New virtual money. And the main features of virtual currency. Ways to make money on Bitcoin

The vast majority of Internet users have heard about the Bitcoin cryptocurrency (abbreviated as BTC) or mining. If you don’t yet know what Bitcoin is and where to get it, then we suggest you read this article to the end. We will tell you about BTC, the most popular methods of its production, as well as where and how you can buy or sell it.

What is cryptocurrency

Cryptocurrency is a digital currency that has quite a lot of similarities with fiat money (euros, rubles, dollars) and at the same time is very different from them. Having cryptocurrency, you can spend it on purchases, for example, in an online store, or even pay for dinner in a Chinese restaurant. You can also transfer it to another person or exchange it for fiat money using the services of Bitcoin exchangers. All this makes cryptocurrency, including BTC, very similar to the usual money on a debit card.

The main distinguishing feature of cryptocurrency is decentralization digital money, which makes it possible to complete transactions without the participation of third parties. If you create a transaction using, for example, a credit card from any bank, your money first goes to the control node. At this point, the banking system analyzes the request, after which it may decide to confirm the transfer or return the money to the sender’s account. In addition to the fact that such operations take up precious time, the bank charges you a commission. In the case of cryptocurrency, there are no such control nodes, and money changes hands.

What is Bitcoin in simple words

VTS is the very first cryptocurrency that appeared in 2009. For the first time, one could get acquainted with the principle of operation of the peer-to-peer Bitcoin network, on which a certain Satoshi Nakamoto worked, two years before the appearance of the digital currency. Despite the fact that Nakamoto managed to attract the attention of thousands of programmers to his project, no one ever believed in its success. The first transaction using Bitcoin was carried out by the American Hanecz Laszlo, who offered 10,000 BTC to anyone who would bring two Italian pizzas to his house. It is difficult to imagine what emotions Laszlo experienced at the moment when Bitcoin began to rapidly rise in price.

Today, there are hundreds of millions of transactions using cryptocurrency. Therefore, to the question “what is Bitcoin?” in simple words Let's answer - money that has its own exchange rate in relation to another currency, but does not have a physical form.

How new coins of VTS and other cryptocurrencies appear

Unlike government banknotes, cryptocurrency cannot be printed. However, this does not mean that virtual coins appear out of nowhere. Cryptocurrency is a digital object that contains a colossal amount of information that has a cryptographic code. Simply put, this is a kind of virtual memory card that has a digital record.

In order to generate new entry, it is necessary to find the only correct solution to a complex mathematical algorithm. Since even the most smart person is not able to cope with such a task, the computing power of a computer is used for these purposes.

Each cryptocurrency differs from each other not only in the uniqueness of the given algorithm, but also in the complexity of the task, as well as the total number possible solutions, which are subsequently turned into coins. It follows that:

• the total number of coins of any cryptocurrency is limited (BTC - 21 million coins);
• programmers know in advance when the last coin will be mined (BTS - in 2140);
• it is impossible to make any changes to the algorithm;
• coins must be obtained by solving problems;
• The fewer coins remain in the system, the more difficult the mining process becomes.

How to earn bitcoins

Today, the interest in cryptocurrency is so great that inventive people have come up with many ways to get the coveted BTC. As an example, here are the most effective and popular methods:

• cloud mining;
• VTS cranes;
• buying bitcoins.

Let's look at each method in more detail.

Mining

This method of how to earn bitcoins was not only the very first, but also the most effective. The “pioneers” who started mining were exclusively mathematicians and programmers, who watched with interest the project that Satoshi Nakamoto was working on. However, the growing popularity of cryptocurrency has led to the fact that at the moment Almost anyone can mine it.

A few years ago, the question of where to get bitcoins was not as pressing as it is today. They could be mined on a regular desktop computer. But since the process becomes more complicated day by day, to mine cryptocurrency you need to have impressive computing power, which the so-called farms have.

A farm is a productive computer that uses the power of several modern video cards to mine bitcoins. We will definitely tell you which devices are suitable for mining digital currencies.

Which video card should you choose?

This is the first question that arises in the minds of people who learn that they can squeeze bitcoins out of their video card. However, before you begin the process of assembling your own farm, you need to pay attention to the cost of video adapters from the new lines presented by such giants as AMD Radeon and Nvidia. Their price varies between $300-600, which is undoubtedly expensive for the average citizen. It should also be taken into account that at least 4 such graphic adapters will be required.

Without a video card, creating a farm is impossible, since they are the ones involved in the computing process, for which rewards in the form of bitcoins or satoshis (one hundred millionth of a bitcoin) will be sent to your BTC wallet.

There is ongoing debate on forums about which chips are the most effective in cryptocurrency mining. Some people like AMD more, while others consider Nvidia to be the absolute leader. There is no definite answer, since in the process of mining a particular currency, chips demonstrate completely different results. But overall they are approximately equal. There is a significant difference in the cooling system. The quietest and coolest are video adapters from Nvidia.

The main thing you need to pay attention to when buying video cards is the declared memory and core frequency. The higher these indicators are, the more calculations per second the video adapter will do.

The cooling system is also an important factor on which not only the stability of your farm’s operation, but also its durability will depend. Overheated equipment will not allow the chip to turn on full power, and a constantly high temperature will lead to physical destruction of the board.

If you are comfortable with technology, take a video card that has the potential for so-called overclocking. With proper settings, you will be able to increase computing power by up to 40%, which will significantly reduce the time it takes to mine your first bitcoin.

The video cards shown in the table are the most suitable for mining in 2017.

Motherboard

When choosing a motherboard, you need to pay attention to the number of PCIe slots. In order for you to assemble an effective farm, the board must have at least 4 such slots. The ASRock H81 PRO BTC model is considered the most suitable for mining.

power unit

Before you buy a power supply, you will need to calculate how much energy the future farm will consume. Each device has a mark in its characteristics that indicates its energy consumption. Experienced people who know where to get bitcoins and have been successfully mining them for years recommend buying power supplies that have received an 80 Plus Bronze certificate. They are more reliable.

