Bitcoin faces a number of problems: is this dangerous for its future? Anyone can access this data. How to earn bitcoins

More and more often we hear or read about bitcoins from the news or from the Internet. As usually happens, many of us receive only fragments of information, often already distorted and overgrown with mythical components. Let's try to figure out what bitcoins are and what are the principles of its operation.

The word "bitcoin" (or "bitcoin") comes from the English Bitcoin, which in turn is derived from

• bit - “bit” and
• coin - “coin”.

The transcription of the word "bitcoin" as "bitcoin" is used on the official website above, as well as on Wikipedia. By the way, any user can read articles on such a world-famous source of knowledge as Wikipedia.

There is also an abbreviation for BiTCoin - this is BTC or the same thing in Russian letters - BTK, but we do not use the latter.

Bitcoins are considered the money of the future. They have become recognized all over the world; there are large companies that now accept payments for their services or for equipment sold in bitcoins.

When did Bitcoin appear?

Let's go a little deeper into the recent past and talk about the origins of Bitcoin. Bitcoin appeared in 2009.

It is not known for certain who invented Bitcoin; there are no official sources as such, but authorship is attributed to a certain anonymous inventor (or group of inventors) Satoshi Nakamoto. Some sources claim that he is a mathematician, but, as it turned out, there is no person with that name on the planet.

According to another version, this cryptocurrency was invented by a secret society that decided to popularize the virtual currency. Members of this society have an initial advantage in obtaining it and, as the value of Bitcoin rises in relation to other world currencies, they can receive huge economic benefits. Whether it’s true or false is everyone’s business; our task is to provide as detailed coverage of the situation regarding Bitcoin as possible.

Now that we've sorted out the stories a bit, let's return to Bitcoin itself.

What are Bitcoins and what is Satoshi

Bitcoin is a cryptocurrency, that is, a monetary unit that cannot be touched with your hands, like regular money or gold. At its core, Bitcoins are simply a collection of numerical values.

One Bitcoin can be divided into parts, just like, say, a dollar can be divided into cents. By the way, the minimum part of Bitcoin is called Satoshi in honor of the creator of the entire system:

• one satoshi is equal to 10 to the minus 8 power of one bitcoin (one hundred millionth of a bitcoin or 0.00000001 bitcoin), and some even use the term “cent” in relation to such a satoshi,
• 100 Satoshi or one millionth of a Bitcoin is called a microbitcoin.
• One thousandth of a bitcoin is called a minibitcoin, and it is equivalent to 100 thousand satoshi.

To explain it in simple words, Bitcoin is a certain object. Let's pretend it's a gold coin. So, everyone who in one way or another owns at least one satoshi has this gold coin, but at the same time this person can not dispose of the entire coin, but only the part that belongs to him, that is, just one satoshi. I hope that at this stage everything is clear, if not, then it will be easier further.

Imagine a perfect coin that cannot be counterfeited, copied or banned. A coin that can be used to pay at any time. Plus, it won't tear or wear out like paper money does. This is Bitcoin.

Bitcoins are limited in their production; there can be no more than 21,000,000 of them.

Why are Bitcoins needed and their concept?

Currently, bitcoins do not belong to any state in the world, which means they cannot depreciate in value due to geopolitical changes or the influence of one country on another.

Moreover, Bitcoins are not tied to any single GDP of any country or all countries in general. This is exactly the concept of Bitcoin. It states that there must be such money that can belong exclusively to you, it cannot be counterfeited, and also instantly, at your request, you can transfer the required amount of it, paying for services or goods in any part of the world, if you have the Internet.

There are already people who use Bitcoin mining as their only source of income. And some receive their salaries exclusively in bitcoins.

Now one bitcoin is equivalent to approximately $5,000-7,000.

Bitcoin calculator online

For example, as of November 7, 2017, you can buy 0.002797 bitcoin for one thousand rubles:

1 bitcoin can be bought for approximately 430 thousand rubles, while the rate is constantly changing depending on different circumstances and conditions.

