Bitcoin for dummies: what is, benefits, and how to use
Many bitcoin users consider the virtual currency as an effective investment tool. Numerous real-life examples demonstrate the opportunity to profit up to 25% per week if to choose a convenient time when the price trend is increasing rapidly. In this regard, the interested people have become interested in the cryptocurrency and the ability to capitalize on it. Try to eliminate “ignorance” and explain what is bitcoin for dummies how you can use the currency to their advantage, as well as cover some other aspects.
What is a bitcoin
It is a currency that exists only online, and decentralized payment system. The funds belong only to their users. The Creator of the currency is a developer (or a team) with the alias Satoshi Nakamoto. The project started in 2009. Was later created many more virtual currencies, functionality which is not much different from bitcoin, so focus on it.
What’s different about cryptocurrencies from a conventional (Fiat) money:
- Decentralization. There is no single body managing the system, which operates bitcoin. In the case of Fiat means there are Central banks and other organizations.
- Lack of material support. The value of crypto signs depends on supply and demand. They can be associated with precious metals, the demand growth which increases their price.
- The total number of tokens is limited to 21 million coins, the issue is regulated by code. According to calculations, the money will produce up to 2031, and their rate will only increase.
- Free money transfers. Commission paid only to increase the priority of a transaction.
- Anonymous electronic wallets, no restriction on their number for a single user. However, the bitcoin address (unique account number) known only to the owner.
Like any other currency, bitcoin has some disadvantages:
- Irreversibility of transactions. If the funds were sent mistakenly, return they most likely will not work.
- Relative complexity. People are not accustomed to the use of online technology, it is not easy to understand the complicated system.
- Risk of being banned. The governments of some countries have a negative attitude to anonymous payment systems.
Ways to profit
Earn virtual currencies in two main ways:
- Mining – the production of coins for solving complex algorithmic problems with productive use of computers. The essence of the task is to verify the authenticity and integrity of transaction data. For their execution miners get rewarded with bitcoins. This caused the emission of coins.
- Trade: speculation on the course and investing (buying coins). The first method involves working on a special online services (exchanges), and the second is the purchase of virtual currency and the expectation of the growth rate.
How to buy bitcoins
To obtain and use the virtual funds, you must first create your wallet. He, as mentioned above, are assigned a bitcoin address that identifies a specific user. Initially the account will be 0 BTC. You can recharge it using the usual currency in an exchange.
Another option for obtaining bitcoins – Forex-exchange. However, there are risks of loss of funds resulting from a successful trading, so keep large sums of money on such online services as btc-e and other not recommended.