What you need to know about cryptocurrency: answers to the most frequently asked questions

What is bitcoin?

In fact, this currency, which is guaranteed by the release of the algorithm. Terms of his work (as DNA or the constitution) in advance and do not change were created. Behind it is not necessary to separate the company or person who can steal all the money. The best comparison for the Bitcoin - a digital gold.

Bitcoin - a decentralized, fully transparent system, and each of its members to supervise the execution of the rules everyone else. It does not intersect with the banking system.

It is bitcoin pyramid, if he so quickly grows and falls?

Not. This is an asset with a fixed supply, so the price is very sensitive to the rise or fall in demand (even more than, for example, oil).

How to make money on the Bitcoin?

If you believe that it will grow, then buy and wait. More can be Main.

Did he grow up?

It depends on many factors. Now the demand for bitcoin mostly speculative. People believe that it will grow, and invest a percentage of their savings. But bitcoin already useful in a real (but gray) economy, for example in international remittances, which were originally larger commission. Also part of the money from offshore jurisdictions flows into bitcoin, because it is anonymous and it is easier to use. Enable and disable states, regulation of stock exchanges will definitely affect the potential bitcoin exchange rate.

What is the Mining and whether to invest in it?

Mining - is the process of confirming the transaction. They can deal with each. The purpose of mining is to ensure the reliability of the system. Bitcoin is designed so that those involved in the mining, earn bitcoins. Mining requires a lot of calculations and, accordingly, the special equipment. Earning power is directly proportional to the latter. To capitalize on mining in general, it is possible, if you have cheap electricity and you perceive it as a job.

What is blokcheyn?

This technology matching database between parties who do not trust each other. A feature of the database is that it:

• only works on adding data;
• It keeps the history of changes;
• uses cryptography to ensure the stability;
• kept by each participant.

To reconcile changes (transactions) algorithm is used consensus. Such algorithms are vast.

How does the bitcoin and blokcheyn?

Blokcheyn - a database of all bitcoins transfers between accounts. Blokcheyn looking at, you can see how many bitcoins rests with each account. Bitcoin uses a consensus algorithm Proof of work.

How at risk are those who bought bitcoins?

The first to lose them due to theft of keys. Owning Bitcoin - the same thing that to know the digital signature for the transaction. Keys can steal a virus, you can lose a banal phone bitcoin wallet, or your computer may crash. If you store your bitcoins on the stock exchange, then it can crack or exchange owner can simply disappear. Due to the fact that the accounts in Bitcoin are anonymous, there is no way to recover stolen.

What is Ethereum (Ethereum)?

This, in essence, a decentralized computer for its execution and programming language environment. In it, by analogy with Bitcoin is also a currency (ether), used to perform the operations of payment (CPU cycles). You can let your assets on top of it, and to enter into contracts on their behavior.

Why ether now so wildly growing?

There are several reasons:

1. Banks say they have experimented with it.
2. People believe that all of the assets (cash, stocks, and so on) will be produced on it and, consequently, the demand for currency will grow strongly.
3. A lot of startups spend ICO on Ethereum, which dramatically reduces the ether market supply and increases demand.

And what is a ICO?

The term ICO (Initial Coin Offering) was formed by analogy with the IPO and means presale startup of its own currency. This currency can have different meanings, but most often it is necessary to pay for the actions of users on the platform, which promises to build a startup.

Why startups collect tens of millions of dollars, spending ICO?

There are several reasons:

1. ICO - this is a relatively simple way to invest in a startup.
2. People believe that a start could be another Bitcoin or Ethereum, and they want to invest, yet cheap.
3. Historically, the currency sold through the ICO, only grew.

Is the current state of affairs with the ICO bubble?

Definitely. ICO principle itself will lead to positive changes in venture investment, but now people are indiscriminately buying everything. Everyone is looking for faster ways to make money. Those who earned bitcoins, put into Ethereum, who earned Ethereum - invest in ICO, hoping for a rapid growth. The pyramid collapses when:

1. Startups massively start selling funds collected in the ether. they keep them now, as the course is only growing.
2. People will understand that startups can not create those products that promise.
3. Intervene State (now the majority of ICO outside or on the margins of the law).

What else are cryptocurrency?

A lot of them, but generally they are divided into the following types:

1. Completely decentralized.
2. Digital assets secured by someone or something.
3. Doubtful currencies that are issued and controlled by a single company and does not provide.

Should I create my cryptocurrency?

Only if you know what you are doing.

Answers to the questions sought to accessible language, the language does not claim absolute correctness. I express only my opinion.