RAM, HHD and CPU

When choosing RAM, the main criterion is its speed. The best option for a farm is one 8 GB stick (1600 MHz). For stable operation, a hard drive with 60 GB of memory is enough. You need to buy a high-frequency processor that is supported by the motherboard.

Raisers

Risers - extension cords-adapters that are not used during assembly desktop computers. They are needed to connect everything at the same time graphics adapters To motherboard. There are two types of risers:

• on trains;
• USB 3.0.

The best ones are those that connect via USB. They are more stable during the mining process.

Programs

Having purchased the equipment and secured it in a special frame that you can make yourself, you need to download and install the operating system. Then register a BTC wallet. You will be assigned a unique address to which bitcoins will be withdrawn.

From the BTC wallet, money can be withdrawn to any other payment system, for example, WebMoney. Recently, WM has a new title sign - WMX (webmoney-bitcoin). This event caused a huge amount of controversy in various forums where issues related to mining are discussed. This reaction is explained by the fact that before WebMoney, Bitcoin did not have support from the largest providers of electronic payment systems.

After installing the wallet, download and install special program for mining, which will allow your farm to start working. However, it should be remembered that independent Bitcoin mining is a rather complex process that requires enormous power. In order to speed up problem solving, most amateur miners gather in groups called pools.

Cloud mining

If you don’t have time to assemble a farm or don’t have enough budget, rent part of someone else’s power and mine military-technical equipment! This is exactly the kind of earning scheme that services offer cloud mining. Owners of such sites, as a rule, large companies who purchase professional equipment in large quantities, ensuring uninterrupted power supply and constant access to the Internet.

On the site provided for cloud mining, there is a huge list of pools in which people combine rented power to process information and solve problems more efficiently.

Also, some resources offer a referral system for passive income or a one-time bonus upon registration. The most resourceful users use the “donated” funds as a startup, thus receiving free bitcoins.

Among the many projects that rent out their own capacity, Telcominer can be highlighted. This is a very young resource that appeared in the spring of 2017. It boasts a rather nice design and rich functionality. After registration, a bonus will be available in the form of 15 GHs of power, which is provided for a month.

VTS cranes

Bitcoin faucet is a site where you can get free bitcoins, or rather part of them (Satoshi) after certain periods of time. In this case, you will have to perform some simple action, for example, enter a captcha. Such resources exist due to advertising, which is placed in videos or banners located on home page site. Some BTS faucets have internal sweepstakes (lottery) and draw additional satoshi among all active users.

1. freebitco. You can “open” the faucet every hour and receive from 45 to 45,000 satoshi.
2. ADBTC. You can withdraw satoshi every 30 seconds. Bonus - fixed (69 satoshi).
3. BonusBictoin. Once every ten minutes you can perform a certain action, for which you will be awarded 50 satoshi.

Now you know where to get Bitcoin without having powerful equipment or funds for investment.

Cryptocurrency exchanges

Most likely, every person who has thought about making money on the Internet at least once in their life has heard about stock exchanges. Many sales and purchase transactions are regularly carried out on these trading platforms, and people who know how to correctly forecast the exchange rate of a particular currency are able to earn a fortune. After digital currency caused a real stir in society, cryptocurrency exchanges began to appear, offering to buy or sell bitcoins on their platform.

Money protected by a cryptographic signature is a rather profitable asset. Selling bitcoins or converting them into other currencies is a small matter, because the demand for them is incredibly high. But the most interesting thing is that the cryptocurrency rate is very volatile. It can plummet and then skyrocket in just a few hours. If you find the right moment, you can buy Bitcoin profitably.

Where to trade is everyone's business. However, when choosing a trading platform, you should pay attention to the following nuances:

• Analytical tools. In order to make money on the difference in Bitcoin exchange rates, you need to learn how to analyze the state of the market. Without the help of auxiliary tools, such as charts, Japanese candles, glass, etc., this will be impossible to do. When choosing an exchange, first of all evaluate its functionality.
• Daily turnover. This information can tell you a lot about the exchange that interests you. The greater the turnover of banknotes on the trading platform, the more promising it is for making money.
• Total amount of cryptocurrency offered. On a proven exchange, which creates ideal conditions for making transactions on its own platform, there are always many traders and those who decided to sell their BTC. This is where you will have more tools to make a profit, which will directly depend on how much you are willing to invest.
• Help Desk. You should not waste time working with a service whose support team does not communicate with customers or resolves issues very slowly. It’s better to save your nerves and money, because there are many sites where you can buy Bitcoin quickly and without all sorts of pitfalls.

How to get “real” money for mined cryptocurrency

We looked at the main ways you can earn bitcoins, the rate of which is constantly growing. Today the cost of 1 military vehicle varies between $2300-2500. But how to hold honestly earned money in your hands? To do this, we will need to use the services of Bitcoin exchangers.

In order to exchange cryptocurrency for fiat money, you need to have a debit card from any bank or an electronic wallet registered with one of the payment systems. Then we go in search of the Bitcoin exchange itself, of which there are a lot today. Before converting bitcoins to another currency, analyze the resource you like, study all the conditions for making transactions, read reviews of people who have used the services of this site. Also pay attention to the rate and commission so as not to sell yourself short. Let's look at the most popular resources among users that work with payment systems such as Yandex.Money, PayPal, QIWI, WebMoney:

• X-PAY;
• 60SEC;
• XCHANGE;
• EXMO;
• PROSTOCASH;
• WMGLOBUS;
• BLUE;
• LIVECOIN;
• BESTCHANGE;
• ALFACASHIER.

All these services have been providing their platforms for currency exchange for more than one year and are the most reliable. And also they have very user-friendly interface, which even a beginner who doesn’t know how to cash out bitcoins can quickly figure out.

