2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Today, perhaps, there is not a single area in life that has not been touched by new information technologies. Even finance, in fact, can now be virtual. What is meant? Let's talk about currency. It is customary for us to perceive this concept as a certain monetary unit of any state. So, in our country, the national currency is the ruble. The currency can also be collective. This is the euro. There are many classifications for this concept. But what is a cryptocurrency, it’s harder to tell in simple words.
Cryptocurrency concept
Digital or electronic currency is in great demand among users of the Internet space. Immediately it is necessary to distinguish between the concepts of electronic currency and the system of Internet money. The main difference is that the equivalent of the latter is a real currency, such as rubles. This is how they worksystems "Yandex. Money", Qiwi.
And the Webmoney system has its own electronic currency, which works only within itself. That is, when money is transferred to the wallet of this system, they turn into its own currency.
Cryptocurrency occupies a separate niche. This is a digital currency, the exchange, issue and accounting of which are based on cryptography, that is, encryption. To summarize what has been said, what is a cryptocurrency in simple terms and how does it differ from other types of electronic currencies? Unlike money in electronic form, such as Yandex. Money, it does not have a physical embodiment. And unlike electronic currencies, such as Webmoney, cryptocurrency is decentralized, that is, it is not controlled by a single server that belongs to a bank or any organization.
How did the cryptocurrency appear?
For the first time, cryptocurrency appeared in the Bitcoin payment system. This happened in 2009. The system was developed by a group of people or a person under the pseudonym Satoshi Nakamoto. It has been constantly improved, changed, bitcoin is still dynamic.
In 2010, the first purchase for bitcoins was made. One of the Americans bought two pizzas for 10 thousand bitcoins. Note that initially bitcoin cost $0.1, and then soared to $1,300 for one and even higher - up to three thousand US dollars in the summer of 2017.
What is the basis of cryptocurrency?
What is the basis for the existence of cryptocurrency? To explain whatis a cryptocurrency in simple words and what underlies it, let's compare cryptocoins with gold coins.
Like the stock of gold, the number of crypto coins is limited, this is a kind of protection against emission. Cryptocurrency was originally created using a technology that will not allow it to fall. Bitcoins, like gold, cannot be counterfeited. Like gold, you can buy cryptocurrency or even mine it yourself. Again, as with real gold, the number of bitcoins is limited (21 million coins are available in total, more than two-thirds are already in the circulation of users).
The algorithm for creating virtual money is based on the following:
- A public database is stored on each computer.
- To make a transfer, a key is used that is generated only once.
Bitcoin cryptocurrency: what is it in simple words
Bitcoin is the very first kind of cryptocurrency. What is cryptocurrency in simple words? These are bitcoins, since they became the first cryptocurrency. In principle, bitcoin can be called in another way a computer program that creates a virtual currency. The principle of operation of bitcoin can be compared with the principle of operation of torrents. Several people immediately install the program on their PCs, and then transfer files among themselves without anyone's control. The difference from torrents is that not files are transferred, but "virtual points".
Bitcoins can be exchanged for real money at ATMs. They can also pay for goods and services.
Most Popularcryptocurrencies
In addition to bitcoin, the ancestor of cryptocurrency, there are other types of cryptocurrencies:
- Ethereum. Appeared in 2013. As of August 2017, its exchange rate is $300.
- Litecoin. Appeared in 2011. Limited to 84 million. Course - $40.
- Zcash - currency unit equals 200 dollars.
- Dash equals $210.
According to various sources, from 200 to 800 types of cryptocurrencies now exist in the virtual space. All of them are somehow based on the principle of bitcoin.
Ethereum as a kind of cryptocurrency
In 2013, Vitaly Buterin, a programmer from Canada, Russian by origin, created a new kind - the Ethereum cryptocurrency. What it is? In simple words, this is, in fact, another analogue of bitcoin, but with new features. The Ethereum platform can be used to create new cryptocurrencies. You can mine on Ethereum, just like on Bitcoin.
Mining, or How to make money on cryptocurrency in simple words
The process of mining cryptocurrency is called mining. It comes from the word "mine" - "to excavate." The method, of course, is different from gold mining. To implement mining, they take a motherboard, a server or other power supply, a hard drive, a monitor, and video cards. A special mining program is selected and installed, then it is launched, then a fork and a pool are selected, and the mining process itself begins.