Pizza for Bitcoins

There is an Internet legend according to which one person ordered 2 pizzas and paid 10,000 bitcoins for it, which is currently more than 70 million dollars! As you can imagine, if this is true, then the person bought the most expensive pizza in the world.

The story of buying pizza with bitcoins in May 2010, in particular, is shown in the video:

Documentary about Bitcoin and what is money?

Similarities and differences between Bitcoin and euros and dollars

Bitcoins are often compared to euros or dollars, but such a comparison is erroneous. Yes, you can buy bitcoins for dollars or euros.

But it is more appropriate to compare this cryptocurrency with gold or silver, since both of these resources, material (gold, silver) and virtual (bitcoins):

• similar in difficulty of extraction,
• have unique qualities,
• and are also limited in their supplies.

The difference is that virtual currency (bitcoin) is not mined by human labor, but by the work of so-called mining farms.

What is Bitcoin mining?

On such farms, special devices operate that consume electricity, and due to this, a computational process is created, thanks to which bitcoins are obtained.

There is only one way to get new bitcoins: as a reward for solving certain equations of extremely high complexity. At the same time, the amount of remuneration for solving assigned tasks is gradually decreasing.

Initially, in 2009, a reward of 50 bitcoins was provided for solving the assigned computational problems. In 2012, the reward amount decreased to 25 bitcoins. In 2016, the reward amount became even 2 times smaller: 12.5 bitcoins.

And so on, the amount of remuneration will decrease by 2 times every 4 years - this is the so-called decreasing geometric progression. By 2031, the reward will be reduced to zero, and the total number of bitcoins that will be put into circulation in this way will be exactly 21 million.

Hence the high stability of this cryptocurrency to any political and economic situations; it simply does not depend on them in any way. All further emission of Bitcoin has already been calculated in advance by mathematicians.

So, in mathematical terms, Bitcoins are an extremely complex mathematical process, or more precisely, it is the solution of complex mathematical equations.

Purely technically, the receipt of cryptocurrencies is directly related to their mathematical structure. When Bitcoins first appeared in 2009, they could only be obtained in sufficient quantities thanks to an average-power home computer. Where were we then?! Why didn’t they deal with this unusual currency, the price of which has increased thousands of times during this time? One can only complain about this!

And when this cryptocurrency became widely publicized and in demand, a huge number of people, as well as some large companies, launched the process of mining (from the English mining - production) of this virtual currency. Currently, the main computing power for cryptocurrency mining is concentrated in China, as this country also maintains its own state currency. There is information that it is planned to create a similar center in our country, this project is so interesting.

As a result, the situation today is such that it is already difficult to even dream of receiving such a number of bitcoins without serious expenses for expensive equipment and electricity.

For more information about the mining process and how you can earn Bitcoin on your home computer, watch the video below. In particular, it states that the cost of a home computer for mining is about 360,000 rubles. To earn one bitcoin, you need to solve a very complex mathematical equation using a powerful PC, and this takes time and costs a lot of electricity. You can earn about $17 per day by mining on such a PC. The cost of an expensive computer, as well as electricity, can pay for itself in about a year. At the same time, cryptocurrency rates change constantly: up and down, and there are no guarantees of reliability.

Video " About Bitcoin in Russia»

To understand what Bitcoins are, you can buy yourself a small amount of Satoshi if you wish. To do this, you need to create an electronic wallet, and also free up about 150 gigabytes of free space on your computer. This volume is the coin we talked about above. And then this coin will belong to you, and only you.

Cryptocurrency has become a huge breakthrough in electronic payments. Over the entire existence of the Bitcoin system, a vulnerability was discovered in it once, as a result of which the mining process was subject to a rollback for one day, which did not particularly affect the stable growth of the rate and popularity of this currency.

