Make bitcoins

 What is bitcoin in simple terms


This is the ultimate guide to cryptocurrency: why the average person needs it, how it differs from conventional money, and why bitcoin is worth as much as an aeroplane wing. If you still think you don't need cryptocurrency or are afraid to use it, this guide is for you.


I have roubles on my bank card, why do I need bitcoin?

Remember when Apple Pay appeared and we started paying directly from the phone? It turned out to be much easier to tap your phone than carrying a wallet, and everyone made the switch instantly.


In the same way, cryptocurrency makes many money transactions easier.


Ultra-low fees

In September this year, a transfer of 45,500 bitcoins ($20 billion) was made and the sender paid a commission of just $6.5.


By comparison, to transfer $100 via Western Union, you have to spend $5.


Accept payments if you are a freelancer and work at the beach

Cryptocurrency is indispensable for digital nomads: global citizens who travel frequently and accept payments from abroad.


If you're a freelancer in Moscow and you have clients from all over the world, accepting payment in bitcoins saves on commissions and gets paid faster.


Moving and taking your money with you

The easiest way to take your savings with you is to buy bitcoins. You put them on a flash drive, safely cross the border and sell them for the local currency.


You don't have to wait any longer. No need to pay commissions to banks either. There is no need to explain to the tax authorities where the funds are from, even less so.


Sending to a grandmother in El Salvador

If you regularly send money to relatives abroad, bitcoin is the easiest option.


I once tried to transfer 30,000 euros to Spain and the banks froze me out for three weeks. I ended up just transferring bitcoin.


Even if the amounts are not that significant, you still save money.


For example, the Salvadorans are going to rake in $400 million annually from Western Union.


Do as the Salvadorans do

El Salvador recently recognised bitcoin as an official currency. More than 2.5 million Salvadorans remit about $6 billion (23% of GDP) annually to relatives back home. Seventy percent of El Salvador's population receives remittances from abroad; on average, people send $195 per month.


The Western Union fee for an online $100 transfer from the U.S. to El Salvador is $5, a $1,000 transfer is $19, and to send $100 in cash would cost $15.


As a result, the payment companies will lose the same $400 every year. You can take part in this.


Earn 12% per annum

The most conservative and safest way to keep money is to make deposits in banks. Popular banks offer 6% per annum, which doesn't even cover inflation.


There is another safe way to get twice as much - lending to people secured by cryptocurrencies.


People pledge bitcoins on special services and you lend them the money. The pledged bitcoin is blocked in the system and if its price starts to fall, it is liquidated and you get your money back and +12% per annum.


If the bitcoin does not fall, you are simply repaid and also paid 12%.


The system is as reliable as a logjam if you choose a good service.


OK, but still complicated

To start using crypto, you need to stop being afraid of it, and to do that you need to understand it. In this longread, we have tried to answer all the frequent questions.


Next, for the sake of simplicity, we will talk about bitcoin - it is the first and most popular cryptocurrency.


How is bitcoin different from regular money?

First of all, we need to understand what traditional money is all about.


We have put together a short dictionary about money, with a reading time of 2 minutes. If the terms are familiar to you, you can safely skip them.


Fiat currency (conventional money)

Fiat currency is issued and controlled by the state. It is dollars, euros, roubles and so on.


It works at the expense of the authority of the state which issues it. If the authority of the state falls, the currency falls.


Fiat money has a paper counterpart, which you have definitely held in your hands. The state can print any amount of money and in doing so it depreciates in value.



He-who-can't-be-named creates hyperinflation

Digital currency

This is money that is software-driven by an electronic payment system, such as Webmoney.


They have their own equivalents to fiat money, for example: WMZ is a dollar and WMR is roubles. Their value is pegged to fiat currencies.


WMZ is controlled centrally - information about transactions is stored on Webmoney servers.


In theory, an intruder who has access to a server can draw any balance, block the transfer, in general, hold in their hands all the power of your money, if you entrust it to them.



An intruder has been interviewed by Webmoney

What then is cryptocurrency?

Cryptocurrency is a type of digital currency. It is not managed by the government or banks.


Whereas fiat money is stored in banks and virtual WMZ on Webmoney servers, all information about cryptocurrency is stored in a blockchain.


4 main differences between cryptocurrency and conventional money

So, the revolutionary features of bitcoin are:


you don't need a bank to transfer money to someone

cryptocurrency has no physical


make bitcoins

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