What is cryptocurrency and why is it needed

The cost of one bitcoin is approaching $ 3,000. The Bank of Russia is working to create a national virtual currency. AMD and NVIDIA are preparing to release graphics cards optimized for mining. If you still have no idea what a cryptocurrency is and why there is such a fuss around it, the Lifehacker cards and the BestChange exchange office monitoring service will help you figure it out.

What is cryptocurrency?

Cryptocurrency is a digital currency protected by cryptographic technologies. These monetary units have no physical analogue, they exist only in virtual space.

The term "cryptocurrency" came into use after the publication of an article about bitcoin - a digital currency and payment system. Bitcoin is the brainchild of Satoshi Nakamoto, but what kind of person or group of people hides behind this pseudonym is still not known for certain. Nakamoto presented the concept of a decentralized payment system on October 31, 2008. Its main principles are: anonymity for all participants, protection against fraud and independence from regulatory organizations.

The Bitcoin network is made up of interconnected blocks of transactions. Each subsequent block contains information about the previous one, so that you can build them into a single chain and get information about all previous transactions (but not about the owners of bitcoins). The process of creating new blocks is called mining. In order for the next block to appear on the network, it is necessary to generate a cryptographic signature for it. As a reward, you get new bitcoins. By the way, their emission is not an endless process. It is known in advance that no more than 21 million bitcoins can be created in total.

It was relatively easy to create blocks at first, and lone miners did it too. Over time, the complexity grew, mining required solid computing power, so miners began to unite in pools and mine new bitcoins with joint efforts.

Great. Can it be simpler?

To simplify everything, the Bitcoin phenomenon can be explained using the example of lemonade caps (yes, hello to Fallout fans). Let's say you can't fake these caps, go shopping and buy all the lemonade too: it is no longer produced. The number of lids is limited and is known in advance, so you just have to wander around and look at your feet - suddenly you come across a lid.

Like any limited resource, caps have a certain value that grows as demand increases. The first caps are easy to find, but the further you go, the harder it gets. People have to unite in groups and spend a fair amount of time and effort to find the next cap. They exchange the production for all sorts of necessary things, and many even make stocks of caps in the hope that over time their rate will only become higher.

Why do you need such a currency?

Then, what is the use of ordinary money: it is a universal commodity, which is a measure of value when buying and selling other goods.

There are several significant advantages to cryptocurrency. First, it is not afraid of inflation. If the printing press goes crazy and stamps a crazy amount of rubles, it is logical that this money will be worthless. With bitcoins, such a situation is excluded: remember that their number is known in advance and is limited.

Another plus is decentralization. There is no single center from which the system is controlled, which means that it is extremely difficult to disrupt the operation of this system by forcibly limiting the distribution of currency. The network simply does not have a single owner; it is controlled by users around the world.

The next advantage is anonymity. It is possible to track transactions and see how many bitcoins have moved from one wallet to another, but it is not easy to determine who exactly owns the wallet. Anyone can open a bitcoin account, for this you need the appropriate software and access to the Internet.

Since this is money, you can buy something with it. Or not?

Of course you can. It seems strange that money, which, in fact, does not exist (in any case, we cannot hold it in our hands), has purchasing power, but the fact remains: it can be exchanged for goods and services in the same way as bills or coins that are in your wallet. Bitcoins can even be exchanged for other money - euros or dollars - at your discretion. In many countries, people buy air tickets and gadgets with bitcoins, use them to pay for utilities or a drink in a pub, even Microsoft accepts bitcoins.

Funny story: in 2013, a user of a bitcoin forum offered to exchange his 10,000 bitcoins for a couple of pizzas. Then the deal was quite profitable, but what this lover of Italian cuisine thinks about such an exchange now, we can only guess.

In Russia, due to problems with determining the legal status of cryptocurrencies, the exchange of bitcoins for goods or services is more complicated, so first of all, it is worth considering bitcoins as an investment option. At the moment, the game is definitely worth the candle: the bitcoin rate is growing steadily. The most profitable investments are associated with the highest level of risk, so choose what is more important to you: the opportunity to make good money or complete peace of mind.

How to start a Bitcoin wallet?

Go to the payment system and choose the option that suits you from the list of applications for Android, iOS, Windows, macOS and Linux. The only problem is that such applications can take up too much space, but in this case, there is another way.

You can trust a third-party Bitcoin wallet service, for example. The registration process takes a matter of minutes: you just need to enter your email address and come up with a fairly strong password. In the "Security Center" section, you can link your wallet to your phone number and activate two-step verification to further secure the funds stored on your account.

Where to find the best exchange rate for cryptocurrencies?

In order not to waste time looking for an exchanger with the best rate, use this service that has collected information on the current rates of more than 300 exchangers. Independently looking for the most profitable in such a heap of offers is a task for the infinitely patient. With BestChange, you can determine which exchanger is worth using in just a couple of clicks.

To find the best rate, select the currency you have and the one you want to exchange it for. The service provides a list of exchangers that carry out transactions with these types of currencies, you sort them by rate, compare and choose. When it is not possible to exchange currency directly, a double exchange will help out - here the transit currency comes to the rescue.

If you are not happy with the current state of affairs, set up alerts. As soon as the course is close to the mark you are interested in, BestChange will inform you about it by email or Telegram. You can study course fluctuations in advance from an hour to a year.

For those who are afraid of running into scammers, reviews about exchange offices will help. Reviews are collected in a separate column, red - negative, green - positive. When you hover the cursor over the icon to the left of the name of the exchanger, a window pops up with brief information: work experience, country of origin and the amount of reserves.

If you want to buy or sell currency at a profit, this is the first service that you should turn to. On June 19, he turns 10, over the years BestChange has become, perhaps, the most convenient and thoughtful resource for finding exchange offices. Only proven and reliable exchangers, the ability to follow the slightest fluctuations in the exchange rate and a quick search for the most profitable options are a reasonable choice for those who value their time and money.