Together, bitcoin and ethereum make up about 70% of the crypto market. Ethereum is much newer than bitcoin. Released in Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. A cryptocurrency is a medium of exchange, such as. Despite having fewer applications than many of its newer competitors, Bitcoin's value has soared over the last few years, and it remains the biggest. DIY CRYPTO MINING RIG
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The government of any country can print banknotes at any time. Things are much more straightforward with Bitcoins. As of now, there are almost 19 million Bitcoins BTC in the world. About new BTC are created every day, but the daily amount of new Bitcoins is decreasing with time. In total, there will be 21 million Bitcoins in the world. The precise amount is 20,, No more, no less. If the Federal Reserve decides to print million dollars, they just print them.
They are not going to ask you or us. Their amount is limited to 21 million coins. Traditional currencies are controlled by central banks of respective countries. Nobody controls Bitcoin. Bitcoin is an anarchic system. The source code prescribes everything that should be happening in the system of this currency. In the next chapter, we are going to see how it works. Transactions in traditional currencies like dollars are controlled by banks. How does it work?
Can anyone but you and bank workers find out that you sent money to your grandmother? Did it go through? Will it go through in 20 minutes or in 24 hours? Please wait. All Bitcoin wallets are interconnected. They communicate with each other all the time sharing information about all cryptocurrency transactions. You have 1 BTC, and you want to send 0. Up until this point, everything is the same with the only difference being that the Bitcoin account number contains more letters and has more symbols overall.
Your wallet transmitted the information about the transaction to all other wallets. However, simply transmitting the information is not enough. Somebody should execute validate this transaction. In the case of traditional money, banks do it. In the case of Bitcoin, a computer or a group of computers do it. The computer gets a reward for the transaction. It must solve a complicated math problem that changes every 10 minutes in a highly competitive environment.
This process is called mining, and we are going to discuss it in the next chapter. All the data in the Bitcoin system is open to any person. All information about transactions is public. However, this information is anonymous. For example, 0.
Any person in the world can verify it. You will see for yourself that your money is transferred to your grandmother and is now in her wallet. You can show it to other family members. They are interconnected and serve as a foundation for cryptocurrencies. We already mentioned that information about all transactions in the Bitcoin system is available to all people.
This information is stored on the blockchain. Blockchain literally means the chain of blocks. There is nothing complicated about this term. Blockchain is like a ledger where pages are numbered sequentially, each page contains the data of creation and a list of transactions performed at this moment of time. One page is called a block. By the way, this data is real.
You can find it in the Bitcoin network by following the link. Similar ledgers have existed since the times of Ancient Rome. However, one thing distinguishes blockchain. We have a notebook with an endless number of pages and start filling out the first page. All wallets in the Bitcoin network communicate with each other.
We receive new data. And so on. We record all the data on the first page of the notebook. We keep receiving more information about transactions. We keep recording. Until we turn the page, all these transactions are void. How to turn the page? Only cryptocurrency miners can do it.
If we are not miners, there is no way for us to do it. We ask a miner for help, and he turns the page. He also puts time and his name on it. Miners get rewards for their work, which is also recorded on the page before turning and sealing it. Then we fill the second page with new transactions. To turn it, we ask a miner again. There is no way around it. This process is endless. Blockchain is open to all people at all times. You can open any page of the so-called ledger and see who made a transfer, to whom, when, and how much.
You can also see the balance of any wallet in Bitcoin. You will only see addresses, but all the information is public. If you want to see it for yourself, you can go to blockchain. Easy, right? We are sure that now you too want to become an important person that everyone needs to close a new block on the blockchain i. Plus, they say you get paid well for it. Bitcoin mining is the process of solving a math problem using computing equipment.
The problem is the same for all the computers in the world. By doing so, he validates all the transactions recorded since the closure of the previous block. Once the problem is solved, another problem appears. The whole world starts working on it. How often do problems change? Bitcoin source code is written in such a way that it takes about 10 minutes to solve a problem.
