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Invest bitcoins. Investing in bitcoins: types and where you can profitably invest. "What can characterize a person more accurately than his financial transactions?"

Is it worth investing in Bitcoin

Bitcoin is not just a digital cryptocurrency, it is also an investment tool. The principle of investing can be compared to investing in any other currency, such as dollars or euros. Even if classic currencies raise a lot of questions, the question of whether it is worth investing in Bitcoin may even lead to a dead end. On the one hand, it is a promising instrument that is only gaining popularity, but on the other hand, bitcoin has already established itself as a highly profitable, but extremely risky investment.

The dangers of investing in bitcoin

Before you decide to invest in bitcoins, there are two things you need to do. First, take a close look at what Bitcoin is. Second, you need to know all the dangers of investing. Bitcoin combines all the dangers of classic currencies, but they add the risks associated with the principles of cryptocurrency:

Exchange rate risks;
Lack of centralized control;
Indefinite legal status;
Low prevalence;

There are always exchange rate risks when you exchange the currency in which you conduct your main business for any other currency. This applies not only to bitcoin, but also to euros, dollars and other currencies. The bitcoin rate is shaped by supply and demand. In defense of a stable exchange rate, they cite the fact that the number of bitcoins is limited. This fact is indisputable, but if we look at the history of the bitcoin rate, we will see that the currency has never been distinguished by a stable rate or some kind of long-term predictability:

No other currency in the world has shown anything like it in recent decades. The cost of 1 bitcoin has increased from a few cents to $ 1,000 in 5 years. In times of high exchange rate and expensive bitcoin, this was explained by the fact that the amount of currency is limited, and its production reached an unusually high level of complexity. But everyone was expected to fall to levels around $ 200 per 1 BTC.

Decentralization of bitcoin and the absence of a regulator - all this is positioned with a plus sign. Yes, the absence of a regulator that could significantly affect or even worsen the position of the currency is a plus, but only on the one hand. Lack of control breeds abuse or even insoluble disputes between participants.

It is not in vain that regulators exist to work with real currency, for example, the Central Banks. The bitcoin system itself is as transparent as possible - all users can look into any wallet or trace any transaction. The absence of a gendarme in the currency market, and bitcoin is a currency, is fraught with situations where one of the parties is disadvantaged and has no opportunity to defend itself.

Scammers can steal your bitcoins. You will not have the opportunity to find protection and return the stolen, even if you have all the evidence on hand. Wallets are reliably protected, and the encryption system does not allow forgery of transactions. But there are less obvious patterns. For example, one of the largest exchanges MtGox “lost” almost 700 thousand bitcoins due to a hole in the system. The exchange accumulated money from ordinary people and companies, and as a result, all customers lost their bitcoins.

The legal status of electronic currencies, therefore, is under a big question, and bitcoin in Russia has not yet been able to find its place. Since March 2016, the Russian government has actively taken up the regulation of bitcoins and is still developing a bill. For a long time, there were rumors about the ban on bitcoins in Russia, but they never came true. On November 7, 2016, the Central Bank again returned to the issue of crypto-currencies and called on Rosfinmonitoring and the Ministry of Finance to jointly develop a system for regulating bitcoins in Russia.

Investing money in something that does not actually have a stable legal status is a big risk. Tomorrow, the exchange of bitcoins for rubles can be made an administrative or even a criminal offense. They can introduce only partial restrictions on the use of bitcoin, or they can even legitimize its use. Experts disagree, but you can watch the following video for a better understanding of the situation:

The low prevalence of bitcoins is another possible nail in the coffin of a cryptocurrency. Any currency “works” exactly as long as it is “believed” in it. For 7 years of its active development, Bitcoin has not been able to grow from an electronic currency into a full-fledged means of payment. Surprisingly, bitcoin is more popular as a speculative financial instrument, and not as a means of payment for goods and services.

