What is cryptocurrency in simple words and how to make money on it. About cryptocurrencies in simple words: you are allowed to play, but according to the rules

Hello! In this article we will talk about cryptocurrency and try to give all the most important information about it.

Today you will learn:

1. What cryptocurrencies exist?
2. Why are they so popular?
3. How can you make money on them?

What is cryptocurrency

Let’s figure out what is hidden under the term “cryptocurrency”, what it is in simple words, and why it is called that way. The name Crypto Currensy itself, meaning “cryptocurrency,” appeared in Forbes magazine in 2011. And since then the name has firmly entered into everyday use.

Cryptocurrency called a special type of electronic payment instrument. Strictly speaking, this is a mathematical code. It is called that because when circulating this digital money, cryptographic elements are used, namely an electronic signature.

The unit of measurement in this system is “coins” (literally “coins”). Cryptocurrency does not have any real expression such as metal coins or paper bills. This money exists exclusively in digital form.

The fundamental feature that distinguishes crypto money from real money is the way it appears in the digital space. Thus, real means of payment must first be deposited into a specific account or electronic wallet, and cryptocurrency units appear in electronic form.

The “issue” of digital money occurs in various ways: this is ICO (initial coin offering, system), and mining (maintaining a special platform for creating new crypto-money), and forging (formation of new blocks in existing crypto-currencies). That is, cryptocurrency literally emerges “from the Internet.”

Another important difference from conventional currency is the decentralization of issue. The issuance of electronic currency involves the generation of a mathematical code followed by an electronic signature.

Only the Central Bank has the right to issue real money, but anyone can issue crypto money. In order to make transactions using cryptocurrency, you do not need to contact any third-party organizations (banks).

Payments using digital money are carried out in exactly the same way as regular electronic transfers via a cashless payment system. The only exceptions are exchanges through which crypto money can be monetized, that is, converted into regular means of payment.

The circulation of such currency occurs according to the “blockchain” system (literally “closed chain” in English). This system is a database distributed across millions of personal computers around the world. At the same time, the storage and recording of information when circulating cryptomoney occurs on all devices at once, which guarantees absolute transparency and openness of the transactions performed.

Why is cryptocurrency so popular?

The popularity of cryptocurrency is due to the demands of the time. In the age of widespread dissemination of information technology, universal means of payment are extremely in demand, which could be used to pay in the electronic space without being tied to a specific country or institution. Cryptocurrency became such a means.

For payments with virtual money, only their number is used, so the cryptocurrency does not need real expression. Digital means of payment are protected by cryptographic code, which makes them more reliable than “real” money. And due to the absolute decentralization of the emission of virtual coins, they can neither be counterfeited nor banned.

Another feature that contributes to the popularization of crypto payments is complete anonymity. When conducting transactions, no one will receive any information about the payer or recipient; of all the data, only the electronic wallet number will be used.

And also the attractiveness of cryptocurrency is that you can get it yourself. That is, digital currency can be obtained almost out of thin air. But you can also buy and sell, as well as invest in cryptocurrency. At the same time, crypto money can be exchanged for traditional money, as a result of which they can generate quite tangible income.

Types of cryptocurrencies

Digital money first appeared in 2008, and by now there are already several thousand varieties of it. There is a large category (almost 50%) of crypto money that is actually not backed by any content. These are the so-called soap bubbles. Let's not take them into account.

The most common types of cryptocurrency:

1. (BTC, bitcoin, at the moment one bitcoin is equivalent to 4200 US dollars). Bitcoin cryptocurrency, in simple words, is the very first digital currency, on the basis of which all subsequent ones were developed. Bitcoin developer (developer group) – Satoshi Nakamoto. This currency has a stated quantity limit of 21,000,000, however, it has not yet been reached.

2. Ethereum(etherium, equal to 300 US dollars). This is the development of Russian programmer Vitaly Buterin. This currency appeared relatively recently – in 2015. Now it is quite popular along with bitcoins.

3. Litecoin(litecoin, LTC, equal to 40 US dollars). The currency was developed by programmer Charlie Lee and has been issued since 2011. Litecoin is considered an analogue of silver among cryptocurrencies (and Bitcoin is an analogue of gold). The issue of litecoins, like bitcoins, is also limited and amounts to 84,000,000 units.

