence, the process of how bitcoins are created (mining) was quite simple and fast, and even users with medium-sized PCs could mine new blocks. But the more Bitcoin is mined, the more difficult it becomes to find new original keys.

Finding a suitable hash function today requires very large computing power.

Therefore, people involved in the emission (mining) of Bitcoin equip mining farms on which they use specialized powerful equipment, which is intended for the sole purpose of generating new Bitcoin blocks.

How to mine bitcoins in 2018: in a pool or on your own?

Blockchain technology

The entire Bitcoin system operates on blockchain technology. This means that absolutely all transactions made with each Bitcoin block are entered into an open database, and each user of the system can track them. All blocks in the blockchain are interconnected in a continuous chain, and it is impossible to make changes to the blocks already recorded in the database. Database registries are not stored in one place, but on thousands of computers of users who are members of the system. The register is constantly automatically updated and supplemented with data on both new mined Bitcoin blocks and transactions performed.

At first glance, such openness and transparency of all transactions provides huge opportunities for fraud, but in fact, everything is exactly the opposite.

Since the database is decentralized and is located immediately on hundreds of thousands of computers, in order to hack it, you need to have access to at least half of all PCs of the system users at once, which is impossible in principle. And that is why it is impossible to spend the same bitcoin twice - the transaction record will instantly appear in the registry, and the user will no longer be able to reuse the same Bitcoin address.

Benefits of Bitcoin cryptocurrency

The popularity of the Bitcoin cryptocurrency is due to a number of advantages of this cyber money over bank non-cash payments. And the most important "pluses" of bitcoins are the following:

• No commissions for making transactions
• Complete anonymity of both parties to the transaction
• Stable and steadily growing rate of the cyber currency, due to the fact that bitcoin is not pegged to the dollar, or to the euro, or to any other currency
• Transparency of transactions and the ability to track all transfers of each bitcoin
• High speed of transactions
• The inability of the payer to cancel the transaction after confirming the transfer
• Very high security of the system and its almost complete invulnerability to hacker attacks.

In this post I will tell you about what is bitcoinhow it appeared, what is bitcoin mining, how to get bitcoins, what the bitcoin rate depends on, as well as many other interesting facts about this cryptocurrency.

8 years ago, bitcoin did not exist. When it first appeared, no one knew anything about it, except for a small group of developers. Over the years, Bitcoin has gained insane popularity, and has allowed many people to make really huge money. But then the bitcoin rate fell quite strongly.

Today, there are already a huge number of Internet sites dedicated to bitcoin, cryptocurrency exchanges operate, where you can buy and sell bitcoins just like any other exchange asset, exchange services that allow you to exchange bitcoin for any currency or. What is bitcoin, and what is the reason for its popularity - more on that later.

What is Bitcoin?

Bitcoin is the first and most popular cryptocurrency that does not have a single emission center and allows you to perform any operations anonymously, without user identification.

The term "bitcoin" is borrowed from the English language (bitcoin) and was formed by merging two words: bit (the minimum unit of computer memory) and coin (coin).

Like others, bitcoins are "mined" by mining - using computer power to perform complex computing operations. The only value that bitcoins are backed by is the performance of computing systems. This cryptocurrency does not have any central governing bodies, they are replaced by cryptography: bitcoins are mined by everyone around the world, and only as much as the power of their computers allows.

Bitcoin has some similarities to electronic money, but the principles of complete anonymity, lack of control and limited release distinguish it from the work of electronic payment systems.

The number of bitcoins issued in circulation may be limited. Now it is planned to "extract" only 21 million units of this cryptocurrency, however, this figure may be revised. It is calculated that this amount of bitcoins is planned to be mined until 2033.

1 bitcoin is divided into fractional parts, the minimum of which is 0.00000001 bitcoin (one hundred millionth part, a number with 8 decimal places). The smallest unit of bitcoin is often called Satoshi, after the founder of this cryptocurrency. Thus, 1 bitcoin \u003d 100 million satoshi.

In 2011, an American company issued bitcoin cash in the form of coins of several denominations and gold-plated bars, which became collectible and still represent great investment value.

Bitcoin creator.

The creator of Bitcoin is the Japanese programmer Satoshi Nakamoto, who first published the principle and proof of work of this cryptocurrency in his mailing list in 2009. And the first mention of cryptocurrencies as a new alternative settlement system belongs to a Japanese named Wei Dai and dates back to 1998.

