Cryptocurrency for beginners

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 Blockchain - The Biggest Revolution In Financial History 

 

In this article we will explain Blockchain technology for beginners. You will learn why this is so innovative and very different from conventional distribution technology. We will also take a look at cryptocurrencies and mining for beginners. 

 

What is Blockchain Technology? 

Blockchain technology allows numerous users to write entries into an information record, and the user community controls amendment and updating of records. There is not a single person ultimately in control of the information. The Blockchain technology distributed database uses a different digital backbone to the conventional client server model used by most applications on the Internet. With conventional Internet based systems, records update on the server and this allows everybody accessing the record to view any changes. With Blockchain each node will update the record on an independent basis and the record that is the most popular becomes the de-facto main record as there is no master copy. This means that there is no requirement for the facilitation of the digital relationships involved. Blockchain cannot claim that it is new technology. What it is though is a number of proven technologies that combined and applied in a novel way. 

The major underpinning technologies in the combination are the Internet, protocol and private key cryptography. Bitcoin creator Satoshi Nakamato came up with the idea of combining these technologies. He wanted to create a system for digital transactions that did not require the intervention of a trusted third party. The Blockchain technology secures digital transactions implicitly through its simple, elegant and robust architecture.

 

 The Trust Element in Blockchain Technology 

The private key cryptography in Blockchain technology provides an ownership tool that is very powerful and this ensures the fulfillment of all authentication requirements. A private key is required for ownership. Another advantage of Blockchain is that users do not have to share a lot of their personal details to conduct a transaction which minimizes the risk of their details being hacked. On its own authentication is not secure enough. There is also a need for authorization (are the funds available?) and the broadcasting of the proper transaction type. A peer to peer distributed network is the starting point for this. Reduced risk of centralized failure and corruption are added benefits of a distributed network. Also there is the maintenance of security and recordkeeping with this solution. 

 

Cryptocurrencies Mining for Beginners 

Right now we are experiencing another gold rush and this one is digital. If you are prepared to invest in the necessary equipment then you can make a small profit after a few months of cryptocurrency mining. Beginners can start with Feathercoins, Litecoins and Dogecoins. If you take Litecoins as an example it is possible to make anywhere from 50 cents to ten dollars per day when cryptocurrency mining. The other coins will earn you a little less but are still very popular. You will need to spend around $1,000 in hardware and you need to accept that it will take anywhere from 18 to 24 months to recoup your money with cryptocurrency mining. If you are looking for a more serious return then be prepared to spend up to $5,000 for the necessary hardware. You could make a profit of around $50 a day or even more. A number of people believe that cryptocurrencies such as Litecoin will one day increase in value to the same level as Bitcoin. If this was to happen then holding this cryptocurrency would make you rich. The chance of this happening is very slim though. You need to achieve 3 things when cryptocurrency mining: 

1. You will be providing a bookkeeping service for the coin network. This is computer accounting 24/7 and you will be "verifying transactions". 

2. In return for your bookkeeping and accounting services you will be rewarded with small fractions of coins.

3. You need to do everything to reduce your costs to make this viable which includes hardware and electrical supply costs. Along with the hardware you will require a coin wallet which is a free private database. This stores your earnings and maintains a network wide ledger. You will also require a mining package consisting of stratum and cgminer (this is also free). Then you need to become a member of an online mining pool where members combine computing resources to enhance their incomes. Finally you will need to be a member of a currency exchange online, where you can convert your virtual coins into real money and the other way around.

 

 

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