4. Z-cash(Z-cash, 200 US dollars).

5. Dash(dash, $210).

6. Ripple(Ripple, $0.15).

In addition to the indicated names, Darkoin, Primecoin, Peercoin, Dogecoin, Namecoin and many others are also used in electronic circulation.

The most popular of all cryptocurrencies is Bitcoin. Its name is made up of the words “bit” - the smallest unit of information and “coin”, which means “coin” in English. For BTC, or bitcoin, not only a program has been created, but also a special digital wallet in which this currency can be stored.

In addition, there are now even special ATMs where you can convert bitcoins into regular paper money, and a number of retail chains and stores accept this currency for payments along with regular bills and coins.

Advantages and disadvantages of cryptocurrencies

According to its main characteristics, digital money differs significantly from conventional money. This entails not only continuous advantages, but also some disadvantages for users.

Pros:

1. Anyone can get this kind of money using specially organized activities (mining). Since there is no single emission center and no bodies controlling this process, no one can prohibit ordinary citizens from obtaining crypto money online.
2. All operations with cryptocurrencies (so-called transactions) occur completely anonymously. The only open information in this case is the electronic wallet number. And all information about its owner is closed.
3. Decentralized issuance, in addition to the possibility of everyone earning money, also determines the lack of control over this process.
4. Each type of cryptocurrency has an issue limit. Thus, excess emission is impossible and, as a consequence, there is no inflation in relation to this money.
5. The cryptocurrency is protected by a unique code like , so it is copy-protected and therefore cannot be counterfeited.
6. There are practically no commissions for transactions, since when conducting transactions using cryptocurrency, the role of a third party in the relationship - banks - is excluded as unnecessary. Therefore, such payments are comparatively cheaper than using regular cash.

With all the variety of positive characteristics, cryptocurrency also has disadvantages.

Minuses:

1. If a user has lost the password for his electronic wallet, this means for him the loss of all funds in it. Since there is no control over transactions using digital money, there are no guarantees of their safety.
2. Cryptocurrency is characterized by high volatility due to the specifics of its circulation (volatility means frequent changes in its value).
3. In relation to cryptocurrencies, attempts may be made to exert various negative influences on the part of national monetary regulators (for example, the Central Bank of the Russian Federation).
4. As the process of mining cryptocoins becomes more and more complicated over time, mining using the equipment of individual users becomes less and less profitable.

Each of the existing types of cryptocurrencies has both advantages and disadvantages inherent in them all together.

In general, all crypto currency units are characterized by the same features as modern money, namely:

• They are versatile;
• They are a means of exchange;
• They can be accumulated;
• Perform a calculation function.

The value of digital money varies depending on supply and demand.

How to make money on cryptocurrency

Currently, there are a number of ways to make money on bitcoins and other virtual currencies:

1. Buying and selling cryptocurrency. This is done on special exchanges or electronic money exchangers. The principle of operation is to buy a currency when its value decreases, and sell when it increases. Most often, such trading is associated with bitcoins, since their cost is higher than other types of cryptocurrency.

2. Cryptocurrency investments. are made by transferring a certain amount of electronic money from one person to another in trust. Typically, brokers deal with trust management issues.

3.Extraction of electronic money (mining). Cryptocurrency mining, in simple words, is the process of extracting cryptocurrency using special software. It will not be possible to produce large volumes of cryptocurrencies on an ordinary home computer; quite significant power is required, and, consequently, the purchase of additional equipment. A powerful video card and processor are required. In addition, special devices are used - so-called mining farms, which produce cryptocurrency.

4. Cloud mining. For such digital currency production, you do not need to buy additional devices. For this purpose, there are special services where you can sell and purchase computing power. That is, the service generates cryptocurrency for you, and you pay for the power expended.

5. Cryptocurrency giveaway. Such services are usually provided for attracting referrals or entering letters from pictures (captcha), that is, in fact, for increasing site traffic. These are the so-called gateways, taps or distributors. There are also special Bitcoin games in which you can earn electronic money. Earnings on such services are small: a small portion of Bitcoin (Satoshi) is distributed per hour.

Conclusion

Thus, cryptocurrency is a new word in monetary circulation. Its emergence is due to the needs of the time. Despite the fact that crypto money has no real expression, it can participate in various market transactions almost on a par with traditional currency units.

Currently, there are a number of ways to earn cryptocurrencies, as well as options for making a profit from them, which is what the most advanced users use.