In print and electronic sources it is growing exponentially. Against this background, more and more people are becoming directly or indirectly familiar with this term. Bitcoin has long ceased to be a sphere of interest for “geeks”, but has become quite firmly established in the lives of ordinary people. And sooner or later you will have to deal with Bitcoin directly. We invite you to prepare for this meeting and get to know Bitcoin better through this guide for beginners.

What is Bitcoin and why is it needed?

Bitcoin (abbreviated BTC) is an electronic payment system in which virtual “money” (bitcoins) circulates. Do you have VISA or Mastercard plastic cards? Both Visa and MasterCard are also electronic payment systems. However, they use the currencies we are familiar with - dollars, euros, hryvnia, rubles, and all transactions undergo bank processing. Such currencies are called fiat. The Bitcoin system uses cryptocurrency - a purely digital currency that is not tied to any world bank or the economy of any country. It has its own cost (rate), which is formed against the background of demand.

Key features of Bitcoin:

The entire system is decentralized. This means that Bitcoin is not regulated by any bank, agency or government entity. All network participants are absolutely equal, regardless of nationality or other characteristics. For example, Visa and Mastercard have Gold, Platinum, Vip cards, systems like Webmoney or QIWI have user levels. There are restrictions on the size of transactions. And in Bitcoin, everyone is equal and there are no limits.

Pseudoanonymity. When transferring to BTC, participants do not reveal their identity. For transactions, an address (a hash of 27-34 characters) is used without disclosing other data about the recipient and sender. Think about transfers between cards or other electronic systems. Transactions often reveal the name of a person or the name of an organization.

Irreversibility. All operations in Bitcoin are irreversible. They cannot be canceled, stopped or blocked. Theoretically, a complete rollback of the system (blockchain) is possible. In practice, this is extremely difficult to implement.

Safety. It is impossible to hack a Bitcoin wallet. All data is stored in a special file that only you have access to. It is also unrealistic to “intercept” data during a transaction, as happens in the banking system. Bitcoin uses cryptographic records - encrypted data that guarantees confidentiality and security.

• Direct nature of operations. In Bitcoin, transfers are carried out directly between participants - the P2P (peer to peer) principle is used. The transaction occurs without the participation of a third party: bank, processing center, server. Therefore, no one except its participants can track a Bitcoin transaction.

History of Bitcoin creation

The history of the creation of cryptocurrencies does not have a clear chronology. For decades, experts in the field of cryptography have been working to create a unique decentralized system, the work of which is based on mathematical calculations. Using the experience of their predecessors and their own developments, Hal Finney and Hal Finney created the world’s first cryptocurrency in 2008 – Bitcoin. Nakamoto received the main fame - he published a file with the Bitcoin protocol and briefly described the features of the new payment system. The smallest fractional part of the coin is named in his honor - 0.000 000 01 BTC.

Why was Bitcoin created? Part of the reasons for developments in the field of cryptocurrencies reveal their features: anonymity, decentralization, security, and general availability. Ideally, the Bitcoin ecosystem should guarantee fast transactions without the participation of a third party (bank, cash desk) with a high level of security.

An interesting point of view was expressed by the famous Russian entrepreneur Sergei Mavrodi back in 2013:

“All this hype about cryptocurrencies is due to their anonymity. People are tired of Big Brother watching their every move. Everyone is tired of this. And Bitcoin in this regard is a breath of fresh air.”

This quote answers the question why bitcoins are needed. Transaction privacy is the most important feature of cryptocurrencies.

How does Bitcoin work?

The entire Bitcoin ecosystem rests on . To put it complicatedly, blockchain is a continuous chain of blocks of all transactions. The block is closed after selecting a digital signature. After this, a new block can be formed. Now let's decipher this in simple words. Imagine that each transfer (transaction) in Bitcoin is recorded on a separate page. The sequence of pages forms a chapter of the book - a block.

