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What Bitcoin?

Bitcoin is the first cryptocurrency that has become the main one for new opportunities and numerous projects. Blockchain technology has been able to ensure the anonymity of transactions in the digital world. Users also received an ultra-reliable tool for conducting transactions.

What is Bitcoin

How Bitcoin (PTS) came to be

The idea of creating digital money began to develop with the advent of non-cash transfers. Such payments were always accompanied by the exact details of the sender and recipient. But the creator of bitcoin considered such a feature of transactions a disadvantage and wanted to ensure anonymity.

This goal was difficult to achieve, since it was necessary to achieve the simultaneous fulfillment of two conditions:

  • information about both parties of the transaction must be confidential;
  • third parties should be able to view the payment information to confirm the transfer.

The first protocols of the bitcoin digital currency appeared in 2008. The real name of the developer remains unknown to this day. But this person (or groups of people) is hiding under a pseudonym Satoshi Nakamoto.

Cryptocurrency works on the basis of blockchain technology. It is a chain consisting of special digital blocks. The first element of this chain was created in 2009. At the same time, the creators published an electronic wallet software for storing bitcoins. And after 2 years, BTCs began to be exchanged for real money with the help of special services.

How does BTC mining work?

The process of generating new bitcoin blocks is called mining. It is reduced to a series of calculations to find a hash (the result of data processing) with the specified properties. To form another block, you must first find a solution to a special mathematical problem and as a result get a hash - a 64-bit number. It is calculated using special equipment, such as video cards.

And the users who participate in this process are called miners. It is not known which of them will be able to find the desired value. But if the miner can get a new block, he will receive a reward in the form of BTC coins.

Another way to earn money on bitcoin mining is to check and approve (verify) transfers of other users. For such a service, miners receive their commission.

What is Bitcoin

Current Bitcoin Status

Today bitcoin serves as an unofficial world currency, being an example of a competent implementation of the idea of avoiding control and ensuring anonymity. Technology Blockchain also has great potential, as it allows you to create various applications that simplify and speed up a variety of processes.

However, many governments do not allow the use of BTC as a full-fledged means of payment. In some states, the authorities allow you to store cryptocurrency and transfer it to other persons. But at the official level, it can not be used to pay for products, equipment or services. The main reason for this ban is the anonymity of transactions and the lack of control over the processes in the blockchain system.

Any state is aimed at controlling financial activity and taxation within the country. But if it is not known who sent and received digital money, it is difficult to understand who needs to be checked for compliance with the tax code. Plus, various illegal organizations can finance their activities inside the country. The government doesn't like that either.

On the other hand, the idea of digital money is interesting to government agencies, since the blockchain greatly facilitates all processes related to payments and even logistics. Therefore, some countries legalize cryptocurrency. For example, in Germany and Japan, it can be used to pay for goods and services.

There are also many countries where it is allowed to invest money in BTC, store cryptocurrency, exchange it for ordinary money and transfer coins to other users.

In addition, many states choose an alternative option – the creation of a national cryptocurrency issued by Central banks. Often it is an analog of an existing monetary unit. For example, digital yuan or euro.

National banks are constantly monitoring trends related to digital assets. This way of working with finance and data in general has significant potential.

Why the bitcoin exchange rate grows

At first, it may seem strange that the BTC is becoming more and more popular, despite the fact that it is impossible to use it as a means of payment in most countries.