Satoshi Nakamoto - a rather veiled personality, it is likely that this is even a pseudonym under which a whole development team is hiding. Nobody knows for sure whether the creator of Bitcoin was really Satoshi Nakamoto, whether there really is such a person, whether he really lived in Japan, etc. For example, it is doubtful that the entire description of bitcoin was posted in pure English, and there was not a word in Japanese.

However, at the end of 2010, the one who called himself Satoshi Nakamoto announced his complete retirement from working on the bitcoin concept, and then the system continued to develop without his participation.

In fact, it is not so important who is the creator of bitcoin, since he did not undertake any management functions for organizing the operation of this system. The bitcoin code and its software are publicly available, anyone can use them and even make their own changes.

Today, no one exercises control over bitcoin.

Although theoretically, many states and private companies could take control of, if not mining, then all the bitcoins in circulation by buying up the coins that are currently issued (their value is still only a few billion dollars). But in fact, hardly anyone will resort to this, since in this case the value of bitcoin will fall dramatically, and the buyer will be at huge losses.

How does Bitcoin work?

The Bitcoin network is based on the so-called "blockchain" (block chain) and is a public ledger that stores data about all transactions in the system. All transactions are protected by electronic signatures of users - network participants, mining bitcoins and / or performing any operations with them.

For a simple user who does not want to delve into the technological processes taking place inside the bitcoin network, this system works similarly to any electronic payment system, for example. That is, the same electronic wallet, through which you can carry out certain operations, input-output, with the only difference that bitcoins can be obtained not only as payment or by exchanging some kind of currency, but also by mining - independent production.

Bitcoin opportunities.

Initially, bitcoin was a very local cryptocurrency, used only by a limited circle of people who stood at the origins of its foundation. But then in a few years it turned into a gigantic large-scale system covering the whole world.

Today, operations with bitcoin are carried out not only on many exchanges, exchangers and other resources on the Internet, but also in many offline companies: shops, service centers and even government agencies. For example, in the United States, there are cases of paying salaries to civil servants in bitcoins, bitcoin is accepted for payment in many restaurants, hotels, shops in several countries of the world.

In some Asian countries, bitcoins are quite actively used as an alternative to bank accounts and plastic cards, since banking services in these countries are very expensive.

In Russia, Ukraine and other post-Soviet countries, bitcoin has not yet received wide offline distribution, although it is used quite actively in the Internet sphere. Moreover, in Russia, for example, they plan to ban transactions with bitcoin altogether, calling it a “monetary surrogate” - there is a corresponding bill about this, which has not yet been adopted. Nevertheless, now in Moscow and St. Petersburg there are several well-known establishments (restaurants, hotels), which still continue to accept bitcoin for payment.

In general, the possibilities of bitcoin at the moment are constantly expanding and growing.

Where can I get bitcoins?

You can get bitcoins in four ways:

1. As payment for any goods or services (for example, you can pay with bitcoins on some, on sites called “bitcoin faucets”, where you can perform certain work for bitcoins).

2. Buy bitcoins in cryptocurrency exchangers for cash or non-cash money, means of electronic payment systems (the so-called bitcoin input).

3. Buy bitcoins directly from another owner (this is more profitable, since you do not have to pay the commission of the exchange office, which may turn out to be considerable - up to 5% or more). These owners can be found on Bitcoin forums and websites.

4. Independent mining (mining) bitcoins. Special software is installed on the user's computer, which contributes to the computing processes of the common bitcoin network and generates cryptocurrency for its owner.

The popularity of bitcoin.

The popularity of bitcoin is primarily due to the great opportunities for speculative earnings. However, this very factor, at the same time, can become disastrous for the entire system.

Consider 2 very illustrative examples.

Example 1. A student from Norway bought 5,000 bitcoins in 2009, spending about $ 27 on the operation. In 2013, he sold this amount, gaining 885 thousand dollars, that is, increasing his capital in 4 years almost 33,000 times (!!!).

Example 2. In 2010, the purchase of real goods for bitcoins was made for the first time. A US resident bought 2 pizzas worth $ 50 for 10,000 BTC. When the Bitcoin price peaked in November 2013, this person wrote a heartbreaking post on his blog that if he had not “eaten” his cryptocurrency, he could now become the owner of a fortune of $ 9 million.

The crazy growth of the bitcoin rate did not last long - only a couple of months - in October-November 2013. Over the previous 4 years, the bitcoin rate rose to about $ 100 (moreover, this growth mainly occurred in 2013), and over these 2 months - it soared to more than $ 1,100 per bitcoin (11 times).

