Is it worth investing in cryptocurrencies now, or is it too late? They say it's too late to buy bitcoin: is it worth investing in cryptocurrencies? Is it profitable to buy bitcoins a year?

Nowadays, it is common for a person to look for an additional source of income. Of course, if you have a great job with a great salary that more than doubles your monthly expenses, then you are a rare exception. But, nevertheless, you have to regularly go to this work and perform your functions, spend your personal time.

The theory of passive income, on the other hand, implies the cost of minimum labor and the receipt of maximum income. This is a very popular practice, and passive income is what many people prioritize. Alas, the assertion that time is money regularly proves its case, and in order to earn excellent money, people have to work hard for a long time accordingly.

This explains the popularity of investing on the Internet - binary options trading, Forex and other businesses. 2017 saw the peak of a new instrument - cryptocurrency. In essence, this is not some kind of bargaining. Cryptocurrencies are a functioning financial mechanism, and in the more modern West they are already equated with real, classic money. But in Russia, purchases on bitcoin or ethereum are still extremely difficult, so Russians often speculate on cryptocurrencies, rather than really treat them like money.

What is Bitcoin?

It is immediately necessary to understand that Bitcoin is only a part of the entire world of cryptocurrencies, albeit the most expensive and popular. Just as in the classical financial world there are notable leaders and hegemons - the euro and the US dollar, so in the world of crypto there are Bitcoin and Ethereum.

The creation of Bitcoin and the development of its basic principles is formed on the basis of electronic cash protocols. Formally, these are lists of system participants and information transfer packages, which are extremely difficult to track thanks to the P2P system. On the way from one owner to another, a coin passes through the records of a huge number of participants, and it is almost impossible to understand its direction.

The increased popularity of Bitcoin, as is often the case, has led to the emergence of a whole range of similar instruments - altcoins (alternative coins). Altcoins are other cryptocurrencies based on similar protocols, but with their own characteristics. Some of them managed to gain immense popularity, and now their rate is quoted at several hundred dollars per unit. One of the most popular and closest to Bitcoin coins is (Ethereum).

The main noteworthy fact of Bitcoin is its limitations. Only 21 million units will be released, which means that after all of them are "in the hands" of users, the cost will be established and become extremely stable. Such a currency is not subject to inflation, since the total amount of money issued does not grow, and physical losses do not threaten it either, since, in fact, there is no physical execution.

Growth in popularity and course

The first coin issued was sold for just 33 cents. Now the rate is fluctuating around $ 400 - $ 500. The cue ball is very volatile, that is, it has sharp jumps in the rate. But, as mentioned above, after all available coins are redeemed, the price will rise. This trend opens the way not only for investing in the future, but also for speculation in the present. It is easy to track the price thanks to the large number of exchanges like Exmo, or quotes on the Investing.com portal.

At first, popularity was concentrated only on the Internet, but then it began to grow and attracted the attention of the media. A special boom occurred in 2016-2017, when the attention became so great that politicians and even those who had never heard of it before started talking about Bitcoin.

Accordingly, investors joined this process, trying to invest not only in Bitcoin, but also in cheaper, but actively growing altcoins.

How to invest?

Approaching this issue, it is important to understand what the system is and what motivates the rate jumps. It is also worth deciding how you want to benefit from these processes.

There are two popular choices: investing in currency and mining. Investing in a currency is the purchase of a certain amount in cryptocurrency, paying for it with more popular classic money. Accordingly, the increased rate will entail resale, that is, exchange for the original banknotes. Due to the rate difference, your profit will be formed.

Mining is a much more complicated process. In simple terms, you will have to purchase computer equipment and connect to the network in order for the technical capacities you bought to make calculations, and for these calculations you receive cryptocurrency.

Then these funds are withdrawn into real money. Thus, an investment in mining involves not only technical preparation, but also the purchase of equipment (farm), as well as payment for the electricity used. Believe me, a farm operating at full capacity will bring its owner a solid bill for "light".

Buying cryptocurrency

Therefore, for technically inexperienced investors, investing directly in the currency will be more understandable. It makes sense to buy bitcoins only if you already have a solid capital for the initial purchase. The plus is that it can be more modest money than you spent on buying a farm.

Also, pay attention to alternative positions in the cryptocurrency market. There are tons of suggestions here, some of which are quite interesting. After the growth of Ethereum, the third most powerful crypt should appear, and now, having managed to choose it correctly, you can make a good investment.

The immediate purchase process is pretty straightforward. You register on the exchange platform, stock exchange. Then deposit a certain amount of real money into your account. Then you change your finances for the units of the crypt you have chosen. The catch is that traditional card payment methods may not work here. Money will have to be transferred through special payment services (Qiwi, Skrill, WebMoney, Yandex.Money), since banks, being state-registered organizations, are not always able to make such payments.