Cryptocurrency can be sold without involving third parties who charge a commission for their services. However, in this case, no one will give you any guarantee that the transaction will be safe. Despite the fact that Bitcoin is the most secure currency, sometimes it is better to play it safe.

In this publication I will tell you about what is bitcoin, how it appeared, what bitcoin mining is, how to get bitcoins, what the bitcoin exchange rate depends on, as well as many other interesting facts about this cryptocurrency.

Just 8 years ago, Bitcoin did not exist. When it first appeared, no one knew anything about it except a small group of developers. Over the course of several years, Bitcoin has gained incredible popularity and allowed many people to earn really huge money. But then the Bitcoin rate fell quite significantly.

Today, there are already a huge number of Internet sites dedicated to Bitcoin, there are cryptocurrency exchanges where you can buy and sell Bitcoins in the same way as any other exchange asset, exchange services that allow you to exchange Bitcoin for any currency or. What is Bitcoin, and what is the reason for its popularity? More on that later.

What is Bitcoin?

Bitcoin is the first and most popular cryptocurrency without single center emission and allows you to perform any operations anonymously, without identifying the user.

The term “bitcoin” is borrowed from the English language (bitcoin) and was formed by merging two words: bit (minimum unit computer memory) and coin (coin).

Like others, bitcoins are “mined” through mining - the use of computer power that performs complex computational operations. The only value that bitcoins back up is the performance of computing systems. This cryptocurrency does not have any central governing bodies; they are replaced by cryptography: bitcoins are mined by everyone around the world, and exactly as much as the power of their computers allows.

Bitcoin has some similarities with electronic money, but the principles of complete anonymity, lack of control and limited release distinguish it from the operation of electronic payment systems.

The number of bitcoins released into circulation may be limited. Now it is planned to “mine” only 21 million units of this cryptocurrency, however, this figure may be revised. It is calculated that this number of bitcoins is planned to be mined before 2033.

1 bitcoin is divided into fractional parts, the minimum of which is 0.00000001 bitcoin (one hundred millionth part, a number with 8 decimal places). The minimum unit of Bitcoin is often called Satoshi, after the founder of this cryptocurrency. Thus, 1 Bitcoin = 100 million Satoshi.

In 2011, an American company released cash bitcoins in the form of coins of several denominations and gold bars, which became collectibles and still represent great investment value to this day.

Creator of Bitcoin.

The creator of Bitcoin is considered to be the Japanese programmer Satoshi Nakamoto, who in 2009 first published the principle and proof of the operation of this cryptocurrency in his mailing list. And the first mention of cryptocurrencies as a new alternative payment system belongs to a Japanese man named Wei Dai and dates back to 1998.

Satoshi Nakamoto- a rather veiled personality, it is likely that this is even a pseudonym under which an entire team of developers is hiding. No one knows for sure whether the creator of Bitcoin was really named Satoshi Nakamoto, whether there really is such a person, whether he really lived in Japan, etc. For example, the fact that the entire description of Bitcoin was posted in pure form raises doubts. English, and there was not a word in Japanese.

However, at the end of 2010, the one who called himself Satoshi Nakamoto announced his complete abandonment of work on the concept of Bitcoin, and then the system continued to develop without his participation.

In fact, it is not so important who is the creator of Bitcoin, since there are no management functions He did not take responsibility for organizing the work of this system. The Bitcoin code and its software are in open access, anyone can use them and even make their own changes.

To date, no one has control over Bitcoin.

Although theoretically, many states and private companies could take control, if not mining, then of all the bitcoins in circulation by buying up currently issued coins (their value is still only a few billion dollars). But in fact, it is unlikely that anyone will resort to this, since in this case the value of Bitcoin will fall significantly, and the buyer will face huge losses.

How does Bitcoin work?

The Bitcoin network is based on the so-called “blockchain” (chain of blocks) and is a public ledger that stores data about all transactions of the system. All transactions are protected by electronic signatures of users - network participants who mine bitcoins and/or carry out any operations with them.

For simple user who does not want to delve into the technological processes occurring within the Bitcoin network, this system works similarly to any electronic payment system, for example. That is, the same electronic wallet through which you can carry out certain operations, input-output, with the only difference that bitcoins can be obtained not only as payment or by exchanging some kind of currency, but also through mining - independent production.

Bitcoin opportunities.

Initially, Bitcoin was a very local cryptocurrency, used only by a limited circle of people who were at the origins of its founding. But then in a few years it turned into a gigantic large-scale system covering the whole world.

Today, transactions with Bitcoin are carried out not only on many exchanges, exchangers and other resources on the Internet, but also in many offline companies: stores, service centers and even government agencies. For example, in the USA there are known cases of paying salaries to civil servants in bitcoins; bitcoins are accepted for payment in many restaurants, hotels, and shops in a number of countries around the world.

In some Asian countries, bitcoins are quite actively used as an alternative bank accounts and plastic cards, since banking services in these countries are very expensive.

In Russia, Ukraine and other post-Soviet countries, Bitcoin has not yet received wide offline distribution, although it is used quite actively in the Internet sphere. Moreover, in Russia, for example, they plan to completely ban transactions with Bitcoin, calling it a “money surrogate” - there is a corresponding bill about this, which has not yet been adopted. However, there are now several well-known establishments (restaurants, hotels) in Moscow and St. Petersburg that continue to accept Bitcoin for payment.

In general, the possibilities of Bitcoin are currently constantly expanding and growing.

Where can I get bitcoins?

There are four ways to get bitcoins:

1. As payment for any goods or services (for example, you can pay with bitcoins on some sites called “Bitcoin faucets”, where you can perform certain works for bitcoins).

2. Buy bitcoins in cryptocurrency exchangers for cash or non-cash money, means of electronic payment systems (the so-called input of bitcoins).

