Bitcoin hits up: how virtual money turns into real money

Sadly, the modern paper "cash" that we are accustomed to is increasingly moving away from the past every day. This is not surprising, because today's paper money is replaced by bank cards and electronic wallets. However, thanks to the rapid development of modern technologies and these innovations are gradually beginning to become obsolete ....

Literally a few years ago, the world was presented with another "virtual novelty" - bitcoin, which at first caused a huge mass of mistrust, but already today bitcoin has established itself as a reliable payment tool that will soon turn the entire financial world. 

• What is the reason for this?

Agree that virtually any high-tech invention usually has a beautiful history of creation. But with bitcoin it was different - he did not have any beautiful stories, and moreover about his appearance was known very little. Therefore, many people until recently perceived bitcoin as another financial pyramid on a global scale.

Its huge popularity and user confidence, this currency has won thanks to the fact that it can be used by absolutely anyone who has access to the Internet. But even more attention in this virtual currency is attracted by the fact that it is in no way connected with states or banks, and for its eight years of existence its rate could grow by more than a thousand times. Therefore, many people call bitcoin - "people's currency."

Quotations of these virtual coins are now determined on special crypto-exchanges (Bittrex, Poloniex, Liqui, etc.), although in fact virtual virtual cryptoonette bitcoin is not provided.

• Could this mean that bitcoin is nothing but another cat in the bag?

Most fears of investing in bitcoin are due to the fact that if investors suddenly lose interest in this coin, then it will very quickly depreciate. Personally, I do not think so, because here in the first place everything is built on trust. While bitcoin is accepted for payment (not only EPSs are involved), I believe that it does not threaten anything, because after all it is not a financial pyramid and there is no payment of dividends from the contributions of previous participants.

Therefore, bitcoin in a sense can be compared to gambling. After all, those who want to earn easy money are very many, respectively, the chance of risk on the game of courses is very high. Being on crypto-birzhe it is necessary to remember that it is completely different from the classical currency exchange, and manipulation with currency rates is quite normal here. That's why the crypto exchange is more like a game, where each player is looking for the right time to enter and exit the market. But not everyone can find the very same moment .....

Proceeding from this, we can draw the following conclusion: the variability of the course of bitcoin can easily lead to a heart attack or heart attack even with the most iron nerves. But all cause a sense of profit and greed ....

As an example, we can cite the moment - when bitcoin was practically worthless in 2010, but it takes 3 years and somewhere in the autumn of 2013 the price of one crypto-jacket has grown to 1000 dollars. And then closer to the beginning of 2015, the rate drops sharply to $ 200 per coin. Quite unexpected turn of events is true? By the way, a similar situation of a sharp change in the course could be observed last week.

But the real value of bitcoin today is determined not by the number of dollars for one cryptonet, but for a real breakthrough in the information storage system. I think it's not a secret to anybody that in ordinary standard mechanisms (the same banks) there is a certain intermediary - in effect fulfilling the role of a control center, whose task is to collect and control data in one place.

• In bitcoin, such a mechanism is completely absent, but is it safe?

Despite the complete absence of the mechanism cited as an example above - no hacker has yet managed to crack this system and say let's release several million cryptonyms. How is that ?

The reliability of the entire bitcoin network is due in its way to a unique technology called blockchain (block, chain). It is this technology that represents the entire real value of bitcoin.

The essence and uniqueness of this technology lies in the fact that all operations and any information entered are immediately fixed in the system and immediately formed into blocks. And to create new blocks, you need to check the correctness of all previous ones.

•   But who does this work?

The creation of the blocks is done by the users themselves - this is called minning, for which they receive a reward - so new bitcoins appear in circulation. However, to get the right to create blocks, you must first solve a complex mathematical problem. But with all this, the system itself is completely transparent and absolutely every user of the system can see the whole chain of blocks.

Thus, it becomes clear that the whole algorithm of mining these coins is thought up literally to the smallest detail - on the knee this can not be done) And proceeding from this fact, it can be assumed that in reality the blockchain creator is not one person, but possibly a group of programmers. Such calculations require enormous power.

If you liked this publication, then you can subscribe to me and vote for this post) Sincerely Viktoria Romanova.