And it is not always reliable to enter data on the card at all kinds of sites. It is important to understand that due to their semi-legal status, cryptocurrencies and everything connected with them are not licensed, which means that any fraudster can create his own exchange exchange, where he will withdraw money from clients' accounts, instead drawing unsupported zeros, issuing them for the accrued bitcoins. Is it legal to conduct such investment activities? At the moment, yes, since no one has banned cryptocurrencies.

How to spend?

Crypto has become a much easier process today than, say, two years ago. Nevertheless, there are still problems with this in Russia. There are several specific options for cashing out funds, but most often they go through other currencies - the euro or the dollar, thereby implying losses in the form of commissions at exchange offices and currency fluctuations.

Many online stores accept crypto as payment. But this list is limited to specific purchases and most often has a foreign character. But the largest volume of purchases using cryptocurrencies occurs in the criminal segments of the Internet. Because of its complexities in tracking, cue balls have become the go-to currency in the drug and data trade.

And legally accepted shopping methods allow you to pay for any goods on online storefronts where such transactions are officially allowed. We positively note that the list of such stores is regularly growing, and, perhaps, soon even the most popular trading platforms will accept such calculation methods.

What about investing?

Is it profitable to invest in Bitcoin Cash? Is it possible to gain a good amount by speculating with him? Depends on what results you expect. For rapid growth and large income, most likely, the Cue Ball is no longer relevant. To this end, you need to look closely at other positions on altcoins.

As for long-term investments, investments are recommended here. Just in order to own a certain asset in case of a rally. This is the main problem of cryptocurrencies - they are not assigned to an asset, which means that their rate is regulated only by the market situation in terms of supply and demand. Therefore, it is worth remembering that specifically Bitcoin is limited. This means that the price will always be high. Accordingly, a long-term investment appears to be extremely reasonable.

Purchase certain amounts and keep them with you for a certain long period. Try not to succumb to temptation during the next rapid growth of this type of crypt. Make it a goal to increase the amount of coins you have on hand. Even without sharp jumps, we can confidently say that such a technique will be beneficial over a long distance.

Many experts expect 2018, as they believe that by that time the rate will rise to $ 5,000 per coin. Imagine such a course at the time when all the coins will be mined. The extraction of all available coins (twenty one million) is calculated by 2023 - 2025. But given the increase in speed, it may happen earlier.

And if such a rate of several thousand dollars per unit is fixed, then it will most likely stop moving down due to the limited number of coins. Accordingly, owning even a small amount would be a good asset. And building up this package now is an excellent foundation for the future.

In short, it all depends on how much you are willing to invest. Everyone will have different answers to these questions, as the profitability of mining bitcoin depends on many factors. Especially in order to make it more convenient for you to calculate the profit from mining by a combination of different factors, mining profitability calculators were invented.

They take into account several parameters at once, including the cost of electricity, equipment and other variables, which makes it possible to make the most accurate calculation of the estimated profit. Before moving on to the examples, let's make sure you are familiar with these variables:

Hashrate (hashrate or computing power)- hashing is a mathematical problem that must be solved by the miner's computing system. Modern Bitcoin miners (which are discussed in the video below) offer different amounts of computing power. The performance of miners is measured in MH / s (megahash / sec), GH / s (gigahesh / sec), TH / s (terahash / sec), and even PH / s (petahash / sec).

Bitcoins per block (bitcoin per block) - every time a math problem is solved, a fixed amount of bitcoins is created. Initially, this number was 50, but every 210,000 blocks this amount (approximately every 4 years).

At the moment, the block reward is 12.5 BTC. The next halving to 6.25 BTC is expected in 2020.

Bitcoin Difficulty (Withmining falsity) - since the Bitcoin network is designed in such a way that a new fixed number of coins is generated every 10 minutes, the complexity of mathematical problems is constantly growing as the hash rate of the network grows. In short, this means that the more miners join the network, the more difficult it becomes to mine bitcoins.

Electricity Rate (cost eelectricity) - almost all Bitcoin miners consume large amounts of electricity. To calculate the profitability of mining, you first need to find out the cost of electricity in your area.

Power consumption (Energy consumption)- each miner (device) consumes different amounts of electricity. You will not be able to calculate the mining benefit until you know how much power your miner is consuming. This information can be found both on the Internet and often on the case of the device itself. Energy consumption is measured in watts.

Pool fees (pool commission)- in order to start mining, you will need to connect to one of the mining pools. A pool is a group of miners who have joined forces to mine more efficiently.

The platform that allows you to do this is called a mining pool, and almost all platforms charge a fee for their services. As soon as the pool manages to mine bitcoins, the profit is distributed among all participants, taking into account how much computation each miner performed (that is, based on the hash rates of the participants).

Time frame (time frame)- when calculating the profitability of mining, you also need to determine the time frame. Since the more time you devote to mining, the more bitcoins you can get.

Profitability decline per year (decrease in profitability during the year)- this is probably the most important variable. The bottom line is that no one can predict the number of miners connecting to the network, and accordingly, no one can analyze the complexity of mining for a month, six months or a year in advance.