But there are a number of reasons why users around the world invest in cryptocurrency:

  • Protection of savings from inflation. The maximum number of BTC is limited. A total of 21 million coins can be issued. And by the end of January 2021, more than 18 million units had already been produced. And the last block will be created around 2140. This approach to the production of BTC allows it not to be exposed to inflation. For this reason, if you invest money in bitcoin, your savings will not devalue every year.
  • Anonymity. The BTC blockchain is designed in such a way that when transferring coins, both the sender and the recipient remain unknown. There is only information about the wallet, but the identity of the owner is not disclosed. Many users and business representatives want to stay in the shadows by making certain payments. Bitcoin provides them with this opportunity.
  • Decentralization. Central banks can influence the state currency. But the bitcoin blockchain works at the expense of the computing power of miners from various countries. That is, there is no central control point. Therefore, governments do not influence the cryptocurrency or manage the work of the blockchain.
  • Fraud protection. Information about all transactions is recorded in the blockchain network. For example, if someone received 10 BTC from another user, a record of this transfer will appear in the distributed registry. You cannot change or delete such a record, it is saved forever. It is also impossible to hack the blockchain, because for this you need to have equipment that exceeds all the miners combined in terms of computing power.
  • High volatility. Here we mean strong changes in the price of the BTC within the day, week and month. Professional traders earn big profits on such jumps in the coin value. Each change in bitcoin quotes on the crypto market can bring significant income.
  • Liquidity. Bitcoin is easy to buy and just as easy to sell. Operations with it are not a problem, since a large infrastructure has already been created – many different services. Not all assets on the crypto market have the same high level of liquidity.

As a result, bitcoin has become one of the best tools for earning, storing funds and conducting anonymous transactions.

Bitcoin price changes from 2009 to 2021:

What is Bitcoin

How the cost of BTC affects the video card market

Bitcoin is already expensive, and its price is steadily going up. For this reason, a large number of users are trying to mine it. But if earlier it was possible to use an average PC to create blocks, now it will not have the required level of computing load.

Today, powerful video cards are used for the production of BTC, combined in one system - a rig. Some miners try to collect it at home to mine coins on their own. But more and more often you can find information about large rooms filled with video cards. The more machines work on performing the necessary calculations, the faster they find new blocks.

All this led to a massive purchase of video cards. Some of the best solutions are the latest generations from brands such as AMD and NVIDIA. And due to the steadily growing demand, their cost is rapidly going up. For example, the flagship model from NVIDIA - GeForce GTX 980 Ti in 2015 could be bought for $650. And one of the popular options for 2021 – GeForce RTX 3090, will cost $2000 and above. Of course, manufacturers see an over-demand for mining equipment and try to make the most of it.

On the web, you can find special formulas that allow you to determine the possible increase in the cost of video cards, taking into account the increase in the bitcoin exchange rate. The situation is further complicated by the fact that in addition to miners, video cards are also bought by professional gamers, whose number is also constantly growing.

Over time, you will have to buy even more powerful equipment due to the halvingprocedure. We are talking about the process of cutting the reward for the extracted block in half. According to the idea of the developers, halving is performed after the extraction of the next 210,000 blocks - about once every 4 years.

Today, the reward for 1 block is 6.25 bitcoin. Before that, it was at the level of 12.5 BTC. After the next halving, you will need to perform 2 times more calculations to get 6 bitcoins. This will require significantly more powerful equipment than what is currently being used.

Alternative to video cards

More and more miners are moving away from using video cards, choosing ASICs. This is the name of special integrated circuits placed in a compact installation. They are initially created only for cryptocurrency mining and have no other functions.

An ASIC miner is a more expensive device compared to a video card. Besides, it is easier to provide reliable cooling for GPUs. Therefore, beginners rarely start with ASIC. At the same time, they are easier to maintain due to their compact size. Therefore, it is worth choosing this option for those who have the means to organize a full-fledged ASIC farm.

If you want, you can put your device's resources at the disposal of a special server. This method of mining BTC is called a mining pool. Such pools combine a large number of users who have connected their equipment to the server. As a result, calculations are made due to the total work of all processors. If you manage to get a block, the reward is also distributed among all the miners, depending on the capacity provided.

Some users opt for cloud technologies. In this case, remote miners in industrial data centers are used. They can be rented for a convenient period of time. But it is necessary to assess the risks correctly. First, cloud services take a part of the extracted coins, which is why such mining can be unprofitable for the client. Secondly, they can simply turn out to be scammers or disguised ponzi schemes. In this case, the user can also not expect to make a profit.