In general, cryptocurrency in its characteristics is largely similar to traditional money, however, it also has a number of fundamental differences that allow digital money to increasingly gain popularity in the modern information space.

The world continues to be divided into friendly and not so friendly jurisdictions for entrepreneurs and ordinary traders who want to make money on cryptocurrencies. Perhaps we will soon see “cryptoases” similar to the already well-known quiet tax havens. However, the countries that were the first to welcome Bitcoin and other currencies do not intend to ingratiate themselves with business.

"Business Petersburg" continues to publish a review of the most significant trends, transactions and courses from the world cryptocurrencies and other projects implemented on the basis of blockchain (

Is the sale over?

Last week could be figuratively called “Black Tuesday” for cryptocurrencies. Their total capitalization fell 25.6% to $251 billion, a level not seen since late November 2017. This is 68% lower than the record $830 billion recorded in early January. Bitcoin fell by almost 20% and, if measured in terms of technical analysis, was not far from its bottom. About the same thing happened with other leading currencies; out of the top 25, only TRON’s rate increased. Ironically, the coin that lost the most was the coin that was the growth leader the week before last – ICON.

Today, the situation with rates has begun to improve, but not yet at a very high pace. According to Coinmarketcap, Bitcoin at the time of publication is at a level of about $7 thousand, its “colleagues” are also in the green zone. Could this indicate that the fall is over? It seems so. At least at the end of the week, even before the start of growth, analysts gave the following forecast: if Bitcoin drops to $6-6.6 thousand over the weekend and pushes off from the bottom, then we can expect a rise to the point of $9177; if it breaks through this mark, it will go to the level of $11.7 thousand, where it will meet the next stage of resistance; if it falls below $6 thousand, then expect the sale to intensify.

It looks like the optimistic forecast is coming true.

But the news that the number of queries on the Indeed.com search engine related to working with bitcoin or, more broadly, cryptocurrencies, has fallen by 76% and 41%, respectively, since mid-December should not surprise anyone.

Write the application “on your own”

The authorities of different countries are gradually determining exactly how they can and want to regulate the crypto business. Or more precisely, what they agree to, what they don’t, and how much taxes to take from entrepreneurs. Approaches vary from state to state. In some jurisdictions, they are no longer just developing rules, but are beginning to apply them, and an interesting practice is emerging.

In the last column, we talked about how regional and municipal authorities in the US and Canada are slowly refusing to register companies that mine cryptocurrencies. In South Korea, the police were involved in the search and arrest of illegal miners, not from among amateur enthusiasts, but, so to speak, “from corporate miners.” It turned out that 13 companies that rented premises in industrial complexes had been illegally mining cryptocurrencies since May 2017. Police arrested 14 people. It would seem that what is so bad about this mining? The fact is that in these industrial complexes, rental rates are lower than in the market, and electricity - the main consumable resource for mining - is 10% cheaper than for other enterprises. Therefore, the companies abused public goods by installing between 100 and 350 machines each.

Three crypto exchanges in Chile - Orionx, CryptoMKT and Buda.com - were very unlucky: three banks, namely Scotiabank, Itau and the country's central bank BancoEstado, closed their accounts of these exchange platforms. The motives of traditional financial institutions remained unclear. Based on comments from representatives of crypto exchanges, we can say that the bankers did not fully understand the essence of how crypto works and why it is needed, and just in case they decided to end the relationship - despite the fact that, for example, CryptoMKT and Buda.com are officially registered in financial authorities of Chile and pay taxes. Apparently, as stated by the founder of Buda.com, Guillermo Torrealba, his company will now have to open its own bank.

Life is becoming more and more difficult for cryptocurrency exchanges in Japan, the first country in the world to legalize Bitcoin. Following the hacker attack on Coincheck, which we have written about several times, there was a wave of inspections by supervisory authorities in relation to other sites. Officials are checking the security system of exchanges, procedures for verifying the identity of traders, monitoring operations, etc. Based on the results of inspections, a number of exchanges are being asked to cease operations “on their own,” without waiting for a letter signed by an authorized person. Last week two sites were damaged - Mr. Exchange and GateWay, which have already withdrawn their registration documents. They are far from the first on the list of those who lost control, and they obviously will not be the last. Having lured business, the Japanese authorities are purge the ranks: investments are investments, but if you don’t keep order, you will lose more than you gain.