The reason for this was the growth of speculative interest in this cryptocurrency: indeed, those who were able to buy and sell bitcoin on time, were able to earn really huge money from small amounts.

However, then the bitcoin rate began to gradually fall, and today it has dropped to around $ 250 per bitcoin. But given the fact that the initial cost of bitcoin was determined by the cost of electricity for its mining, we can conclude that the bitcoin rate is still too high.

Another important point that keeps Bitcoin popular is that Bitcoin is essentially a profitable and fair alternative that many consider unfair and ineffective.

In fact, bitcoin gives everyone the opportunity to produce money on an equal footing with others, independent of the state and its laws. Of course, this idea is supported by many, which also ensures the popularity of Bitcoin.

Can Bitcoin depreciate?

Yes, it can, like any asset, any free-circulation currency. If the demand for bitcoin begins to fall, and the supply begins to increase, according to market laws, the bitcoin rate will begin to decline. And it can even drop to zero. Of course, this requires some serious fundamental reasons.

It is also important that bitcoin is not backed by any real money and assets, except for the computing power spent on its production (they were spent in the past, and they are no longer there). However, the same can be said to a large extent today about any real currency, since the pegging of the emission of money to the gold reserve, the dollar rate or something else was canceled about 40 years ago.

The most important reasons for the possible depreciation of bitcoin, analysts call the complete absence of its inflation, and the desire to take the turnover of cryptocurrencies under state control.

Bitcoin today.

Today bitcoin continues its development, the number of users of this system is growing steadily. The popularity of bitcoin has also spawned the creation of other cryptocurrencies that are developing along with bitcoin, but their popularity and opportunities are much less so far.

In some countries, including Russia, they began to fight with bitcoin, explaining this by caring about people, warning them against investing money in “money surrogates” and their possible loss if bitcoin collapses. However, in fact, such a struggle is most likely caused by the desire to concentrate the functions of money issue, and hence power, in the hands of the state and prevent the formation of alternative sources of emission of means of payment, especially those that are not subject to any state regulation.

However, it is almost impossible to physically prohibit Bitcoin transactions on the Internet. You can restrict their exchange for real money by prohibiting the activities of such exchangers, but in order to prohibit the mining of bitcoins, you will need the ability to access every computer device, which is still prohibited by the legislation of most countries, as interference with privacy.

You got some idea of \u200b\u200bwhat bitcoin is, where it comes from, how it is used, what caused its popularity and growth in the rate. In further publications, I will return to this rather interesting and noteworthy topic. Stay with us and see you soon!

Bitcoin (bitcoin) is an intangible digital currency and a special type of payment system. This money cannot be held in your hands, but you can pay with it by making purchases in online stores. The transfer of bitcoins from user to user is the transfer of encrypted data.

This cryptocurrency is based on two qualities - absolute anonymity and the reliability of intra-system transactions.

Bitcoin (BTC) is not associated with banks, states, gold reserves, since it is only a set of symbols obtained as a result of solving a problem. According to the creator's idea, only demand, which is deliberately limited, can influence its course.

According to the created algorithm, the amount of BTC cannot exceed 21 million units. Virtual coins appear gradually, and the process of their emission is expected to be completed in 2140. The basic principle of the existence of this currency is the constant computation of the encrypted function.

A user who decides to create new bitcoins installs special software on his computer. The ultimate goal of multiple settlements is to create a decentralized free currency. This process has been called "mining" (mining). Mining is based on a cryptographic algorithm that converts data into a bit string.

Attitudes towards bitcoin in various countries

Does cryptocurrency have a chance to be in circulation alongside real currencies, or can it be treated like a game? There is no definite answer to this question yet. Most economists are skeptical about this money. They consider them to be a bubble, noting that the value of bitcoins increases due to speculation, and the volume of its actual use for trading does not change. Some financiers consider cryptocurrency transactions to be like a financial pyramid on a global scale.

Nevertheless, if something can be purchased for virtual currency, then it can to some extent be considered a means of payment. So, the Ministry of Finance of Germany has defined the status of bitcoin as a "unit of financial accounting", that is, recognized it as a kind of money. In the United States, a federal court ruled that military-technical cooperation meets the concept of money.

The first ATM is already operating in Vancouver, Canada, where you can exchange bitcoins for the traditional national currency and vice versa. It is noteworthy that in the first week of the exchanger's operation, transactions were made in the amount of over 100,000 Canadian dollars.