This is one of two main reasons why no one will ever be able to give a clear answer to the question "Is it profitable to mine bitcoins?" The second reason is market quotes. Thus, when calculating the profitability of mining, the factor of the decline in profitability over the year will help you determine the approximate increase in difficulty.

Conversion rate (quotes)- since no one knows what the BTC / USD exchange rate will be even in the near future, it is extremely difficult to accurately predict the profitability of Bitcoin mining. If you are planning to mine and save BTC, then this question should not bother you. However, if you want to immediately exchange the mined coins for fiat currencies, then, of course, this point must be taken into account.

Choosing a mining profitability calculator

In order to calculate all these parameters, and get an answer to the question from the title, we will use the mining profitability calculator. Here's a simple example of a calculator from 99Bitcoins:

However, let's jump straight to a more complex example with more variables:

Today, Antminer S9 is considered one of the most advanced miners. It represents what is commonly called an ASIC mining rack (farm). Its computing power reaches 14 TH / s. Using a simple calculator (in the screenshot above), we can calculate that with today's mining complexity, you can earn about 1 BTC per month.

But this, of course, does not take into account the cost of equipment, the cost of electricity, pool commission and much more. Let's try to take into account all aspects.

This data was taken from an advanced mining calculator, and the following parameters were used in it: 2% of the pool commission, 25 BTC block reward ( editor's note: the calculation was made before the halving in July 2016), 14 TH / s of computing power and 1375 watts of consumption.

That is, after 12 months, the profit should be $ 6,000. But even here we did not take into account the cost of the equipment, which means that the actual profit will be $ 3,400. In addition, the above calculations were made when the block reward was another 25 BTC, but now it is dropped to 12.5 BTC.

The result can vary depending on the cost of electricity, the difficulty of mining, and more importantly, the change in the price of bitcoin.

In general, you cannot get rich mining bitcoin at home if you are not going to buy a lot of equipment or expensive electricity in your area. Below are some examples of the most productive Bitcoin miners. In fact, there aren't many options, as home mining is an endangered art form today.

Comparison of equipment for Bitcoin mining

AntMiner S7	AntMiner S9	Avalon6
Power: 4.73 TH / s	Power: 13.5 Th / s	Power: 3.5 TH / s
Energy efficiency: 0.25 W / J	Energy efficiency: 0.098 W / J	Energy efficiency: 0.29 W / J
Weight: 4 kg	Weight: 4 kg	Weight: 4.1kg
Price: $519 (6.02.2017)	Price: $2399 (6.02.2017)	Price: $559 (6.02.2017)
Estimated monthly profit: 0.1645 BTC	Estimated monthly profit: 0.3603 BTC	Estimated monthly profit: 0.1232 BTC

I think it’s not worth explaining that mining at home is not a cheap hobby. However, you have other options for a lower price.

Mining bitcoins through cloud mining

In the mining industry, there is such a thing as “”. It implies that you do not have to purchase expensive equipment, but instead rent computing power from the company, paying only for the amount you need. This sounds very appealing at first, since you don't have to order and wait for expensive equipment, place it somewhere, refrigerate it, etc.

However, even if you do a superficial miscalculation, you can understand that none of the cloud mining services will be profitable in the long run. The most profitable companies often turn out to be trivial pyramids that do not even have any equipment, they simply pay "profit" from the money they receive from new users.

If you do decide to invest in cloud mining, then I recommend you Genesis Mining - the only cloud mining company that has been operating for several years. But still, start with a small investment.

Altcoin mining as an alternative to bitcoin

Consider mining (Altcoin) instead of bitcoins. There are hundreds of alternative cryptocurrencies on the market today, and some of them are very easy to mine. The problem is that due to the sheer number of different altcoins, it is extremely difficult to say which ones will be profitable. Litecoin, Dogecoin and Peercoin are considered to be good examples of altcoins.

To understand which of the alternatives might be beneficial, look at the statistics on sites like CoinChoose, in which each altcoin is analyzed in detail. CoinChoose provides information on the difficulty of mining, how these currencies can be exchanged, and the likelihood of earning bitcoins through mining.

So will mining bitcoins be profitable?

Personally, I believe that long-term profit from Bitcoin mining is possible only if you are willing to invest substantial funds in a good mining farm (for example, Antminer s9), or if you have the makings of a great trader.

Interest in cryptocurrency has grown significantly over the past few years. At the beginning of 2017, there was a real boom around this digital asset. Therefore, investments in cryptocurrency began to attract ordinary users who did not know anything about this before. Together with ProfitGuide, we will consider this digital asset from different angles in order to understand whether it is worth investing in it in 2017.

Before investing money in any instrument, you need to at least understand what it is. Cryptocurrency is an electronic currency that is not tied to a bank or state. The system develops independently, therefore, the emission of coins occurs without internal or external control. If you have a powerful computer, you too can join the network and start mining (mining) cryptocurrency.

The mining process is very difficult as it is about finding new algorithms. This explains the authenticity of the new coins. Gradually, the reward for creating a new block decreases, so the release of new coins is significantly reduced. However, mining will be relevant not only throughout 2017, but also until the end of this century, as cryptographic currencies have risen significantly.