The situation may end up with bitcoin turning from currency into numbers on screens. The numbers, which only investors (or speculators) work with, and the real buyers of the currency, who use the currency to exchange for goods and services, will become so small that the BTC price bubble will burst. Some experts predict that the technology will not be able to gain the necessary popularity and will collapse in the same place from where it all began - to near zero points in relation to the dollar.

How to invest in bitcoin

Investing in bitcoin is similar to investing in any other currency: buy at a lower price and then sell at a higher price. Using financial instruments on the bitcoin exchange, you can also perform a reverse “sell” operation. To do this, you need to use one of the exchanges. The BTC-E exchange was popular in Russia. However, it is now closed, but there are other popular Bitcoin exchanges.

You need to create an account on the exchange. If you already have bitcoins in your wallet, then you can transfer them to the exchange account for sale. If you have neither bitcoins nor a wallet, then you can buy bitcoins for real money. To do this, you need to deposit money into your account on the exchange. Buying bitcoins on the exchange does not require you to have a wallet. You only need a wallet if you want to withdraw bitcoins.

The meaning of the investment is simple - you have to predict the rate and buy the currency cheaper than you will sell it in the future. Bitcoin differs from most real currencies in that it has high volatility.

You also have another opportunity - to "get" bitcoins, this is called mining. Instead of buying currency, you can buy powerful computers and use their computing power to “create” bitcoins. When you get bitcoins, you can exchange them for real money on the exchange. For an investment, you need to calculate how much the equipment costs, how much it costs to maintain, and assess the computing power. Keep in mind that the difficulty of mining is growing every day, so every day your investments will bring less and less.

There is a third option - an indirect investment in bitcoin, which is available when purchasing shares of the Bitcoin Investment Trust. This option is one of the safest in legal terms, since you are not working with cryptocurrency, but with company shares. The fund's shares are officially traded on the OTC market in America. 1 share of the company = 0.1 BTC. At the time of this writing, the share price exceeded the real value of BTC by 35%.

Any of the above options for investing in bitcoin assume that you have to understand and anticipate the exchange rate. Investments can provide you with both 10-15% monthly income and a similar loss. Some exchanges offer the use of financial instruments, including the play of a fall, as well as "leverage". This is available, for example, in Alpari. All this requires an even greater understanding of the cryptocurrency, otherwise there is a risk of losing the entire investment amount.

№	Crypto currency	7 days
1	Bitcoin	-10.84%
2	Ethereum	-10.44%
3	XRP	-7.02%
4	Bitcoin Cash	-15.19%
5	Litecoin	-8.1%
6	EOS	-22.02%
7	Binance Coin	-7.39%
8	Bitcoin SV	-3.89%
9	Tether	0.0%
10	Stellar	-10.52%

Bitcoin (BTC) ×

The first cryptocurrency was created in 2009 by the mysterious Satoshi Nakamoto. Today, its market capitalization is approaching $ 70 billion, which exceeds the total capitalization of all digital currencies in the Top 10. Most people under the term "cryptocurrency" mean Bitcoin, which is why all other currencies are called "altcoins", i.e. alternative to bitcoin coins.

Ether is the cryptocurrency of the Ethereum decentralized platform, which allows the creation of blockchain services and applications based on smart contracts. The platform was developed by programmer Vitaly Buterin and launched in mid-2015 after a successful crowd company. In September 2016, an attack on DAO, the first Ethereum-based venture fund, split the currency into Ethereum (ETH) and Ethereum Classic (ETC). According to Buterin, “the platform is a common decentralized world computer,” with the help of which blockchain technology can be applied in any area. The versatility of the technology is a key characteristic and main advantage of Ethereum. Now hundreds of online services and applications are running on the platform, and its token is steadily holding the second place after bitcoin in terms of capitalization.

Ripple (XRP) ×

Ripple is a financial payment services platform. It is based on an open source distributed internet protocol, consensus ledger and proprietary XRP cryptocurrency. Launched in 2012, Ripple has been integrated across multiple banks and payment networks in an effort to reduce the cost of international transfers. The creator of the platform, Ripple Labs, is successfully conquering the field of financial technology, and Ripple tokens are among the three leaders in cryptocurrencies in terms of capitalization. Unbelievable, but true: in terms of the growth of the rate since the beginning of 2017, the cryptocurrency has surpassed Bitcoin: since January, the Ripple token has risen in price by 2500%. The explosive growth is driven by plans to create new platforms for selling XRP tokens, as well as an increase in transaction volume, according to a CNBC report.

