Of course, many of you have heard of things like Bitcoin. You may even know that this is a cryptocurrency that can be used for online payments without paying interest to banks and other familiar financial institutions, and Bitcoin can be mined at home without having to get up from the couch. But let’s take a closer look at how this all actually works.
Maybe it’s worth starting with the main function. Bitcoin is a peer-to-peer, decentralized and anonymous cryptocurrency. It can be translated into publicly available language as follows:
- All transactions are carried out directly between entities in accordance with the P2P (point-to-point) principle;
- There is no central currency management agency and emission center, such as a central bank (decentralization);
- All transactions from one subject to another are carried out using an encryption (encryption) key, which protects the transmission from third-party intervention (cryptocurrency).
Bitcoin appeared at a particularly dramatic moment-at the height of the crisis in 2008, people all over the world lost confidence in their country’s central financial institutions.
In society, there is a need for alternatives to the current payment system, in which anonymity will be combined with the transparency of transactions and the independence of financial giants. It is believed that Bitcoin was created based on these standards.
The first thing to understand is that Bitcoin is not a tangible asset. Currency prices are formed online without the participation of the central authority.
The scarcity of Bitcoin is another key feature that distinguishes it from fiat currencies. The limited supply of Bitcoin is 21 million coins. The creators incorporated the scarcity of Bitcoin into the Bitcoin protocol to maintain the value of the coin for a long time. As of early 2020, there are more than 18 million Bitcoins in circulation.
According to the type of traffic received by the blockchain network, the Bitcoin protocol adjusts the difficulty of mining each new block at 10 minute intervals. As of March 2020, the mining difficulty is 15.4 teraheras. In 2009, the complexity of mining did not exceed 1 hash.
Since the introduction of cryptocurrency in 2008, many changes have taken place. It is becoming more difficult to mine coins on the Bitcoin network: mining rewards are getting smaller and more difficult, and electricity bills are increasing.
In order to make the mining industry profitable, the miners banded together into the community-the swimming pool-and started their own farms. Most of these farms are concentrated in China.
Generally, due to limited emissions, Bitcoin is called an analog of gold and safe assets in crisis situations. The cost of coins is entirely determined by the law of supply and demand. How intense people interact with it determines the price of Bitcoin.
Although Bitcoin’s price will definitely show high volatility as Bitcoin penetrates into the global financial system, its controlled supply is the opposite of the legal tender supply that has contributed to economic crises in the past.
How does Bitcoin work?
For the average user, Bitcoin is a mobile app or computer program that gives access to a Bitcoin wallet. Using this wallet, you can carry out all operations related to cryptocurrencies. In fact, Bitcoin is understood as a public ledger, in another way it is also called a blockchain. It contains the history of all transactions that have ever been carried out, which can be seen and monitored by any user.
For ordinary users, Bitcoin is a mobile application or computer program that can access Bitcoin wallets. With this wallet, you can perform all operations related to cryptocurrency. In fact, Bitcoin is understood as a public ledger, in other words, it is also called a blockchain. It contains historical records of all transactions that have been executed, which can be viewed and monitored by any user. Start a new life today and gain financial freedom with bitcoin era website.
How do I get Bitcoin?
You can earn Bitcoin in several ways:
- Mining-the process of growing cryptocurrency;
- Exchange-a simple exchange of bitcoins through someone near you. To provide a special service for this;
- Buying is also a simple operation to buy Bitcoin.
- Accept bitcoin as payment for its goods and services.
Can you make money with Bitcoins?
The entire cryptocurrency system is designed to create new bitcoins at a fixed rate. This allows miners to create highly competitive businesses, because the more miners join the market, the more difficult it is to make a profit. Therefore, players must look for new options to reduce operating costs.
And because the entire system is decentralized, no user can control or manipulate the system to increase revenue. Therefore, participants have the opportunity to make money in cryptocurrency, but it is not worth it as the only source of income.