What are bitcoins and how to store them

What is bitcoin

It all started in October 2008, when the site bitcoin.org there was a document describing the mechanism of distributed cryptocurrency open source, dubbed bitcoin.

The basis for the transaction has become blokcheyn technology, which is a database that stores all ever committed transactions in the form of publicly available blocks. Special mathematical algorithm connects the blocks with each other and stores on the participants devices system, not allowing to change from the outside, which provides protection from hacker attacks and increases safety system.

Cryptocurrency - this is only the first successful application of blokcheyn technology capabilities that are much wider than the creation of a secure means for the exchange between users.

Transaction need not be connected to finance. For example, all people interact with each other can be encapsulated in the legal transaction. For such a system does not need employees, it will not cause disputes, not create opportunities for fraud and can occur almost instantaneously.

The first working version of the Bitcoin became available in 2009 and was used in a relatively narrow circle of geeks and programmers. Price per bitcoin at that point was about 0,001 dollars. By 2011, the price is equal to that of the dollar price. Over time, the rate continued to rise. The technology has attracted more and more new users, and many economists have estimated its prospects. A year ago, a bitcoin was worth about $ 600, now it is the price is about 2500 dollars.

How to earn bitcoins

The important role played by miners in the functioning of the system. They create and support new blocks of transaction records. The process of mining It named by analogy with the mining and requires solving complex mathematical problems, so miners use powerful computing resources on a specially equipped computers, called farms.

For each block created they receive a share of the commission from each transaction and system of reward. The complexity of mining is automatically adjusted every two weeks depending on the total number of emerged during this time block. It requires powerful hardware to mining revenue. Typically, the computing power of graphics cards are used for this, but now because of the high demand the price is greatly increased, which reduces the time to value and increases the complexity of mining.

So do not rush purchased graphics cards. Spikes in the field - a common phenomenon. If today in the wake of HYIP someone buys a video card for 50 thousand rubles, it is possible that tomorrow he will quickly sell it on Avito 20 thousand.

What are the alternatives to Bitcoin

Engage in bitcoin mining is relevant only in an industrial scale with the use of special equipment. Miner-lovers have long switched to a more simple and young cryptocurrency that massively began to appear with increasing popularity of bitcoin.

All alternative cryptocurrency created on the basis of existing algorithms, called altkoynami. Each of them has its own unique features and solves specific tasks.

Litecoin

Following after Bitcoin digital currency became laytkoyn (Litecoin). He has been thought to create an analogue of silver on the market cryptocurrency in addition to Bitcoin, which is associated with gold.

Laytkoyn - advanced copy of the first cryptocurrency with minimal cosmetic changes. Key features: improved algorithm calculation, which does not offer clear advantages to owners superproductive equipment, putting them on a par with ordinary users, as well as high speed transactions. Laytkoyna price currently stands at about $ 40.

Ethereum

Ethereum (Ethereum) - a platform to create a decentralized online services based on blokcheyna. Unlike other cryptocurrency, the authors did not limit his role installments, and proposed as a means to share resources or the registration of transactions with assets using smart contracts.

Smart deal - electronic algorithm that describes a set of conditions, the implementation of which entails some of the events in the real world or digital systems.

To implement smart contracts require a decentralized environment completely eliminates the human factor, and for transmission costs need cryptocurrency.

Zcash

Relatively young cryptocurrency. Its characteristic feature - an absolute guarantee of anonymity. Due to the nature of Bitcoin all the information about the movement of funds between purses recorded and available for everyone, it creates a problem with anonymity.

Thanks to algorithms Zcash transactions conducted using this cryptocurrency leave no data on that from what happened purse cancellation, transfer size and the address of the recipient's purse. The information is completely hidden and can only be released at the request of the parties.

How to create and replenish bitcoin wallet

This can be done online blockchain.info.

When registration is better to specify the actual data that you have always been able to restore the account and money stored on it.

Do not forget to take care of security, snap-mail, include two-factor authentication and record the passphrase to recover.

There are several ways to fund your wallet. The most obvious - buy cryptocurrency with friends or acquaintances, paid directly by any convenient method.

Be careful when selling or buying bitcoins from the hands of strangers. Cancel payment is impossible, and legislative regulation in this area does not exist.

If you send money to the fraudster or make a typing error in the address, to recover the funds will not work.

If you are a pioneer bitcoin traffic in your environment, you can buy the currency at the exchange. One of the most convenient for shopping in Russia - btc-e.nz. It does not require the identification and allowing top-up using familiar e-wallets.

You can also use proven exchangers that work with cryptocurrency:

• xchange.is;
• exmo.me;
• ALFAcashier.com.

Buy or exchange altkoyny possible to kriptovalyutnyh exchanges. The most famous of them - Poloniex. The easiest way to exchange one currency to another through service shapeshift.io.

For storage, there are also alternative purses, e.g. BitPayAlthough it is not the safest way to store a large volume cryptocurrency.

How to securely store cryptocurrency

The most reliable method - cold storage. Here are some of its varieties:

paper wallets

Paper purse - one of the easiest and most popular methods of cold storage. Creating such a purse involves generating bitcoin address and the passphrase is offline and record them on any carrier, which is not connected to the network.

You can record a couple of keys on a sheet of paper, which is then put in a safe or deposit box. When you decide to spend bitcoins to the above address, you will need to enter your passphrase in the program-purse, which you use.

Multisignaturny method

This method is to create a wallet that requires more than one key for the transaction. Companies can assign the current number of keys, as well as the amount required for the transaction.

For example, the company produces five keys and distributes them to different people, distributing credentials, and then assigns the necessary for the accomplishment of the transaction number of keys - three. As a result, none of the participants will not be able to manage the resources individually, and to confirm the transaction required the keys at least three people.

hardware purses

Now this method is the most popular among users. Information placed on small devices, resistant to moisture and viruses that can support multisignaturny storage method. They are suitable for a digital currency, have a backup function and QR-camera. An example of such a device - Ledger Nano S.

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Bitcoin course subject to jumps. It is formed from the existing supply and demand, and players with large assets may temporarily affect it. rate jumps happen quite often and will happen in the future, but in the end there is always the price correction.

For the current exchange rate cryptocurrency can watch online coincap.ioAnd on our websiteBut the main news and the actual course of basic coins, you can also monitor their forecasts for prices in the next two weeks.