Most cryptocurrencies (s) have limited emissions, but there are options with unlimited mining. What is the best investment instrument in 2017?

Varieties of cryptocurrencies: the most promising for mining and investing

There are a huge number of different cryptocurrencies, but not all of them are suitable for investment. ProfitGuide has selected the most promising cryptographic currencies in advance. Together with us, you will be able to understand whether it is worth investing in cryptocurrency in 2017. Let's first take a look at the most common coins separately, and then compare how much they have grown over the past year.

Bitcoin

The most popular digital currency is Bitcoin. You probably at least briefly heard about him in the media. It attracts the attention of not only private investors, but also statesmen, economists and financiers. So far, it is the most famous and demanded electronic currency. It was she who served as an example for creating analogs.

Bitcoin appeared back in 2009. If at first no one took this digital currency seriously, today tens of thousands of people want to invest in it.

Ethereum

Ether is on the 2nd place in popularity among cryptographic currencies. It appeared in 2015, but quickly gained popularity. Some consider it so far the only worthy replacement for Bitcoin.

The main problem with many cryptocurrencies is that they are partially dependent on Bitcoin. That is, in order to withdraw money, you must first make an exchange for BTC, and only then convert the digital currency into dollars. Ether is free from this disadvantage. On many exchanges, it can be immediately exchanged for dollars, which also had a positive effect on the demand for this currency.

Another important benefit is the unlimited number of coins. Thus, ether mining may remain in demand for a very long time.

Litecoin

Litecoin follows them. So far, the value of the coin is noticeably lower than that of Bitcoin or Ether. But this is at the same time an advantage, since a much smaller investment will be required from the investor.

The trading volume of this cryptocurrency has grown lately and is already in the hundreds of thousands of dollars. If this goes on, then the rate will continue to grow. Therefore, Litecoin is great for investing in 2017 cryptocurrency.

Monero

If you are looking for the most secure system that will provide anonymity not only outside of it, but also inside, then Monero is definitely worth a look. In the development of this system, confidentiality was put on the 1st place.

Amid the surge in popularity around cryptocurrencies, many investors also began to pay attention to Monero. In terms of capitalization, it is in the TOP 10. It should be noted that the issue of coins is unlimited.

Dash

This currency also showed rapid growth. Experts justify the increased popularity of Dash with the release of the Sential update. Since then, the level of security has increased significantly. The update also had a positive effect on the speed of work.

Now the Dash cryptocurrency is in 7th place in terms of capitalization. She will definitely not leave the TOP 10 in the near future.

Ripple

Ripple appeared in 2012. This system had a predecessor called Ripplepay and has been in operation since 2004. After 2011, the developers began to create a digital currency system. Ripple has an important difference from Bitcoin in that the authenticity of the currency is confirmed by the consensus of the participants.

Now Ripple is in 3rd place in terms of capitalization among cryptocurrencies. Users prefer this system due to its fast operation.

In total, there are more than 870 cryptocurrencies in the world.

How to invest in cryptocurrency in 2017

Based on the table above, it can be seen that cryptocurrency rates on the market have increased significantly. It is quite difficult to find such fluctuations among other financial instruments. From here both positive and negative sides emerge. Since there are much more advantages to cryptocurrency, this makes investing an unusually profitable activity, in particular for novice investors.

Buying and selling cryptocurrency: speculation on the course as an investment

Looking at the difference in rates, the first thing that comes to mind is speculation on fluctuations. You can trade cryptocurrency in the same way as other financial instruments, for example, stocks, bonds, currencies, and so on. ProfitGid.ru offers readers a list of TOP 10 exchanges in terms of trading volume.

Russian-speaking users generally prefer the BTC-e exchange. All top cryptocurrencies can be found there. In addition, the main site has a chat room where users can exchange up-to-date information on investing in cryptocurrency. To fully trade on exchanges, it is best to acquire several wallets at once in EPS:

• WebMoney;
• PayPal;
• Yandex money;
• QIWI and others.

Cryptocurrency mining

Translated from English "mining" means mining. Now this term is actively used by people who produce cryptocurrency. They call themselves miners. There are several ways to join them.

1. Collect your "farm".

Previously, it was enough to have a powerful computer for mining. However, the likelihood of creating a new block and receiving a reward depends on the ratio of the computing power of the device to the total power of the network. Thus, when Bitcoin first appeared, one person was engaged in mining this currency for several months. Since his computer was the only one connected to the network, he was able to earn about 1 million bitcoins from January 3, 2009 to January 25, 2010. Having invested only a short period of time, this person is a billionaire today.

Now, serious capital investments are already required from novice miners. The fact is that large companies are interested in mining. To do this, they assemble special devices consisting of modern processors and video cards with low energy consumption. Thus, the total capacity of the system has increased significantly. Therefore, ordinary PC owners can forget about mining.

