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.

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!

Cryptocurrency in simple terms is virtual money that has no physical expression. “Coin” is a unit of cryptocurrency, this word is literally translated from English as coin. How are cryptocurrencies different from regular money? Electronic currencies in the standard sense (for example, rubles, dollars, euros, yuan) are one of the forms of real currency, money issued by states and their central banks. To top up your electronic account with such money, you must have physical, printed banknotes. Cryptocurrency is not issued by the state and has no material analogue. Such money is issued online and is not subject to regulation by countries, their legislation, or other supranational governing bodies.

Anyone can mine cryptocurrency. This process is called “mining” from the English word “mine” and implies the extraction of minerals. To receive the first cryptocurrencies, it was enough to have a computer with special software installed and access to the Internet. Now this process has become somewhat more complicated, since all currencies have a script-defined limit on the number of coins, both per day and the total amount, and for successful mining it is necessary to have increasingly greater power to solve problems of processing blocks of information (transactions).

A crypto coin is, in simple terms, a block of encrypted data, a record on the user’s computer that has a connection with the previous one and information about the transaction.

Such money does not have a centralized storage center, as well as an emission center, and can be located in the wallets of users around the world.

Cryptocurrencies are open source, thanks to which anyone can become a miner, that is, make money on cryptocurrency. Unlike transactions with conventional electronic money, transactions with cryptocurrencies are completely anonymous, which, by the way, has led to the use of cryptocurrencies in illegal business.

Cryptocurrency, as stated earlier, is independent of the control center. It is not produced or controlled by any institute. Thanks to this, it is reliably protected, because all the program code is distributed across the computers of millions of users, and not on a single server. Therefore, counterfeiting, hacking and other types of fraud with cryptocurrency will not work.

Cryptocurrencies also have disadvantages. Thus, each owner is personally responsible for his money; if it is stolen, it will be difficult to prove anything, and there is no one to turn to for help. Virtual money is very volatile, in other words, subject to sharp fluctuations due to various factors. They may also be at risk of being banned from certain countries under threat of prison terms and fines. The difficulty of mining cryptocurrencies is growing, and therefore mining is gradually becoming an inaccessible form of income.

What types of cryptocurrencies are there?

Currently, there are several dozen popular cryptocurrencies.

The founder in this direction was Bitcoin, which in 2009 was sold for a couple of dollars, and by 2017 its price had risen to $10,000. Initially, bitcoins were used mainly in computer games, and the number of miners was small. However, within a year, interest in this money increased significantly due to anonymity, security and decentralization. Today, bitcoins can be bought and exchanged on various exchanges, used to pay for goods and services, and transferred to other users.

In addition to Bitcoin, you can name a whole list of currencies: namecoin, peercoin, litecoin and others. However, according to experts, they are unlikely to achieve such success as Bitcoin in the near future.

Cryptocurrency: how to make money

There are several types of earnings on cryptocurrency.

In simple terms, this is cryptocurrency mining. To receive coins, you need a special farm, consisting of a computer with special software and a powerful video card, or a whole network of such computers.

The cost of the farm is quite high, new networks currently pay for themselves for quite a long time, and constant equipment upgrades are required.

2. Cloud mining

A good solution if there is no money for large investments is cloud mining. The gist of it is that you buy power from other farms; you don’t need your own equipment. Investments pay off much faster, no specific technical literacy is required, you can choose the most suitable one from many different tariffs, it is possible to earn several currencies at the same time. However, on rented farms there is a commission for withdrawing cryptocurrency, such centers are susceptible to hacker attacks, and there are many scammers in this market. Examples of rental sites include hashing24.com, hashflare.io, www.genesis-mining.com.

3. Purchase and resale on the exchange

Cryptocurrencies can be purchased on the exchange. And the essence of earnings lies in its subsequent resale and winnings due to the difference in rates, both during market fluctuations and on different exchanges. The difficulty lies in the fact that the scheme for withdrawing currencies and replenishing accounts on such exchanges is not simple, there are high commissions, you need to devote a lot of time to the process, and constantly monitor the rates. The advantage will be a large selection of different currencies, the starting amount, which can be determined independently, due to the volatility of cryptocurrency rates, you can win up to one hundred percent per day on promising coins, such as ether, bitcoin. Examples of exchanges: bitfinex.com, exmo.me, poloniex.com.

4. Purchase and storage of cryptocurrency

Buying foreign currency is suitable for those who are ready to make investments for the future, and do not count on quick earnings. In simple words, the point of this method is to purchase virtual money at a low rate in anticipation of growth. This option is suitable for those users who are not ready to monitor exchange rates daily, but have the opportunity to invest a certain amount for a period of six months or more.