Litecoin (LTC) ×

Litecoin was released in October 2011 by former Google employee Charles Lee as an alternative to Bitcoin. Both cryptocurrencies are generated by mining and are based on the same open source code, but differ in parameters such as total number of coins, algorithm, block time, and mining rewards. As the creator himself recently wrote, “as long as Bitcoin is gold, Litecoin remains only silver, and this cannot be changed. They work side by side, but Litecoin will never surpass the cryptocurrency king. " Over the past three years, Litecoin has been worth about $ 4, since the spring of 2017 it has been growing rapidly and is now trading in the region of $ 50- $ 45 per coin.

Bitcoin Gold (BTG) ×

The new cryptocurrency Bitcoin Gold (BTG) appeared on October 24 as a result of the Bitcoin hardfork. The Bitcoin Gold project is led by Jack Liao, head of Hong Kong-based mining company LightningASIC. The goal of the latest fork is to make an analogue of bitcoin that can be mined by a larger number of participants, thereby reducing the influence of large mining farms. Bitcoin Gold coins went free to those who were the holder of the classic bitcoin at the time of the hard fork.

Cardano (ADA) ×

Altcoin Cardano (ADA) is a cryptocurrency that operates on a specially designed blockchain platform using a special protocol and principles of scientific philosophy. The developers and creators of the project initially deconstructed the basic concept of the cryptocurrency, integrated it into the Proof-of-Stake system, turned on their own Ouroboros algorithm - in fact, they created the platform and Cardano (ADA) coins not according to the template of any existing project, but created their own brainchild from scratch. The development company IOHK was the first to use the results of scientific research to introduce useful conclusions into their project.

Dash (DASH) ×

The main characteristics of the Dash cryptocurrency, which was launched in 2014, are increased privacy and faster transaction speed. Initially, the cryptocurrency was called Darkcoin, however, later the creators carried out a rebranding in order to get rid of associations with the "underground" Internet network darknet. In June 2017, the Dash development team announced the release date for the new Evolution decentralized payment system. According to the creators, the payment system will be completely safe, user-friendly and "will be the first project that will bring digital currency to a truly massive audience." In May of this year, Dash's market cap surpassed $ 1 billion for the first time.

IOTA (MIOTA) ×

IOTA is an Internet of Things exchange network project based on the unique Tangle consensus method. If in traditional blockchains, for example, in the bitcoin blockchain, transactions are verified by miners, then in Tangle each transaction forms a new block, and users themselves verify the transactions of other users. There are no fees for transactions within the network, which allows micropayments to be made in real time, in addition, the system is infinitely scalable.

Monero (XMR) ×

The name of the Monero cryptocurrency is taken from the Esperanto language, in which Monero means a coin or / or currency. Its first release took place on April 18, 2014. Unlike Bitcoin, the total emission of Monero is unlimited: after the initial release of 18.4 million monero, subsequent mining will bring 0.6 new monero for every two-minute block. This was done in order for the miners to maintain the system after the end of the main issue. Monero is primarily used to conduct anonymous transactions.

Bitcoin Cash (BCC) ×

The Bitcoin Cash cryptocurrency appeared on August 1, 2017 as a result of the division of the Bitcoin blockchain into two chains. Currencies share a common history: until a certain block, both chains were identical, but now Bitcoin Cash is a new digital asset. All bitcoin owners who kept them in wallets and exchanges that supported the split received new coins in a 1: 1 ratio. Bitcoin Cash has a large block size compared to Bitcoin without the SegWit protocol implementation. This allows more transactions to be carried out on the network, which consequently leads to lower transaction fees. The reaction of the blockchain community to the split was mixed, not all crypto exchanges recognized the bitcoin "clone". Some believe that the emergence of Bitcoin Cash will accelerate the process of scaling the technology, while others believe that the split of Bitcoin creates unnecessary confusion and damages the reputation of Bitcoin.

