☆ Cryptocurrency: What Is Bitcoin?

1. What cryptocurrency Bitcoin?

Bitcoin, what is it? Bitcoin virtual money - this is the first cryptocurrency, electronic media, which created an unknown programmer (or a group of programmers) under the pseudonym Satoci Nakamoto. This happened in 2009. The term "Bitcoin" and specificity (algorithm of Bitcoin) it was he who came up with.

Nobody knows where this man is and what his name is in the real world. He created not only the program but also a special application - purse on your PC containing cryptocurrency Bitcoin.

Cryptocurrency Bitcoin has the basic functions and properties of conventional money from different countries:
• a medium of exchange;
• Means savings;
• The unit of account.

However, Bitcoin is cryptocurrency.

Cryptocurrency and Bitcoin Wikipedia describes in the following way: cryptocurrency - a type of digital currency. Its emissions and accounting based on different encryption methods. But the operation takes place in a decentralized, distributed in a computer network.

It should at least briefly mention the second most popular cryptocurrency - Laytkoine. This is the same cryptocurrency only transaction of this algorithm cryptocurrency running a little faster. Bitcoin Laytkoin and can be compared to gold and silver. To date, there are already more than a dozen smaller cryptocurrency.

Let''s also look at why Bitcoin - this is not a pyramid scheme. Cryptocurrency - this is the real software, the growth rate of which depends on supply and demand and not by subsequent investors.

2. How do cryptocurrency (on Bitcoin example)

Each member of the network can make instant transactions cryptocurrency without intermediaries. That is, the buyer sends the money directly to the seller. No need to go to the bank or to make money on the Kiwi-purse, you simply send Bitcoins person. Coins in the system - it''s cryptographic (mathematics) hash codes. Each of them is completely unique and can not be used twice.

Like any currency, Bitcoin has its course. Check the current exchange rate can be cryptocurrency blockchain.info on site.
Bitcoin mining what is it? New Bitcoin or any other cryptocurrency created through a process called mining.

The essence of Bitcoin mining is reduced to solving some complicated kriptozadachi, which is solved by the method of exhaustive search. Therefore, a regular computer is not suitable for these tasks. cryptocurrency miners usually use of super powerful PC or server.

But because the Bitcoin network is soaring, mining has become a technologically complex process.

Alternative methods of preparing cryptocurrency Bitcoin:
As payment for services rendered and goods;
Buying Bitcoin cryptocurrency;
Bitcoin exchange between individuals.

The whole process of buying and selling Bitcoin or any other cryptocurrency I described in the article: "Where and how to buy Bitcoin and Laytkoin (Bitcoin and Litecoin)". I can only select the most suitable option 2 cryptocurrency purchase Bitcoin: for RF is Matbi exchanger, and for the rest of the CIS countries - buy Bitcoins through exchange WebMoney.

3. Advantages over conventional cryptocurrency Bitcoin money

- Open source cryptocurrency.
Source code and cryptocurrency Bitcoin theory open. The Bitcoin work the same algorithms that are used in online banking. The only difference between online banking is the disclosure of information about the end-user. The Bitcoin network all the information about the transaction has to be shared (what, when), but there are no data about the recipient or sender of coins (no access to the personal data holders purses).

- The absence of inflation.
The number of coins in this system increases at a certain rate laid down so as to coincide with the speed of extraction of gold on the planet. The maximum number of coins is strictly limited and amounts to 21 million Bitcoins. Since no political parties or corporations, can change this order in the system there is no possibility for the emergence of inflation.

Due to this, even safer cryptocurrency is gold. Unprincipled mathematical calculation ensures Bitcoins deficit in the near future. Today, each of us can become the owner of cryptocurrency that will never depreciate, and will only get more expensive. And this is not an empty promise, a mathematical rule that is embedded in each program-purse. Of course, you can change it, but under the condition that 99% of owners of purses will agree to the new changes. That''s where true democracy.

- Cryptocurrency peer network.
In such networks, the main server is not responsible for all operations. The protocols work as a peer network like torrent. Exchange of information (in our case - money) takes place between 2-3 and more software clients. All installed users program-wallets are part of the Bitcoin network.

Each client keeps a record of all the transactions performed and the number of Bitcoins on each koshelke.Tranzaktsii produced hundreds of distributed servers, they are called "getters".

Neither banks nor tax, nor the state can not control the exchange of money between the wallets of users.

- Unlimited transaction opportunities.
Each of the holders of the purse can pay anyone, anywhere, for anything. Transactions can not be controlled or prohibited, so that you can make transfers to any place in the world where there was not another user with Bitcoin wallet.

Bitcoin cryptocurrency working as a live in cash, combining e-commerce functions. No need to pay commissions and fees to banks and other organizations. The third party here - mathematics, which does not need your money. Charge in this system is lower than in any other. They make up 0.1% of the transaction amount. The percentages are in the wallets "earners" Bitcoins.

- The boundaries are erased.
Bitcoins have no boundaries. Payments made in this system, it is impossible to cancel. Sami coins can not be faked, copied, or spend twice. These capabilities ensure the integrity of the entire system. Every month, the number of online stores, resources and companies that accept Bitcoin pay increases.

4. Disadvantages cryptocurrency Bitcoin

The main and the only drawback I think Bitcoin is still strongly influenced by the news on cryptocurrency. Almost all of the ups and downs of Bitcoin course directly dependent on the catechumens statements of governments of different countries. The high volatility of the exchange rate creates problems in the short term. For example, you bought a Bitcoin, and over the last month it fell by 10%. The same may happen quite the opposite.

But, on the other hand, if the rate of Bitcoin less stabilized and become less volatile, and the investment potential cryptocurrency greatly reduced.

5. Cryptocurrency Bitcoin: how can you use it?

Bitcoin can be used to purchase goods and services on the Internet anonymously. In addition, to make international payments easily and cheaply, because Bitcoin is not tied to a particular country.

There are several options for storage Bitcoin:
• Offline purse
He established and created on your PC. Usually, it is encrypted to prevent tampering.
However, there are some cons, if you forget the password to log into a purse or on your computer hard disk fly - you ever lose access to their funds.
• Online wallet
Online Bitcoin wallet has its advantages over the offline version. You can access it by using not only PC, but the tablet or phone. Specificity is similar to the usual Kiwi wallets, WebMoney, or online banking.

One of the main problems of these purses is that all data is stored on the server. If the server is hacked, hacked and all the information.

Cryptocurrency Bitcoin and Laytkoin as an investment
According to the schedule of the course cryptocurrency Bitcoin can be traced to a certain regularity.
The growth of Bitcoin in some periods of exponential growth, and in plain language: at times inflated "bubble", where you can earn good money.
Investors have begun to take seriously cryptocurrency just after the first of the bubble in 2013.

That only is the story of a pizza when an American in 2010 bought a pizza for 10,000 Bitcoins, is now equivalent to more than 5 million dollars. And all it took several years.

Investments in cryptocurrency involve greater risk and should be considered in the medium and long term.