To record a new page (conduct a new transaction), we need to “turn over” all previous pages and chapters. That is, each new transaction is carried out along the chain - with the processing of old blocks (turning pages and chapters). A new chapter of a book can only be started after the old one is finished. And all the chapters form a book, and the blocks form a blockchain. Pages and chapters cannot be torn out or altered. And access to the blockchain is open to all participants in the system.
That is, a blockchain is a large open database that stores encrypted information about all completed transactions.

Blockchain and its potential are one of the reasons for the constant growth of Bitcoin’s exchange rate relative to fiat currencies and a key feature of BTC. Here are some other differences between “virtual” Bitcoin and regular money:

Form. Bitcoin is an electronic currency that has no material appearance. There are physical “coins” with a QR code or coin-shaped drives that store BTC. However, they cannot be called money in the truest sense of the word. We can say that Bitcoin is a set of numbers generated by an algorithm. Not a paper note or a metal coin.

Price. The exchange rate of a fiat currency directly depends on the economic and political development of the country or confederation to which it is attached. In fact, the money of more than 100 countries around the world is tightly tied to the dollar. The price of Bitcoin is determined by demand and does not directly depend on economic processes (although it is indirectly related).

Emission. Theoretically, ordinary money has no emission ceiling. You can print as many of them as you like. BTC has its own ceiling built into the system - 21,000,000 coins (20,999,999, 9769). According to forecasts, this figure will be reached in the middle of the 22nd century.

• Direct transfers. Even if we are talking about an electronic version of ordinary money (card, wallet), the transactions are carried out with the participation of a third party. In Bitcoin, the transaction is carried out directly (P2P).

Objectively valuing BTC is not that easy. Certain features of Bitcoin can be attributed to both its advantages and disadvantages. Let's take such a characteristic as the irreversibility of operations. On the one hand, you will receive cryptocurrency in any case - no system failure will block the transaction. On the other hand, this feature of Bitcoin is exploited by scammers or representatives of the “black” market.

The main advantages include:

Anonymity - the other participant in the transaction will only know your Bitcoin address or QR code. Other data is not disclosed.

The decentralized nature of the system – all network participants are equal and independent.

Security – hacking of wallets, data substitution, interception of transfers is impossible.

Globality - Bitcoin allows you to quickly carry out transactions between people from different countries and time zones.

• Mining – there is an independent method of mining BTC, which is considered by many as a means of earning money.

Often the advantages of Bitcoin include the speed of operations. It's not that simple. The transaction can last 10-20 minutes, and sometimes an hour. To complete it, you need 6 confirmations from other participants. They happen automatically. When network load is high, transfers slow down. Another disadvantage is the regulatory activities of the authorities of different countries in relation to cryptocurrencies. Formally, BTC creates the same conditions for all potential network participants. However, in some countries (Vietnam, India, Ecuador, and partly China) bans have been issued.

Other cons:

Unstable exchange rate - because of this, the potential of BTC as a payment option decreases;

• Fraud – Bitcoin itself is very secure. However, inexperienced people can fall for scams: fake exchangers, fraudulent investment projects, viruses.

Where to get Bitcoin

Bitcoin, like any other cryptocurrency, is mined through the use of the hardware power of computers, or rather processors and video cards. This process is called. If in 2009-2010 To mine bitcoins, you could use a regular computer, but now this requires powerful installations - . These farms combine dozens and sometimes hundreds of video cards or special ASIC-type processors. This equipment costs thousands of dollars and requires additional care and technical skills. This method of receiving BTC is not suitable for beginners. Firstly, there are a lot of costs involved. Secondly, there are too many nuances. And in some countries, mining is completely prohibited. There are other ways to acquire Bitcoin:

Exchangers. There are services online that exchange fiat currency for cryptocurrency. In the vastness of the RuNet, the AlfaCashier resource enjoys great authority. An absolutely safe and proven service offering cryptocurrency exchange services.

Cryptocurrency exchanges. Resources where cryptocurrency trading is conducted. Largest exchanges: , . Bitcoin rates on different sites may vary.