3. Buy bitcoins directly from another owner (this is more profitable because you don’t have to pay an exchange office commission, which can be significant - up to 5% or more). Such owners can be found on forums and websites dedicated to Bitcoin.

4. Independent extraction (mining) of bitcoins. Special software is installed on the user’s computer, which contributes to the computing processes of the general Bitcoin network and generates cryptocurrency for its owner.

Popularity of Bitcoin.

The popularity of Bitcoin is primarily due to the great opportunities for speculative earnings. However, it is precisely this factor that, at the same time, can become disastrous for the entire system.

Let's look at 2 very illustrative examples.

Example 1. A student from Norway bought 5,000 bitcoins in 2009, spending about $27 on the transaction. In 2013, he sold this amount, earning 885 thousand dollars, that is, increasing his capital in 4 years by almost 33,000 times (!!!).

Example 2. In 2010, real goods were purchased for the first time using bitcoins. A US resident bought 2 pizzas worth $50 for 10,000 bitcoins. When the Bitcoin price reached its peak in November 2013, this man wrote a heartbreaking post on his blog that if he had not “gone through” his cryptocurrency, he could now become the owner of a fortune of $9 million.

The crazy growth of the Bitcoin rate did not last long - only a couple of months - in October-November 2013. Over the previous 4 years, the Bitcoin rate rose to around $100 (and this growth mainly occurred in 2013), and over these 2 months it soared to more than $1,100 per Bitcoin (11 times).

The reason for this was the growth of speculative interest in this cryptocurrency: indeed, those who were able to buy and sell Bitcoin on time were able to earn really huge money from small amounts.

However, then the Bitcoin rate began to gradually fall, and today it has dropped to around $250 per Bitcoin. But taking into account the fact that the initial cost of Bitcoin was determined by the cost of electricity for its mining, we can conclude that the Bitcoin exchange rate is still excessively high.

Another important point What makes Bitcoin popular is that Bitcoin is, in essence, a profitable and fair alternative to what many consider unfair and ineffective.

In fact, Bitcoin gives everyone the opportunity to make money on equal terms with others, without depending on the state and its laws. Of course, this idea finds support among many, which also ensures the popularity of Bitcoin.

Can Bitcoin depreciate in value?

Yes, it can, like any asset, any currency in free circulation. If the demand for Bitcoin begins to fall and the supply begins to increase, according to market laws, the Bitcoin exchange rate will begin to decline. And it can even drop to zero. Of course, there must be some serious fundamental reasons for this.

It is also important that Bitcoin is not backed by any real money or assets other than computing power, spent on its extraction (they were spent in the past, and they no longer exist). However, the same can be said to a large extent today about any real currency, since the link between the issue of money and the gold reserve, the dollar exchange rate or something else was abolished about 40 years ago.

Analysts say the most important reasons for the possible depreciation of Bitcoin are the complete lack of inflation and the desire to take the circulation of cryptocurrencies under state control.

Bitcoin today.

Today, Bitcoin continues its development, the number of users of this system is steadily growing. The popularity of Bitcoin has also given rise to the creation of other cryptocurrencies that are developing along with Bitcoin, but their popularity and capabilities are still much less.

In some countries, including Russia, they began to fight Bitcoin, explaining this with concern for people, warning them against investing money in “money surrogates” and their possible loss if Bitcoin collapses. However, in fact, such a struggle is most likely caused by the desire to concentrate the functions of money emission, and therefore power, in the hands of the state and prevent the formation alternative sources issuing means of payment, especially those not subject to any government regulation.

However, it is almost impossible to physically prohibit transactions with bitcoins on the Internet. You can limit their exchange for real money by banning the activities of such exchangers, but to ban the mining of bitcoins, you will need the ability to access every computer device, which is still prohibited by the legislation of most countries, as an interference with privacy.

You have gained some idea of ​​what Bitcoin is, where it comes from, how it is used, what determines its popularity and rate growth. In future publications I will return to this rather interesting and noteworthy topic. Stay with us and see you again!

All countries in the world have their own national currency. For Russia it is the ruble, for the USA it is the dollar, for European countries it is the euro. Now the Internet has its own national currency, called Bitcoin. Cryptocurrency has become an integral part of many modern people. And for this there is large number reasons.

What is Bitcoin and what are the advantages of electronic currency?

Electronic money Bitcoin represents fundamentally new look decentralized digital currency. It can only be used on the Internet. This currency is not under anyone's control. Its release and circulation is carried out largely thanks to millions of computers turned on and connected to the Internet.

The Bitcoin currency has the following advantages that make it popular among users of the global network:

• Ease of use

In order to start using cryptocurrency, you only need to spend 5 minutes of time. To open a current account in a banking organization, you sometimes have to spend 1.2 hours or even a whole day. It is possible that you may encounter difficulties in doing so. Once you open a Bitcoin wallet, you can use it immediately without any fees.

• Minimum commission

When does the transfer take place? cash in a bank to the account of a bank client in another country, a commission is written off, sometimes amounting to 50 percent. With bitcoins, there is no commission charged for transferring money to a native of another country.

• Translation speed

Bitcoins are sent by users to different countries peace. When transferring, they arrive at the account of another person in a maximum of 5 minutes, which is very convenient.

• Anonymity

Internet users have the opportunity to create several Bitcoin wallets without being tied to a specific name and address.

• Transparency

The peculiarity of Bitcoin is that it stores the entire history of transactions. When a user has a publicly open Bitcoin address, everyone can see how much cryptocurrency is in the account. Only, they will know whose electronic funds they are if the user himself decides to confirm that this is his address.

Basic functions of Bitcoins

The first mention of bitcoins began to appear in 2009. It is believed that the creators of this currency are a programmer or a group of programmers known under the pseudonym of the Satoshi Nikamoto network. The exact name of the creator is difficult to determine, but he managed to create an application that is an electronic wallet installed on the user’s computer device to store cryptocurrency. It has its own functions, among which are the following:

• medium of exchange
• means for saving your capital,
• unit for calculations.