Further on, in simple words, howmine cryptocurrency. The program installed on your PC will create tasks that it must solve. For this action, the computer will receive virtual money. So, for bitcoin, the program issues no more than 3600 cryptocoins per day.
Each time, the tasks that the miner's PC must perform become more complicated, and miners have to create more powerful machines to solve them. The main point is that whoever decides first will get bitcoin. To date, there are a huge number of so-called "farms" - machines for solving the problems of the program.
How to exchange cryptocurrency?
There are two ways to exchange cryptocurrency. Further, in simple words, this is a cryptocurrency exchanger. In the virtual space, there are special services for the exchange of such money. In other words, exchangers. First of all, when choosing one, pay attention to the rate and commission.
Advanced users put exmo.com first. Here you will need to enter your email address and create a password. If we want to exchange bitcoins, we go to the "exchange" menu. Specify the number of bitcoins that we want to exchange. The system will show us the course. To complete, press "exchange".
Another exchanger is 60cek.com. Similarly, we go through the registration, confirm via mail and activate the account. Next, we also enter the number of bitcoins for which we want to exchange. You can immediately transfer to a card in a bank. To do this, enter the card number, full name of the owner and other data.
The third most popular exchanger is blue.cash. Registerthe same as in previous versions. Click "Exchange", enter the number of bitcoins that we want to change. You can withdraw exchange money to "Yandex. Wallet". To do this, you need to specify the wallet number and mail.
Exchange as a means of cryptocurrency exchange
EXMO exchange is very popular among Russian miners. The exchange works with 6 types of currencies:
- USD.
- EUR.
- LTC.
- BTC.
- RUB.
You can perform exchange transactions using payment systems:
- VISA/MASTERCARD.
- "Yandex. Money".
- WebMoney.
- QIWI.
Commission is 0.2 percent of the transaction amount.
On the official website of the exchange, click the "Start" button. Thus we start the system. We pass registration in the section "Profile" - "Verification". Here you will need a passport. You need to upload a scanned copy of it.
The site works in English and Russian. In the tab "Trading" you can see the exchange rate.
EXMO works with both conventional and cryptocurrencies.
LiveCoin is an exchange created in 2014. Supports the following trading pairs:
- BTC/EUR.
- BTC/USD.
- BTC/RUR.
- EMC/USD.
- EMC/BTC.
- LTC/BTC.
- LTC/EUR.
- LTC/USD.
On this exchange, you can not only buy or give away currency, you can simply exchange it. The site is in English and Russian.
Cryptocurrency inRussia
There is no unequivocal position in our state regarding cryptocurrencies. But still, most compare them with financial pyramids. What is a cryptocurrency in Russia? In simple words, it is called surrogate money.
The Ministry of Finance has prepared amendments to the legislation on punishment for the use of cryptocurrency, transactions with it.
In Russia, the concepts of cryptocurrency and blockchain are divided. If the first is treated sharply negatively, then the situation is different with the second. Blockchain technology is considered precisely as a technology. It is proposed to develop the blockchain for further use in the banking system or registries. Currently, the use of cryptocurrencies by legal entities is seen as counteracting the legalization of proceeds from crime.
Cryptocurrency Reviews
Reviews about the existence of cryptocurrency are mixed. Those who make money on this are talking about the future of cryptocurrency. According to reviews, cryptocurrency (what it is, in simple words, we described above) is a phenomenon similar to financial pyramids. There are also examples of deceived virtual investors. For example, the Hong Kong exchange My Coin crashed in 2015. Contracts were issued to depositors as a guarantee to cover up fraudulent activities, but there were no physical agreements.
Scammers also use cryptocurrency e-wallets in their actions. So, to create online wallets, there is a faucet site. After a certain amount appears in the wallet, it disappears.
Some people manage to make money on bitcoins, moreover, this activity has become extremely popular even in Russia (confirmation of this is the skyrocketing prices for video cards used in mining and the excess of supply by demand). Of course, the reviews about the cryptocurrency of such people will be positive. Others, having tried the faucets, complain that the earnings are very low and there is no point in doing this. In general, the reviews are diametrically opposed.
Summing up. What is a cryptocurrency - in simple terms? Virtual currency that exists in the virtual space. If you have knowledge and experience in it, then you can work with cryptocurrency. If you are a regular PC user, use standard payment methods.
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