Video on the topic

Cryptocurrencies are talked about at every turn today. Meanwhile, while some consider them a revolutionary trend in the financial market, and others consider them a global financial bubble that will one day burst, the majority still have a very vague idea of ​​what it is. Let's try to explain what cryptocurrency is in simple words.

The term “crypto currency” itself has existed since 2011 and owes its appearance to the American magazine Forbes, although in fact the first such currency - Bitcoin - was released in 2009. At its core, it is digital (electronic currency), which is produced on the Internet and does not have physical media. This “money” is created using a special cryptographic cipher. at first glance it seems that this is the same electronic money. However, in reality, cryptocurrency is something completely different.

First of all, the difference is that any specialized body that regulates the issue is not responsible for the creation of cryptocurrencies, such as, for example, the US Federal Reserve controls the issue of dollars or the Bank of Russia controls the issue of rubles. Cryptocurrency is based on the blockchain system - a distributed database. The more popular the cryptocurrency, the larger the amount of memory it can be stored. It is created using electronic calculations and is a computer-generated code. The process of creating such code ("mining" cryptocurrency) is called mining and occurs on a large number of computers located in different places. they can even be located all over the world, as is the case with Bitcoin, the most popular cryptocurrency.

Miners come in different sizes. Some people equip entire halls (so-called farms) for this purpose, investing large sums in the purchase of computing equipment. Someone simply installs a special program on their computer and “mines” cryptocurrencies in small quantities. Moreover, anyone with the appropriate knowledge can create their own cryptocurrency.

When we talk about paying with regular money, it doesn’t matter, cash or electronically, there are always intermediaries - payment systems. banks, exchangers, who dictate their own rules. For example, under certain conditions, a bank may block a client’s account or card. Cryptocurrency allows you to do without such intermediaries; in many ways, it was created for this. There is no bank regulating its circulation; it comes from user to user. As a result, the circulation of such units is difficult to track and control, in particular, for tax authorities. Moreover, tracking the transaction itself is not so difficult; it is much more problematic to prove that a particular wallet belongs to a specific person.

The absence of intermediaries has its disadvantages. For example, in the event of an erroneous transaction, it is no longer possible to return the paid amount in any way, except by persuading the new owner. Another disadvantage is the different attitude of different states towards the circulation of such units. some countries seriously restrict transactions with them or even prohibit them altogether. In Russia, the legal framework for cryptocurrencies is just beginning to be created.

To become the owner of cryptocurrency. it does not have to be generated. You can simply buy it for regular money from a miner. In this case, as in the case of purchasing regular currency, the seller will take a commission so that the transfer is profitable for him. Usually, special exchanges are used to buy and sell cryptocurrencies, but there are also exchangers, as well as special terminals where you can dial your wallet number and deposit cash.

There are still quite a few places in the consumer market where you can buy goods or pay for services with bitcoins or other cryptocurrency. Usually this virtual money is used as an investment tool to buy it. and then sell, making money on the difference in rates. the rate, in turn, depends on demand - the more popular a digital currency is, the more expensive it is.

A bubble that will burst at one moment, leaving thousands with nothing, or a revolution in the world of electronic payments - the attitude towards cryptocurrencies today is radically different. Today we hear about cryptocurrencies at every turn, but not everyone fully understands what they mean and how to use them.

What is cryptocurrency - in simple words for dummies

The term became firmly established in everyday use after a publication in Forbes magazine in 2011, where the name “cryptocurrency” was mentioned, in English - crypto currency. In other words, it is a digital or electronic currency that is produced on the Internet and stored here in virtual wallets. There is simply no physical analogue.

When creating this currency, a special cryptographic cipher is used, consisting of sequential hashing and a digital signature. Hence the first part of the word – crypto.

At first glance, cryptocurrency is similar to traditional electronic payment systems. However, the differences between them are actually colossal. And the first is the method of issuing and storing money, which we will discuss later.

But first, about the advantages...

As with any concept, there are also advantages and disadvantages. Let's start with the advantages of cryptocurrencies, and among the main ones we note:

• decentralization;
• direct exchange in the absence of intermediaries;
• transparency;
• anonymity;
• small commissions for transfers, or even none at all;
• not afraid of inflation;
• ease of use.

Decentralization

When creating a cryptocurrency, there is no centralized body that deals with emissions, that is, issues title units, such as the Federal Reserve System in the USA, the Central Bank or the National Bank in the Russian Federation or Ukraine, respectively, when it comes to ordinary money. If we take payment systems like WebMoney or Yandex.Money, they are also owned and controlled by certain organizations.

In the situation with cryptocurrency, there is no such central regulator. They are based on a system - in other words, a distributed database. Depending on the popularity of a particular cryptocurrency, it is stored simultaneously on thousands, or even millions of computers around the world at the same time.