Businesses are fleeing from crypto

Large corporations, including those associated with the Internet, follow in the footsteps of bureaucratic regulators. This is probably not surprising, since it is not yet properly administered, which is used by scammers and hackers, and simply incompetent people who believed in their talent, raised money, but failed to cope with the task. Internet empires with a good reputation do not want to be part of scandals and therefore distance themselves from crypto as much as possible until order is restored to it.

Firework. Despite the fact that it has become warmer outside, many people have begun to spend more time outdoors. We decided to work a little to give you more information about the projects.

It's no secret that the first areas where they began to accept bitcoins as payment were not entirely legal areas. This included the adult entertainment industry, if you know what we mean? In this article, we will introduce you to the SpankChain platform, which is developing in this direction.

What is Spank Chain cryptocurrency (SPANK)

SpankChain (SPANK) cryptocurrency is an ERC20 protocol-based token that will be part of the entertainment platform. Spank Chain is based on the Ethereum blockchain, so it will be able to interact with other decentralized applications on Ethereum. The platform will be implemented as a website where you can view public shows, as well as buy content that interests you.

Features of the SpankChain platform

The peculiarity of the platform is that it consists of 3 layers:

– Application layer;

– Service layer;

– A micropayment layer called SpankChain Core.

On this platform, developers will be able to develop their own applications as well as create their own content.

Blockchain technology, in combination with other technologies, will help every user to be anonymous and safe. In addition, each user will save money on commissions and fees.

Prospects for SpankChain cryptocurrency

To be honest, there are already a lot of projects like SpankChain, for example, Bunny Token - advertising for which does not leave the screens of YouTube. But we don’t have much faith in the development of the SpankChain platform. We don't even know what this is connected with. Maybe because we don’t use such platforms.

Cryptocurrency– cryptographic currency (encrypted) is electronic money, a means of payment on the network. Such a currency appeared due to the impossibility of counterfeiting it, since during creation (emission) it is encrypted and additionally protected by the technology on which it is built - blockchain.

Cryptocurrencies are widely used almost all over the world - the more developed the country, the more these electronic money have taken root. They are used for fast, secure, untraceable, and most importantly, not controlled by anyone.

There are already several thousand types of “cryptocurrency” in the world., some are more successful, others less so. But making your choice is very simple - no one in their right mind would invest in an unsuccessful “coin”. If the capitalization of one individual cryptocurrency is at least $5 million, you can safely start working with it.

Reasons for the popularity of cryptocurrency

The popularity of cryptocurrencies is caused by two main reasons:

• Impossibility of counterfeiting– thanks to blockchain technology, it is impossible to issue a fake digital coin. But more about the blockchain below.
• Decentralization– behind this difficult word lies a simple essence: no one (!) manages cryptocurrencies. That is, users themselves receive it, increase the demand for it themselves, and decide for themselves what to do with it - this is the real and, so far, the only “people’s money.” There is no governing body, such as, for example, a “state”, which wanted and arranged an artificial depreciation of the currency, after which your savings literally melted away.

Currency protection is based, first of all, on the technology of its creation – blockchain. It involves the sequence of creating blocks for which a reward is issued in the form of cryptocurrency. This sequence cannot be changed; there is no way to wedge into blocks that have already been built one after another.

Thus, if someone wanted to create fake “coins” (units of cryptocurrency), they would break the entire chain. But such a “modernized” chain cannot be used, since there are several tens of millions of copies of the original chain around the world - for everyone who is engaged in “mining” (extraction) of cryptocurrency.

At first glance, the explanations above may seem confusing, but this is the simplest explanation of the essence of cryptocurrency and its main feature - security. It is difficult to imagine a simpler description of a phenomenon costing over $300,000,000,000.

How do people make money from cryptocurrency now?

There are a number of methods, some of them are popular and accessible to the average user, and some require either huge investments or special knowledge and skills.

Now we will look at those methods that are in demand among ordinary people. Us with you. We're talking about:

• Mining(direct cryptocurrency mining);
• Purchase and sale coins already mined by someone.

Cryptocurrency mining – “printing money” with your own hands. Mining is the basis, the production of calculations using the power of the participants.

The gain is, that a computer (video card or, less commonly, processor) performs complex calculations, something like solving equations for a person.