You can also assemble a "farm" at home. The minimum amount required to purchase equipment is 2-3 thousand dollars. It looks like this.

Preference should be given to devices with low energy consumption. The point is that the farm must be permanently connected to the electrical network. In addition, you need to take care of a stable Internet. Otherwise, the mining time can be greatly increased.

There is an opinion among users that such investments cannot be beneficial, and cryptocurrency mining is a worldwide deception. The main problem is that energy costs may not be recouped. If earlier this situation really could have happened, now, after the rate of many cryptocurrencies has increased, investing in mining has become a more profitable option.

1. Cloud mining.

There are quite a number of organizations that are ready to lease computing power. They can be used to mine cryptocurrency. Investments will require a smaller amount of funds, but experts, in turn, warn that against the background of the growing popularity of digital currency and mining, a large number of scammers have appeared.

On the Internet, you can easily find companies that offer rent on the territory of their organization. Interaction with the equipment takes place via the Internet. However, there are scammers among them who do not actually have suitable devices for mining cryptocurrency. On the web, you can find reviews from users who have suffered from such investments.

Advantages and Disadvantages of Investing in Cryptocurrency

Investments in any financial instrument have both positive and negative sides, and cryptocurrency is no exception. Before investing real money in cryptocurrencies, it is better to familiarize yourself with all the advantages and disadvantages. Let's start with the pros:

• government authorities cannot freeze the investor's account or limit his actions;
• it is impossible to track payments, which means that the level of income is hidden from the tax authorities;
• good prospects for further growth;
• several investment options (mining or speculation);
• a large number of cryptocurrencies worth investing in.

However, there are drawbacks to investing in cryptocurrency. Among the minuses it is worth noting:

• the inability to cancel the transaction, even if it did not occur at the will of the owner of the wallet;
• a large number of hackers who are trying to gain access to other people's wallets;
• high rate fluctuations, which makes it difficult to predict the real income from mining.

The global cryptocurrency market.

To bookmarks

The five most expensive cryptocurrencies as of May 14, 2017 (capitalization is indicated in the first column on the left):

The total estimate of the value of their money supply at current exchange rates per dollar is $ 46.9 billion, while the total cost of 830 others, whose indicators are tracked on the coinmarketcap.com website, is $ 5.7 billion. the exchange, and in terms of world fame, are, probably, only the first three - basically I will talk about them.

To roughly imagine the scale - here are similar indicators for the ruble:

• Market Cap - $ 675.220 million.
• Volume (24h) - about $ 56,000,000,000.

Real currency markets are of course much more lively, even if you make allowances for the difference in volume. Even the volume of international currency trading in Peruvian salt is still several times higher than the trading volume of bitcoin - nevertheless, given the difference in the origin of these currencies, the achievements of the bitcoin system are striking.

Why do cryptocurrencies cost so much and is the currency getting stronger with increasing capitalization?

The exchange rate is influenced by various factors, such as the volume of demand for it (transactional - the demand due to the need to buy some product for a specific currency - and investment) and the volume of supply of currency. In the case of bitcoin, everything is clear with the volume of supply - now more than 16 million bitcoins have been “put into circulation”, and by 2100, when their number reaches 21 million units, their “release” will stop.

The amount of XRP (the currency of Ripple) was set at creation, and although most of XRP is still owned by Ripple Labs (temporarily taking over the functions of the central bank), sooner or later the entire volume of the currency is expected to be in the hands of secondary users. ...

The same amount of Ethers (Ethereum currency) is issued annually, which over time will lead to the stabilization of the amount of active currency (due to the loss of keys to wallets, death of owners, and so on).

By the way, in the case of Bitcoin and XRP, at some point we will inevitably face a decrease in the supply of currency due to the same natural losses.

As for the demand for currency, it is mainly supported from the investment side - despite the emergence of numerous services for international transfers via Bitcoin, their turnover is still small.

The price of bitcoins (or XRP, ETH and other currencies) depends mainly on the sentiment of speculators in the market, whether or not related to individual events.

Such as the collapse of Mt.Gox as a result of the hacking of the exchange, which at one time carried out up to 70% of operations on bitcoin, regulatory changes on the part of governments and central banks of various countries, primarily China. For example, the current rise in the price of bitcoins is largely due to the entry of Chinese players into this market, worried about the weakening of the national currency. Finally, the theft of 11.5 million ETH (about $ 50 million at the time) from the accounts of DAO, a venture capital fund launched on the basis of the Ethereum network.

In addition, the input and output of even a relatively small amount on the scale of other foreign exchange markets can radically change the situation.

Do these changes affect the currency's spread and do they make the currency's position stronger?

The volatility of bitcoin itself makes international transfers using this currency more risky if both sides have to exchange for some other "real" currency (say, dollars or euros), as well as some other financial enterprises based on the infrastructure of the bitcoin system.

The explosive growth in transaction volumes due to problems with network bandwidth has led to an increase in the cost of a transaction, which on average is already from several to several tens of cents. On the other hand, more activity in the markets leads to lower spreads (the difference between the best prices of bids for sale and for purchase at the same time for any asset - site) and reducing intermediary fees, which can make life easier for cryptocurrency-based financial startups.