How can you use bitcoins?

Cryptocurrency in its characteristics is no different from the regular currency that we are used to using in life. They can be purchased on any specialized exchange, such as exmo.com. Bitcoins can be used to make anonymous purchases in online stores. They can also be used to make simple and fast payments to users around the world. This is due to the fact that the currency is not tied to any country in the world.

Bitcoins are stored in two ways:

• Offline wallet

Users install it on a computer device. In some cases, it is encrypted. There is a possibility that when a hard drive fails or its owner forgets the password, it will be almost impossible to restore access to the funds on it.

• Online wallet

Access to such a wallet is carried out not only from computer device, but also from a mobile device at hand. It works on the principle of a web money service, Internet banking.

Using Bitcoin as an Investment

Investors started taking Bitcoin seriously in 2013. From time to time there is an opportunity to earn money using this type of cryptocurrency. The Bitcoin exchange rate chart makes it easy to determine the most best time to earn money using electronic currency.

But this is more news. It is noticeable from the comments that many people, especially those not directly familiar with Bitcoin, have many questions about the principles of its operation. There are also a lot of guesses, often incorrect. In order to somehow clarify the situation, it was decided to write this article.

Real money?

I repeat - all this is nothing more than misconceptions. The idea of ​​Bitcoin was based on the desire to create not just another “piece of paper” that represents real money, such as gold, but an analogue of gold itself. Take those properties of gold that make it ideal money, and make an electronic currency based on them.

Mining difficulty

Let’s say a person worked diligently to mine gold all day and eventually extracted 1 kg. For him, the value of mined gold is equal to one day of hard work. After a hard day at work, he decided to relax and go to the cinema. By a happy coincidence, the cashier gave the tickets in exchange for gold. Why? Because the cashier likes gold, but doesn't like working with a pickaxe all day. Therefore, he is ready to provide a service - give away the ticket - in exchange for 1 kg of gold. In fact, he exchanges his service for one day of hard work.

Now let's imagine a different situation. They invented a copier that works with gold. And any person can make 10 kg from one 1 kg of gold in a minute. In this situation, the cashier will no longer exchange tickets for gold, since now he himself can easily print as much as he wants. Gold will cease to have any value and can no longer be used as money.

In Bitcoin, the process of mining coins also requires resources and time. But in in this case These are not human resources, but computer ones.

Conditionally limited resource

In Bitcoin, similar behavior is achieved by introducing a function of the speed of the total mined coins versus time. This function is inversely proportional, i.e. the speed drops over time and tends to zero. If we take the integral of this function over time, we get an exponential. Something like this:

Here you can see that the total number of coins tends to 21,000,000. The details of how Bitcoin works will be discussed below. In the meantime, you need to know two things: coins appear in the system in packs approximately every 10 minutes, the number of coins in one pack is 50, and it is halved every 4 years.

Materiality

This behavior is natural for material currency, but not for electronic currency. To achieve this behavior virtual money, you need to apply a lot of ingenuity. In Bitcoin, this behavior is provided by the transaction mechanism. All transactions are combined into chains. Each transaction takes coins from one or more existing transactions and specifies who they are intended for. Therefore, you can always check the entire chain for validity.

Difficulty of mining, limited resource, materiality - these properties, plus the use of cryptography to ensure security, allow Bitcoin to be used as money. The core of Bitcoin is based on them. These are not just agreements. All of them are embedded in the by design system, and it will not work any other way. It's time to look at this very design.

Block chain

In current versions of the Bitcoin program, the entire blockchain is downloaded by each client, which makes the system completely decentralized. The data is not encrypted in any way and anyone can manually trace all transactions. There is even a special website - Bitcoin Block Explorer, where you can easily view all the information about blocks and transactions.

At the time of writing, the number of blocks in the chain was 110,968, and, as I said earlier, this number increases by 1 approximately every 10 minutes. This means that one of the participants was able to create a new block.

By the way, all participants are divided into two groups: those who are working on the new block and those who are not working. According to statistics, these groups have a ratio of 1 to 3. Why create blocks at all, and even every 10 minutes? Transactions are recorded in blocks. Each block contains all transactions that took place during its creation, i.e. within 10 minutes.

It works as follows. One of the clients creates a new transaction and sends it to other clients who are busy generating a block. They add this transaction to their block and continue generating. Sooner or later someone will be able to generate a block. Such a block is sealed (no more transactions are added to it) and sent out across the network. Next, clients check the block and transactions within it for validity. If there are no problems, then the transactions are considered approved. At this point, the fresh block has already reached each client and is added to the chain. After this, the process repeats - clients begin to generate the next block and collect new transactions into it.

Block

hash- SHA-256 hash of the block header. Such a hash is quite random, and its calculation time is predictable. I would like to note that only the header is hashed, without transactions. So the number of transactions will not greatly affect the hash calculation time.

ver- Block diagram version. At the moment, all blocks have one version - 1.

prev_block- Hash of the previous block in the chain. Thanks to this property, the chain cannot be tampered with by replacing one of the blocks in it, since the hash of a block always depends on the hash of the previous block in the chain. If you change one of the blocks, you will have to recreate all subsequent ones.

mrkl_root- Merkle root - list of transaction hashes. The hash of the block must necessarily depend on the transactions so that they cannot be forged. But calculating it directly will take a long time if the number of transactions is large. Therefore, the transactions themselves are hashed first, and then their hashes are used to calculate the hash of the entire block.

It may seem absurd - why calculate the hash of the same thing twice. But the fact is that the transaction hash is updated only when a new transaction is added to a block, and the block header hash is recalculated several thousand times per second. In addition, the closer the size of the header in a constant, the more accurately you can predict the time to calculate its hash.

time- uint32_t representing the block creation time. The maximum allowed year is 2106.

bits- One of the most important properties. Is a short form of the target hash value. A block is considered generated (valid) when its hash is less than this target value. The target value determines the difficulty of creating a block. The smaller it is, the less likely it is to find a suitable hash in one iteration. This property is updated every two weeks.

