Earn bitcoin online

 Investors and journalists compare today's fashion for investing in cryptocurrencies (such as bitcoin) to the American gold rush of the mid-19th century. Others compare the mania for digital currency to the Dutch fascination with tulips in the 18th century.


Time will tell how long bitcoin and similar digital currencies will last, whether they will become the new gold standard or fade into oblivion like the tulip craze in Holland.


Digital currency

Digital currencies, or cryptocurrencies, are electronic monetary units generated by networks of computers and used in place of traditional currencies.


Paying with digital currency is not the same as paying with a credit or debit card, PayPal or ApplePay - all of these payment systems address traditional currencies such as US dollars, British pounds and Chinese yuan.

A unit of digital currency has a value that is determined in the process of exchanging traditional currencies and goods for units of digital currency on special currency exchanges on the Internet, such as BitPay. The operation of these exchanges is somewhat similar to PayPal, but is in no way related to that company.


Traditional currencies, commodities and gold are valued based on national and international banking standards.


Generation of digital currency

The generation of cryptocurrency is generated by a distributed network of computers linked together in a closed Internet community; the computers execute a set of complex cryptographic algorithms, producing cryptocurrency in the form of digital currency units. They can only be paid for within digital communities; individuals and organisations can open accounts (called wallets) in specialised communities.


Community founders limit the number of units of money that can be generated by the computers that support transactions in the community. The collective effort to create currency for the community is called Initial Coin Offering.


Bitcoin is the most popular cryptocurrency, and yet it is one of the first cryptocurrencies to have an initial issue limit.


The man known under the pseudonym Satoshi Nakamoto organized this cryptocurrency and founded the technology to generate and manage it, in 2008 Nakamoto set the maximum number of bitcoins to be generated by a distributed network of computers at 21 million. This bitcoin supply limitation ensures demand for the currency, which consequently increases in value.


Bitcoin price

At the end of August 2017, the established market value of bitcoin was almost $5,000 per bitcoin. This is well above the price of gold, which at the time was around $1,300 per ounce.


However, 2 weeks after that peak, the bitcoin price dropped to around $3,000.


Those who invested real money in bitcoin in mid-August and did not exit the market before the fall lost about 40% of their investment.


Because of its status as the world's most popular digital currency, bitcoin has become a standard in its own right, much like the well-known currency exchanges on Wall Street, in London and in Japan.


That said, bitcoin's exchange rate falls when markets for other digital currencies experience problems. For example, bitcoin plummeted in late August as other cryptocurrencies lost support from the Chinese government following a period of frighteningly rapid growth in China during 2017.


The Chinese government feared the development of complex pyramid schemes involving cryptocurrency exchanges, which had their own bitcoin-type monetary units.


As a result, the country's government ordered the closure of exchanges such as BTCC, Okcoin and Huobi by the end of September 2017. This created panic in all the world's digital currency exchanges, which led to a rapid fall in the bitcoin exchange rate.


As bitcoin showed volatility unlike gold and traditional currencies, its chances of becoming a global standard in the foreseeable future became significantly lower.


Bitcoin security

There have been about a dozen hacks of cryptocurrency exchanges since 2010. The losses run into the hundreds of millions of dollars.


On the other hand, traditional banks and financial institutions have lost billions of dollars to cybercriminals over the same time period.


Programmers and members of the cryptocurrency community are working hard to identify and fix vulnerabilities in their respective blockchain networks.


If blockchain becomes an acceptable currency for traditional merchants, sophisticated computer algorithms could take over some of the functions of the world's central banks.


In terms of personal security, every user investing in bitcoin is advised to install a security class solution to protect against Internet threats before accessing financial information and conducting transactions.


Bitcoins cannot be touched. They are not notes or coins. Bitcoins also have little in common with electronic money on a bank card. Bitcoins are digital money with its own rules for transactions, which cannot be broken.


earn bitcoin online

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