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What is Bitcoin and how to make money on Bitcoins?


Literally BITCOIN (bitcoin) is a "bit" unit of information, a "coin" coin. In fact, bitcoin (official abbreviated BTC) is an electronic payment system (currency), which does not have a single information center, so the system does not have a single owner. You can say that the cue ball belongs to those who use them. By the way, most often in the network bitcoin is called just bits. Electronic crypto currency bitcoin was created in 2009 (development started in 2007), a programmer or a team of programmers with the pseudonym of Satoshi Nakamoto (apparently the Japanese name).

In 2009, Satoshi published the source code of the system and this event can be called the beginning of the electronic payment system.
To date, there are more than 10 electronic currencies with a similar mechanism of operation, they are also called forks (answer). I will list the most promising forks in terms of earnings and investments:
LiteCoin (now the LTC rate fluctuates in the range of $ 25-40);
Namecoin (now the NMC rate fluctuates between $ 5 and $ 10);
PPcoinn (now the PPC rate fluctuates in the range of 3-5 $).
The cost and stability of the courses of all existing crypto-currencies is directly dependent on bitcoins, so in this article I will only talk about bits.

In order to fully understand what bitcoin is, I will list the main differences between bitcoins from the usual money:
Bitcoins are not provided with anything
BTC are not debt obligations (as usual money) and in fact nothing material is not provided. The price of bitcoins directly depends on supply and demand, i.е. how much currency people need. You can draw a parallel with gold, the price of which depends directly on demand. If gold, at some point there will not be anyone, the price will collapse, however, until the full zero, the price will not fall, because it is still metal and something can be done from it. Of bitcoin, in the absence of demand, nothing will be done, so the price of it can theoretically fall down to zero.
There is no single center
As I said above, all the data of the payment system is stored in the open code on the users of the system. There is no regulator of the system (as, for example, the central bank), who could influence the price of the currency, the quantity of the issue of new units, 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 is known initially (21 million coins). Not only the maximum quantity is programmed, but also the emission dynamics (release of new coins), which now amounts to 25 coins every 10 minutes. Coins are distributed among the so-called miners, which I will discuss later. Every 4 years, emissions are halved.
Thus, the payment system has a deflationary structure that promotes a constant rise in the price of the cue ball. This is the graph of the increase in the emission of bitcoins, according to which the issue will end already in 2033, although it seems to me that this moment will come sooner.

Assuming that the governments of large countries will not prohibit bitcoin, then proceeding from the deflationary model, the rate will only grow. When the total amount of coins is 21 000 000, coins can technically be divided to the eighth decimal place, so the end of the issue does not mean the end of the development of the payment system.
No commissions for transactions
Since the system does not have an owner, therefore, and pay a commission for transfers between purses is not someone. In the system, it is possible to pay a voluntary commission to speed up transactions.
Complete anonymity of bitcoins
Despite the fact that the system has open source code, and anyone can follow any operation with btc, the system of wallets is absolutely anonymous. Any user of the system can have an unlimited number of wallets on his computer, and they will have completely different numbers. To find out who is the owner of a particular purse, you can only from the owner.
The purse number is a line of long, order, 34 characters (letters and numbers). The purse itself can be stored on a computer, portable media or online service.

There are only two ways you can make money on bitcoins:
Earnings on the mining of bitcoins
Mining (mining - mining of minerals) - extraction of virtual currency bitcoin due to computing power of the computer. This process is necessary to ensure the life of the network, it is the miners (virtual currency miners) that ensure the anonymity, security and efficiency of transactions in the bitcoin system. Earnings for the miners are new coins in the system (25 coins every 10 minutes), which are distributed among the miners. At present, calculations in the bitcoin system are so complex that using a normal computer for mining will only bring losses (electricity, depreciation, etc.). In order to combine the processing power, the miners are pooled, the profits in which are divided in proportion to the volume of the calculations made.
Now for mining it is most advantageous to use special devices of the asika, which were created specifically for mining and do not know anything else. As a person far from the anatomy of computer configurations I will not go into details of this way of earning on bitcoins. Perhaps later I will write an article on mining.
Earnings on trade in bitcoins
This method can be divided into two: passive investing in bitcoins and active speculation on the course. The first method consists in the banal purchase of bitcoins and canning them under the mattress, in the hope that in a couple of years they will cost ten times more than now. By the way, I recently read an article by the leading analyst of Bank of Amerika, who conducted a study and claims that the price of cue bottles will only grow to a minimum of $ 300 (now the price is 1 BTC = $ 2500).
The second way of earning on the bitcoin trade implies active trading / speculation on the bitcoin course. For these purposes, you can use the service eToro (official site). Service differs intuitively clear interface, it is possible to establish stop-loss and take profit, copy successful managers, trading crypto-currencies. There is an opportunity to try trading on a demo account without attachments.

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