Cryptocurrency was developed almost 10 years ago but the world hasn’t completely understood its advantages even now. The world is gradually coming around though. A couple of years ago, Bitcoin went over the roof. When bitcoin was first released into the mass market, its cost was 60 cents! Now it is over 7,000$. In addition, other companies issued their own cryptocurrency and the whole lot has now developed into a very profitable investment instrument. Due to all of that, to questions arise:
Is it too late to invest in cryptocurrency?
No, it isn’t. Considering recent trends in cryptocurrency, it’s going to last. Let me just give you one example. Only a year ago, big players didn’t even think about going into bitcoin and other coins (called Altcoins, by the way) and they are seriously considering it now. We are on the brink of witnessing crypto-hedge-fonds, where you can store the money you save to get profit.
I don’t have a lot of money, how can I get into the market?
Well, just sit back and enjoy the article to understand that.
A Short History Of Bitcoin
Let’s go back to 2008 when it all started. It is fascinating and really suitable, that the currency based on cryptography was created by an anonymous person. He called himself Satoshi Nakamoto… or she… or they. Noone knows for sure. I’ll just mention Satoshi as a “he” since its a male Japanese name. A one-millionth part of bitcoin was named after him, by the way. So, anyway.
2008, we have a lot of centralized cash-free operations. But all of them have a major flaw. If somebody somehow manages to sabotage the functionality of the center than its users are all in a pinch. Example: You are using Paypal and it’s been DDosed. So, you can’t use it to pay any more until some guys set it back up. When will that happen? It’s great if you have other ways to pay, but what if you keep all your money there? you are left penniless for a while. What if it wasn’t a DDoS attack but a hacker and someone stole all your assets? And the assets of other people as well. In addition, the person who has all your assets has sway over you. And that is never a good thing.
So, the idea of the decentralized transaction system appeared. And with it – the idea of a cryptocurrency. But the thing wasn’t as easy as you could’ve expected. The central system is good as it serves as an administrator. It synchronizes all the deals and prevents double spending. It is the biggest issue in decentralized systems since there are two actors and so, two invoices that could duplicate. A lot of people gave up on the idea but Satoshi Nakamoto invented a blockchain system and the Bitcoin. That changed it all.
What Are Blockchain And Cryptocurrency
Blockchain is like an archive of operations. With the exception that every actor who participates or ever participated, doesn’t get an entry, he gets the whole archive. In order to make a deal, you have to get confirmation from all the other actors. So, you can’t really forge a transaction or make it faulty. With a centralized system, you have to deceive the center and you got it. Now, you’ll have to deceive all the people who had ever participated in a deal. It’s impossible to hack. In addition, the blockchain cannot be turned off because there is nothing to turn off, it exists with every user.
The cryptocurrency itself is the asset we exchange using blockchain. It is basically an entry in the blockchain database, an encrypted file that cannot be hacked due to its extremely complex mathematics. The total amount of any coin is such that the coin is finite. Meaning, you can’t create lots of new coins and plummet its price that way, like governments do to some currencies.
Ways To Earn Cryptocurrency If You Don’t Have Any Money
You can enter the cryptocurrency market even if you have no money. That’s the beauty of it. The market is only developing so there are tons of opportunities. One of them is using airdrops. As the idea of blockchain developed, entrepreneurs found another use for it. They managed to create their own cryptocoins or smaller entities – tokens. Those tokens have become digital stocks. When some people want to create a crowdfunded project, they create their own token and sell it. People buy the token if they think the project is useful. They invest in the project and hope to get profit from the tokens they obtain. Those tokens either represent the project worth or can be also used for some purpose that is connected to the services the company will offer. Now, how can you earn some of the tokens?
When the company is selling their tokens to get funds, they often distribute some small amounts to people for doing trivial tasks. You may be asked to “like and repost” something in Twitter or Facebook or refer some people to their site. Having done those tasks that take up to 5 minutes, you get some tokens. After a few months, if the company reaches the market, you can exchange them for Bitcoin. If you believe in the project, you can also keep them and the tokens may grow up and be worth 10 times their initial value. There are tons of airdrops being issued all the time, so if you spend at least an hour a day, you can raise up a considerable sum for further trading.
A lot of crowdfunding companies need other services apart from just getting more coverage. Some of them may need a site or an app. Some may require articles or art. If you have a special skill, you can participate in the Bounty program.
The gist of it is that you can get tokens for being useful to the company. There are different types of bounties: in some of them, you work as a freelancer paid in tokens, in others, you have to make posts on bitcoin.org, the main cryptocurrency forum while using the signature of the company. The results of the bounty program are determined by ranking the people. The higher your rank, the more tokens you will get. Generally, if you put in some effort, you can get much more than from airdrops. There is a lot of bounty programs as well.
This method involves using your hardware capabilities or uniting with other people on the internet. This is also the only method of the three that will get you the coins themselves and not the tokens. So, what is it about?
We’ve talked about the blockchain technology and you’ve probably asked yourself. Wait, all the people who have ever traded this bitcoin must get every past and future transaction? How does the system even find them all? Well, here is where miners come in. They are the ones who provide blockchain data to all the possible actors. In return, they get a small piece of cryptocurrency. Depending on the hardware capacity, this can get a profitable business. You can buy a few video cards and stack them into a “cryptocurrency farm”. Or, you can unite with other people online and form a “cloud-based farm”. Either way, you just sit back and enjoy the coins dripping into your pocket. However, you should know, that you’ll need a lot of capacity to effectively mine cryptocurrency.