Explaining normally: 10 myths about bitcoin.

On social networks, people in business suits are beckoning to webinars to earn millions of bitcoins and not, advertising for “turnkey mining farm, inexpensive” tempts from the pillars, and at the same time, the Internet is full of articles that bitcoin is a new financial pyramid . It’s scary to miss the opportunity to get rich, but you don’t want to be a fool either. How to figure out when there is so much conflicting information around? In order not to be fooled, let’s expose popular misconceptions about this cryptocurrency.

Myth number 1: It takes a lot of incomprehensible words that explain what is BitcoinIn fact, not everything is so bad. Here’s what you can understand from Wikipedia and the words of experts about cryptocurrencies, bitcoin and mining:

Cryptocurrency – Internet money that is created, transmitted, protected using elements of cryptography, more simply – mathematical encryption algorithms. Bitcoin is far from the only cryptocurrency.

Bitcoin is a cryptocurrency that can be exchanged on the Internet without banks and other intermediaries, “electronic cash”. Bitcoin is decentralized – it is not tied to any state and does not have a regulatory center that can “print” money or set rules for using it. No one controls it, and anyone can issue up to a certain limit – 21 million bitcoins. Bitcoin is anonymous – you do not need to enter any of your data to register a BTC wallet. The Bitcoin network is powered by computers around the world, not centrally located servers. Bitcoins on the network are transferred directly between two wallets, without intermediaries. Bitcoin is the name for the entire network of the payment system, and the monetary unit, and the technology of data transmission in the network – what we are talking about is usually clear from the context.

Mining (from the English mining – mining) – the provision of computing power of a computer to maintain the network (for example, bitcoin) in exchange for a reward – bitcoins or other cryptocurrency.

“Mining (mining) bitcoins can be compared to mining.

How to protect yourself from hidden mining?

The more tractors you have under your control, the more you can find in the same time. Only the finding of bitcoins is regulated in such a way that every 10 minutes only 1 miner finds new money, “explains the lead developer of BitClave, Anton Bukov. The more powerful the equipment, the higher the likelihood of becoming that lucky miner and getting a reward. Mining is the only way to issue new bitcoins.

Mining pools are associations of miners that have emerged because powerful equipment is needed to successfully “mine” bitcoins alone.

Solo mining with little power is like playing the lottery. When a miner enters a pool, he receives a portion of the money every time someone from the pool “mines” it. The money is distributed throughout the pool in proportion to the capacity of the equipment, this guarantees a “stable” income.

Blockchain is a chain of blocks of information, where each subsequent block is linked to the previous one.Why blockchain is called the second Internet, and what is it all about

It is impossible to quietly enter false information into such a chain, as well as to cancel any transaction. Everything written on the blockchain remains unchanged . The entire Bitcoin blockchain chain is entirely stored on the computer of each miner in the network. Blockchain technology in particular ensures the security of Bitcoin and other cryptocurrencies.

To stop the work of a centralized payment system, for example, Yandex.Money, you need to turn off their servers – prohibit work at the state level or destroy them physically. The Bitcoin network is operated by miners all over the world, so it is almost impossible to block or freeze someone’s accounts. To do this, you need to turn off all the computers that support the network – and if at least one miner with an antediluvian computer remains somewhere in Zimbabwe, it will work. This is how decentralization works.

To register a bitcoin wallet, in contrast to the usual Internet wallets, you do not need a passport, phone number, identification code or any data in general. You can have as many wallets as you want. Therefore, bitcoins are anonymous, for which they are also called “electronic cash”. But it is important to understand that all operations on your wallet are publicly available, just no one knows that the wallet is yours until you say it yourself. If mom finds out that a particular wallet is yours, she will be able to see all your past and subsequent transactions. And her friends too, if she tells them. But if you “burned out”, you can always get a new wallet.

Bitcoins, like regular cash, can simply be lost. When registering a wallet, private keys are generated – if you forget them or give them to an attacker, then that’s it – consider that you dropped your money in a crowded place. Private keys are not recovered, like, for example, a password from Yandex.Money. You will not prove in any way that it was your money, because you did not enter any data about yourself. And there is no one to prove it.

Myth # 3: Bitcoin and N are a pyramid, the new MMM

The pyramid scheme, or Ponzi scheme, assumes that old investors earn income by attracting new investors. At the same time, all investors are promised income, and for the pyramid to work, you need to constantly attract new investors. Late depositors are deliberately deceived, because it is impossible to attract investments endlessly.

The Bitcoin network does not promise income to anyone and can work with any number of users. Of course, for those who bought bitcoin in the hope of a long-term growth in its rate, it is really profitable that you buy with the same hope. And if many people believe in growth and buy bitcoins, then until a certain moment the rate will grow. But nobody knows to what extent. Therefore, do not flatter yourself if someone claims that “bitcoin will always grow”, it may suddenly fall. For example, due to the emergence of a more promising cryptocurrency.

Myth # 4: To use Bitcoin and Nom, you need to mine it

“Some people think that in order to use Bitcoin, you need to mine it. Of course, this is far from necessary. If you want to mine – mine, if you want to use – buy bitcoins and use it ”, – shares a popular misconception, lead developer of BitClave, Anton Bukov. You can buy bitcoins for “regular” money or for other cryptocurrencies on specialized exchanges. For example, Bittrex or Kuna.io.

