Generating Income using Bitcoin

Introduction Emergence of Bitcoin has been in contrary with the views of majority whom believed that blockchain-driven cryptocurrency is not possible in real world. However, Bitcoin has turned up to be one of the hottest assets for investment in the recent past. The interest of every investor has been aroused despite earlier perception on possibility of emergence of blockchain-driven cryptocurrency. In the initial stages of emergence of the cryptocurrency coins, many people thought that it would end up failing miserably (Khan, 2018). However, with the increase interest of large corporations and governments to invest in the currency, every person gained interest in Bitcoin and hence it has realized the tremendous growth. Even those who had very little interest in it or did not believed it possibility has found it as a prolific investment. Therefore, although the cryptocurrency niche, there have been tremendous opportunities for making extra income online has incredibly increased, there has to be adequate knowledge and skills to have high returns. People use a number of ways to earn Bitcoin online. However, just as hard as it is to make a dime or to get free lunch in real life, similarly it is to earn Bitcoin online. To earn the cryptocurrency, one has to exchange; your time and skills, computer’s processing power or your knowledge. Some ways that require minimal time and effort also will result to minimal results. Those means that yields lucrative requires very high level of knowledge and expertise (Khan, 2018). Therefore, although some people may have perception that earning Bitcoin and cryptocurrency in general is easy, it is in contrary. People have to invest their time, knowledge, and skills to have their cryptocurrency wallets having something. Moreover, it requires time to learn and some skills to be able to earn Bitcoin. Cryptocurrencies can offer excellent earning opportunities and therefore deserve some attention and above all an adequate preparation for all the people who intend to invest their money. The best type of cryptocurrency With the evolution of the macroeconomic scenario, the economic crisis, the wave of failures, the restructuring in the banking sector, the low return on shares, bonds and others financial instruments, has pushed investors and savers to search for valid and affordable alternatives (Kamps & Kleinberg, 2018). These are just some of the reasons for the success of cryptocurrencies. In recent years, there is nothing to talk about “them”, cryptocurrencies, but not everyone knows what is meant by this term and what are the much talked about digital currencies like Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple. The current list of cryptocurrencies is quite wide, and for the purposes of their legislative to consolidate, it is necessary to classify the entire aggregate of cryptocurrencies. Therefore, the crypto category is cryptocurrency that includes three groups. The first group: cryptocurrencies that are used as a means of payment means of accumulation (savings) and exchange. Cryptocurrencies of this group are often used as an investment tool. The group comprises of Bitcoin, Bitcoin-cash, Dash, Ripple, Litecoin, and Eteherium (Kamps & Kleinberg, 2018). The second group: cryptocurrencies tokens, which receive as a result of Initial Coin Offering (hereinafter – ICO). Cryptocurrencies of this group are used as a means of payment, means of accumulation (savings) and sharing (CoinMarketCap, 2018). It is not uncommon to use cryptocurrencies of the second group as an investment tool. The group comprises of STRAT, IOT, and Waves. The third group: tokens and cryptocurrencies that have not received distribution as a means of payment, medium-accumulation (savings) and exchange, and not used as an investment tool (TRUMP-COIN). It is recommendable that the above classification allows us to distinguish cryptocurrencies by their level of liquidity and visibility (Kamps & Kleinberg, 2018). The highest liquidity is for cryptocurrencies belonging to the first group. Cryptocurrency Token Liquidity are slightly fewer new ones, and the liquidity of the last group of cryptocurrencies is the smallest of all listed. The main problem with regulating relations with tokens is the possibility of crypto tokens and cryptocurrencies simultaneously appear in different qualities. According to Developments in Banking and Financial Law: 2013. (2014), the token can also be used as a means of drinking and circulation, and as a means of payment. This phenomenon of “conflict of legal regimes” is one from the signs of the dynamic development of new technologies, as well as the search for new forms of legal relations from the market side. This phenomenon coincided with an increase in the popularity of ICOs and with a significant increase in exchange rate cryptocurrencies in 2016-2017. It should be noted that any restriction of the rules established by the market is unjustified. The exception is general solutions. In particular, Australia has determined that the regulation of tokens as the regulation of related legal relations, is determined taking into account the actual content legal relations, i.e., or as a turnover within the framework of corporate law (by analogy with the turnover of valuable securities), or under the law on the protection of consumer rights. Under such conditions, it seems expedient a move that determines the widespread use of flexible tools of the regulatory sandbox practiced many foreign states (Developments in Banking and Financial Law: 2013., 2014). As an analysis of foreign experience shows, cryptocurrency is quite successfully used as a payment product in the European Union (hereinafter – the EU) and Japan. Cryptocurrency Mentioned in documents of the Financial Action Task Force (FATF, FATF). Cryptocurrency is considered as a payment means and in the Russian judicial practice.
