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What is Bitcoin?
Really, what is Bitcoin? Back in 2009, an unknown programmer (although it could be a group of programmers) under the pseudonym Satoshi Nakamoto has created a fundamentally new virtual money - Bitcoin. It was he who coined the name of the currency, and invented alhorytm. Although six years have passed, but until now no one knows where it came from who he was and even how to actually his name. After creating algorithm of cryptocurrency, the method of its production, he also introduced a way for storing this cryptocurrency so-called Bitcoin - a purse that is placed on your computer.
What are the main functions of cryptocurrency in general and Bitcoin in particular, and whether they differ from the usual fixed for all the money? Cryptocurrency fully comply and can perform all of these functions, namely to be a medium of exchange, a means of preserving and unit of account. Meanwhile, bitcoin is cryptocurrency.
Here is how Wikipedia describes the Bitcoin and cryptocurrency in general: cryptocurrency - a type of digital currency based on asymmetric encryption and the use of different cryptographic methods of protection, such as the Proof-of-work and / or Proof-of-stake. Its functioning is decentralized and takes place in a computer network.
Bitcoin has no central management and issuers. Transactions digitally signed between the two nodes are sent to all nodes of peer-to-peer network, and the data on the movement of funds stored in a distributed database. To prevent the possibility of spending other people's money, or the use of their money twice used cryptographic methods.
Short cryptocurrency it’s a money what ideally suited for the operation of the Internet, or in such networks, if they are created. Examining the topic cryptocurrency worth mentioning one more digital currency which has recently become popular. It - Laytkoin. At its core, this is the same cryptocurrency, except that the algorithm of its transactions is slightly faster from transaction Bitcoins. To draw an analogy with medieval Europe in which cash settlements bimetallism prevailed, the bitcoin and litecoin comparable to gold and silver. As a medium of exchange and crypto bitcoin and litecoin not lonely, today they already comprise dozens of different exchange quotations.
Concluding this short review, I note that cryptocurrency has the opportunity and potential to become the currency of the future. Especially if the global economic system will continue and evolve. Time will show.
Bitcoin place in the modern financial system
In the past, people used the money as a variety of items and products. In the course were and unusual rocks and shells, and teeth of killed animals and their skin. All that is used as a means of payment is impossible to enumerate, since at different times in different regions, they differed significantly.
Modern monetary system, which we use today, was formed in the Europe of the sixteenth - seventeenth century. The main difference between medieval and modern is that whereas in the calculation of bimetallism prevailed, giving unrestricted access to treatment, like gold and silver coins. Over time, the European countries have switched to using only gold - the so-called monometallism who introduced in England in 1816.
Life moves forward and the gold just faded into the background, giving their function to regulate cash -SDR (Special Drawing Rights). At present, there is the need to create a world currency due to the need to optimize all financial transactions. The creation of such payment instrument through which could be expressed in any other currency.
What are the characteristics of the currency necessary for it to carry out the functions delegated to it. First of all, it's high stability and liquidity, and most importantly spread it around the world. What currency of today meet these requirements? Only the US dollar, although it is not regulated and is not able to provide controlled payment transactions.
That's it for this, given the way the development of a modern economy, on the first place - crypto currency as the fittest for financial transactions. And so it becomes tender - Bitcoin. Its great advantage is that it is decentralized, independent currency. And today Bitcoins can be exchanged for any other currency in the special services in the Internet or with the help of the payment system Web Money. To do this, you only need to have a Bitcoin - a purse. It should be remembered that all operations cryptocurrency are anonymous, have no emission centers, and all transactions are carried out only in a digital format.
We can only add that one of the qualitative characteristics of Bitcoins have no control and it is not yielding to the pressure of political circumstances and the central banks of the world. Only the supply and demand form the course Bitcoins. And despite the fact that in recent years dramatically increased the number of different crypto currency, first place belongs to the Bitcoins.
You want to make money on the Bitcoin – Faucet? What could be simpler
Since its introduction, it was necessary to mine Bitcoins. In the beginning, it was only mining - activities for the next generation unit. To do this, use the power of your computer that is working on solving specific mathematical problems. For this miner received a reward of cryptocurrency - Bitcoin.
But over time, the complexity of the problems risen, leading to an increase in the effort to mine Bitcoins. And if at the beginning of the home computer for this fully enough, now it requires much more power. Mining is carried out on the high end gaming video cards and even a dedicated device for the production of Bitcoin.
Imagine the power of a single graphics card Radeon HD +7990 gigahash was 1,2 per second and consume hundreds of watts of power, while the system is in use today ASIC Red Fury able to issue 2,5 gigahash per second, and that the consumption of only 2,5 watts.
Over time, there were a group of diggers, so-called "pools", where users provide in common use power their own computers where each received a fee depending on their contribution to the common cause.
