What is Blockchain & Cryptocurrency? How do they work?

In todays and the coming generations, one of the top 5 income generators online is digital currency. In order to understand how to make money with digital currency, one must understand what blockchain is and how it functions. This is what will be covered in this article. By the end of this article, you will have a full understanding of Blockchain? You will know what coins and tokens are, and you will find out the difference between coins and tokens are.

What is a Blockchain?

A blockchain is a specialized network that utilizes an open and decentralized database. It consists of three basic units: AccountsTransactions, and Coins! 

What is a decentralized database?

In order for me to explain what decentralized means, I must explain what centralized means first, so that you can have a complete understanding!

CENTRALIZED:

According to Merriam-Webster’s Dictionary, “centralize” means to cluster or bring around a center, or to concentrate authority or power in a central group.  In a centralized organization, all of the “power” or decision-making authority lies with a group or individual at the top. The other members of the organization then work to carry out the decisions made by top-level leaders. A centralized structure can help organizations control costs, quality, efficiency, messaging, and overall operations. IT has complete power over all resources: money, information, people, technology.  It decides the content of curriculum, controls the budget, is responsible for employment, the building of educational facilities, discipline policies, etc. Centralization of authority means the power of planning and decision making are exclusively in the hands of top management.

DECENTRALIZED:

On the other hand, decentralized is to transfer the administrative powers or functions of (a central authority) over a less concentrated area. In Decentralization there is no on group that has complete power and control. It is the dissemination of powers by the top management to the middle or low-level management. It is the delegation of authority, at all the levels of management.

Now I must return to the overall purpose of this post/article, which is to explain what is blockchain? and How it works. As I stated earlier, a blockchain consists of three basic unites: Accounts, Transactions and Coins!

THE ACCOUNT

 

Accounts function in much the same way a traditional bank account do, allowing the owner to send and receive transactions. Each account has a unique address and a private key.

THE TRANSACTIONS

 

Transactions are digital messages, which transfer data between two accounts on the network. They contain the addresses of both the senders’ and the receivers’ accounts, along with additional data.

THE COIN

 

Coins are the fundamental unit of value used on a blockchain. Users provide processing power to run the network, through what is known as mining, and are awarded coins in exchange.

THE PRIMARY USE OF A BLOCKCHAIN IS A CURRENCY. DIGITAL CURRENCY TO BE EXACT, AND THIS CURRENCY IS KNOW AS CRYPTOCURRENCY;

Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds

THERE ARE TWO TYPES OF CRYPTOCURRENCY; COINS AND TOKENS;

Coins

Coins are a digital store of value analogous to how USD or RMB are physical stores of value. Coins have an intrinsic economic value as they are a representation of resources spent (electricity, computing power, etc.) in order to run the blockchain’s network.

Tokens

Tokens function as currency in the sense that they are transferable between different accounts. They do not have an intrinsic economic value in the way that coins do, as the creation of tokens is not done by the blockchain itself, but rather through specialized transactions.

Now I am going to do an analogy and give you the difference between a coin and a token:

Coins verses Tokens

A real world analogy of the difference between coins and tokens would be postage stamps. Stamps are purchased with money and used to send mail. They are essentially a token that provides the utility of identifying mail as having been paid for!
*CRYTOCOINS have their own blockchain
*CRYPTOTOKENS are on a coins blockchain
Another way to easily understand this is to look at the United States Dollar currency system. The United States dollar as a general currency is the coin, which has it’s own blockchain. It does not matter it you have a $1, $5, $10, $20, $50, or a $100 bill, it is in the United States Dollar blockchain. The various bills in different amounts are the tokens because they are on the blockchain of the United States Dollar. The United States Dollar overall is the money that we use to shop with. The diffferent bills identify and represent the United States Dollar  in different amount values!

By now you should have a clear understanding of what cryptocurrency, what a blockchain is, how a blockchain works, and now I am going to explain to you:

What can you do with cryptocurrency?

There are several different cryptocurrencies; bitcoin, ethereum, litecoin, and many others popping up. Yet in this in explaining what you can do with cryptocurrency, I am going to focus on BITCOIN.
BITCOIN is a cryptocurrency. It is a coin. It has a blockchain of its own. Bitcoin is used to pay for a variety of goods and services. Many companies are now accepting bitcoin as a form of payment for their products and services. It works the same as paper money with some key differences. Although it is a digital currency, physical forms of Bitcoins do exist. The currency’s primary form is data so you trade it online, peer to peer, using wallet software or an online service.
You can obtain Bitcoin’s either by trading it for other other currencies (euro, usd, gbp, etc.), goods, or services with people who have them or through mining. The mining process involves running software that performs complex mathematical equations for which you’re rewarded a portion of a Bitcoin. When you actually have some Bitcoin, you can then use it to purchase anything from any person or business that accepts it. In some cases, Bitcoin is the only accepted form of payment and you’ll have to acquire it in order to complete a transaction. Now lets discuss how you can acquire bitcoin and why you’d use it.