But in some states, the new currency is not recognized. It is completely banned in Thailand. China, which used to be sympathetic to bitcoins, has banned financial institutions from any transactions with their participation since 02/01/2014. But such a ban was not introduced for individuals.

The Central Bank of France also disapproved of the cryptocurrency. The regulator issued a press release in which the new currency was called a speculative and risky instrument. In Russia, bitcoins were called monetary surrogates. This was announced in an official statement by the country's Prosecutor General's Office. Representatives of the department said that the official currency of the Russian Federation is the ruble, and the use of monetary surrogates is prohibited by the current legislation of the country.

The reasons why financial regulators in individual countries do not consider virtual money to be legal tender are obvious. This currency does not have an issuer, so there is no formal basis for classifying it as securities or banknotes. It is also difficult to call it a payment system, since there are no licensed operators that manage the turnover and bear legal responsibility.

No financial organizations are involved in making payments in bitcoins. Payments are made directly and cannot be canceled. Information about the payment made by the payer is distributed throughout the network and is accepted by all its other participants, if the payment complies with the rules. An incorrect payment is rejected. There is usually no fee for payment, but it can be voluntarily paid to speed up transaction processing.

The addresses are anonymous and do not contain information about their owner. The address consists of about 34 characters of text. It includes numbers and letters of the Latin alphabet. Vitcoin addresses can be presented in the form of QR codes, as well as other two-dimensional barcodes that are read by mobile devices. The Vitcoin user can create several addresses on his own initiative.

Acquiring a new address consists of creating a new key pair, it does not even require a network connection. Obtaining an address for only one correspondent or for one transaction enhances anonymity. The wallet file located on the computer serves as a repository of funds. They can be listed to any user using a Bitcoin address.

Based on the properties of the Bitcoin system, it is compared to gold. The Bitcoin resource is limited: the more bitcoins are mined, the more difficult it is to further mine. The resource cannot be copied, theoretically the value of coins only increases over time. But virtual bitcoin is different from material gold. You cannot buy something twice for the same coins. Cryptographic protection and the system's algorithm will not allow this. The pluses of cryptocurrency, in comparison with gold, include the speed of transactions. The operation can be initiated even from a mobile phone, being at any distance from the recipient, the payment will be made in a few minutes.

Hundreds of services and shops have already accepted bitcoins as payment. There is an opinion that just as at one time e-mail limited the functioning of traditional ones to a minimum, and Skype pressed telephone companies, Bitcoin will be able to take its place in payment systems.

Perhaps virtual money will compete with the usual circulation of money. Traditional currency has long been an unsecured paper and is printed in any volume. Moreover, this process enriches some people and devalues \u200b\u200bthe share of other owners of "candy wrappers", which are much more than the former. But it is still impossible to accurately predict the development of Bitcoin.

How the bitcoin rate is formed

The rate of BTC and other cryptocurrencies is formed on specialized exchanges based on supply and demand, as befits any such asset. However, due to the rather low total capitalization of the currency, it is greatly influenced by large players and massive panic. This is clearly visible on the charts of cryptocurrency rates.

Bitcoin is absolutely not immune to speculation and is subject to strong volatility. For example, in 2013, as a result of the banking crisis in Cyprus, its rate increased from $ 30 to $ 240. Subsequently, quotes exceeded $ 1240. In total, for incomplete 2013, the rate increased by 9500%. But in December, the bubble burst due to prohibitive sanctions in China. The rate dropped to $ 400. Since 2014, Bitcoin has started to grow steadily. In mid-February, the rate reached $ 620.

Almost every owner of several tens of thousands of military-technical cooperation can, using the general confusion and excitement around what is happening, crash or raise the market. Local and global bitcoin pumps occur regularly and will continue to happen as long as people are willing to buy and invest their savings.

The MTC rate, like any other currency, grows with increasing demand. When players are ready to buy, it gradually rises. A sharp rise in the rate means not so much an explosive interest in the currency as the arrival of a pump-bull on the stock exchange.

Players with large assets (pampers) can quickly buy up sell orders and raise the rate to the maximum value as soon as possible. Pumpers create the appearance of stable growth in the exchange rate, provoking newcomers to buy. By arranging a dump at the peak of activity, they dump their assets. The bitcoin rate drops to minimum values.

The popularization of the currency through advertising and good news is also driving the growth of the cryptocurrency. The more users are informed about the product, the more they will want to invest in it or play on the exchange. Vitcoin is advertised in all the media in the world, which contributes to the growth of its rate.