The next step was the creation of the so-called Bitcoin - farms, the largest of which is located in Hong Kong. At the time of launch it was producing 26 Bitcoins per day.
As a result of this award for the creation of each new unit is gradually reduced.
Is there another way to mine Bitcoins cryptocurrency and including? Yes there is. It cryptocurrency or Bitcoin Faucet - passive and without expensive way to get crypto currency. How does this happen? You go to the appropriate site and perform certain actions. This may be the introduction of "captcha" and participate in a game or lottery. For this you get a certain amount of "Satoshi" (this is the smallest particle of Bitcoins equal - 0.00000001 BTC)
In order to make a profit on the Bitcoin-Faucet, you need to have a Bitcoin wallet, or if you also collect other crypto currency, the purse for this currency. When you got your wallet, you can start making "Satoshi". To do this, go to the site hosting the Bitcoin-Faucet, enter the address of your Bitcoin wallet, enter the "captcha" and forward…
The Consequences of Civil War in Bitcoin
Almost a year has passed since the time when Bitcoin became a stumbling rock for the crypto-currency community. At the moment an uneasy truce continues between the fans of multiple blockchain apps, Ethereum platform, and various projects of big banks that financed the creation of their own blockchain projects.
The big Bitcoin discussion started with the publication of the article series by Gavin Andresen in spring 2015, who advocated the increase of everyday transactions to 200 thousand. However, his arguments met frantic opposition within the community. After some time a small confrontation grew into massive conflict.
In view of these people, who had stood at the origins of the crypto-currency, suffered. Because of the aggressive critics and real crackdowns on his point of view Mike Hearn changed the workplace to R3. Gregory Maxwell, in his turn, felt heavy critics from the followers of the opposite camp, he was almost named Judah. Blocksteam in their lips sounded like swear-word.
Right now the discussion is on the level when any reasoned point of view can become too subtle. Majority keeps to the neutral position. Twitter struggles calmed down as well. One may think that peace has come, all arguments have been already sounded, and everyone is right in his way.
The size of blockchain at the moment is around 60 GB according to the resource blockchain.info, increasing for 5 GB during the last month. If such tempo preserves, it will make 50 GB per year. Such quick grow will increase the nodes expenses.
The compromise was reached with the help of Segwit, which should increase current transaction capacity to 1.6-1.7 MB with the additional hard fork – to 4 MB in 2017 year.
The time has come to bury the hatchet and unite again. The demand for more Bitcoin programmers exists. The loss of anyone will make the community worry again and again. So one should round out rough corners and grow the trust of users to crypto-currency. The multiple views are not a problem, since the truth is born of arguments. Another point of view is not the reason for ostracism.
Bitcoin Classic has at the moment nearly 6% of the general volume of Bitcoin-hash and develops the ideas of the SPV, when the Bitcoin Core experiments with the Segwit ideas. It is a new alive ecosystem, where new ideas and creative potential can make progress.
During the last years the Internet attracts users by more and more various ways to earn within the network. To count them, one probably must write a dozen of volumes. Among them, there is one method that doesn’t require a call for money, a lot of efforts and bright intellectual abilities. I mean Bitcoin faucets, where free coins are distributed.
How one can earn Bitcoin? Let’s look into main options:
- Bitcoin mining. You have to install specific software on your computer, and you have to buy powerful hardware. After that, you can start mining. However, the times when it was profitable to mine at home, have passed – right now Bitcoin appears too expensive.
- Open an exchange point and take commissions for transactions. To earn Bitcoins, you have to invest a sufficient sum at first.
- Stock market game. It works with the analog of the well-known Forex, but here the main item is Bitcoin. To use this method, you have to understand the main principles of stock market functioning and possess strong analytical skills.
- Storage. You can buy a certain amount of crypto-currency and store it for some time, waiting for its possible rising in price. Experts make prognosis that Bitcoin will only grow in price, however, it is not so straightforward, and there is still a risk to lose everything.
- Trading. A perfect way to receive earnings – sell items for Bitcoins in the online market, for example. If you invest in advertising, you have good chances to earn from crypto-currency lovers.
- Lotteries and casino. Recently, many gambling resources have appeared, which use Bitcoin and Satoshi as stakes.
- Using Bitcoin faucets. This method is especially popular among newcomers.
The principle of Bitcoin faucet work is quite simple. You just have to visit a website, enter your Bitcoin wallet, click on the button like “Receive Reward” and type captcha to ensure you are not a bot. If we get things straight, the user receives free coins for watching the advertising. The faucets owners receive their earnings from the ads placement, and the part of their earnings are distributed among users for the visiting of their website.
There are also other types of faucets in the network. They count Satoshi as well, but they are basically Bitcoin generators. They work on the principle of a counter, the peculiarity is that every minute the number of stored Satoshi increases, but the speed of their storage, on the contrary, decreases. This means that the best time for getting your earnings is at the start of new counting.