How I Make Extra Cash Using My Favorite Bitcoin App
When was the last time you came across Bitcoins? Maybe you saw it advertised online, read a news article about it, or perhaps your neighbor told you about them?
Perhaps you have always been curious about what they are and how they work…but have never made the first move to see how they can work for you? This article will provide you with a brief, detailed history of how Bitcoins came into prominence, exactly what Bitcoins are and some simply ways I use them on a regular basis to earn some extra cash on my spare time. You will then have a good idea of how Bitcoins can be used for you or your business to make the handling of money easier than ever before.
A brief history…
Bitcoins are basically a type of digital currency that was first suggested in Oct 2008. Oddly enough, the person who developed them started dissociating himself from the whole project (on Source Forge) in 2010 and used the pseudonym Satoshi Nakamoto. Nobody to this day knows or understands who on earth he is! Yet, Bitcoin operations commenced on January 3rd, 2009 and continue to grow to this day with just over 13 million Bitcoins currently in existence. The system is designed to ensure that no more than 21 million units can ever be made, which should occur the year 2040. Each Bitcoin component can be broken up into 100 million components for use in commercial trade.
Bitcoins aren’t backed by any physical commodity but are instead traded which makes them a very interesting commodity. Since so many people use these forms of digital payments globally, the individual trades can happen immediately, for free, and at a very low cost. Bitcoins remain as an open source currency that can be obtained by anyone interested in becoming a user. All one needs is Internet access, an email address, and some cash to get started.
How are Bitcoins made, you may be asking, if there is no gold or silver or other commodity involved?
The process of making Bitcoins involves a system called “mining”. A miner continuously tries to solve complex math puzzles based on the most recent Bitcoin transactions made on the network. This end result is also called a block and is currently made every 10 minutes. This is impressive considering the incredibly high number of attempts (over one billion) that are generally required to crack the algorithm of recent transactions! This number is also regularly adjusted as the computational demands of the algorithm increase or decrease based on the general consensus of what Bitcoin users want at the moment.
But you may still be asking what the point of mining is? The whole point of mining is to make a record of past Bitcoin transactions, also known as a public ledger. The first part of the ledger was created by the owner of the system himself and is still found today on the computers of everyone dealing with Bitcoin transactions. Thus, the ledger is built in a chain-like fashion, with new blocks being added on top all the time.
That’s nice, but who is doing the mining and what are the benefits of doing it? Great question! Any with an internet connection can mine for Bitcoins, but it far more effective to join a pool to increase your computing power. At one time CPU mining, or the use of a personal computer, had enough power to solve the earlier hashes of the network. With time, the ratio of power costs to bitcoin generation required greater processing speeds, resulting in newer technologies such as GPU mining, FPGA mining and the popular ASIC mining most commonly used by miners today.
There are great incentives for cracking the algorithm and creating new blocks on the public ledger. The users who are capable of doing this are awarded actual Bitcoins, which today have an impressive market value that fluctuates around $1000 per coin as well as the transaction fees associated with all of the recorded transactions. This keeps people motivated, as without a public ledger the entire system would be very insecure.
The Valuation of Bitcoin Currency
Bitcoin is not controlled or held by any financial institution making it largely a decentralized currency. No central bank or any other power for that matter is able to control the circulation, create more currency or trade this type of money. This is a very important factor in keeping the world of Bitcoin trade safe.
Unlike real world money, authorities or banks are not capable of devaluing its finite supply. Rather, the worth of Bitcoin lies only in its approval between users. Upon reaching any discrepancies, all users have a right to say what they feel is the truth, and the majority will win the dispute.
As international money values fluctuates according to demand and supply as well as market speculation, the same holds true with digital currency: As more individuals create wallets and spend Bitcoins, the value of Bitcoin as a major currency will increase.
What are the Advantages of Bitcoin Currency over Traditional Currency?
There are many advantages to retailers and consumers that use this form of digital payment. Speed is the most important of them, since Bitcoin is transferred immediately using the power of the Internet. The there is the issue of safety: The recent hacks of many national retailers’ payment processing systems have revealed to us that the Internet isn’t always a safe place for private data. With Bitcoin, users don’t give up their private information as all transactions always take place anonymously.
Convenience is another advantage of using Bitcoins. Bitcoin money can easily be converted to dollars at any time, without requiring one to actually hold any money. There are also no middlemen involved in the process, which drastically reduces the fees required to process transactions. The potential savings can be used to reduce the final retails costs of many products.