This happens as follows. The number of blocks generated over the last two weeks is counted and compared with the standard (1 block every 10 minutes). If there are too many blocks, then the difficulty increases. If there are too few blocks, it decreases. In this way, the system adapts to an increase in the number of users and, as a result, the total power of their computers.

nonce- A number that, starting from zero, is incremented after each iteration of the hash calculation. Actually, this is how the search continues until the hash is less than the target value. For each new hash to be different from the previous one, at least one of the block header properties must be different.

For example, the version never changes. The hash of the previous block is updated when someone gets ahead of us and generates a new block. Merkle root is updated when a transaction is added. Time - every few seconds. Bits (target value, difficulty) - every two weeks. All this is too long. To avoid waiting until one of the properties is updated and a nonce exists.

Let's consider a hypothetical situation. All nonce values ​​have been checked and none of them match. During this time, no other property changed. A nonce overflow occurs and it starts from scratch again. It turns out that the hashes will be repeated further. To avoid such situations, after a nonce overflow, a special property of one of the transactions is changed. After this, the Merkle root is updated and the block header hashes will no longer be repeated.

n_tx- Number of transactions in the list.

size- Block size in bytes.

Transactions

To specify the recipient, his public key is used. In order for the recipient to use the money received, he must create a new transaction that will take the money from the previous one and redirect it to another address. To prove that a person is using his own money for the transfer, and not someone else’s, he must leave his digital signature in his transaction. Then at any time you can make sure that all transactions in the system are valid.

In practice, all this is implemented using the following properties:

hash- Hash of the entire transaction. It turns out that transactions are hashed twice. The first time during the calculation of the transaction hash. The second time is during the calculation of the block hash. In addition, each block refers to the hash of the previous block, and each transaction refers to the hash of the previous transaction (or transactions). If you change a transaction and by some miracle its hash does not break, then all other hashes will break and the changed block chain will be rejected by all clients.

ver- Version of the transaction scheme. So far it has never changed, so it is equal to 1 everywhere.

vin_sz- The number of previous transactions from which money is transferred to new addresses. One or more.

vout_sz- The number of addresses to which money is transferred. One or more.

lock_time- Not used yet and is equal to 0 everywhere. The idea is to create deferred transactions so that they are added not to the current generated block, but, for example, to the following one. This property is meant to indicate the number of blocks the transaction must skip before adding. This makes it possible to change the transaction and re-sign it over a period of time.

size- Transaction size in bytes. This assumes the transaction size in JSON format.

in- Contains a list of transaction inputs (sources). The outputs of previous transactions are used as inputs ( prev_out). Each output has the following properties:

hash- Hash of the previous transaction.

n- Since a transaction can have several outputs, it is necessary to indicate which of them the money is taken from. That's why it exists this property. It contains serial number exit of the previous transaction, starting from 0.

scriptSig- In this property, the sender must prove that he is transferring his own money, and not someone else’s. To do this, he indicates the public key of the recipient of the previous transaction, i.e., his own key, since he must be the recipient. In addition, he adds the ECDSA signature of the same transaction, which is made with his private key. This proves that he is managing his own money, not other people's.

After the list of transaction inputs ( in) indicates a list of outputs ( out), i.e. addressees. Each output has the following properties:

value- Contains the amount of money that will be transferred to the new address. They are taken from previous transactions. Therefore, this number should not exceed their sum. For example, we want to take 10 coins from one transaction and 20 from another and send 25 to a new address. So that the remaining 5 coins do not disappear, we send them to ourselves as change. Thus, our transaction will have two recipients, one of which is ourselves. Value always specified in nanocoins to avoid fractional numbers.

scriptPubKey- This property, together with scriptSig write a script in a modified Forth-like language. ScriptPubKey contains language operators and hash public key recipient of the transaction. The script checks the transaction for validity. Using such a scenario provides rich opportunities for describing the conditions for the recipient to receive money. For example, you can force the recipient to provide a password instead of ECDSA.

The total amount of money at the input of a transaction is always equal to the total amount at the output. Otherwise, money either appeared out of thin air or disappeared from circulation. But at the very beginning there was a graph that shows that the number of money is growing exponentially. So where does new money come from in the system?

To my taste, the issue of money is implemented simply and elegantly. In each block, the first transaction in the list is a special transaction. It always has one input, which instead of the property scriptSig there is a property coinbase. This property can contain anything.

The transaction also always has one output. It redirects 50 coins to the person who generated the block in which this transaction is located. This is a kind of reward for spending time and resources on generating a block. By creating a new block in the chain, the client contributes to the operation of Bitcoin.

Every four years, this reward is halved, thus stabilizing the total number of coins in circulation. After this, even if an attacker creates a block using a modified version of the program and assigns 50 coins to himself, this block will not be added to the chain, since it will be rejected by other honest clients, which should be the majority.

The stability of the system is based on the number of users who have the official client running. As long as they are in the majority, Bitcoin is not in danger.

Conclusion

Here we can recall the analogy with gold, the extraction of which takes a lot of time and resources. But you can understand that there is gold in front of you almost immediately. In this sense, Bitcoin also has its value. But this should not be understood as the price in dollars or in electricity bills that the computer used while selecting the hash.

The dollar price is a little different. It is not built into Bitcoin in any way and is determined solely by the market. After all, gold itself does not guarantee you a certain price in dollars. It is guaranteed only by a person who wants to exchange gold for dollars.

The original value of gold was determined solely by those who mined it. For the gold he mined, he asked so much that he could compensate for the efforts to extract it. And after that, the market begins to influence the price of gold.

Once Bitcoin hits the market, its value is determined solely by the level of trust in the system. How more people will be trusted, the more Bitcoin they will buy, the more dollars they will invest in it and, as a result, the more expensive Bitcoin will be.