As a result, when an equation (block) of several thousand or even millions of lines is solved, you receive a reward from the system for this - from one to several thousand coins, depending on the chosen cryptocurrency.

It's important to understand, that when mining it is necessary to use the maximum available power, which endlessly absorbs electricity. For this reason, mining any cryptocurrency on a home computer was last relevant a few years ago. Now specialized energy-efficient equipment is used for this.

How to make money from mining?

Today, the very first and at the same time expensive and popular cryptocurrency is Bitcoin.. It is unprofitable to mine it on a regular video card to such an extent that it will cost many times more on electricity bills than you will be able to earn from selling the received bitcoins.

Why? This is due to the fact that the complexity of cryptocurrency calculations periodically increases and Bitcoin is now the highest among all cryptocurrencies.

Solution– the use of the so-called ASIC (ASIC) – these are ready-made solutions that are tailored for the extraction of cryptocurrency (most often Bitcoin).

ASIC is a medium-sized device consisting of a powerful power supply and a large number of chips configured for cryptocurrency mining.

The peculiarity of ASICs is their power: one such device can equal 1000 home computers or laptops, and at the same time costs only several times more.

And also, which is a decisive factor, in energy efficiency - everything unnecessary is removed from these devices, which can consume energy, but does not provide an increase in calculations.

You can buy ASIC in online stores(American, European and Chinese) or by contacting specialized sellers.

For other cryptocurrencies, regular video cards are still suitable, which can be easily purchased on the shelves of our stores. Another thing is that due to worldwide popularity, the complexity of mining all cryptocurrencies has increased greatly and now, in order to do so, you need not one or 2 video cards, but a whole Farm!

What is a mining farm? This is a group of video cards whose ratio of computing power and energy consumption is optimal for constant operation at full capacity. These video cards are assembled into a single stand and connected to already familiar components of home computers.

As a result, you get a farm with high computing power, which, after configuration, can stand in your home and earn the chosen cryptocurrency without your participation. Depending on the region of residence, you will spend from 5 to 50% of the money earned by the farm to pay for electricity.

In addition, there is the so-called “cloud mining”. But this topic is for a separate article, as it requires very detailed disclosure.

Whatever mining option you choose, it is definitely recommended to consult with an appropriate specialist before starting. This will allow you to avoid standard beginner mistakes and earn many times more!

Buying and selling cryptocurrency - fast, a lot, but risky

There is also an alternative with cryptocurrencies - earnings on the difference in exchange rate (which has only been growing in recent years). What mining has in common is investments; their volume will determine how much and in what time frame you can earn.

It is difficult to talk professionally about making money from buying and selling cryptocurrency, since this is what traders do. And for people with such a colossal income, it is difficult to find an incentive for which they would share all the details.

But in general terms, the principle looks like this:

1. The most successful cryptocurrency based on a number of factors is selected: its history, the exchange rate in the past and at the moment are studied, news and prospects are analyzed.
2. The investment amount is taken at your discretion, it can be from $20 to a million dollars or more, since nothing prevents you from buying just a piece of a coin (yes, if a unit of the chosen cryptocurrency costs $100, then you can easily buy 0.02 coins for $2).
3. These investments are entered into the selected exchange, where you buy cryptocurrency for money and hold it until the rate rises, after which you sell it and get your money and earnings back.
4. Repeat as many times as you want!

Among the most striking recent examples: Ethereum cryptocurrency (Ethereum or Ether for short). In mid-February 2017, it cost $12 per coin, and by mid-June it reached $390 for just one coin. Growth 32.5 times.

Let’s say a small percentage will be spent on depositing and withdrawing funds from the exchange, as well as when purchasing cryptocurrency. The output is a net multiplication of investments by 30 times.

With Ethereum, you could invest $1,000, and after 4 months withdraw your $30,000 without doing anything, of which $29,000 was pure profit. Impressive, isn't it? Traders call this high volatility, when the rate can change several times.

Eg, after reaching a maximum of ~$390, Ethereum began to fall in price down to $150 per coin. But then he partially returned the value and for several months was in the range of $200-350 per coin. After which another growth began and by the beginning of winter (December 1), the price of one unit of Ethereum was $470, and the growth continues.

In other words, by buying and selling (in other words, market speculation) you can easily multiply your investments several times, the main thing is to have patience and not sell the currency while it is cheap.