Bitcoin faucets. These are services that distribute cryptocurrency to visitors for free. To get a small amount of BTC, just fill out a captcha or do some other small thing. There are hundreds of them on the web. Read more about how to get started with Bitcoin faucets.

Trading platforms. You can also sell goods for Bitcoin. Where? Yes, at least on Amazon or Ebay. There is a specialized site in this area - Purse.io.

• Self-service terminals. You can also receive BTC through regular terminals. There are also specialized Bitcoin ATMs - they have a better exchange rate and more modern technology. So far they have not received wide distribution in the CIS.

Read more about how to buy Bitcoin in our large.

How to use Bitcoin

Okay, we know what Bitcoin is and how to get it. Now it remains to get acquainted with the storage tools for this cryptocurrency. These are wallets. Hardware wallets are the most reliable because they store your private keys securely, that is, offline and without access to the Internet. The most popular and accessible device is a wallet. It allows you to store Bitcoin and 1000 other different types of cryptocurrencies and tokens.

In order to start using Bitcoin, you just need to set up and top up your wallet in accordance with the instructions.

What can you buy with Bitcoin?

Bitcoin is a payment system. Accordingly, purchases are made with its help. In the early years of cryptocurrency, all transactions were conducted unofficially. Buyers and sellers communicated in chats (mIRC, Miranda), social networks, and forums. It was on the forum that the most famous purchase of goods for Bitcoin took place. It is considered the first purchase of anything using cryptocurrency.

On May 18, 2010, a user with the nickname laszlo created a topic on the BitcoinTalk forum with the title “Pizza for bitcoins?” (Pizza for bitcoins?). In it, he asked who could order him two pizzas for 10,000 BTC. At the time it was the equivalent of 30 dollars. An English user agreed to the offer and ordered laszlo pizza. This is how the first and most famous purchase using BTC was made.

Not much time has passed since then, and BTC as a payment option has developed to a global scale. In the summer of 2017, it became known that 260,000 retail stores in Japan would begin accepting BTC. This is an important step towards the globalization of BTC payments. Read where to spend bitcoins in the world.

Every month there is news that a coffee shop, bar or restaurant is opening somewhere in the world that supports payments in cryptocurrencies. In some countries, taxi drivers use Bitcoin. The Coinmap allows you to find stores and services that accept Bitcoin near you. To understand the payment capabilities of Bitcoin, we have compiled a table of popular companies that support the cryptocurrency.

BTC is suitable for buying food, a car, an apartment, booking a plane ticket or booking hotels. Moreover, some universities accept tuition payments in Bitcoin. In the US, supporters of the Republican Party can donate money for its development in BTC. Cryptocurrency has even reached outer space. It is used by Virgin Galactic, a company working in the field of space tourism.

Cryptocurrency is a digital currency that has significant differences from real money. The former are code based on a special chain of blocks called a blockchain. This feature allows any cryptocurrency to be maximally protected from hacking. It can only exist on the Internet.

To mine coins, specially built farms with high computing power are used. They are necessary to solve blocks from the blockchain, for which they give cryptocurrency.

The very first and most popular of them is Bitcoin. Appeared in 2009 thanks to the efforts of Satoshi Nakamoto. Until now, no one knows who this person is, which once again confirms the security of the crypt as a whole.

Until a certain time, I could not find good value for myself, and those programmers who knew about the system and the coin did not believe in their success, but later there was a real “boom”, after which the whole world learned about Bitcoin. Today, hundreds of thousands of transactions take place every day.

In order to store bitcoins somewhere, you need to create a wallet that has a public address and a private key. The first is the wallet number, you can transfer funds to it (an analogy can be drawn with any electronic wallet services, such as YaD, WM, Qiwi, PayPal), and the second is the password, which is known only to the owner of the address.