Before people can trust Bitcoin, they must know whether it has sufficient security and whether it can be used as money, i.e., whether it has the properties of money that I listed at the beginning. You can find out for sure only by understanding the principles of Bitcoin operation.

I hope that after this article the level of trust in Bitcoin will increase at least a little.

Tags:

• bitcoin
• payment systems
• electronic money
• p2p
• protocol
• data structures

In the age of electronic transactions, the emergence of cryptocurrency has become a breakthrough in the global market. You can use Bitcoin - experts can easily explain what it is in simple, understandable words. How to buy it, why do you need such electronic money? Cryptocurrency serves as a commission-free, anonymous alternative to official, resource-backed currencies. It is possible to buy btc on specialized exchanges, but to spend it is not possible everywhere: due to its anonymity, cryptocurrency is a priori considered illegal by many countries.

What is Bitcoin

A decentralized currency that is not controlled by any bank or exchange has always been a nightmare for the global financial system. She is scattered around to the globe, works only online, is not backed by anything, and every user in the world is able to influence the course without leaving the computer. At the same time, the computing function of the server grows, which in the system can look like a continuous operation. Bitcoin - what it is in simple words can be described as follows: mathematical calculations generate the mining process in a small part computer code.

Who invented

The first developer of unique complex mathematical cryptocurrencies was Satoshi Nakamoto in 2006. Within two years, they were sent cryptographic documents that for the first time in history described what bitcoin was. Later, in 2009, Satoshi Nakamoto created the first client software that allows you to control the operation of the cryptocurrency and the speed of block creation. Who invented Bitcoin and its icon is still unknown, because... a person worked under the pseudonym Satoshi, whose real data remained a secret.

What are they for?

Bitcoin - what it is in simple words cannot be explained without asking the question why it is needed and how cryptocurrency works. The main advantage of an electronic tool for storing money is the absence of commission or its insignificant value. Bitcoin is necessary for people who want to achieve 100% efficiency in their business, coin exchange electronic form anywhere in the world. Commission-free transfers, complete anonymity, protection of the recipient's and sender's money from government interference - these are the advantages and features of Bitcoin and the use of other cryptocurrencies.

Technical characteristics of bitcoin

Bitcoin is a unit of information, a specific piece of computer code, expressed in mathematical calculations of computer power. The peculiarity of Bitcoin is that it is an independent digital unit, which is not influenced by other currencies and payment systems; the Bitcoin economy is completely independent. One bitcoin (1 btc) has certain technical characteristics:

• formation of an information block: every 10 minutes;
• block reward: 25 coins;
• number of bitcoins in the world: 21 million;
• The complexity of the structure changes: after 2016 blocks (2 weeks).

Open source

The development and introduction of cryptocurrency is carried out with open source code. This means that changes to the structure of Bitcoin can be made by most users. In addition, open source code allows any user of a personal computer to start mining, electronic money. This approach to the development of Bitcoin instantly eliminates errors in the system, helps to rapidly develop the exchange network and mine Bitcoin.

Blockchain technology

A chain of blocks containing information and built according to a certain scheme is called a blockchain. Such a chain of blocks grows and performs the function of distribution and classification of the database. Necessary for conducting transactions and exchange operations with the bitcoin cryptocurrency. Blocks are formed simultaneously by many “miners”, after which they go to a special database (blockchain). Blocks contain all the information about transactions and cryptocurrency owners. The number of bitcoins does not affect the speed at which block branches are formed.

Secure transactions using electronic signatures

Electronic signature Bitcoin – what is it in simple understandable words: a password assigned to a new account. When registering in bitcoin network All users are given unique signature keys. Only with their help is it possible to carry out a transaction from your account. In addition, it is possible to create a joint account for several people with a multi-signature. To transfer currency from it, you will need to enter the personal identifiers of at least two thirds of the account holders.

Where do bitcoins come from?

An unsupported cryptocurrency appears through the efforts of users who use it and allocate computing power to process all transactions. Bitcoin mining - what is it in simple reasonable words, how does electronic cryptocurrency appear? Bitcoin does not have a transaction processing center, so users take on the task of providing computing processes. For spending the resource of their computer, they receive a strictly defined amount of btc. In total, up to 3,600 units of currency can appear per day.

Who is issuing

The emission of Bitcoin is clearly limited, limited; you can intervene in this process only by leasing the computing power of your computer to the system. The people who do this are called miners, and for their services they receive a limited amount of bitcoin issued daily. Such an activity is currently beneficial only to owners of large companies and members of large pools. Smaller farms are already struggling to cope with the tasks provided to them by the bitcoin system.

How many bitcoins are there in the world?

A currency not backed by traditional resources, capable of self-reproduction through the execution of certain programs on the computers of network users, will instantly depreciate. To prevent this, an artificial limit has been created that prevents the number of bitcoins in the world from becoming more than 21 million. All these millions are financial transactions on the network reliably backed by computer power. Currently, 14 million have been mined. Due to the constant complication of the mining algorithm, the issue of the last Bitcoin is expected in 2140.

What is the backing of the bitcoin cryptocurrency?

Bitcoin - what it is in simple words can be described as a complicated version of the nascent economy of a country with undeveloped gold mining. An unmined resource is worth nothing except a person's promise to buy it in the future. The use of cryptocurrency is based on the same principle: it appears due to demand, which creates itself. The value of bitcoin is determined by people’s trust in the system, their willingness to conduct transactions with its help, which is why a financial pyramid or bubble arises, and this is a negative feature of bitcoin.

