What is cryptocurrency
In just a few months of spring 2017 at the blast wave of growth of the cryptocurrency one could earn up to 300% of the profits. Now, when the growth of bitcoin is a bit slowed down and entered a sideways trend, the question arose, what will be the future of cryptocurrencies. Someone inclines that by the autumn there will be broken plank of 3000 USD with the prospect of $ 5,000 in a year. Someone thinks that the market is in a stage of oversaturation of the grounds for such rapid growth, the faith in crypto currencies is exaggerated, there soon will be a reversal. About what a cryptocurrency is, types, how to simply earn, etc., read on.
What is cryptocurrency
Supporters of cryptocurrencies believe that bitcoin and its analogs is an electronic money of the future. Their argument boils down to the fact that the issue of cryptocurrencies is automatic in nature and has a digital limitation. Fiat money (the ones we are accustomed to understand by that word — paper or electronic accounts).
Cryptocurrency is a digital currency that has no central issuer, it has a digital code that is impossible to copy or hack. The hashing mechanism (the creation of cryptocurrencies, production) based on the encryption algorithm in a decentralized, distributed network. The encryption process itself (not going into details) is blockchain — built according to certain rules generated by a chain of blocks of transactions. Online mining calculators allow you to calculate how resources are spent, how will they pay off with the result. You can find calculators on the Internet.
Important: the concept of electronic money and the HYIPs are very closely intertwined. If Litecoin to some extent can be called cryptocurrency, such projects as E-Dinar, OneCoin is a typical HYIP-projects, that is a financial pyramid. They also can make money, but it is about investment risks.
The only cryptocurrency in the world is bitcoin. Only this coin is recognized as money and can be exchanged for goods, other so-called crypto — currencies- an asset for investment. Justification is explained in this article.
Features and benefits of cryptocurrency:
- anonymity. All transactions with the “crypt” does not require the disclosure of personal data;
- heavy reliance on laws of other countries;
- the risk of hacking. There are numerous examples of bankruptcy of bitcoin exchanges because of the theft;
- possibility of payment.
A few years ago, the coin was taken only by a few companies. Today it is possible to pay with them for the goods through intermediary resource, even though the largest Internet platforms (Alibaba, Amazon, etc.) are still have issues. Example: Purse.io acting a kind of intermediary between the platform and customer.
Popular cryptocurrency for simple earnings
The first cryptocurrency, introduced in 2007-2009. The developed code was designed for the emission of about 21 million, but at first they were not widespread. Peaks above the “1000” is quickly followed by instant collapse. In October 2015, the value of the coins barely exceeded 300.e. in may 2016 — 450.e. in June — 725.e. Then the growth is explained to a mass withdrawal of money from China and the referendum in the UK. As gold cryptocoin is in demand as a defensive asset.
The views of the countries regarding the cryptocurrency divided dramatically:
- a total ban on all operations in: Vietnam, Bolivia, Iceland, Ecuador, Bangladesh. Countries with hard economic and political regime;
- China banned transactions for legal persons, but physical persons trades are under control. Periodic tightening negatively affect the rate;
- Russia and Norway. Bitcoin is equal to the exchange tool but as a means of payment is prohibited. Taxation of transactions are confusing, but you should necessarily pay the tax on transactions;
- Japan. The first country in the world equated bitcoin to Vietnam money. This news is a driver of spring growth;
- the United States. Here, the cryptocurrency is an investment tool. Tax is imposed on emissions and revenue from its growth;
- The EU. The views of the countries is ambiguous. France considers the cryptocurrency as a source of problems because of its anonymity (financing of terrorism), Germany allowed the coin as personal savings, in 2013 the EU abolished taxation VAT at the judicial level.