The origins of Bitcoin lie in libertarianism, a political ideology that considers authority centralized should be minimal and that, on the other hand, the individual should be able to decide the most autonomously possible the course of one’s life, giving up as little as possible their rights in favor of the state. For this, one of the key concepts is the Respect for Privacy. From this philosophy, in the world, two groups have emerged online: the Cypherpunks ei Crypto-anarchist. Both advocate the use of encryption to protect privacy intended as “The individual’s right to selectively reveal himself to world”. In an open society this requires systems of anonymous transactions. In the past, the purchase of goods was done with cash currency and was basically anonymous but nowadays, thanks to digital, banks have the ability to control easily our current accounts and how we spend our money. Bitcoin was not born out of nothing but has had precursors that, however, did not have the same luck: Digicash, HashCash and B-Money (but there are also Flooz and Beenz). The first introduced the digital signatures in transactions, the second proof-of-work and the third the distributed transaction log (Temple, 2000). In October 2008 he appeared online, in cryptography mailing list, a work entitled “Bitcoin: A Peer-to-Peer Electronic Cash System “by Satoshi Nakamoto (name fictitious) and the bitcoin.org domain was registered. How do cryptocurrencies work? Cryptocurrencies use decentralized encrypted technology to allow users to make secure transactions and to store money without having to use your own name or go through the services of a bank. A distributed public register yes called “blockchain”, which is nothing but an updated record of all transactions and possessions of those who have this particular type of currency (Trump et al, 2018). These currencies are anonymous by nature and decentralized, so, as they are not issued by Government bodies of any kind are theoretically immune to any maneuver. Among the main features of cryptocurrencies is their high volatility. The price movement daily is very wide and this offers many opportunities for profit but also risks they must never be underestimated. How to invest with cryptocurrencies through Mining Another method to invest and trade for a potential profit with cryptocurrencies is that to “undermine” them. This activity, from the English word “Mining”, means the mining activity criptovalute. The mining activity consists in solving blocks through hardware equipment containing information about transactions. Users who make the power of their PCs are repaid by the system in proportion to the activity performed. In simple words, it is about creating cryptocurrencies through dedicated software (Temple, 2000). Cryptocurrencies are developed with open source languages and with a decentralized system, that is why, anyone can download software and contribute to the production of the coins themselves. The task of undermining cryptocurrencies is only possible if you have cutting-edge computers very expensive with a high consumption of electricity. For a potential profit through the Mining system it is therefore necessary to make an analysis real costs, and time needed for the “creation” of cryptocurrencies. Speculating on cryptocurrencies through online trading Trading is one of the most widely used tools for buying and selling cryptocurrencies. From specify that with trading you do not actually buy cryptocurrencies but derivative contracts (CFD). The derivative is a financial instrument that replicates the progress of an asset, which could be Bitcoin, Ethereum, Bitcoin Cash, Litecoin and others (Nakamoto, 2008). There are many advantages to trading with cryptocurrencies among these: simplicity in using the platform even with a free demo account, reduced amounts required, financial leverage, risk management tools, and the possibility of aiming for a potential profit by speculating whether prices rise or not if they come down. To trade with cryptocurrencies it is necessary to open a price account for a Broker that has it this type of asset (Nakamoto, 2008). Not many brokers offer the possibility to buy or sell cryptocurrencies (Bitcoin, Ethereum, and Bitcoin Cash) but some, even among the most popular, allow its customers to trade the main cryptocurrencies. The most famous brokers for cryptocurrency trading are Markets.com and eToro. However, before talking about the services offered by these two brokers it is necessary to know why invest in cryptocurrencies through trading. Therefore, let us see why it is worth trading on cryptocurrencies and differences compared to exchanges. Benefits of trading cryptocurrency Trading cryptocurrencies is the best solution to exploit the enormous price volatility. Purchasing is not absolutely necessary in the true sense of the word. The brokers offer contracts for difference, flexible contracts based on an underlying asset, such as the Bitcoin. These tools make it possible to invest in the progress of the asset in a situation of rise or fall in prices. Moreover, it allows you to trade and aim for a potential profit with cryptocurrencies even where the aforementioned prices fall. Traditional trading and exchange, the differences Access barriers: cryptocurrency exchanges usually require a verification process rigorous and additional software installation; furthermore, it is necessary to understand how the blockchain technology. In comparison, opening a trading account on Markets.com or eToro is very simple, and allows you to start investing quickly on all the major ones cryptocurrencies on a single platform. Regulated platform: the cryptocurrency market is still very new and its status Legal is at the center of discussions in many countries. There is therefore a risk that some exchanges may suffer “stops” or even closure with the consequent loss of money. The platforms of trading have stricter rules, there are controlling bodies (eg Consob, CySec) that they verify their work, guaranteeing customers maximum confidence (Mac & Lytvynenko, 2018). Fast trading on the platform: Since brokers invest through CFDs, oen does not buy the underlying asset; transactions can be completed within seconds and is possible trade cryptocurrencies 24 hours a day, 7 days a week, including weekends and holidays. Cryptocurrency: beyond the fashionable phenomenon Less than 10 years after their appearance, cryptocurrencies1 have emerged from the darkness and have begun to arouse a keen interest in companies and consumers, as well as in central banks and other authorities (Nakamoto, 2008). They attract attention because they promise to replace trust in established institutions such as commercial and central banks with that in a new completely decentralized system, based on the