The difference between Bitcoin and cash

Electronic cryptocurrency has a number of striking differences from conventional cash and other valuable financial assets. Bitcoins have the following differences:

1. Decentralization. There is no central authority to control the network; it is distributed among all computers used for computing resources and mining bitcoins. The decentralized system uses a special program code regulating the work of network participants and the emission schedule.
2. Irreversibility of transactions. Once the cryptocurrency is transferred from one recipient to one of the online wallets to another (for example, webmoney), it cannot be returned to the original account.
3. Emission limitation. Mathematical algorithms are built in such a way that the generation of coins is closed. The total number of Bitcoins will never change.
4. No or low transfer fees. A special feature of Bitcoin is the absence of any intermediaries during the transaction, so no commission is charged. There may be a small percentage of commission for transactions with bank accounts.
5. Does inflation affect the exchange rate? Global inflation is isolated from the financial economy, so inflation does not have any impact on the exchange rate, unlike conventional currencies.

Bitcoin electronic money - advantages and disadvantages

Like any financial system, bitcoins have their advantages and disadvantages when using, mining, and forming an exchange rate with other monetary currencies. Among the advantages are:

• simple and clear use;
• ease of extraction;
• anonymity;
• decentralization;
• no commission.

The following characteristics are considered disadvantages:

• transparency;
• irreversibility of transactions.

Ease of use

The growing popularity of cryptocurrency is due to the ease of use of Bitcoin services. Any computer owner can earn bitcoins in several ways. Electronic currency bitcoin uses user equipment to special services for volumetric information processing. Millions of computers registered on the network contribute to the growth of system performance, while users receive compensation at a favorable rate.

Complete anonymity

All cryptocurrency systems are completely anonymous. For transactions, acquisitions and investments, they do not require any passport data from the user, only data is enough electronic wallet. The user can create an unlimited number of addresses and wallets without linking personal data. However, every transaction must be registered under specific number and saved in the database.

Transparency of operations

The information block system saves all transactions performed on electronic Bitcoin accounts. The main disadvantage of transparency of operations is publicity. Anyone can study all transactions carried out on a specific account. To ensure complete anonymity, it is necessary to open a new wallet or account even for a single transaction.

Where to get bitcoins

There are several ways to purchase bitcoins. However, the process can be fraught with some difficulties. For example, there are a large number of scam sites listing fake Bitcoins. You can only detect counterfeit electronic currency when you try to spend it.

There are practically no ways to get completely free Bitcoin. After the rapid growth of the cryptocurrency rate, such services for receiving free electronic coins ceased to exist. To receive bitcoins by any method requires the expenditure of certain resources. The main ways to receive bitcoins:

1. Cranes. One of the easiest ways to get bitcoin. The service user only needs to click on advertising banners and rollers, but the transition cost is very low.
2. Mining Those involved in mining rent out video cards to obtain cryptocurrency by using the computing power of the computer. There are many farms for mass mining of Bitcoins.
3. Jobs paid by bitcoin. There are special exchanges that offer jobs paid in bitcoins. After completing a small task, the employer transfers electronic currency to the performer’s wallet.
4. Coupon clipping. You can make big profits by lending bitcoins to other users. However, you should remember that once you transfer currency to the addressee, you cannot withdraw it back in case of fraud.
5. Buying cryptocurrency. You can purchase electronic currency for money on bitcoin exchanges at favorable exchange rates.

What are Bitcoin faucets?

Any specialized distributors of bitcoin to resource visitors, existing mainly through the sale of advertising space on the site, are called bitcoin faucets. Entry to such resources is free, but requires mandatory registration in a simplified form: entering your email address and wallet number. Faucets work as follows: the owner places advertisements, and visitors go to the advertiser’s website by clicking on the advertisement. At the same time, they are transferred electronic currency (1 Satoshi - a conventional penny of Bitcoin).

The more transitions across different advertisements- the more virtual coins “drip”. An additional condition for some resources is the presence of the user on the site for some time (from one to five minutes). In addition, the number of paid transitions to the same site for one user may be limited relative to the time interval (for example, once per hour or day), so bitcoins are mined very slowly.

How Bitcoin works - cryptocurrency mining

The number of bitcoins in the world and the daily emission are strictly limited to 21 million, 3600 units. Mining Bitcoin - what it is in simple words is easy to explain. To generate and do the calculations for these 3,600 units of cryptocurrency, the servers send special messages to the mining users' computers. math problems, the solution of which consumes a significant resource of processor and video card power - this process is called mining.

For solving these problems, Bitcoin is awarded, and it works with the help of cryptocurrency symbols. The more there is in the world, the more difficult it is to achieve the goal. The difficulty of mining lies in the fact that even now, calculating the mathematical power of the machine, it is difficult to cope with the development of Bitcoin, so this method of earning money is unprofitable for the creators.

Electronic wallet

In order for the user to be credited with Bitcoin currency, it is necessary to register the wallet. The main function of an electronic Bitcoin wallet is to store an individual secret key, used to access the address where the cryptocurrency is stored. Transactions are processed only when a key is provided. There are wallets for computers and smartphones in the form of an application. Technically, they are the same, they work according to the same algorithms, but they are “tailored” for the use by wallet owners of a specific device with specific software.

What can you buy with bitcoins?

The use of cryptocurrency in Russia is almost undeveloped. Bitcoins can be spent or exchanged for air tickets from some companies (for example, AirBaltic), food in restaurants and cafes. On the world market, yachts, cars from some companies (Tesla), and real estate are sold for bitcoins. The main problem with purchasing with electronic currency is the small number of trading platforms that accept bitcoins and other cryptocurrencies. Banks allow the exchange of electronic currency into dollars, euros or other real currencies. The possibility and conditions of such a transfer or exchange must be clarified with specific banks.

Abroad, investing, investing one’s own money in cryptocurrencies, is gaining popularity. Due to the fact that the Internet currency bitcoin as a whole is independent of the global economy, inflation does not affect it, and the funds retain their purchasing power without the risk of huge losses in the transaction chain. The negative features of Bitcoin are the instability of the world's cryptocurrency exchange systems, the impossibility of implementing money transfers in Bitcoin currency.

Video