A few words about where cryptocurrency comes from

Cryptocurrency is created using mathematical calculations and is a computer-generated code. In most cases, the process looks like this.

Users send transactions to each other, which are collected into blocks that are sequentially linked and thus confirmed. With each block found, a certain number of crypto coins are issued, which are received by the one who confirmed the block.

Cryptocurrency is created using mathematical calculations and is a computer-generated code. Issued in blocks interconnected by sequential hashing.

This process is called, and those who do this are called miners. Thus, this currency is issued and stored in a decentralized manner.

Anyone can build, figuratively speaking, a mint at home and turn on a printing press, subject to certain conditions. It is enough to have a powerful computer and install the appropriate program on it.

Similar to the gold rush that hit humanity in the 19th century, today the world is gripped by a cryptocurrency rush. Entire mining farms are being created that tirelessly generate new and new coins (coins).

But that's not all. If you really want to create and put into circulation your own personal cryptocurrency. If it inspires trust among users, success is guaranteed.

By the way, it is worth noting that in some cryptocurrencies, all tokens are issued at the start of the system, and are not mined gradually over time. These include, for example, Ripple, Cardano, Stellar and others.

And through classical mining, coins are mined from the following currencies:

• Bitcoin;
• Ethereum;
• Litecoin;
• Monero;
• Dash.

No intermediaries

As a rule, we exchange money (we are not talking about cash in this case) through intermediaries. These could be banks, payment systems, exchangers. They all set their own exchange rules, which can be changed at any time. In any unclear situations, your accounts may be blocked.

In the case of cryptocurrencies, there are no such intermediaries. Here, each user transfers money directly to another user's wallet from anywhere in the world.

Thus, the essence of cryptocurrencies is to eliminate the third party during transactions, that is, intermediaries represented by banks and exchangers. Another nuance is that such transfers are difficult to track, for example, by tax authorities. More precisely, all transactions in electronic cash systems are visible to anyone.

Seeing how much, from which wallet and to which amount was transferred is not a problem. The question is different - linking these wallets to a specific person is not easy. The main goal of this approach is to eliminate fraud during transactions and maintain anonymity.

In the absence of intermediaries, strictly established transaction fees also disappear. You can often transfer money, if not for free, then for a small fee.

Another question is that it is more profitable for a miner to first process those transfers that provide a larger reward. However, compared to the commissions of banks or exchange offices, here you can set the amount as a reward an order of magnitude lower.

What does cryptocurrency look like?

But in fact, nothing. There are simply no physical analogues. It is impossible to physically transfer cryptocurrency from hand to hand. In fact, these are only records of completed transactions. Let's say Vasya transferred 2 bitcoins to Gaucher - this will look like a record in the blockchain about the transaction. And Gosha will have these 2 bitcoins on his wallet balance until he transfers them to someone else.

Cryptocurrency mining algorithms

As already mentioned, all transactions in cryptocurrency systems are encrypted in a special way. Different algorithms are used for this. For Bitcoin it is, for example, SHA-256, for Litecoin it is Scrypt. Their transactions are confirmed using PoW (Proof-Of-Work, proof of work). Novacoin, in addition to PoW, also uses (PoS, proof of storage). Other cryptocurrencies, such as NXT, only use PoS.

Other hashing algorithms worth mentioning are X11, X13, X15, N-Scrypt, CryptoNote, each with its own pros and cons.

How to get cryptocurrency

In addition to the mining mentioned above, when miners receive a commission for generating electronic currencies, you can get hold of coins either by accepting them as payment for goods or services, or for cash on specialized cryptocurrency exchanges. Among the popular ones:

• Bitfinex;
• Bithumb;
• Kraken;
• Bittrex;
• Exmo;
• Poloniex.

You can also purchase digital coins using exchange offices, which will gladly exchange dollars, euros, rubles or hryvnias for popular cryptocurrencies.

There are also so-called cryptocurrency faucets that distribute tokens for free for performing certain actions - watching advertisements, solving captchas. However, you can get a very tiny amount of coins with their help.

How to store cryptocurrency

There are special cryptocurrency wallets for this. They come in many different types:

• In the form of a program for installation on a computer - in this case, your coins are stored on your hard drive.
• As an application for mobile devices.
• Online wallets that can be accessed through a browser. For example, blockchain.info.
• Hardware wallets in the form of physical media, similar to a regular flash drive.

If you buy coins on an exchange, you can keep them directly on the balance sheet of this site.

How can there be no downsides?

If there are advantages, then there are also disadvantages. In the case of electronic cash, it is important to be careful about the safety of the wallet, as well as the password to it. If access is lost, you can say goodbye to your money forever. It is unlikely that it will be possible to restore it.