You need to understand that the optimistic sentiments of investors can at any time be replaced by no less strong pessimistic sentiments, and the assessment of a project or technology according to the principle “in principle, the idea is promising - I think we need to invest money here, but more” has more than once led to sad consequences ...

An example is the dot-com crisis. On the one hand, the Internet as a technology has nevertheless justified all the expectations placed on it. On the other hand, from the generation of companies founded before 2001, very few have survived and are still alive - despite the general promising direction of the direction, most of the ideas tested then turned out to be unviable, a significant part of the projects - garbage that rose sharply on a growing wave, and many of companies that survived the crisis did not subsequently become market leaders, but simply faded over time or occupied some niche.

If I were an early bitcoin investor, I would get rich like most of those guys.

A simple example of an interesting currency paradox. In 2010, at the dawn of the Bitcoin era, one person bought from another two boxes of Papa John’s pizza for 10 thousand bitcoins (respectively, about $ 17 million now). People hearing this story have mixed feelings about this pizza lover and wonder how lucky the guy would be if he didn't.

However, in 2010, the Bitcoin world was not that big. Imagine a multitude of people with huge amounts of virtual money whose value is zero. If you put 10 painted pieces of paper in your pocket, you will come to a friend and jokingly buy from him shoe laces or an apple core for these pieces of paper, and he, in turn, will also buy something on them (all sorts of nonsense, pencils, paper clips, whatever), then you will act out in faces the history of the development of bitcoin in the initial stages.

Yes, it was an interesting idea, and over time, bitcoin, as a convenient financial instrument in some respects, began to lead to the emergence of new infrastructure projects, someone launched stores that accept bitcoins, someone even decided to receive a salary from them, and so on.

However, if it weren't for these people - the man who sold pizza for 10,000 bitcoins, the man who launched the Bitcoin Facet website that same year (giving out 5 bitcoins to each visitor; that man was Gavin Andresen, the main developer in the Bitcoin hierarchy now), and many others who bought low-value items for amounts that now seem enormous, if there were no enthusiasts turning on their computers in order to "for fun" mine themselves more cryptocurrencies (and invisibly involved in the competition that increases the value of the prize itself), there would not be all this story.

Who knows, maybe if there were two or three more practical (or, conversely, short-sighted) people among the "pioneers", they could start circles on the water and bring this whole viral story to a halt. And then there would be no bitcoin.

And by the way, this can happen at any time.

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The same reasoning holds true for the large Bitcoin holders. Of course, you cannot call them poor people, but you need to understand that they will not be able to sell their share without breaking the market (I'm talking about really large holders - those whose existence worries the community).

In this sense, they do not own the money that journalists ascribe to them, multiplying the rate by volume. And the only way for such people to keep the price of bitcoin as long as they remain large holders is to refrain from large sales, without realizing the volumes that they own.

Because bitcoin itself (infrastructure is another story), like any currency, does not have real value. This is how the currency differs, for example, from the shares of companies - even with large transactions there is always some minimum threshold, below which - you can be sure - the price will certainly not fall.

What level of investment in bitcoin can be promising

As I said, now the price of bitcoin is determined mainly by speculation, associated at this stage mainly with the uncontrolled behavior of the mass investor. In this sense, bitcoin as an investment item is no worse (and no better) than other popular technologies (alternative energy, some types of new materials, electric vehicles, robotics, and others).

Ironically, the equilibrium price for bitcoin can be anything - including zero. In the long term, the very existence of bitcoin, the development of its infrastructure and, in the end, determining its place on the financial map of the world depends on how large this currency will take in the world of transactions.

And while growing volumes (and decreasing spreads) certainly strengthen Bitcoin's position in the world of real values, the main question to ask yourself about Bitcoin and other cryptocurrencies remains one.

What problems does this particular cryptocurrency, as well as the community behind it, the central development team and the services built on its basis - and for some reason focus on working exclusively with it - solve better than other currencies and cryptocurrencies? What will allow Bitcoin, Ethereum or Ripple to take at least a niche place in the market? Is there a problem inherent in the currency protocol that cannot be quickly resolved and could seriously affect its prospects?

So, for example, one of the long overdue for solving the problems of bitcoin was the limitation of the network bandwidth (about 4200 transactions around the world in 10 minutes - the approximate time for generating one block in the network; I will talk about what blocks are later).

This limitation can be changed in a number of ways, but so far the community has not taken any decisive action in one direction or another. Meanwhile, despite the relatively stable volume of transactions on the network, there is an increase in the total volume of transaction costs (or premiums, which side you look at):

Total transaction volume

The volume of transaction costs

Now the average "reward" for a transaction is about 0.0008 bitcoins, which is just over 80 rubles at the current exchange rate. Or, if we take the average transaction size - 0.12%. How do you like this free bitcoin?