Bitcoin - Breaking News
June 4 Bitcoin rate may collapse by 30%

Another way to increase your cryptocurrency asset is to make a deposit at interest. Yes, there is such a possibility. And if your wallet contains a couple of idle Bitcoin coins (or any other token), this is a great opportunity to extract additional income from your investments.

Features, pros and cons of this way of making money, as well as: links to sites and practical instructions for beginners - we will talk about all this in the current article.

The essence of earnings

The way we propose to make money on digital currency is not much different from the usual and familiar to all of us bank deposits: the investor is invited to make a deposit for a certain period (or indefinite) at a percentage of the investment amount.

On the Internet, you can find more than a dozen websites of companies and services offering to invest Bitcoin or altcoins at interest (a large proportion of which, by the way, may turn out to be frankly fraudulent resources). We, however, will tell only about those sites that we dealt with in practice (reviews of which were posted on the pages of our site). These are cryptocurrency exchanges, which, in addition to their main tool - trading, offer their users to invest free funds at interest, and automatic trading services on crypto exchanges.

Peculiarities

pros

Additional income
(or other cryptocurrency) generate income due to the growth of the coin rate. Profit is generated from the difference between the buy and sell prices. Investing a cryptocurrency at interest for a period until the moment of its sale is an excellent opportunity to earn extra money.
Passive income
Requires virtually no time or attention. The income level directly depends on the amount of the deposit. Depending on the goals of the investor, the profit can be withdrawn / cashed and used at your discretion, or reinvested, increasing the amount of the deposit.
Favorable percentage
Deposits in cryptocurrency will provide a much more favorable interest on the deposit than the traditional bank deposits already mentioned above. Starting with a "moderate" profit (36-48% per annum), ending with a yield of 10% per day (and more).

Flaws

Perhaps the only, but rather significant, disadvantage of investing in cryptocurrency at interest is non-trading risks, such as the option with the closure of the exchange, as a result, the loss of all invested funds. However, this applies equally to any crypto trader who trades on the site. Often times, non-trading risks are simply ignored by most traders as unlikely. And banks in the vastness of our country are not particularly reliable.

Links to sites and exchanges

Lending Bitcoin at Poloniex

On the Lending page of the Poloniex exchange, you can issue a loan (that is, lend your own funds) to traders who trade on the site.

The crypto exchange acts as a guarantor of the return of funds.
The only currency available for lending is Bitcoin.
The user chooses the interest rate, as well as the term of the "deposit" (from 2 days) at his own discretion.

Screen of bitcoin deposit at interest on the Poloniex exchange

You can find out more about investing Bitcoin at interest. There is also a detailed instruction on registration and work on the Polonix exchange for beginners.

InvestBox on Yobit

At the disposal of users of the Yobit crypto exchange is the InvestBox tool. Provides the opportunity to make a deposit in several dozen altcoins.

The loan is issued not to traders, but to the exchange itself.
The altcoins available for investment are constantly changing.
The percentage of the deposit in some tokens can reach 10%, 50% and even 200% per day.

Cryptocurrency invested at interest on Yobit

Read more about investing cryptocurrency at interest on the Yobit exchange - read on, where you will find a comprehensive guide to working with the Yobit exchange.

What is happening in the world of cryptocurrencies clearly claims to be a mini-revolution, the potential of which is not fully understood today even by the most active players of this market. Its capitalization today is $ 80 billion, and the daily trading volume is 4-5 billion. Where did cryptocurrencies come from, how to get them and what to do with them, says Zhanna Kulakova, financial consultant at TeleTrade (TeletradeBel LLC).

- Initially, there was a powerful ideological rationale in the creation of cryptocurrencies, and the creators of bitcoin focused on its anonymity.

Zhanna Kulakova
Financial advisor TeleTrade

"What can characterize a person more accurately than his financial transactions?"

