A lot of people know about cryptocurrencies like bitcoin, Ethereum, Litecoin, etc… but they don’t understand its working and the future of cryptocurrency. So, let’s walk through by understanding the concepts such as – what is a cryptocurrency, its working, bitcoin, and best methods to earn Bitcoin for free in 2020.
For a long time, the currency system has undergone many changes, from the barter system, gold coins to paper currency, and now modern/digital currency has taken its place. Most of the people have adopted the digital currency for daily use that includes bank transactions, card payments, UPI, and more.
The digital payment system is dependent on a centralized server like a bank or some organization through which you can transfer the amount to another person. This centralized server can be a great method for transacting money, whereas it can also lead to major problems.
Lets us assume that you are transacting money with your colleague and it’s done successfully, but there might be many scenarios where this could have gone wrong such as technical issues from the central server/bank. Risks like your account getting hacked and other cyber threats are always there in this system.
So, what’s the solution to these issues and how can we keep our money safe?
Presently, the best solution would be “Cryptocurrency” – A new model of limitless transactions and the future of the modern banking system.
What is cryptocurrency?
A cryptocurrency refers to a virtual currency that can be used as a medium of exchange (online fund transfers and transactions). The cryptography method is used for encryption and decryption of the cryptocurrencies (eg. blockchain).
For a simple explanation, cryptocurrencies are the digital cash that can be used by everyone for their regular transactions and solves all the problems of modern banking systems. The advantages of this system are:
almost 0% chance of failure.
Easy verification of fund transfer with the help of hashing algorithms.
Encrypted p2p network, which means no worries regarding hackers or cyber threats.
Decentralized system– operating independently of a bank or any sort of central server.
Little to no transaction fees. (except wallet transaction fees)
No limits for withdrawals or purchases.
Very few paperwork.
Faster international transactions.
NOTE: Although cryptocurrency is safe and user data can’t be known. Account transactions can be traced.
Cryptocurrency is not only beneficial for businesses, large industries, and also investment sectors but also to a common person. Recent few years, there is a huge increment of cryptocurrency rates and also mining has increased exponentially.
How does a cryptocurrency transaction work? (simple explanation)
How does cryptocurrency work?
When someone requests payment or transaction, the transaction requested is sent through p2p computer networks, also known as nodes. It validates the user status and transaction using the algorithms.
Once it is verified, the transaction is connected to a group with other transactions and creating a new block of data for the ledger. (A verified transaction can have cryptocurrency, records, contracts, or any other information.)
This new block of data is added to the existing blockchain in such a way that it is set as a permanent record and no modifications can be done. Then the transaction gets completed.
Read more in detail at blockgeeks about blockchain and crypto.
Everything that an average user needs to know to do a transaction using cryptocurrency
You must be at least 18 years old and reside in a country where crypto wallets are permitted. Countries where coinbase services are available.
1. Create a cryptocurrency wallet (it’s similar to PayPal account or any other digital wallet)
Personally, my preferred wallet is Coinbase.
- Enter your Name and Email id.
- Click on “Create account“. After this, go to your email inbox and click on the verification link.
- That’s it. Now you are eligible to start sending and receiving your preferred cryptocurrency.
- For further access such as trading one cryptocurrency to another (eg. Bitcoin to ethereum), you need to provide contact details and a photo id.
2. Now, you have to choose the preferred crypto to purchase or receive from other users.
The top 10 cryptocurrencies are given below.
3. Here’s an example of how you can buy cryptocurrency (Bitcoin) from coinbase.
- Click on the “Trade” button. This will enable the options to buy, sell, or convert your cryptocurrencies.
- Enter the amount to buy and preferred cryptocurrency (BTC) $100.
- Add a payment option to the Coinbase account, you can either choose a debit card to invest a small amount (instant purchase, $3000 buying limit) or directly from bank transfer for a large investment (takes few days to process, $25000 buying limit).
- A similar procedure can be followed for selling bitcoin (in the “sell” tab).
What is Bitcoin?
Most probably, Bitcoin is the first name that comes in your mind when you hear about cryptocurrency. It is one of the most popular cryptocurrencies out there.
Although bitcoin is a currency, it actually looks like numerous lines of code with multiple if, else, and conditional statements.
According to the founder of bitcoin, Satoshi Nakamoto says that “A bitcoin is a chain of digital signatures where the owner can transfer bitcoin to another person by digitally signing a hash of the previous transaction and the public key of next owner then adding these to the end of the coin. A payee can verify the signatures. “
In simple words, A bitcoin can be stored in various wallets. When a user wants to receive an amount in terms of bitcoin, he can provide a unique address known as bitcoin address/ public key for making their transactions (numeric value and character string). There is no need for providing any additional information, unlike personal info, bank details, or addresses.
Eg. Bitcoin address- 35NGv7gqXx1o8rtxj1W8EKNEHKGpkj5jBx
How profitable can bitcoin be in the future?
Investing in bitcoin is great for long term benefits. Bitcoin is completely volatile and no proper estimation can be determined. Within a year (2017-2018) bitcoin value increased rapidly from $4000, $10000, and went up to its highest peak of $19000. Although it raised to such an extent, its price dropped within a year and the value of bitcoin was less than $4000 in 2019, then it extended to $13000 in the same year.
>>Check out the graph on the huge rise in bitcoin over the years in the image below.
On this date, the value of a bitcoin is approximately $9300. Because of this high fluctuation in its price, many crypto experts and well-known investors have been predicting that the value of bitcoin would rise to $20000 and then to $100000+ within 2030.
Although most people speak that crypto/bitcoin is unstoppable, there are few controversies too and many business owners, investors also suggest that bitcoin’s value might go to greater heights but it can never eradicate the general economy of a country.
Read more about the Tesla CEO, Elon musk views on bitcoin and cryptocurrency.
Simple ways to earn Bitcoin (BTC) for free in 2020
As of now, you might have understood a general overview of what is cryptocurrency and bitcoin. Due to this rise in the value of bitcoin, cryptocurrency mining became a great business model. Most people used to buy multiple high-end graphic cards to mine bitcoin. Presently you can invest in bitcoin by purchasing it from bitcoin.com. Whereas it’s too risky if the price falls. So my suggestion would be to check out these methods from which you can make a reasonable amount of bitcoin for free.
If you’re unable to purchase bitcoin. You can check out these methods to earn bitcoin online for free.
- Affiliate marketing and promotions
- Some of the organizations/companies provide commissions for promoting their product or services. Recommended for now- Coinbase.
- Mining and trading
- Check out freelancing jobs here. If you have the skills, you might even earn a bitcoin in a few days.
- Shop and earn bitcoin
- Earn a percentage of your shopping commission through bitcoin. Lolli extension (applicable only for the US users)
- Complete small task and surveys
Related links to make more than $100 per month
- Earn $10 using coinbase.
- Install the Brave browser. (Best strategy to earn Bitcoin/cryptocurrency for free 2020)
>>Learn everything about crypto: Cyber security and cryptocurrency Training & Certification