Micro currency is now a reality. Bitcoins can easily be split down to one hundred millionths, which is particularly convenient for those running convenience stores or subscription-based sites that rely on charging small fees from many users. Also, each transaction is stored into a permanent database, the public ledger, which makes it easy to track purchases historically. This can greatly benefit law enforcement officials who rely on such data to win troublesome court cases.
Other benefits include the lack of having to pay exorbitant transaction fees, such as those often charged by banks. This is especially true of international transactions.
There are no geographic borders in the Bitcoin world. People are also protected from taxes by authorities from particular geographic regions, since the trades are always done anonymously.
Are Bitcoins Secure?
Internet users have two keys – a public key that functions as their personal Bitcoin address and a private key that hold their personal data. Each transaction is then signed digitally as a mixture of the two keys and is so personal that it can never be reused in any other transaction. Nobody involved in the transaction is ever able to see any of your private info such as your name or address, keeping you anonymous.
The use of complex algorithms ensures that payment can only reach the target recipient. The network validates all trades and transfers, as they occur in order to avoid any fraudulent transactions. This is huge plus for online merchants who are very often subject to credit card fraud and expensive chargebacks while using traditional currencies due to the ever-rising problem of fraudulent transactions.
Great! I want to get started. How?
The first thing to do is to setup a so-called wallet where you will be storing all of your digital money. The beauty of this system is that it can be done by anyone in the world in anyplace where an Internet connection exists. There is no need for any brick-and-mortar bank to store your money. Yet, money can easily be taken in and out of the system at your convenience.
Instead of using denominations of currency based on the metric system of cents, dollars and hundreds of dollars, money is transferred in digital, cryptographic bits from one user to another, relying completely on the Internet. Each transaction is publicly encrypted and can only be deciphered by one’s private keys.
There are now numerous apps that make the process of signing up and acquiring Bitcoins even easier.
One example I love to use is the smartphone app Bitcoin tapper, which is simple and enjoyable to use. While it certainly won’t make you rich overnight, you can learn so much about this exciting new area of digital finance and even make some money while you’re at it. The app finds numerous clever ways to earn Bitcoins using simple taps of your smartphone. In fact, a place called Sean’s Outpost in Florida uses similar services like this to generate money for the homeless! It’s simple, easy to use, and affords you the ability to earn money with very little effort. Highly recommended!
Challenges Facing Bitcoin Currency
There are numerous challenges still facing the use of Bitcoin currency, preventing from gaining acceptance on the global marketplace. We are still very far away from allowing it to replace traditional currency, although this idea is garnering more and more attention. Curious users may give it a shot and enjoy its convenience.
First, there is the issue of a relatively small number of users that rely on Bitcoin currency as their primary way of paying for goods and services. Nevertheless, adoption is growing internationally as new technologies and tools are being developed to make participation easier. The virtual money isn’t yet available worldwide but is slowly getting approval and greater market recognition. The purchase of bitcoins is also comparatively pricey, which may detract poorer countries. The present rates can be found on exchanges available on-line and can reach as high as $1000 per bit coin, although the market remains quite volatile in this regard.
Furthermore, there is an impending loss of incentive that may be experience by miners in the future due to a progressive decrease in the block reward that will occur as the total bitcoin number reaches it limit of 21 million. A new denomination will have to be introduced at that point or another solution may have to be found.
Next, there is always the issue of security looming in people’s minds. Bitcoins can be stolen like other money, as there is never such a thing as a 100% secure electronic database. This was certainly evident after $500 million was stolen in the form of bitcoins from a Bitcoin exchange firm in Tokyo (Mt. Gox). A quarter of a million was also stolen from user accounts at another exchange firm in 2013, according to the Economist. A network must stay very secure in order to prevent such attacks from happening. It is critical to never let one’s private keys ever go public, while making regular backups of secure data.
Many measures have been put in place to make Bitcoin data more secure. For example, the wallets used to hold currency used to be unencrypted. Encryption was finally added as a desperate measure to secure one’s assets. Malware attacks are now less likely to store your private keys.
Many other ways of securing data have been devised, which mean that no malware attack would ever be strong enough to cause the entire Bitcoin currency system to crash. Malware attacks, loss of private keys, demands for backing up are all essential parts of cyberspace now and help to drastically minimize the risk of data fraud.
There is also the issue of power and control. The US government does not control Bitcoins, so there’s little insurance for your account if hackers manage to successfully get into someone’s account. There is also little benefit for doing so for the government since taxes are generally not collected for such anonymous transactions. Losing these taxes could mean an immense loss to the authorities. Another thing is that a powerful currency is often used by national governments as a way of influencing other nations. This leveraging power is lost if bitcoin were to become the primary international currency.