Transactions are carried out using blockchain - a chain of blocks that cannot be hacked. Information is transferred from one block to another, which allows you to create not only a secure coin, but also a decentralized one - one of the biggest advantages of any cryptocurrency, because it becomes beyond the control of any government.

Blockchain operation consists of five stages:

1. Decide on the network within which the transaction will take place.
2. The operation enters the network, after which a new block is formed, which has a connection with the previous block. This creates a chain of blocks.
3. After creating a new block, information about it is distributed to all nodes of the system, which makes it possible to enter the block into the database.
4. After this, the block receives its place in the chain, as well as a private key, which gives access to information only to its owner. Everyone else will only be able to find out general information about the operation performed.
5. Now the block is a full-fledged part of the entire chain.

What is a Bitcoin address

A Bitcoin address is an alphanumeric account identifier that can be interpreted as a QR code. Each address has an owner, but there is no information about him. Anyone can get an address; you just need to install the BTC software.

The address will be used as a wallet in electronic money systems. Unlike them, identity verification is not required here, which makes the owner anonymous.

What can you do with virtual money?

Bitcoins allow you to make transactions. The transfer of funds can be aimed not only at the exchange of large amounts, for example between global companies. An ordinary person can pay something with BTC, for example:

• restaurant;
• hotel;
• Internet;
• goods;
• utilities, but only in some parts of the world;
• car rental and much more.

The development of Bitcoin allows us to find more and more places where crypto is accepted. But if this type of money is inconvenient for a person, then he can easily exchange it for USD or Euro in an online exchanger that works with coins.

Also, some people make money on Bitcoin. There are many exchanges that allow you to trade cryptocurrencies just like real money. If you have enough experience and knowledge, you can get a large influx of funds, but you can easily go bankrupt.

How to earn them

There are several ways to earn money. Each of them has its pros and cons, so you should carefully consider all methods.

Mining (classic, cloud)

Mining is the extraction of currency using computing power. This is the first method used by enthusiasts to obtain virtual coins. For the classic version, the user will need a real farm consisting of a large number of video cards, processors or other components.

Such an event was especially profitable at the beginning of the journey.

The fact is that the number of bitcoins is limited, and to prevent people from “mining” all the coins today, the problems that must be solved by computers are constantly becoming more complex, making mining less profitable every year.

When taking into account everything necessary to build a farm (expensive equipment, cooling system, supply of sufficient electricity), many abandon the idea of ​​​​creating their own mining point. It simply ceases to generate significant income.

Cloud mining is mining that uses rented power on some large farm. The client simply pays for the rental of the power he is interested in, which produces a certain coin, for example Bitcoin, and then waits for the receipt of funds.

In fact, such services are located mainly in countries with cheap electricity and cold climates, which allows saving on cooling costs and increasing the efficiency of the farm.

Buying and selling

All cryptocurrencies have a feature - instability. Bitcoin can drop several thousand dollars in one day and then rise to a value that exceeds that amount. Thanks to this, many traders are moving from the world of forex, securities and real currencies to crypto.

The system of making money on purchases is very simple:

1. The user tries to buy BTC as cheaply as possible.
2. When the rate rises, BTC is sold.

Thus, the user receives a profit expressed in monetary value. But there are a large number of scammers in the exchange industry, so before choosing the exchange on which you will work, you need to familiarize yourself with its reputation.

Bitcoin futures

Futures are a financial instrument that has its origins in a derivative. A derivative is an agreement between the parties to a transaction based on the future value of an underlying asset. To complete a transaction, you will need an underlying asset, which in this case is Bitcoin.

Futures are the most common type of derivatives transaction. This is a forward contract that allows you to buy or sell an N-quantity of an asset at a fixed price until a certain point in time. When the period expires, an obligation to buy and sell between the parties must be completed. Selling the futures themselves is permitted until they expire. The futures are transferred as part of the full value.

The average futures price varies around 10-15 percent of the total transaction amount. Such a transaction allows you to receive a relatively high income compared to ordinary purchase and sale.

