Bitcoin: what it is and how to make money on it
- by Noah Mckinney
- 3 years ago
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Bitcoin: what it is and how to make money on it
Bitcoin happens to be the most well-known cryptocurrency throughout world. Initially, the term was
used by a narrow circle of people, but after the popularization of blockchain technology and the
explosive growth in the value of digital money cryptocurrency wallet malaysia, many learned about it. The Internet is full of news
about changes in the Bitcoin exchange rate, stories of huge earnings and the prospects for the
development of the currency. But before investing in bitcoin, you need to study the features of the
asset, the advantages and disadvantages, differences from other currencies and ways to make
money on this.
Bitcoin: what it is – explanation in simple words
Bitcoin (BTC) is an electronic user payment system similar to digital wallets and bank accounts. The
main unit for settlements on the network is bitcoin. Digital coins web design and mobile app development, unlike traditional money, are not
tied to the economy of any country or to the central bank. All actions to issue new money, process
payments and create accounts are done by users.
To fully understand the essence of bitcoin, it is necessary to understand the principles of the system,
creating wallets and processing transactions on the network.
A small digression into the system:
Wallets are analogous to a bank or electronic account where money is stored. They use to be
registered making use of special sites or programs.
Transactions happen to be required for transfering bitcoins between wallets of the user. All the
operations places a common pool, which is treated by other members of the system. But a
commission must be paid to confirm the operation.
Miners – that kinds of people who "mine" bitcoins – use to be the backbone of the security and
performance of the system. They use computing power to power the network in exchange for the
rewards they receive. All operations for mining new blocks and processing transactions fall on the
shoulders of miners.
Blockchain is a sequential chain of blocks in which information about transactions is recorded. The
spirit of the technology lies in the point that data use to be stored on several self-governing servers
and in circumstance of issues or failures, the network will remain operational.
Bitcoin: pros and cons
The popularity of the first cryptocurrency is explained by the peculiarities of the technical
implementation of the system, as well as a number of advantages:
Lack of a central authority. All actions to issue new coins and process transactions are performed by
network members.
Security and protection level. To extract new blocks, a proof-of-work algorithm is used, which
requires a lot of computing power. Given the amount of equipment in the Bitcoin network, it is
almost impossible to carry out an attack.
Unlimited payments. The system is not tied to any country or state, which allows you to make
international payments almost instantly with minimal fees.
Low fees. Users are forced to pay a commission for processing transactions, and the amount is set
independently. The higher the commission, the faster the transaction confirmation speed.
Possibility of self-issue. The availability of mining equipment allows you to mine new coins.