It is enabled through a simple algorithm. The more miners are working on the problem, the more difficult it is. And vice versa: less miners would be solving an easier problem. Unlike traditional currencies, cryptocurrencies are anonymous but completely transparent. Ironic but true. Senders and recipients are identified with wallet addresses instead of names, like the gibberish we already mentioned above: 1CKXsyrhF9zfzizZb1x9zwkHczjxNRc6by.
On the one hand, it guarantees full anonymity. On the other hand, if you match a real person with his Bitcoin address, you can see all his transactions: how much he transferred and to which addresses. One important thing that distinguishes Bitcoin from the dollar or euro is that nobody regulates or safeguards Bitcoin in any way.
Here is a simple example. You would contact your bank and file an application. It is almost certain that you will get your money back. If you transfer 0. There is no mechanism that would let you get your money back. There is no Bitcoin police. In this case, cryptocurrencies are like cash. Storing cryptocurrencies is as unsafe as storing cash.
The only difference is that banknotes are pieces of paper, and you can only stash a limited number of those. On the contrary, an unlimited number of Bitcoins can be stored on a flash drive, or even in a tiny file on your computer. Since then, many Nigerians have reported that their bank accounts have been frozen due to cryptocurrency-related activity. Mr Fadugbagbe's bank manager called to advise him that his account would be closed, giving him a day to transfer his funds.
One source says his bank account was frozen two weeks ago with tens of thousands of naira in it. The software engineer says the bank would not disclose the reason for its actions. He suspects he was targeted for running a cryptocurrency remittance business.
Furthermore, the BBC was shown a customer's bank correspondence, which contains the warning: "We strongly advise that you do not use your account for cryptocurrency-related activities so you don't get into trouble with the law".
However many investors with the possibility say they will continue to trade using their overseas bank accounts. They say they can easily revert to peer-to-peer transactions. This means that rather than transferring funds between a financial institution and a cryptocurrency online trading platform, investors transfer funds directly to each other or through a middle person as they buy and sell.
This is the method the cryptocurrency community used before the development of the virtual currency marketplace ecosystem in Nigeria. Mr Ugwu has also heard many in the business of cryptocurrency talk of relocating to potentially more hospitable environments such as Ghana, Rwanda and Sierra Leone. The concerns of the authorities when it comes to cryptocurrencies being used for illegal purposes are legitimate but some argue that they are being too heavy handed. A former Deputy Governor of the Central Bank, Kingsley Moghalu, believes that the country should engage and manage the risks "rather than just shutting it off completely - especially to the extent that it provides livelihoods for many people in a depressed economy".
There are also fears that cryptocurrency could become a missed opportunity, according to Gbite Oduneye who heads EGM Group, a Lagos-based brokerage firm. Build an ecosystem round it. Put in rules and regulations. Nigerians also see cryptocurrencies as a way to get around foreign currency restrictions.
She saw awareness of their service grow in October during the EndSars protests against police brutality. Attempts to crack down on the organisers by freezing their bank accounts led to the increased use of digital currencies, which saw Bitcoin trend on Twitter. Ms Nwachukwu says this resulted in a wave of new sign ups and an increase in transactions. At the heart of the rise of Bitcoin is a distrust of centralised financial systems and top-down economic control, investors say.
Many express their frustrations with government policy and the decline of the Nigerian economy. None more so than Mr Fadugbagbe, who spent years struggling to scrape by as what he describes as a "minimum-wage slave". I trust cryptocurrency more.
Clarification 1 March This article has been amended to make it clear that the Statista survey of Nigerians was carried out online, and so does not reflect the whole population. How Bitcoin's vast energy use could burst its bubble.
Nigerians' double blow: Currency woes and Covid Bitcoin: From buying a Bentley to losing it all. Why I bought Bitcoin. Cryptoasset investors warned they may lose the lot. Image source, Getty Images. It was a decision that transformed his life.
Tola Fadugbagbe. No Nigerian comes to cryptocurrency and wants to look back. Getty Images. Nigeria's cryptocurrency business 1. Michael Ugwu. I'd made naira but lost US dollars. That's when I realised we're hustling backwards".
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