The cost of Bitcoin is 10,000 USD, but the trader expects a further increase to 14,000 USD, so he enters into a futures contract for 1 month with 10 percent collateral. This made it possible to purchase BTC at the market price.

As soon as the price reaches 14,000 USD, the contract can be sold to another market participant, receiving additional funds (in this case, 10% of 14,000 USD = 1,400 USD). But you can also keep the contract if forecasts indicate a further increase in value.

But provided that the price has not reached the specified point (in this case - 14,000 USD) after the expiration of the contract, the transaction is closed at the market price. This prevents you from losing more money than was invested in the contract.

Advantages and disadvantages of cryptocurrency

Cryptocurrency, like any phenomenon, has its pros and cons.

Advantages:

1. Cash coins can be obtained through mining. In this case, classic or cloud mining can be used. Today, the second method is more preferable, since the threshold for entry into it is much lower than when purchasing your own computing power.
2. Transactions are completely anonymous, and access to the wallet number does not provide any information about its owner.
3. The coins are completely decentralized thanks to the blockchain system, which does not have a specific place of existence. This allows you to get rid of the influence of politics and any state on the crypt.
4. Each cryptocurrency has a limited circulation (a limited number of blocks that can be generated), which prevents over-issuance from occurring in any case.
5. The cryptocurrency is well protected thanks to a unique electronic code. This allows you not only to protect yourself from thieves, but also from counterfeit coins.
6. Transactions have minimal fees. The only option to lose funds during a transfer is to use banks and other third parties (for example, exchangers that allow you to get fiat money for bitcoins - real currencies: euros or rubles).

Flaws:

1. Losing the wallet password or the wallet itself means a complete loss of money. This is a negative side of security, since only the owner of the address has access to the password.
2. High volatility has a negative effect on the exchange rate of coins - it can quickly soar and fall just as quickly. This makes any crypto completely unpredictable. The USA and China have a particularly strong influence.
3. Cryptocurrencies may be prohibited by various legal structures, or restrictions may be placed on transactions with cryptocurrencies.
4. With each block mined, it becomes more and more difficult to obtain the coveted reward. This is due to the limited number of available coins in the system.

Bitcoin is a promising direction, but very unstable. It is for this reason that countries are not ready to accept crypto as equal to regular currencies. Because of its apparent simplicity, the concept of Bitcoin can become known to every person, but in fact, behind the simplicity of any crypt there is a blockchain, the capabilities of which are still not fully known.

Bitcoin is the most famous cryptocurrency in the world.

In spades, its price reached almost $20,000, and even grandmothers discussed it in the capital’s transport.

Despite its universal popularity, few people know what Bitcoin actually is.

Contents:

Cryptocurrency boom

2017 is the year of mass popularization of BTC. All news feeds were filled with information about the rise or fall in the price of cryptocurrency.

Some countries, like China, limited its circulation and mass access to it by their citizens.

Others, like Japan, recognized it as an investment asset.

No matter how the authorities treated it, its price broke records almost every day. If in January last year, its price did not exceed $1,000, then by December it jumped to $19,500. True, it did not last long at this level and fell to $10,000 at the beginning of 2018.

However, the price has firmly established itself at this level and remains around $11,000.

At the same time, Bitcoin is the champion in capitalization among cryptocurrencies. Now its capitalization exceeds $198 billion.

What is Bitcoin

In reality, it is not so much Bitcoin itself that is important, but the technology behind it - .

This is a decentralized system that has revolutionized the world of finance.

It was thanks to her that the emergence of cryptocurrency became possible.

Essentially, Bitcoin itself is a derivative of the blockchain. Or, to put it quite simply, a piece of program code. The blockchain consists of blocks that store information about transactions on the network.

Blockchain does not have a centralized data store. All information about all transactions is stored on thousands of computers.

Anyone can access this data.

If hackers hack one, the entire chain can be easily restored from other PCs.

