Cryptocurrency

What is cryptocurrency?
Let's see what is hidden under the term "cryptocurrency", what it is in simple words, and why it is called so. The very name Crypto Currency, meaning "cryptocurrency", appeared in the magazine" Forbes " in 2011. And ever since then the name is firmly entrenched in everyday life.

Cryptocurrency is called a special kind of electronic means of payment. Strictly speaking, it is a mathematical code. It is called so because of the fact that the circulation of this digital money uses cryptographic elements, namely an electronic signature.

The unit of measurement in this system is considered to be "coins "(literally"coins"). Cryptocurrency has no real expression such as metal coins or paper banknotes. This money exists only in digital form.

The principal feature that distinguishes cryptogenic from the real, is the way they arise in the digital space. Thus, real means of payment are required to be first deposited to a certain account or electronic wallet, and crypto-currency units appear already in electronic form.

"The issue of" digital money is happening in various ways: it is the ICO (initial placement of the coins, the system investment), and mining (maintaining a special platform to create new cryptogenes), and forging (the formation of new blocks in existing cryptocurrencies). That is, the cryptocurrency arises literally"from the Internet".

Another important difference from the usual currency is the decentralization of output. The issue of electronic currency is the generation of a mathematical code followed by an electronic signature.

Only the Central Bank has the right to issue real money, but any person has the right to issue crypto – money. In order to make transactions using cryptocurrency, you do not need to contact any third-party organizations (banks).

Payments with digital money are carried out in the same way as regular electronic transfers via the non-cash payment system. The only exception is the exchange through which cryptogenic can be monetized, that is, transferred into a means of payment.

The circulation of such currency is the system of " block-chain "(literally" closed circuit " in English). The system is a database distributed over millions of personal computers worldwide. In this case, storage and the entry information when cryptogenes happens on all devices at once, which ensures absolute transparency and openness made by the transaction.

Why cryptocurrency is so popular
The popularity of the cryptocurrency is due to the requirements of time. In the age of widespread information technology, universal means of payment are in great demand, which could be calculated in the electronic space without reference to a particular country or institution. Such a tool was the cryptocurrency.

Only their number is used for payments with virtual money, so the cryptocurrency does not need real expression. Digital means of payment are protected by a cryptographic code, which makes them more reliable in comparison with "real" money. And due to the absolute decentralization of the issue of virtual coins, they can neither be forged nor banned.

Another feature that contributes to the popularization of crypto-payments is complete anonymity. No one will receive any information about the payer or recipient during the transactions, only the e-wallet number will be used from all the data.

And also the attractiveness of the cryptocurrency is that it can be obtained independently. That is, the digital currency can be obtained almost"out of thin air". But buying and selling and investing cryptocurrency and you can still earn money. At the same time, crypto-money can be exchanged for traditional money, as a result of which they are able to bring quite tangible income.

Types of cryptocurrencies
Digital money first appeared in 2008, and to date, there are already several thousand varieties. There is a large category (nearly 50%) of cryptogenes not actually provided any content. These are so-called bubbles. We will not take them into account.

The most common types of cryptocurrency:

1. Bitcoin (BTC, bitcoin, at the moment one bitcoin is equivalent to 4200 us dollars). Cryptocurrency bitcoin in simple words is the first digital currency, on the basis of which all subsequent ones were developed. Bitcoin developer (development team) – Satoshi Nakamoto. For the currency declared limit on the number of 21 000 000, however, currently it is still not achieved.

2. Ethereum (etherium, equal to $ 300). This is the development of the Russian programmer Vitaly Buterin. There was such a currency relatively recently-in 2015. Now it is quite popular along with bitcoins.

3. Litecoin (litecoin, LTC, equated to 40 us dollars). The currency was developed by programmer Charlie Lee and has been issued since 2011. Litecoin is considered to be an analogue of silver among crypto-currencies (and bitcoin is an analogue of gold). The release of litecoin, like bitcoin, is also extremely limited and is 84 000 000 units.

4. Z-cash (Z-cash, $ 200).

5. Dash (dash, $ 210).

6. Ripple (Ripple, $ 0.15).

In addition to these items, in the electronic treatment is used also Darkon, Primkey, Pirmin, Dogcon, Namkeen and many others.

The most popular of all cryptocurrency is bitcoin. Its name is made up of the words "bit" – the smallest unit of information and "coin", which translated from English means "coin". For BTC, or bitcoin, not only a program is created, but also a special digital wallet in which you can store this currency.

In addition, now there are even special ATMs where you can transfer bitcoins into the usual paper money, and a number of trading networks and shops accept this currency for payment along with ordinary bills and coins.

Advantages and disadvantages of cryptocurrencies
According to its main characteristics, digital money is significantly different from conventional. This entails not only advantages but also some disadvantages for users.

Pluses:

Anyone can get such money with the help of specially organized activities (mining). Since there is no single emission center and no bodies controlling this process, no one can prohibit the production of crypto-money in the network to ordinary citizens.
All operations with cryptocurrencies (so-called transactions) are completely anonymous. The only open information in this case is the e – wallet number. And all information about its owner is closed.
Decentralized production, in addition to the possibility of extracting money for everyone, causes the lack of control over this process.
For each type of cryptocurrency there is a limit of issue. Thus, excessive emission is impossible and, as a result, there is no inflation in respect of this money.
Cryptocurrency is protected by a unique code like an electronic signature, so it is protected from copying, and therefore it can not be forged.
There are practically no fees for transactions, since the role of a third party relationship – banks-is excluded for unnecessary transactions with the help of cryptocurrency. Consequently, such payments are relatively cheaper than using conventional cash.
With all the variety of positive characteristics, cryptocurrencies have disadvantages.

Minuses:

If the user has lost the password from his e-wallet, it means for him the loss of all the funds in it. Since there is no control over the transactions using digital money, there is no guarantee of their safety.
Cryptocurrency is characterized by high volatility due to the specifics of its circulation (volatility means frequent change of its value).
In relation to cryptocurrencies, various negative impacts from national regulators of monetary circulation (for example, the Central Bank of the Russian Federation) may be attempted.
As over time, the process of mining crypto-coins becomes more and more complicated, the mining with the help of individual users ' equipment becomes less profitable.
Each of the existing types of cryptocurrencies has both advantages and disadvantages inherent to all of them in the aggregate.

In General, all crypto-currencies are characterized by the same features as modern money, namely:

They are universal;
Are an exchange means;
They can be accumulated;
Perform the calculation function.
The cost of digital money varies depending on supply and demand.

How to earn on cryptocurrency
Currently, there are a number of ways to earn on bitcoins and other virtual currency:

1. Purchase and sale of cryptocurrency. This is done on special exchanges or electronic money. The principle of action is to buy the currency during the decline in its value, and sell – during the increase. Most often, this trade is associated with bitcoins, because their value is higher than other types of cryptocurrency.

Recommended reading:

How to earn Bitcoins-9 working ways from scratch + instruction on the withdrawal of cryptocurrency.

1. Cryptocurrency investments. Investments are made by transferring a certain amount of e-money from one person to another in trust. Usually, brokers deal with the issues of trust management.

2. Production of electronic money (mining). Mining cryptocurrency in simple words-is the process of mining cryptocurrency with the help of special software. On an ordinary home computer, large amounts of cryptocurrencies will not be able to be produced, rather significant capacities are needed, and, consequently, the acquisition of additional equipment. You need a powerful graphics card and processor. In addition, special devices are used – the so-called mining farm, which produce cryptocurrency.