Experienced traders are good at recognizing rate changes such as corrections, losses and falls. Correction is a gradual increase or decrease in the rate after a sharp drop or rise. However, if a correction in a certain period of time is observed on all exchanges with large trading volumes, this may mean that an instant drain is coming.

A drain is a sharp drop in the exchange rate by 15% or more. The leak is triggered by bad news, dump or panic, like the restrictions associated with cryptocurrency in China. A fall is understood as a medium-term moderate drain, as a result of which the price of MTC decreases by no more than 5-7%.

Correction and rebound (a sharp short-term change in the price of bitcoin in the opposite direction) happen almost constantly. When playing on corrections and bounces, the only serious problem is ignorance of the minimum level of fall in the cryptocurrency rate (bottom), at which one should buy.

Drain (dump) is an action planned in advance by large players, which is impossible to foresee, but theoretically it is possible to foresee. A long-term dump that lasts several days usually ends up in a dump. As a rule, the upcoming leak is foreshadowed by far-fetched negative news, escalating the atmosphere in chats and the desire of diapers to create panic in the markets.

It is quite difficult to predict the fall or rise in the bitcoin rate without serious assets. However, you can protect yourself from falling into a negative stream and avoid losing all money. It is necessary to closely follow the dynamics, trend and news. Constantly analyze the situation, not be afraid to make thoughtful decisions and even merge into a loss, but at the right moment.

The cost of military-technical cooperation is not backed by any organization or government. Like other currencies, bitcoin is worth something as people are willing to exchange it for services and goods. But its course is constantly fluctuating. Investing in bitcoins is quite risky. At an early stage, the system lacks widespread adoption and is therefore quite vulnerable.

Supporters of the system do not deny that no one promises money, the nominal value of which would be provided and guaranteed by the state (fiat). Cryptocurrency liquidity is not guaranteed by anything. Its non-speculative value is provided only by those goods or services that can be purchased with bitcoins, and does not depend on the global commodity mass. The more people want to use the new currency, the higher its rate will be.

Perhaps later, when bitcoin is better known, its stability may increase, but now the rate changes are rather unpredictable. Investing in cryptocurrency must be carefully considered and a clear risk management plan must be drawn up. The deflationary model of the military-technical cooperation itself assumes an increase in the exchange rate over time, but it is not guaranteed by anyone. Therefore, you should not invest in Bitcoin the latest savings or amounts that are significant to you.

There are two options for investing in bitcoins. In the first case, money is simply invested in Bitcoin, counting on the growth of the rate. In the second, profit is obtained by speculating on fluctuations in the value of bitcoin. Bitcoin speculation can only generate income for players who are versed in trading. The cryptocurrency rate is characterized by rate changes by tens and even hundreds of dollars per day. In the case of a correctly predicted movement of the rate, the profit can be quite substantial.

Bitcoin prospects

Many have questioned Bitcoin's viability. Much in the system is incomprehensible and resembles the famous financial pyramids. The actual developers of the program are unknown. There are various assumptions about who is hiding under the pseudonym Satoshi Nakamoto. The rules for issuing bitcoins gave clear advantages to the first users of the system.

In 2013, the generation of a block required half a million times more operations than at the beginning of the system. The task becomes more difficult and requires much more resources and costs, while the value of the reward has decreased. The differences from the pyramids in the system are, of course, significant. Structures like MMM are based on a referral program. Profit is obtained only when new members are invited. Bitcoins are earned regardless of the attraction of new users. On the contrary, as the number of participants increases, mining becomes more difficult.

The number of participants in the Bitcoin network is relatively small, although it is the leader among cryptocurrencies. After a sharp rise in bitcoin prices in 2011, other similar systems appeared: Namecoin, Litecoin (LTC), Novacoin. But they have yet to achieve the popularity of Bitcoin. These currencies are traded relative to BTC and have the same rate changes. Many experts distrust digital currencies and regard them as a kind of pyramid scheme. Some suspect that these systems are “groping the way” to create a new world currency to replace the lost dollar.

Despite the fact that the number of sellers willing to accept cryptocurrency is growing, its share in the global economy remains microscopic. This speaks of bitcoin more as a fashion trend than a real means of payment. It is possible that the number of virtual currencies in the near future may increase (there are already several dozen of them), but in the future there will be no more than three to five of them. Their courses will be extremely volatile and the likelihood of recognition is low. Whether bitcoin will be among them is impossible to say today.