In addition, decentralization allows for fast cross-border money transfers.

For example, a regular bank transfer will take a week or even longer to travel from Europe to North America.

A year later, development was completed and the first block was mined. IN

Miners received 50 BTC as a reward.

Almost immediately, Satoshi Nakamoto transferred BTC for the first time.

He transferred 10 bitcoins to another crypto enthusiast, Hal Finney.

In September of the same year, Bitcoin was exchanged for fiat for the first time.

Crypto investor Marty Malmi sent 5,050 BTC to another investor under the username NewLibertyStandart. For them, Malmi received only $5.02.

In 2010, crypto enthusiast Laszlo Hanecz became the first to successfully exchange BTC for a real commodity.

He bought himself two pizzas. It cost 10,000 bitcoins.

At the moment, controversy over the identity of the creator of Bitcoin continues. Many claim this title, but they do not provide any convincing evidence. In any case, to perpetuate Satoshi Nakamoto’s contribution to the development of cryptocurrencies, the hundred millionth part of Bitcoin was named in his honor.

Where to buy BTC

There are thousands of services for buying and selling cryptocurrencies. You can get them on exchanges like or.

Because of this, the number of transactions has increased significantly. Since the block size is limited to 1 MB, confirmation began to take longer. This affected the performance of the entire network.

Last year, the crypto community found a solution to this problem -

Bitcoin problems are causing its price to fall immediately after a short-term rise. At the time of writing, the cryptocurrency rate was $8,658. Over the past twenty-four hours it has dropped by 3.15%.

There is a problem

Search giant Google recently announced that it would ban all cryptocurrency-related advertisements. It is possible that this measure will affect Bitcoin trading and the entire industry as a whole. Let's look at the main problems that may arise due to Google's actions.

Decline in cryptocurrency trading volumes

The first effect will be that the number of people willing to invest in the Bitcoin market or its peers will decrease. This is problem. After all, if there are no ads on the world's most popular search engine, fewer will be able to see the trading opportunities available to them.

Companies whose business is based specifically on cryptocurrency (for example,) will face the problem of attracting new customers. This will lead to a drop in profits.

Cost reduction

Market participants undoubtedly noticed that Bitcoin and its peers lost a lot of value in the wake of the news, at least in the short term.

This asset class is known to be highly volatile, which is one of its main problems. The value of digital currencies is very sensitive to any events, both negative and positive.

A Google ban could harm the popularity of Bitcoin. The market may begin to sell off and reduce the price of virtual assets.

No problems

Despite the bad news received from the search engine, it is possible that Bitcoin and other coins will lose little or no damage in the long term.

Cryptocurrency has already become one of the important events of recent years. Therefore, it can be argued that Google will not be able to stop the current surge in interest.

The latest developments will likely impact companies offering cryptocurrency services and will not be a problem for Bitcoin or other digital currencies.

Recent research has also influenced the popularity of online exchanges. According to them, Bitcoin.de and Coinbase are the safest, while Bitstamp and Livecoin are the most susceptible to financial theft.

Reliability problem

The free password manager Dashlane examined accounts on 35 Bitcoin exchanges. The study was conducted among trading platforms that allow users to create accounts in browsers.

According to the data obtained, more than 70 percent of Bitcoin exchanges have customer accounts susceptible to financial theft due to insecure passwords.

The fact that most platforms allow their users to register such weak passwords speaks to the insecurity of accounts, says Dashlane CEO.

Forty-three percent of Bitcoin exchanges allow users to use passwords with seven or fewer characters, and 34% do not require alphanumeric passwords. This creates security problems.

Less than 50% of trading platforms provide clients with tools to assess the strength of secret codes during account creation.

Studies conducted among sites such as Apple, Facebook, etc., gave a failing score to only 36% of participants. And among Bitcoin exchanges, 71% did not pass the exam.

Do you think cryptocurrency can cope with the challenges it faces? Write about it in the comments to the article.