blockchain and on the technology connected to it, the DLT (distributed ledger technology, or technology a distributed ledger). The rise of cryptocurrencies in perspective A good way to understand if a new technology could be an addition really useful to the existing monetary landscape is to take a step back and move on review the main functions of money in an economy and what it teaches us the story about failed attempts to create new private currencies. Subsequently one may wonder if a currency based on this technology could improve in somewhat the current monetary landscape. A brief history of money Money plays a key role in facilitating economic exchanges. Before of the advent of money, thousands of years ago, goods were exchanged mainly with the promise to return the favor in the future (that is, through the exchange of “IOU”). However, with the growth of companies and economic activity, it became difficult keep a record of increasingly complex promises, and the risks of insolvency and regulation began to be a source of concern. The coin and the institutions that issue it were born to cope with this growing complexity and to the relative difficulty of maintaining trust ((Nakamoto, 2008). Money has three fundamental and complementary roles. It is: (1) a unit of account, that is a parameter that facilitates the comparison between the prices of the goods we buy, as well as the value of the promises we make. Secondly, it is a medium of exchange: a seller has to accept it as a means of payment, with the expectation that someone else will do the same what against it; and (3) a store of value, which allows users to transfer the purchasing power over time. To fulfill these functions, the currency must have the same value in places different and maintain a stable value over time: deciding whether to sell a specific one good or service is much easier if you are sure that the currency you receive in exchange has a guaranteed value in terms of present and future purchasing power. One way to achieving this goal is through real commodity coins with a value intrinsic, like salt or wheat. However, commodity money by itself does not support exchange effectively: it may not always be available, it is expensive to produce e inconvenient to exchange, and can be perishable. The expansion of economic activity required more practical coins, which could respond to the growing demand, that they could be used in a way which is efficient in the trade and having a stable value. However, the challenge is more has always been important to maintain confidence in institutional settings through which the coin is supplied (Nakamoto, 2008). All over the world, in different contexts and at different times, the currency began to depend on the issue by the authorities centralized. In ancient times, the seal of a sovereign certified the value of a coin for transactions. Later, bills of exchange were created with banking intermediation that traders used to limit the costs and risks of traveling with large amount of coins. Current monetary and payment system In the modern era, the tested, trusted and resilient way to generate trust in currency is the independent central bank. An independent central bank means agreed purposes, that is clear objectives of monetary policy and stability financial, operational, administrative and instrumental independence democratic accountability to ensure broad political support and legitimacy (Cryptocurrency Prices, 2018). The independent central banks have largely achieved their goal of safeguard the economic and political interest of the company in having a stable currency. In this configuration, the currency can be appropriately defined as an “indispensable social convention supported by a state institution that gives an account of his work and enjoys the trust of citizens. In almost all modern economies, the money supply takes place through a public-private alliance between the central bank and private banks, with the bank central to the center of the system. Electronic bank deposits are the primary means of payment among end users, while the central bank reserves are the means of payment between the banks (Li, Shin, & Wang, 2018). In this two-tier system, trust is generated through independent and accountable central banks, which support the reserves through their availability of activities and operating rules. In turn, trust in bank deposits it is generated through various means, including the regulation, the supervision and deposit insurance systems, which in many cases are incurred in last resort by the State. Cryptocurrency: the elusive promise of trust decentralized Will cryptocurrencies keep their promises? Alternatively, they will end up being a curiosity ephemeral? To answer these questions it is necessary to define them more precise, in order to understand the technology that supports them and analyze the economic limits who are associated with you. Cryptocurrencies aspire to become a new form of currency and promise to maintain confidence in the stability of their value using technology (Li, Shin, & Wang, 2018). It consist of three elements: first, a set of rules (the “protocol”), that is, a code computer that specifies how participants can do transactions; second, a ledger (ledger) that preserves the history of the transactions; third, a decentralized network of participants who update, preserve and read the transaction ledger following the protocol rules. With these elements, supporters of this technology argue, cryptocurrency is not subject to incentives potentially counterproductive of banks and sovereign entities. In the perspective of the coin flower taxonomy, cryptocurrencies combine three key features: first, they are digital, they aspire to be a practical means of payment and rely on encryption to avoid counterfeits and fraudulent transactions. Secondly, although a private party creates them, there is no attribution of liabilities, or they cannot be redeemed, and their value derives only from the expectation that they will continue to be accepted by other users: this makes them similar to a commodity currency (although they are without any intrinsic value); finally, they allow peer-to-peer digital exchanges. What distinguishes cryptocurrencies compared to other private digital currencies, like bank deposits, is the digital peer-to-peer exchange (Li, Shin, & Wang, 2018). Digital bank accounts have existed for decades. Moreover, “virtual currencies” issued by private parties – such as those used in highly successful online multiplayer games like World of Warcraft – have anticipated the cryptocurrencies of a decade. Unlike these coins – cryptocurrency transfers can, in principle, take place in a context decentralized, without the need for a central counterparty to carry out the exchange.