How much can you earn on cryptocurrency?

As much as you like. And this will be the most accurate answer to your question. You can invest in ASIC and earn money on it every day, gradually reducing its cost and starting to receive money out of thin air. You can do the same with video card farms, which, if used correctly, pay for themselves within 12 months.

Or you can choose an unsuccessful cryptocurrency at its maximum growth, after which it will go into a natural temporary decline and you, getting scared, will sell it, losing part of your investment.

The main thing to remember is: in order to invest successfully and successfully, you must either study long and hard to analyze the market, or trust a real specialist who will guide you into the world of big electronic money!

Hello! Cryptocurrencies are very popular in the media. Some earn millions from the growth of the exchange rate, others call them another “bubble”. Politicians accuse cryptocurrency owners of money laundering, and large stores are starting to accept payments in cryptocurrency. I myself have mentioned cryptocurrencies several times, and now I decided to explain what a cryptocurrency is and why it is needed - simple and understandable language.

What it is

Cryptocurrency (crypt, coins, coins, whatever they call it) is digital decentralized money. Now we need to clarify a few issues.

What is money? It is a universal medium of exchange that cannot be counterfeited or created out of thin air. Paper money, minted coins, animal skins, shells - all of this serves as a medium of exchange. Seller and buyer acknowledge value money and they can exchange them for the desired product. Moreover, money must be valuable in itself so that it is quite difficult to obtain or produce. Therefore, tree leaves cannot be money - they are too easy to get, so they have no value.

The emergence of cryptocurrency - next step in economic development. Coins and pieces of paper are a thing of the past. They are not always convenient to use: you can carry a limited amount with you, you can count and check the change yourself, they can be lost or damaged. Electronic money is the equivalent of paper money, only manage it more convenient. From the point of view of the state and business, non-cash payments are also convenient - electronic payments are processed fast, cheap, safely.

What is decentralization? This is the way the system works in which all participants are equal. When paying by card, the terminal sends a request to the bank server, which checks the availability of money in the account, debits the required amount and sends a confirmation. If the server crashes, it will not be able to confirm payment - this flaw centralization. In a decentralized system, the terminal will contact any nearby system participants who will confirm the payment.

Who releases?

Someone has to make money. The Central Bank prints rubles, hunters mine skins, divers look for shells, and crypts are mined. Mining is inextricably linked with decentralization and blockchain. Blockchain is an archive, which consists from consecutive blocks. Each block contains information about transactions in the cryptocurrency network, that is, the blockchain stores information about movement in general everyone coins during the existence of the crypt. Each block also contains hash sum previous blocks. If you change one block, the hash of subsequent blocks will no longer match it, causing it is impossible to hack or change the blockchain. The blockchain is simultaneously stored by all participants in the system. The structure of the blockchain is in the picture.

Mining- the process of searching and signing new blocks. To do this, miners run a program on their computer that searches and hashes random numbers until one of the miners finds a number that matches the condition. Conditions are selected automatically to ensure a certain speed of mining blocks depending on the power of the computers involved in mining. For the number found, the miner receives award in the crypt. If you want to learn more about mining, watch the video.

Structure

Information about all transactions is stored on the blockchain. There will be an article coming out soon detailing how the whole system works. If we greatly simplify it, then Using records in the blockchain, you can track all coins and find out the balance of any wallet. This way you can do without a central server - the closest participants in the system can confirm that there is money in the wallet, confirm the transaction and add it to the next block to complete the transfer. You have to pay for translations commission, the size of the commission affects the speed of the transaction.

Advantages over fiat money

• Impossible to steal- you can withdraw money only if you know private key. I urge everyone to pay attention to the issue security: every day we hear about another hack of a wallet, exchange or individual.
• Small commissions- for transferring several million dollars to another country they will charge from zero to 5 dollars.
• No central server, which can be hacked or disabled.

What is cryptocurrency for?

• Like any means of exchange, crypto must be used to exchange for goods or other currencies. For cryptocurrency you can buy goods and services, while reducing fees for transferring money. Also, coin flows can be well confused and make your purchases completely anonymous.
• Crypto is a good tool for long-term investment. You can simply buy coins and wait for them to increase in value. The Bitcoin price has risen from $10/BTC to $10,000/BTC in just a few years.
• Cryptocurrency rate volatile, jumps of 5-6% per day are the norm. Speculators and skilled scalpers make good money from such short-term fluctuations using crypto exchanges.