Little known to the masses, the "father" of bitcoin Satoshi Nakamoto did not promote his offspring alone: other people took an active part in this, such as, for example, Hal Finney, a convinced cypherpunk (representative of the community of people interested in maintaining anonymity). One of the main threats to the confidentiality of cypherpunks was seen in money, since there is little that can characterize a person more accurately than his financial transactions. That is why the idea of creating an anonymous payment system seemed so attractive to them.

Finn actively promoted cryptocurrency on the Internet Marty Malmi. "The widespread adoption of such a system could undermine the ability of the state to exploit citizens (...) I cannot but be encouraged by practical projects that can bring us closer to real freedom.", he wrote. By the way, that Finny, that Malmi, that other "activists" of bitcoin did not set themselves the task of evading taxes. It was primarily about the desire to hide information about oneself from the all-seeing eye of the state.

Marty Malmi. Photo from the site talouselama.fi

The first relatively large online store to accept bitcoin was an anonymous platform selling illegal goods - Silk Road. Over the 2.5 years of the site's existence, the volume of transactions amounted to 9.5 million bitcoins. Its owner, William Ross Ulbricht, by the way, was also an active critic of government economic regulations. He is now serving a life sentence. The history of these people and their motivation is described in detail in the book "Digital Gold" by Nathaniel Popper.

However, today it is not the anonymity of cryptocurrencies that comes to the fore, but the investment attractiveness for individuals and the possibility of attracting funding for companies.

Long-term investment: what is the risk?

It is interesting to consider cryptocurrencies as an investment instrument, and the simplest and at the same time profitable strategy can be “buy & hold” - buy and hold. This is a long-term investment.

The rise in prices will be facilitated not only by the widespread legalization of cryptocurrencies and the growing interest in them in society, but also by the fact that the emission of many cryptocurrencies is algorithmically limited. The system was originally conceived in such a way that it is impossible to issue more than a predetermined number of tokens (electronic tokens, each of which is a unit of virtual currency). For example, for bitcoin, the ceiling is 21 million coins, for litecoin - 84 million.

And in the short term, the cryptocurrency market can be subject to strong fluctuations.

For example, for the period from 2009 to the end of 2013, bitcoin rose in price from zero to $ 1200, after which it fell to $ 160 by January 2015, two years later, by January 5, 2017, it again rose in price to almost $ 1200, and by January 11, it had fallen to 765 dollars. Ether this year first pleased investors with an increase from $ 8 to $ 400, a week later it fell to $ 13, but soon again exceeded the $ 300 mark.

Literally a few large transactions can provoke significant fluctuations in cryptocurrency prices, and these fluctuations will not necessarily be in the direction of growth. In 2011, one seller, placing only one large order for the sale of bitcoin on the MtGox exchange, dropped its price from $ 17.5 to $ 0.01 in a matter of minutes. It is still not known exactly who it was: someone who deliberately wants to crash the market, or just a fraudster who wanted to get rid of the stolen bitcoins as soon as possible. But the fact remains - the price of this cryptocurrency instantly collapsed 1700 times. Now the market capitalization is much larger, and it will be much more difficult to collapse it, but the repetition of such situations is not excluded, especially if we are not talking about bitcoin, but about a “young” cryptocurrency with a small capitalization.

In addition, a sudden drop in confidence in cryptocurrencies can cause periods of price falls of months or even years. For example, in the summer of 2016, the bitcoin rate collapsed by 20% after a large-scale hacker attack on one of the largest bitcoin exchanges in Hong Kong. And for the period from December 2013 to January 2015 (that is, just over a year), against the background of hacker attacks and massive profit taking, bitcoin collapsed more than 7.5 times from $ 1200 to $ 160.

Photo from the archive, ferra.ru

However, those who choose cryptocurrencies as an object for long-term investments are also at risk. The growth in the value of virtual currencies in the future looks very likely, but it is not guaranteed. If, for example, we assume that some critical vulnerability is discovered in the system of a particular cryptocurrency, or states begin to massively impose a total ban on the use of this currency, its value may even collapse to zero.

