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What is bitcoin and is it possible to make money on it?

22.03.2021
What is bitcoin and is it possible to make money on it?

Bitcoin is a digital currency. You cannot hold it in your hands since the coin doesn’t physically exist. People pay with cryptocurrencies in the same way as with bank cards.

Operations are recorded on the blockchain - a special register. It can be accessed simultaneously on all computers related to the bitcoin network. Everyone can see the history of cryptocurrency transactions for the entire period of its existence. It’s impossible to rewrite information, technologies are well protected from hacking.

How do I get bitcoins? Unlike ordinary money, cryptocurrency is not issued by the state - new coins appear in the process of how the ASIC miners serve the needs of its payment network. In Russia, bitcoins have not yet been legalized, but they have not been banned either. There is only the term “digital assets” in the law. Thanks to this, cryptocurrency can be bought from individuals, in online exchangers or on stock exchanges.

Bitcoin allows you to transfer money using a pseudonym, and without including banks in the process. The location of the transaction participants doesn't matter either. Today, a digital asset can be used to buy plane tickets or make a donation. The system won’t reveal the owner of the wallet, but all transactions are recorded on the open blockchain.

Since 2015, bitcoin has greatly increased in price: from $200-300, its value has grown to $50,000. Interest is growing thanks to those who invested at the dawn of the cryptocurrency - in 2009, a Norwegian student Christopher Koch bought bitcoins for $24. He remembered the investment after 4 years, when his fortune reached 885 thousand dollars.  And he bought an apartment in Oslo with a part of invested money.

This is largely due to the fact that he didn’t forget the password for his wallet. It is bitcoin wallets that are used to pay for goods and services. They store digital keys required for transactions. If you lose your private key, your money will be lost forever.

Online exchangers buy cryptocurrency at a lower price than the average price, and sell at a higher price. On many platforms, bitcoins can be bought using rubles or dollars. If the seller agrees to the deal, he “freezes” the required amount. When the opponent transfers rubles to him, he sends bitcoins to his wallet. Transactions take about half an hour on average. It should be borne in mind that for large amounts the commission is less. And you can negotiate individual conditions with exchangers.

There are also exchanges - online platforms for trading cryptocurrency, where cryptocurrency sellers and buyers cooperate. If there are more sellers, the rate falls, and in the opposite case, it rises. When choosing a website, you should pay attention to two points: the currency selling rate and the money input system.

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