Myth # 5: Mining is more profitable than buying bitcoins and n and waiting for the rate to rise

Mining is profitable if you spend on equipment, electricity bills, mining pool commission (if you don’t want to mine alone) and rent less than you get bitcoins. You can roughly calculate whether your investment in mining will pay off using mining calculators that are easy to google. For example, on my 1.33 GHz netbook, mining will only be at a loss. Be sure to separately deduct the cost of the equipment, be sure to it in bitcoins!

Alarm! If you decide to join the mining pool, be careful – choose only trusted ones, because they are often hacked by hackers, and they can trick you. Be doubly skeptical about cloud mining, this is where the pyramids really started, which pay rewards at the expense of new investors.

Myth # 6: Bitcoin is expensive

“I often hear from ordinary people that bitcoin is too expensive and they cannot afford it. Bitcoin has a precision of 8 decimal places. There are exactly 100 million satoshi in 1 bitcoin, which is like a penny from a ruble, ”says Anton Bukov. That is, it is absolutely not necessary to buy a whole bitcoin right away. You can buy 0.00000001 bitcoin, at the exchange rate on the day of this writing, it will cost 0.0047 rubles.

Myth № 7: chock and n can be hacked and its already hacked

Hacking Bitcoin means hacking the blockchain – no one has ever done that. They hacked exchangers, lured away private keys from BTC wallets. But nobody hacked the blockchain itself. There are horror stories on the Internet that in a few years quantum computers will learn how to hack the blockchain, but you don’t need to be deeply imbued with this. First, such a hack is unlikely to be economically feasible, as it will take a lot of energy. Secondly, if you fantasize, then, most likely, miners will be the first to use quantum computers – which will dramatically increase the required amount of energy. After all, the more capacities independent miners have, the more efforts will be required to hack.

But the myth is partly true. In order to “fake” new operations or change the protocol for generating new blocks in the blockchain, you need to control 51% of the system’s capacity. But the “51% attack” is hardly profitable, because it can only be carried out openly. And, most likely, after the hack, the remaining 49% of the network will separate from the attacker, and he will be left alone with the stolen, but depreciated (or depreciated) money.

Myth number 8: Value of the cue ball and on anything not secured , and that’s too bad

Bitcoin’s value is determined by the demand for it. If people quote it as a medium of exchange and an object for investment, then it will grow. If demand drops to zero, then value disappears. This is neither good nor bad, it is just that. And this works for any money: if all dollars are exchanged for bitcoins, then dollars will lose value. What no one needs is not valuable. The demand for bitcoins, in turn, is highly dependent on the media and public opinion. For example, when Mike Hearn, a former Bitcoin Core developer and one of the early adopters of bitcoin, wrote that he had become disillusioned with the cryptocurrency, the price dropped from $ 450 to $ 350 per bitcoin.

Myth # 9: The more miners, the sooner all bitcoins and us will be released

You won’t be able to release all bitcoins faster, even if you mine with the whole world. The number of miners affects the probability for each of them to receive a reward, the more miners – the less likely it is. The reward itself is fixed and only one miner always receives it once every 10 minutes (the time required to create a new record – a block in the bitcoin blockchain, this limitation is built into the code and cannot be circumvented). For example, at the time of this writing, every 10 minutes the whole world is competing for 12.5 BTC. Over time, the reward will only decrease, so all bitcoins will be released by 2140. Not earlier. Unless, of course, by that time bitcoin will not lose its relevance or humanity will not stop needing money.

Myth # 10: Bitcoin is the ideal money of the future, ordinary money will soon die

Bitcoin has many disadvantages. For example, at the time of this writing, the computer of every full-fledged client of the bitcoin network must store almost 170GB of history of all transactions in the system. This is exactly the same file that is duplicated on many computers. And over time, it will only grow.

You need to wait at least 10 minutes for confirmation of transactions, and this is if you assign a large commission for the transfer of funds. No commission – you can wait a day. That is, when someone sells coffee for BTC, the money does not come to him immediately. In the Bitcoin network, it is theoretically possible to carry out 7 operations per second, now the average is 3-4 operations per second. For comparison – Visa conducts 2,000 transactions per second with a maximum of 50,000 transactions. “At the same time, the cost of a transaction on the bitcoin network is about $ 70. Bitcoin can be called a commercially effective replacement for modern systems with a huge stretch, ”says Igor Bederov, founder of CABIS.

Still, there is a probability of “51% attack” and its possible consequences are not fully understood. “More than 80% of all bitcoin capacity is now concentrated in one country – China. And more than half of all Chinese mining is concentrated in the hands of only 4 companies, ”adds Igor Bederov.

Well, buy, mine, what to do in general?

Be skeptical, invest in bitcoin and in mining only what is not scary to lose, not invest the last money, study and check everything yourself. If somewhere in the text I am wrong, then I apologize and more literate people to correct me. I am sure that it is impossible to know everything about bitcoin. I will be grateful to everyone for questions and new myths – we will sort it out together.