How to invest in cryptocurrency

There are several ways to get cryptocurrency.

Mining- independent mining using a computer, which has to solve a complex cryptographic problem. This method requires from a person certain material costs for equipment and electricity, as well as some skills, so it is not suitable for everyone.
Just buy cryptocurrency using one of the many online services for exchanging virtual currencies or even a special cryptocurrency ATM (there are already such ones on the territory of Russia and Ukraine). Here it is important to pay attention to the commissions that are often charged during the operation, and to choose the most profitable option.
Buy cryptocurrency as part of the ICO- the initial public offering of cryptocurrencies, which is used by companies to attract investment. This process has much in common with an IPO (public offering of shares), only in this case the investor does not invest money in securities, but in so-called tokens - units of a new virtual currency.

After the ICO, cryptocurrencies, as a rule, begin to trade on the exchange and their price fluctuates depending on how successful the project turned out to be. A tenfold growth is possible, as well as a significant drop. Here it is important for the investor to correctly assess the prospects of the project for which the financing was attracted. In fact, everything happens as in the stock market.

Photo from the world's largest mining farm in China. From cryptonavigator.com

Is it worth the candle

This year alone, startups have raised more than $ 1 billion through ICOs. According to research firm Smith & Crown, this is ten times more than in all of 2016.

According to some reports, 10 million people invested their money in the ICO. Interestingly, the creators of ether, one of the most popular cryptocurrencies today, raised funds for the development of the system through ICO, selling the first 60 million tokens for 31.6 thousand bitcoins. Then the price of one ether was $ 0.3. As of July 13, 2017, it has reached $ 200.

Today there are several thousand cryptocurrencies in the world and new ones are constantly appearing. Among them there are about a hundred well-known ones. According to Coinmarketcap, the top 10 cryptocurrencies in terms of capitalization at the beginning of July 2017 included Bitcoin, Ethereum, Ripple, Litecoin, Ethereum Classic, Dash, NEM, IOTA, Monero and BitConnect.

Many people say that it is too late to buy bitcoin: it is too expensive and you need to choose from young and promising ones.

However, over the past three months, bitcoin has doubled in price and, according to forecasts by Goldman Sachs, will reach $ 4,000 by the end of this year.

Standpoint Research predicts it will grow to 50 thousand dollars in 10 years, and Saxo Bank - up to 100 thousand. Some experts also talk about a million dollars per token. Bitcoin has clearly not reached its ceiling yet.

In my opinion, cryptocurrencies placed within the ICO of really successful projects have the best chances for growth, as well as "oldies" that have been known to everyone for a long time and keep afloat well - bitcoin, ether, litecoin.

What is the law?

Cryptocurrency prices are formed in the same way as for any other asset: under the influence of supply and demand. The demand in this market is of an investment nature, and its additional driver is the legalization of cryptocurrencies in many countries.

Regulatory approaches differ, with some states treating cryptocurrencies as a commodity and taxing them, others as a currency or as private money.

A complete ban on cryptocurrencies exists in Thailand, Vietnam, Bolivia, Bangladesh.

But most of the developed countries - the USA, Canada, Singapore, the EU countries, Japan, Australia - have followed the path of legalization.

The caution of states in this matter is not difficult to understand. Cryptocurrencies do not have a regulator over them and are little dependent on monetary measures by central banks and big politics, since they can be issued by any participant in the system, and transactions do not require the presence of any intermediaries.

There is still no legal crypto-foundation in the world: no direct bans, no permissions. And Belarus seems to be taking the first step in this direction. A special interdepartmental working group with the participation of the High-Tech Park Administration is preparing a draft regulatory legal act on the digital transformation of the Belarusian economy. The blockchain network is planned to be used to maintain registers of bank guarantees and in the securities market.

Features, pros and cons of this way of making money, as well as: links to sites and practical instructions for beginners - we will talk about all this in the current article.

The essence of earnings

Peculiarities