According to information from the Bitcoinfees.21.co service, when assigning a reward for processing a transaction of less than 60 Satoshi per byte (1 Satoshi = 0.00000001 bitcoin), that is, about 9 rubles for an average-sized transaction at the current exchange rate, you will never risk to see its execution, and for a transaction with an average reward of up to 36 rubles, you will have to wait several hours for execution.

Will this problem, as well as the competition of other currencies with different approaches, opposition from states and the lack of real application, prevent the development of bitcoin? Very few people in the world have approximate answers to this and other questions - to be honest, they, as well as those who are not allowed to sit still by their excitement, I would leave speculation in the cryptocurrency markets.

How it works

I'll tell you a little about how the bitcoin system works.

Where does the currency come from from the original owners

Money within the system can be distributed in different ways. Nevertheless, for the purposes of the development of the system, it was important to solve two problems:

• Creation of a wide range of participants in the system and prevention of the concentration of currency among one or a few owners.
• Providing value to Bitcoin in the eyes of users by artificially giving it some value.

Both of these tasks were solved through the system of issuing and transferring rights to new money in a proof-of-work system, which means that in order to receive a portion of bitcoins, the computer of the system participant must perform a number of operations.

What are these operations

These are cryptographic problems in which one sequence of characters is compared to another obtained as a result of calculations. Moreover, everything works a little differently than with ordinary tasks - the system participant knows in advance not only the calculation algorithm (one for all), but also the answer that he needs to get.

And he, in fact, is looking for such input data that would give this answer - and this search is carried out using a sequential enumeration of possible options.

Thus, the algorithm with which it works should give an unpredictable change in the result with small changes in the input data (otherwise it will be possible not to iterate over individual options and thus reduce the work for yourself), and produce as a result all combinations of results in a certain range (say, from 000 to 999) with equal frequency - then the system will be able to indicate some value as a check key to the problem without duplicating calculations, because it is clear in advance that, say, the number 021 as a solution will occur with the above system about every thousandth time.

It is not easy to come up with an algorithm that satisfies these and some other conditions necessary for the system to work. Fortunately for Satoshi Nakamoto - the person or group of people who invented bitcoin and was at the head of the project for some time - this class of algorithms has existed for a long time - these are the properties that many cryptographic algorithms used in computer security possessed.

Suppose we declare that the algorithm in our system is the multiplication of some number by 2, and as a result, the participant in the system needs to get some number. This algorithm will not work for our purposes - it will take the same amount of time to get the result as it does to check.

The encryption mechanism used in bitcoin (rather complicated, I will give below a much simpler example, which, although it satisfies the above conditions, for a number of reasons could not be used for cryptocurrency purposes) was selected in such a way that it was impossible to understand from which sequence this solution came out otherwise, as a simple enumeration of numbers. In any case, for the algorithms of this family, a satisfactory algorithm for obtaining input data on the answer has not yet been found.

In general, our task might look something like this:

• Asdfh11415712egE - 021
• 235sdf73918sdg8s2 - 523
• 2389sdfkjlkjl12858s - 192

On the right we have hashes, the results of the implementation of the given set of operations with sequences on the left. Moreover, each operation can be very, very time consuming for an ordinary person and consist of hundreds or thousands of actions.

The task can be, for example, finding such a sequence that will give the result 000 after hashing. If the conditions that I mentioned above are met, then approximately once in a thousand we will stumble upon the correct sequence and receive a "prize" - our wallet will drop a certain amount of BTC.

For example, the following could be taken as a problem: find a prime number that, when squared and divided by 1000, would give a certain remainder. Let's say, let it be 507 (it is clear that this number is from 000 to 999, there can be no other leftovers from the last operation).

There seems to be no other way to solve this problem, except to sort out all possible options. We'll take different primes over and over again, square them, divide by 1000, and see if we end up with 507.

If, however, a solution has been found, it can be verified in just one operation. We can arbitrarily increase the complexity of this algorithm (and at the same time the difference between the time to find the correct answer and the time to check it).

Something similar happens with the procedure for generating new bitcoins. They appear in the network with a predetermined predetermined frequency. In order for this frequency to be preserved in practice (Initially, solving this problem on one computer, you can use the help of a whole network of distributed computing tomorrow - what then?), A certain algorithm for increasing the complexity has been implemented.

The greater the total power of computers involved in mining new bitcoins, the higher the difficulty is set in order for the frequency of new bitcoins to be dropped in the algorithm to be observed.

So, on the one hand, the network maintains a given generation rate of new bitcoins, on the other hand, their distribution is ensured in proportion to the resources of all users, on the third, due to the fact that the generation task has become more and more complicated, and mining has become an increasingly costly undertaking - a natural impetus was provided for early holders to exchange bitcoin for valuable resources and a non-zero number of different currencies.