Significant Cryptocurrencies

Coins differ from each other much more than fiat money. They differ in the method of extraction, commissions and scope of use. But the main characteristics are market capitalization And well.

Top 5 cryptocurrencies by capitalization:

1. Bitcoin. The most popular coin in the world, value - $8000 . Works with a regular blockchain, mines on farms and brings profit;
2. Ethereum. The second most popular crypt, created by a Russian programmer Vitalik Buterin. Smart contracts are written on Ethereum, which are executed automatically when the specified conditions are achieved. Price - $500 ;
3. Litecoin. Made on the basis of Bitcoin code, it introduced the technology of fast transactions, cross-currency exchange and smart contracts. Price - $200 ;
4. Ripple. "Banking" cryptocurrency. Used for fast and ultra-cheap transactions between banks, it cannot be mined. Price - $0.5 ;
5. Monero. An anonymous cryptocurrency, popular on the Darknet. Due to this, it is not so susceptible to price fluctuations. Price - $200 .

In addition to the giants, there are also cheap cryptocurrencies with small capitalization, but interesting idea.

• El Petro. National cryptocurrency of Venezuela, first state crypt in the world;
• GRAM. Cryptocurrency from the founders Telegram;
• CryptoKitties. Blockchain-based cryptocurrency, in which instead of coins there are cards with images cats.

This is all? No, there is more several thousand cryptocurrencies that differ in functionality and audience. You can find out about them on the Coinmarketcap website .

There are the main indicators: capitalization, cost of one coin, daily trading volume, number of coins in circulation, exchange rate chart. Most coins are listed on exchanges, and this information will help you discover trend And earn money money on exchange rate fluctuations.

Cryptocurrency calculator

Sometimes I find it difficult to convert dollars into euros, and in my head it’s completely unrealistic to convert BTC to DOGE. To find out the exact value of a coin or to calculate how many BTC I will buy for $1000, I use this page .

Everything is simple there - select currencies, enter the amount and get result. Useful if you want to calculate how to add cryptocurrency to your wallet with maximum profit.

Technical analysis

To make money from trading, you need to know everything about previous price movements. On the tradingview website There is all the necessary tools for analysis: chart, drawing tools, indicators, trading volumes, history of price movements. If you are a beginner, you can look at ideas And notes other users. You can also run market simulation to test your trading strategy. The site is complex, but very useful Perhaps in the future I will write a complete guide to developing your own trading strategies.

How to buy cryptocurrency?

Crypto enjoys demand, so popular exchangers add automatic purchase of coins to their functionality. I use Bestchange to find the best rate. Buy on exchangers profitable, as their offers are often updated late. If you find the right moment, you can buy it at 5-10% more coins than you would buy on an open exchange with the current exchange rate. Exchangers accept electronic money, payment by bank cards and other crypto coins; approximately 15 minutes pass between payment and receipt of cryptocurrency.

Take advantage of favorable exchange rates

Cryptocurrency can be purchased on exchanges. There will be a link to a review of the best crypto exchanges, you can read it. Differences between exchanges functionality- you can use them to buy and store crypto on your wallet or start trading immediately. A wallet on the exchange can be used in the same way as a regular one: you can receive and send money without restrictions. Usually, when registering, they do not ask for a name, but in connection with the “legalization” and the creation of regulators in the USA, in the future exchanges may oblige users confirm identity.

List of profitable crypto exchanges

• Binance;
• Yobit;
• Exmo;
• Bittrex.

Register on the Binance exchange

Which method did I choose? I buy crypto on open exchanges to get the maximum benefit on commissions. But I prefer to store it in a separate wallet, since exchanges regularly hack and steal coins from users’ wallets. I advise you to read an educational program on the topic of how to profitably buy cryptocurrencies, there are several tricks there.

Where to store?

On a special wallet. Each of them has public address And private key. The creators of cryptocurrencies came up with an interesting security scheme - For each operation, the wallet creates new unique addresses. Let's say you wanted to transfer coins that are in your wallet A. The wallet will first create a second wallet IN, and then send the money to the desired address. To accept a transaction, a wallet is created WITH, from which money is automatically sent to the wallet A. This way no one will know real wallet address where the money is stored.