It is also worth considering the irreversibility of transactions. If you mistakenly transferred money to the wrong wallet, you can return it only with the voluntary consent of its owner.

Among the disadvantages, it is also worth mentioning the ambiguous attitude of different states towards the existence of cryptocurrencies. Some consider them as a means of payment, for example, Japan, others either limit their circulation or completely prohibit any work with them.

Why is cryptocurrency needed?

Cryptocurrencies are a kind of symbol of freedom. Lack of control, transfers directly to each other - such opportunities attract many.

Therefore, given the growing popularity of virtual money, more and more stores in the world are beginning to accept them as payment. Cryptocurrencies are also increasingly used as an investment tool. However, given their increased volatility, this should be done carefully.

What cryptocurrencies are there – where did it all start and what do we have?

The first and currently most expensive cryptocurrency was released in 2009 and is called Bitcoin. It was invented by an anonymous person or a group of people hiding under the name Satoshi Nakamoto. It is with it that the very concept of cryptocurrency is most often associated.

Since that time, a great variety of different electronic currencies have appeared with original and not so original concepts, most often tailored to a specific industry. For example, IOTA for the Internet of Things.

Their number has already successfully exceeded a thousand. Most of them duplicate each other, differing only in names.

Developers are trying their best to outdo each other. This is how cryptocurrencies appear for owners of Facebook accounts (Face), the LGBT community (GayCoin). Others are dedicated to famous people and contain their names in their names - EinsteinCoin, TeslaCoin.

In March 2018, the top 10 cryptocurrencies are as follows:

1. Bitcoin;
2. Ethereum;
3. Ripple;
4. Bitcoin Cash;
5. Litecoin;
6. Cardano;
7. Stellar;
8. Monero.

Most often, new cryptocurrencies are released for specific purposes. If Bitcoin was developed exclusively for transactions and is often called virtual gold, then, for example, Ethereum is designed not only for money transfers, it already contains smart contracts. Decentralized applications are also launched on the basis of its network. By the way, the role of an analogue of silver in the world of cryptocurrencies is assigned to Litecoin.

What is cryptocurrency backed by?

It is worth noting that digital currencies are not backed by anything: neither gold and foreign exchange reserves, nor the economy of a particular state. The only thing that determines their value is demand. The higher it is, the more expensive you have to pay for a certain currency unit. In addition, the creators of certain cryptocurrencies most often set the emission volume in advance, upon reaching which the coins will no longer be issued. For example, Bitcoin has 21 million coins.

Capitalization, price and ratings

You can view the list of the most popular cryptocurrencies on specialized websites. As an example - coinmarketcap.com. Here, in the form of a table, the top most common cryptocurrencies are shown, their price, market capitalization, price chart and other indicators.

Our website also has its own, where you can find out their current value in relation to the dollar, ruble, hryvnia, and view charts.

By the way, in December 2017, the total capitalization of cryptocurrencies exceeded $500 billion. And in January 2018 it completely exceeded the figure of 800 billion. In March, this figure had already dropped to 360 billion. Bitcoin is also in the lead with a figure of 150 billion dollars.

To find out the rates of a particular currency, you should use one of the currency converters available on the Internet. For example, ru.cryptonator.com

Legal regulation of cryptocurrency

Different countries today have different attitudes towards cryptocurrencies. Japan officially recognized Bitcoin as legal tender back in the spring of 2017 and exempted sales from consumption tax. More recently, in Germany they began to treat it as a monetary unit of account.

Favorable attitude towards cryptocurrencies in Switzerland as well. In the USA and Canada they are treated as valuable property, and in Bulgaria they are treated as a financial asset. The UK treats digital money as foreign currency. Iceland prohibits its citizens from buying tokens on exchanges, but, on the contrary, they welcome mining.

Is cryptocurrency banned in Russia? - No. While officials are pondering the eternal question “to be or not to be,” everyone here carries out transactions with crypto tokens at their own peril and risk.

Russia plans to adopt a corresponding law on cryptocurrency this year. In January, the Ministry of Finance published the preliminary text of a bill according to which mining will be classified as a business activity, and cryptocurrencies will not be able to be legal tender.

Cryptocurrency is currently in the so-called “gray zone” in Ukraine. Back in 2017, 3 bills were submitted to the Verkhovna Rada here to regulate this area, but to date none of them have been adopted.

What will happen to cryptocurrency in 2018

What will happen? – Further growth and development. It’s unlikely that anyone will be able to stop this snowball. Some cryptocurrencies may fall into oblivion, others will replace them. The top 10 cryptocurrencies may change - stronger systems will displace those who have stopped in their development. However, digital money will no longer be able to disappear from our lives. Even if individual states ban them. In general, today we are talking more about the regulation of cryptocurrencies, and in 2018 active steps will continue to be taken in this direction.

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.