Electronic gold - this is sometimes called cryptocurrency. This digital money has existed on the Internet for several years. For some, they cause genuine interest, and many do not even know what they are talking about. It is worth understanding that cryptocurrency - what is it, why is it needed, how does it work and can it generate income? Let's find out the answers to these questions.
Cryptocurrency - what is it?
The meaning of this term is incomprehensible to many who have not encountered digital money. Cryptocurrency is a special electronic means of payment, the exchange rate of which is supported only by supply and demand. Such electronic money is not regulated by any of the state systems, including the Central Bank. The function of observers and controllers in this case lies with the users of the Network and the owners of cryptocurrencies.
Many believe that cryptocurrency is the money of the future. This is supported by the fact that some large stores in the US and Europe are already able to settle incryptocurrency. Money transfer systems such as eBay and Paypal are already reconfiguring functionality to work with this electronic payment method.
Incredulous skeptics compare digital currency systems with fraudulent pyramid schemes like MMM. And others, on the contrary, call electronic money the engine of progress and prophesy that soon they will be able to completely replace paper means of payment. It is important to note that distrust most often arises from the fact that people do not understand this topic.
Cryptocurrency features
The main distinguishing feature of the considered digital currency is its decentralization. Cryptocurrency is dispersed on the Web and, as already mentioned, has no centralized control.
The advantage of electronic coins is also considered to be their anonymity and confidentiality of transactions. A cryptocurrency wallet is just a set of characters that is not tied to personal data and cannot be an identifier of its owner.
Moving cryptocurrency between users (even if it is an international transfer) is much faster than a similar banking transaction. At the same time, the absence of a commission is very pleasing.
The rate of cryptocurrencies cannot be affected by the work of any financial institutions or political instability.
The specificity of digital money lies in the fact that its value is unstable and can change every minute. The cryptocurrency converter must be updated every minute, only then it allows you to find out the current valueelectronic coins.
Some advantages of cryptocurrencies can be simultaneously called their disadvantages. For example, anonymity is good ground for online speculation with large amounts of electronic money.
The disadvantage of such a settlement system is its vulnerability to computer viruses and damage to physical media. Also, the irreversibility of transactions with electronic coins can be considered differently.
There is an assumption that the spread of cryptocurrencies can cause a depreciation of the national currency, have a destructive effect on the work of banks and other financial institutions - in a word, destabilize the world economy or the economies of individual countries.
List of existing cryptocurrencies
Over the few years of their existence, we have learned about a wide variety of cryptocurrencies. This list is constantly growing. Some currencies appear and disappear, but there are those that have been functioning for a long time and are known to us now. Here are the most popular cryptocurrencies in the world:
- Bitcoin, BTC (bitcoin).
- Litecoin, LTC (litecoin).
- Peercoin, PPC (peercoin).
- QuarkCoin, QRK (quarkcoin).
- Feathercoin, FTC (feathercoin).
- Protoshares, PTS (protoshares).
- Namecoin, NMC (namecoin).
- Worldcoin, WDC (worldcoin).
This is only a small part of all existing cryptocurrencies. In the period from 2008 to 2015, there are about 600 active and obsolete digital money items.
Mostcommon cryptocurrencies in the world
What is the most popular cryptocurrency? Anyone who has ever de alt with the crypto-money market will answer that this is bitcoin. Bitcoin is the very first cryptocurrency to appear. It became the basis for the creation of all subsequent electronic coins and to this day is the most popular in the world. Any cryptocurrency exchange works with bitcoin.
The second most popular today is Litecoin. It was created by a former Google employee. This digital currency appeared in 2011. Its creator, Charlie Lee, planned to tie the price of this cryptocurrency to the prices of silver on the world market, which is why it is sometimes called electronic silver.
Ratings of cryptocurrencies for 2014 put Peercoin in third place. But today, this electronic currency is characterized by insignificant inflation - 1% per year.
Buying digital currency
One of the ways to get electronic coins is to buy them for money. For this, there is more than one cryptocurrency exchange on the Internet. Such resources help to exchange your real money for digital. After making a purchase, the received digital currency is withdrawn from the exchange to your cryptocurrency wallet.
So far, this scheme only works flawlessly with bitcoins. Buying other cryptocurrencies directly with dollars can be problematic. Therefore, you will need to buy bitcoins according to the above procedure, on a special exchange, exchange cryptocurrencies one for another, and only after that make a withdrawal to the wallet.
How to getcryptocurrency without investment?
There is another way to get digital currency that does not involve investments. This method is called mining. But only at first glance, this is a cost-free method. In fact, in order to start receiving electronic money through mining, you must be the owner of computer equipment with good computing power. After installing the necessary program, you can start mining. Its meaning lies in solving algorithms that help find the required number. In digital currency terminology, this is called "solving the block". Solving each block helps release some coins.
If all operations are performed by one user, this is solo mining. Recently, this type of earnings has become practically ineffective, since finding a block requires a lot of time. Miners began to combine the computing power of their computers, thus carrying out pool-mining. In this case, the block is found faster, but the reward is divided among all participants in the process.
Is it possible to make money on cryptocurrency rate fluctuations?
Ever since electronic coins went mainstream and began to gain popularity, it has become almost impossible to make a profit on mining. More and more users take the ever-changing rate of cryptocurrency as the basis for earning.
This will be easier to understand for those who are already familiar with the principles of stock exchanges, following the example of Forex. Huge jumps in rates are caused by the constant appearance of new cryptocurrencies and the extinction of old ones. For example, the same bitcoin in 2013 changed its value from $90 to $1,000. The exchange rate of new unstable currencies can fluctuate even more.
This state of affairs makes it possible to quickly earn money by making a timely exchange of cryptocurrencies, but the probability of losing investments is also high.
Unconventional ways to make money
celebrate investing in the organization of mining companies and earning income from "caught" coins. In other words, this is the purchase of computing power, which is analogous to the shares of mining farms. In fact, this involves investing your funds in order to receive dividends. Such operations should be approached with the utmost caution, as there are many trap companies that imitate activities and are not able to generate income.
The methods of earning money indirectly related to cryptocurrency have become widespread on the Internet. Most often, their work is based on attracting the masses to accumulate bitcoins. These are various entertainment sites that distribute digital coins for registration, viewing news, making referrals and other simple operations. Cryptocurrency is the basis of calculations for completed tasks. Reviews about the work of such sites are varied. Some consider it a waste of time, and there are those who manage to consistently receive rewards in the form of bitcoins, which are later exchanged for "real" money.
Instead of afterword
And yet,cryptocurrency - what is it? Is it worth paying attention to it and mastering the new opportunities that it provides? Surely many people want to know if there is a useful perspective in this?
To date, no one can give a definite answer. Taking into account all the shortcomings of this system of electronic payment instruments, you can safely refuse any participation and protect yourself from risks. But if we delve into history, we will remember that all the brilliant discoveries of mankind were initially severely criticized, so it may happen that cryptocurrency will turn out to be a new step in global financial development.