Another option is to rent a virtual server on which you can install mining programs. But in this case, you need to have a fairly high technical knowledge. Because not every remote server has enough power to mine Bitcoin. And those that have the necessary characteristics can simply be unprofitable, since the cost of renting them exceeds the profit from mining.

Open Source bitcoin

The creators of bitcoin did not close the possibility of using the source code. And there are many sources where it can be found. This allows people to develop new products based on it.

Bitcoin was the first virtual coin on the blockchain, which had no analogues at the time of its creation. And this decentralized technology cannot be appropriated by anyone – it belongs to everyone. As a result, BTC has become a kind of base for launching other cryptocurrencies with new features, the number of which is constantly growing.

A good example is the Litecoin cryptocurrency. The blockchain of this coin is based on the Bitcoin protocol. Today its market capitalization exceeds the mark of $20 billion.

Another striking example of a successful crypto project is Ethereum, which is built on a new-generation blockchain. The developers have given it new properties, implemented the ability to create tokens, smart contracts and decentralized applications. Today, this cryptocurrency is the second most popular one. And its market capitalization is $450 billion.

At the same time, Bitcoin is not only the basis for many crypto projects, but also remains the main digital asset on the market. If BTC becomes more expensive, the entire cryptocurrency market also grows. When its value drops, the prices of altcoins go down.

What is Bitcoin

BTC Trading

There are two main ways to make money with Bitcoin:

  • buy and hold until the price increases significantly;
  • trade in the market, making a profit on fluctuations in price.

In both cases, the investor earns money by buying the cryptocurrency low and selling it high.

The difference is that the first option requires a long wait – it is a long-term investment. This approach is often used when you want to save large amounts. Investors buy coins to transfer their funds to secure digital assets. For long-term storage of BTC, it is better to use so–called cold wallets -devices that are not connected to the Internet.

The second option involves the constant opening and closing of positions in the market - active trading. If you use the right strategy, then this way you can earn serious amounts.

There are quite a few Forex brokers that provide the opportunity to trade cryptocurrencies. Almost always, a novice trader has access to a training account that uses virtual coins. This option is good because the introduction to the market takes place without the risk of losing money.

The price of BTC can change by 10-20% or more per day. Transactions are opened for both the growth and fall of bitcoin. That is, you can earn money on movements in any direction. The main thing is to correctly predict this movement.

Bitcoin Daily Chart:

What is Bitcoin

Automated trading

Given that the value of the BTC changes very quickly and at the most unexpected moment, the trader is not always able to react in time. Plus, working with the market stops during sleep and any employment. You can fix this problem with the help of trading robots.

This is the name of special programs that can automatically open and close orders. That is, to simulate the actions of a trader. In order for the robot to trade well, you need to load the correct algorithm of actions into it. These are detailed instructions that indicate under what conditions you need to enter a position and when you need to exit it.

A high-quality bot will independently analyze the market and determine the moment of purchase and sale. You can install such software directly in the terminal and through the personal account of most forex brokers.

You need to choose individual bots carefully, because not always software offered has a high-quality trading algorithm. If you have the funds, you can find an effective strategy and order programmers to create a robot based on it.

We can offer you to try our trading robots that allow you to work with bitcoin automatically. They can trade via terminals of our partner brokers.

To make the trading program work 24/7, you need to upload it to the VPS server. Then, even with the trader's PC turned off, they will be able to make trades. Such servers work similarly to personal computers. They have a familiar operating system that is available around the clock on a remote device.

The investor can install a trading terminal on the virtual operating system and connect a robot to it. As a result, everything will work in the usual mode, regardless of the state of the PC.

We can also offer to use our VPS servers for this purpose. They are properly configured and fully prepared to work with the forex market. If you install a robot on them, you can trade bitcoin, almost without spending personal time on it.


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