But not all wallets have such functions and not all are equally convenient to use. Total there is four types:

1. Online wallet. This is a website, a layer between you and your money. The website stores wallet data; to access it, you need to enter your login and password. At the same time, the sites give user-friendly interface and the ability to manage your money from any device that has an Internet browser. On such a wallet You should not store large amounts, since your login and password can be stolen by a virus, keylogger or other harmful program. Examples: Coinbase, Exodus, Wallet.BTC.
2. Wallet on the exchange. An online wallet with limited functionality, since on most exchanges you buy not coins, but contracts. The exchange wallet can only store the main currency in which the exchange carries out settlements: usually this USD, BTC or ETH. Convenient if you do not need other currencies and you actively trade in the crypto market.
3. Cold wallet. Access data (address, passwords) are stored in a special file wallet.dat. Why not store this file where no one can steal or spy on it, for example, on a separate flash drive? Cold wallet - storing data on a device that is generally not connected to the internet and protected from strangers. Not very convenient, but very safe if you want to make a large investment. Examples: flash drive, password on paper, hard wallets like Trezor.
4. Local wallet. You can store money on your computer, accept and send transactions through a special wallet program. Safe enough, but to use it you will have to download the blockchain file, which weighs several tens or hundreds of gigabytes. Examples: Electrum, Jaxx.

There are many wallets, so I chose several popular and reliable ones from each type - read the review of popular wallets. You can also look at the review at Trezor- “iron” wallet.

It is safe?

Yes, it's safe. Cryptocurrency is the same electronic money as WMZ or Yandex.Money. But the media and politicians are trying to convince us of the opposite, since using cryptocurrencies we do not pay taxes. So, popular myths:

But if you don't know how to use crypto, you risk losing money:

• Your wallet can be hacked. If you don't care about the security of your information, haven't come up with a strong enough password, and haven't secured your computer, your wallet file or online wallet password could be stolen.
• The investment may not be profitable. If you are going to invest in a new and not very promising cryptocurrency, consider the probability of losing. Some cryptocurrencies are growing rapidly, others are losing value, just like with stocks, securities and fiat currencies.
• You can lose on the stock market. The volatility of the cryptocurrency market is a very dangerous thing. You can determine the main trend, but it is very difficult to guess instantaneous sharp fluctuations. These fluctuations can easily cut off stops or even eat up the entire margin, so you need to trade very carefully.

Why have cryptocurrencies become popular?

The Internet is penetrating deeper and deeper into everyday life. Bank cards are a convenient way to pay for goods and services, but owners have to pay for the service. Add here the percentage for withdrawal/replenishment, various commissions and “promotions” that eat up money. With the development of the Internet, it has become possible to buy goods abroad and avoid paying intermediaries. But for international transfers too you have to pay.

Cryptocurrencies allow you to send any amount of money to the other side of the world by paying a few cents for the transfer. Cryptocurrencies allow obfuscate transactions and ensure complete anonymity. The blockchain stores all transaction information to protect the system from hacking and the coins from theft. Cryptocurrencies automate monetary relations and make them completely transparent. In simple terms this is new generation money.

At first, these opportunities were of interest only to enthusiasts, but later businessmen and investors became interested in them. Now banks, corporations and popular Internet resources are creating their own tokens and coins, implementing blockchain and starting to accept bitcoins and ether for payment. Cryptocurrencies are the future.

Summary

• Cryptocurrencies - electronic money. Other users of the system recognize their value, which means they are no different from ordinary money. You can buy goods, services and fiat money with cryptocurrency.
• Crypto is stored in special wallets. Before you buy coins, get the appropriate wallet and take care of his safety.
• Crypto can be purchased at exchangers or stock exchanges, or mined on a computer or farm. Crypto can be used for trading, as a long-term investment or a trading tool. The crypto market is volatile, the price of some coins actively jumps up and down, and this is a good answer to the question of how earn money money using cryptocurrency.
• Popular cryptocurrencies vary greatly in structure, method of use and mining. For example, Ripple used for large interbank transfers, so this coin is not interesting for ordinary users. Before you buy interesting coins, Fine their study.

I tried to talk about all the main aspects of the new type of money. If you forgot about something or you have questions, write in the comments, I will definitely answer. Goodbye, wait for new articles!

If you find an error in the text, please select a piece of text and click Ctrl+Enter. Thanks for helping my blog get better!