How is fraud protection provided by the system participants and how can you be sure that they do not spend the same bitcoins several times

Roughly speaking, after mining, a new portion of bitcoins is “signed”, and records about this transaction, like all other transactions on the network, are entered into a special database that is stored on the computers of all full-fledged participants in the system. You can, however, buy and sell bitcoins without it, but the storage and processing of transactions are encouraged at the expense of those "commissions" that were discussed above, and which you will not receive if you are not a full participant in the system.

At the same time, although purely theoretically falsification of property rights in the bitcoin system is possible, in reality such an operation is now unlikely to be carried out. To do this, you need to simultaneously control more than 50% of all computing power of the system.

And verification of transactions, uninterrupted operation and independence of the system from the "central office" is precisely what ensures the distributed nature of the system, that is, storing records of the entire history of transactions (with each bitcoin) on many servers of the network at once.

Sponsorship material

Since the beginning of 2017, the most popular cryptocurrencies have grown several times. Anyone who bought Bitcoin for $ 1,000 in January 2017 can now sell it for $ 2,500 (at the time of writing). Whoever bought Ethereum for the same 1000 can now sell it for 26000 (twenty six) thousand dollars! Since at the beginning of 2017, the cryptocurrency industry was already quite developed, there were a lot of such people. Now they are sharing their success stories, and many have a desire to invest in cryptocurrency.

But, as you know, you need to buy any asset when it is cheap. Is it worth buying a cryptocurrency after it has been growing continuously for six months?

Any trader in the classic financial markets will say that it is not worth it. And he will be right about securities, commodity futures and currency pairs in the Forex market.

But the situation with cryptocurrencies at this stage has features that make it possible to assert that it is not too late to invest in them now. And we must not regret the previously unused opportunities, but use the existing ones.

Why is that?

The cryptocurrency market is a new market that is just developing. The majority of potential investors not only have not yet reached it, but have not even heard of it. If in doubt, take a few people from your environment who earn more than they spend, and for whom the question is relevant - Where to invest money?

Ask them two questions:

1. Do you invest in cryptocurrencies?
2. Are you interested in buying an asset that allows you to receive passive income from 100% per annum and will you take advantage of this opportunity if you find out about it?

I can say that 90% will answer the first question negatively, and the second positively.
This means that in the coming years, a huge number of new investors will enter this market. They will all be eager to buy cryptocurrency. What do you think will happen to her course? Especially when you consider that the flagship of the industry - Bitcoin - has already issued and sold 16 million of the 21 million coins that can be issued at all. That is, the supply is limited, the deferred demand is huge due to the attractiveness of this asset for a huge audience.

Growth in demand creates a vertical trend

In addition to private investors, holders of big money - banks and hedge funds - are interested in the main cryptocurrencies, only in the last month the banks of Japan and Norway announced their work with Bitcoin. Earlier, the American financial regulator considered the possibility of trading Bitcoin on stock exchanges. So far, he has not given the go-ahead, but there is no doubt that this will happen in the coming years, since all regulators operate according to the same principle - that you cannot win - you need to control. It is not difficult to guess how the massive entry of institutional investors into the cryptocurrency market will affect the course.

Vertical trend

In recent years, all over the world, measures have been tightened to combat tax evasion, offshore, and other concealment of income and money laundering. It is clear that this applies mainly to those who earn a lot and a lot. Cryptocurrency solves all their problems in the form of decentralization, lack of regulators and controllers, the ability to remain anonymous. These people will also buy cryptocurrencies, and more and more. Which, in turn, will also direct the course up.

Each of these factors drives sustainable and long-term demand for top cryptocurrencies in the long term. Therefore, I can say with confidence - it is not too late to buy cryptocurrencies now, but even the time is right.

How to do it quickly, conveniently and safely?

If you are technically savvy enough to understand the wallets of different cryptocurrencies, as well as ensure their security, and feel the strength to open accounts on cryptocurrency exchanges, create a diversified portfolio of 3-4 cryptocurrencies, and quickly manage this portfolio - do so, for you are the best option.

If you don’t want or cannot delve into all this, use a ready-made solution from the Investors Club vprofite.club

They compiled cryptocurrency indices, thanks to which you can buy a portfolio of 4-5 currencies in one click, and for rubles, hryvnia or dollars, you can pay with a bank card. The index rate changes online, the graph can be seen here (link to the index and graph description page). Since the composition of the index is open to everyone, the correctness of quotes can be calculated using a calculator.

The club is run by a British company, but there is a Russian version of the site, everything is clear and accessible.
All investing comes down to buying an index, waiting for a profit, and selling it in whole or in part. On the charts, how much did the index rise in May, or from the beginning of the year.

The club also recently launched the option to insure indices to no loss. You can read more about insurance at this link.

In addition to indices, investments are available in other projects, including the manufacturing sector.
Some statistics - since the beginning of 2017, cryptocurrency indices have brought from 257% to 2419% profit. This is not a typo, but it really is.

And over the past month, cryptocurrency indices have brought from 45 to 70% of profits. At the same time, all calculations are transparent, each of you can check their reliability, since the prices for cryptocurrencies that are part of a particular index are known at any time.

You can read more about cryptocurrency indices.
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