The current growth of cryptocoin has no simple explanation. Fundamental news are not capable enough to swing the course, because there is an alternative view that the market went to someone from institutional investors who will sell your portfolio at the peak, the market collapses. Something similar happened already with other cryptocurrencies: at the end of may the TOP 10 coins have lost more than 20% of the cost, due to which the total capitalization of the market fell from 90 to 67.2 billion USD. Capitalization of bitcoin amounted to 33.5 billion, or about 52%. And yet it is the bitcoin which said the first word in blockchain technology, and therefore is the most promising.
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Payment system was launched in 2011 and has earned popularity for its high transaction speed (4 times faster than the bitcoin) and more convenient simple parameters of mining. But didn’t become a full-fledged money from cryptocoin. But many wallets work with this coin.
The coin, which in 2015 outrun the startups of Zuckerberg and received a grant for implementation. Popularly it is called “ether”. Then its Creator, Vitaly Buterin, a Canadian programmer with roots from Russia, was 21. Now the ether is considered one of the most promising, but it concedes in the volatility of the bitcoin. Cryptocurrency has no equivalent to money, because its future is uncertain. Capitalization of the ether is about 23 billion USD.
How to make money on bitcoin
1. Create your own farm
Once a simple popular method of mining today is only on an industrial scale. 4-5 years ago it was enough to put a powerful computer with graphics card and recoup it in a few months. Today due to the power of the bitcoin network mine cryptocurrency is profitable only in the so-called farm return on investment 1-1. 5 years. While there are still lots of private miners around the world, but in Russia to earn money in this way is not the solution. You can verify this with online calculators of mining.
2. To buy the cryptocurrency through the exchange offices, stock exchanges, ATMs
Exchange of cryptocurrencies are similar to stock exchanges, where after the purchase the right of ownership for free passes to the buyer (user). The general procedure is to replenish the electronic purse or exchanger and add orders arrived at the exchange. This simple method gave the opportunity to buy and earn up to 300% in 3 months for many investors. It has its drawbacks:
- each exchange has its own margin, which is due to the volatility of the asset could be 200-300 USD. At an average rate of 2700 bitcoin could be sold for 3100-3200. Most people prefer to work online from Poloniex;
- there are no objective reasons for the growth. ETF Fund has not been launched, attempts of introduction of technology of the blockchain is open to question. While the rate rests on the optimism of investors, but it’s just a sign of a bubble;
- due to the avalanche of demand the number of transactions has dramatically increased. As the number of bitcoin is limited, the proposal simply does not meet demand, which applications in the case of issuing a small commission froze up for a few hours, and even days. It was difficult to remove the applications quickly so investors suffered losses on the volatility.
In August 2016 in Russia (in Moscow) opened the first ATM exchanger was opened, which has become an easy way to capitalize on market fluctuations. The ATM network is constantly growing.
3. Earn with Forex or binary options brokers
Broker Olymp-Trade offers bitcoin as an asset and it is not alone. This trend in Russia continued by other brokers trying to offer traders the best quotes. Plus of this variant is the immediate conclusion of the transaction with a minimum capital (of $ 10 or more) can be a good trading news. Minus the lag on quotes, high volatility of the asset, the ownership of the asset to the investor is not transferred.
Summary. By far the cryptocurrency is a new technology in the field of secure data transfer, domestic clearing and payment of funds. But this is not the easiest way to earn money. Great volatility, the almost complete dependence on the position of the authorities of China and Japan, legislative restrictions of some countries — all this is will curb the demand and use of cryptocurrency.
Analysts agree that the blockchain technology is the future, but the society is not yet ready to accept it. Capitalization of bitcoin is only 46 billion dollars at the rate of 2900 USD/1BTC, total cryptocurrency market is a little over 101 billion For comparison, the number of U.S. dollars is calculated in trillions. For the countries own currency is a monetary lever of economic management. Is hardly as easy Fiat money will be replaced by electronic. If you buy bitcoin today, then in 3-5 years it is guaranteed to bring 100% profit. And 20% stable income in a year is a good passive income!
In the next articles we will describe how cryptocurrencies market works with electronic wallets, how to buy cryptocurrencies on exchanges and more. Stay with us! We will teach you how to earn!