What is a crypto currency: new high-grade cash or a money surrogate? Many people are asking this question more and more often, but can not find a simple and intelligible answer. Conflicting information from different sources is even more confusing and leads to new questions. In this article, in simple words, it is told what the cryptocurrency is and why the digital currency is gaining popularity in different countries of the world.
Why crypto and why currency?
Cryptography in simple words is encryption. Transformation of information into a way that is incomprehensible to anyone other than those who have the key. Scientific direction, based on mathematical methods of ensuring confidentiality.
Disadvantages of the fiat currency (paper money)
A currency is a means of measuring the value of goods or services. The disadvantage of paper money – it can be counterfeited, stolen, fallen under inflation, printed in the amount in which the government-issuer wants. The cryptocurrency has no such drawbacks.
Emission (Issue) of crypto-currency
The cryptocurrency has no single emission center. Their release is carried out due to the work of thousands of computers around the world. Each transfer of cryptocurrency from one person to another is fixed and permanently stored in a special database (blockchain) that is stored not in one place, but on the same hundreds of thousands of computers. This scheme of digital money guarantees invulnerability for hacker attacks.
Security of transfer (transactions) of cryptocurrency
The Internet allows sharing any information with people at any distance from each other. By the same principle cryptocurrencies are transferred. All transactions are made without the participation of banks and other financial organizations. Cryptocurrency is transferred from one digital purse of one user to another user's digital wallet. At the same time, due to the encrypted form, no one can steal your currency.
What is bitcoin and what is it for?
The crisis of 2008 showed the imperfection of the financial system of the world. This crisis arose in the US, then spread across the planet and seriously undermined the economies of many countries. The basis of the crisis is the widespread distribution of the US dollar and its use as a world currency.
In the same year, the first cryptocurrency – Bitcoin appeared. Its creator, Satoshi Nakamoto, is still unknown to the whole world. Does such a person really exist of is it just a group of programmers, it is unlikely we will ever find out. Satoshi Nakamoto created the world's first system, allowing to implement and account for digital money transactions. That moment has become the birthday of Bitcoin. The functional part of the system is based on the fact that its users, who keep a special program on their computer, track and fix the appearance of new digital coins, as well as the procedure for their movement from one purse to another.
Anonymity, emission, mining
Anonymity is the foundation, the basis of Bitcoin. A bold plus of its uniqueness. Only the moving of coins between purses is fixed. At the same time information about the owners of these digital wallets is not fixed anywhere.
The Bitcoin emission is due to the work of computing powers that solve the problem of encryption on a certain algorithm. This is called mining (Eng. extraction of minerals). To solve such a problem a stationary computer was initially sufficient. With the increase in the number of issued cryptocurrency and the increase in the number of users, the complexity of the computations required for release has increased rapidly. Therefore, for the emission of digital coins, super-powerful ASIC processors created specifically for this purpose are used. They have one goal - the production of bitcoins and the maintenance of the existing transaction system.
Central banks of states can print paper money in unlimited quantities. This always leads to inflation and depreciation. Bitcoin has a different nature. Its developers have set a certain number of digital coins in the system - 21 million. Once this volume is reached, the release of bitcoin will cease. It will happen approximately in 2140. A limited amount of bitcoin even now already increases its value compared to paper (fiat) money.
In 2009, bitcoin cost $ 1,000. In 2017, its price soared to $ 19,000. It is possible to buy a digital coin not in whole, but in parts.
How to mine (make) bitcoin?
Earlier we already said that for the issuance of cryptocurrency and for carrying out transactions, computing power is needed. By providing these processing powers for the emission of bitcoins and the functioning of the network, you can earn bitcoin. It is called mining. To mine bitcoin, you need to purchase and run super-power ASIC processors. They are the only way of mining. And only the mining farms are able to obtain other crypto-currencies. Simply speaking, these are computers in which not one, but several powerful video cards are running at once. Collected in this way, crypto-currencies can easily be changed to bitcoins.
What is blockchain?
Blokchain is a same database we spoke about above. In this database all information about digital coins is collected. Each cryptocurrency has its own blockchain. This database contains all transactions. Accounting for emissions and transfers between purses is maintained from the time the digital coin appears and doesn’t stop for a second.
Fields of cyptocurrency’s application
Today you can purchase digital goods for digital coins via the Internet. They are already gradually displacing payment systems from the market. It is easier, faster and cheaper to use cryptocurrency for making money transfer to any place in the world than traditional methods. Banks and financial structures are not needed for such kind of processes.
The transfer of the cryptocurrency is from one person to another, and there is also a commission for this transfer, but it can be installed independently. The higher the commission, the faster the transaction will be. The commission goes as a reward to the participants of the system, supporting its viability, i.e. miners. Having received the transfer by digital coins, they can easily be converted into rubles, dollars or other currencies. This is done through special exchanges or exchangers. With their help, you can purchase, cash in a currency.
Where and how to acquire a cryptocurrency?
The purchase of cryptocurrency can be carried out by using exchanges or using the services of special exchangers. It is important that these exchanges and exchangers are reliable and verified. The task is facilitated by the website https://www.bestchange.ru/ . It is a database of certified exchangers which you can trust.
If you want to buy cryptocurrency with rubles, you can make it easily using a bank card or payment systems. The entire list of options is presented in the table, which is colored in green.
In the right column, choose the crypto currency you want to buy. For example, Bitcoin.
In the left column choose the option with which you want to purchase Bitcoin. For example, using the Sberbank card.
To the right of the green table is the list of exchangers in which you can perform the selected operation. Opposite the name of each exchanger, the course will be displayed. In the case of our example, this is the rate of bitcoin to ruble. Now you choose the most advantageous offer for you and go to the website of the exchanger, where you will find instructions about how to complete the transaction. To translate rubles into the cryptocurrency in this way, you only need a few minutes.