How to acquire Bitcoin?

Getting your hands on even a whole/single Bitcoin can take a bit of work, but you have a few options. Purchasing Bitcoin takes less effort than mining it, but it comes at the cost of your hard-earned cash. Mining, on the other hand, takes computer processing power and takes a while to acquire a single Bitoin based on how much you can put into mining. The more you you can put into a Bitcoin mining contract, the faster you can acquire and own whole Bitcoins. First, let’s talk about how you can buy a Bitcoin and then look at the mining process.

As I mentioned earlier, storing and using Bitcoins requires wallet softwareor an online service. The wallet software requires quite a bit of disk space and you have to find a Bitcoin seller in order to acquire any of the actual currency. An online wallet, on the other hand, makes the entire process much easier. As a result, we’re going to focus on that process. To set up an online wallet and purchase your first Bitcoin, just follow these steps:

To create a wallet, sign up for an online service like Coinbase or LocalBitcoin For these instructions, we’ll use Coinbase because they provide a simple, integrated purchase process with two-factor authentication for added security.

  1. Register a wallet with Coinbase
  2. Go to www.Coinbase.com, Once on the website; enter your email address and click get started. Once you finish registration process, go to your email address and confirm your wallet registration through the email sent to you by Coinbase (CLICK HERE to go directly to Coinbase website)
  3. Log in Coinbase account
  4. Click on settings, fill in your information than click on “Save”
  5. Once finished filling in your information, look to the top left of the page and click on “Linked Accounts”
  6. Click on “Link A New Account” and put in the information to the bank account you want Coinbase to send your withdraws to
  7. Once your account is all linked up, click the Buy/Sell Bitcoins link. The page will default to the Buy Bitcoins where you  just enter the amount you want to purchase, choose your bank account (if you linked more than one), and click the Buy Bitcoins button. The transaction may take a few days to complete, but you’ll receive a notification when the Bitcoins have been safely transferred to your wallet.

 

Now we will discuss how you can MINE Bitcoin;

Mining Bitcoin involves running software on your computer that processes complex mathematical equations. If your computer solves one of these equations, you get a payout in Bitcoins. However, companies have evolved that you can earn without your computer solving equations. All you do create an account with them, purchase Hashrate. Hash Rate is the speed at which a compute is completing an operation in the Bitcoin code. A higher hash rate is better when mining as it increases your opportunity of finding the next block and receiving the reward.

My #1 recommendation for mining bitcoin is Hashflare. Hashflare allows you to get started with as little as $5. Hashflare allows daily withdrawals and they have a reinvest option, which enables you to reinvest your bitcoin earnings towards purchasing more hashrate with the click of a button. I personally mine with Hashflare, so I am making this recommendation based on a good experience that I am having with them.

I started off investing $80 into a 1 year bitcoin mining contract with Hashflare. From $80 it was arranged for me to mine an average $1 a day. Now Many may say, a dollar a day is nothing. Well lets take at the reality of this and the numbers.

There are 365 days in a year. At $1 a day income, I get the $80 that I invested back within 80 days. There are 265 days left when you subtract 80 days from the 365 days in a year. Thats $265 profit. Percentage wise its over 200 percent profit. What makes this even greater of an opportunity is the reinvestment option to purchase more hashrate to mine faster which earns more.

The biggest purchase one can make at a time with hashflare is$8000 which purchases 100,000 GH/s. At this rate, the one who invest $8000 would mine around $100 a day. Multiply $100 a day times the 365 days in a year and that equals a total income of $36,500. Thats around $3000 a month. The one who invest this maximum amount gets their return of their $8000 investment back in less  than 3 months, and spends the rest of the 9 months in the year making pure profits of $3000 a month.

Now is a very good time to purchase a mining contract because Bitcoin is on the rise and expected to reach $30,000 per coin value by the end of this year. The numbers explained above are based on the current Bitcoin value of $9200.

Here is a video of me logged into my Hashflare account and explaining the system;

As you can see, Hashflare is 100%  legit. The company has nothing but good reviews and ratings. You can login to your account daily and check your earnings. This is one of the easiest, if not the easiest ways to make money online from home.

GO TO HASHFLARE ACCOUNT AND OPEN AN ACCOUNT TO START MINING AND EARNING TODAY, CLICK HERE

 

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