Investors in Bitcoin are charging as if they are distributing gold - all of them are there

Bitcoin is the most famous of them, but there is also Litcoin, etherium, and hundreds of others, about 700 in all, How do they make them, where are they being Sold/Bought?

An ordinary person exposed to the discussions of members of the digital coin groups can not help but feel as if he is caught in a science fiction book when words such as "crypto currency," "the etherium miners," or "Satoshi Square Forum" are put into the air. On the other hand, the number of people in the world who can explain these expressions is growing rapidly.
referring to the investors and miners of the digital / virtual currencies whose Bitcoin is the most familiar, but there is also Litcoin, Etherium, and hundreds of others, about 700 in all. Also, dealing with a very speculative, dangerous field and the truth is not entirely understood by anyone, but "the investors charge as if they were distributing gold in the streets."

In a weekly meeting held at the Satoshi Square in the Bitcoin embassy in Tel Aviv, which is located, symbolically, just opposite the new building of the stock exchange, a diverse mix of dozens of people participated, including computer geeks, programmers, mathematicians, 2011 and young hipsters.
Alongside them we found a law professor, a few lawyers, real estate people and an architect, all of whom are imbued with business and ideological fervor, usually dealing with currency trading, but this week was very thin. The latter slightly moderated and stopped on goals that were around $ 2,600 and $ 360 respectively.

But even if there was no trade, a lot of energy flowed in the meeting. The main topic of the talks was a start-up called Bancor, which raised $ 150 million in three hours. Bancor engages in the field and herself raised through the creation of a virtual currency, which for some reason did not bring her much paranoia in the meeting (more on that, later). "They have raised so much because digital coins are the next thing," sources at the meeting explained. "There the world goes and everyone wants to be there."

Other popular topics at the meeting were the Japanese government's acknowledgment of Bitcoin, the question of whether, in light of certain statements by Vladimir Putin, Russia would recognize the Etherium, and the hype that has been generated in recent months around the mining of the Atrium, according to the various spokesmen, Israel has created a shortage of computer cards used for mining.

And where does it go?

Not long ago, they said that the Bitcoin is money laundering and terror financing, but all that is happening indicates that these coins are not going to disappear, but a lot of our customers come to this as an alternative to investment, and there is already interest in the institutional bodies. Today, whoever invests.

Bitcoin and other viral currencies are distributed computer currencies. While the amount of dollars, yen, rubles or shekels produced and entered into circulation are determined by central banks, virtual currencies are not produced by a government, and understanding their method of production is far from trivial.

Before we explain the method of producing Bitcoin - the familiar between the currencies - it is important to say that it is the product of the interaction between the records of money transfers and the production of currency in a process called "mining." To transfer money from one digital wallet to another, the wallet owner sends an encrypted instruction to the network. The currency transfer is transmitted to all Bitcoin users via the Internet and a registration is made available to each one, which records all currency transfers from the date of its establishment until that moment. The registration is divided into blocks, Each block contains a certain number of money transfer records. If you attach all the blocks, you get a continuous record of all the money transfers that were ever made in Bitcoin. In other words: where was every penny from the day it was created until this moment? This documentation prevents the possibility of "counterfeiting" coins, because any transfer of a currency that has no prior record in the global system has been disqualified. The process of creating a block takes about ten minutes due to the arbitrary definition of the software code. This is also the reason it takes about ten minutes to approve the transfer of funds in Bitcoin - all the wallets on the network are waiting for the building to confirm that the money transfer is authentic.

Here comes the second part - the reciprocal relationship between the process of building the block and the creation of the coin. Block manufacturers, called "miners," create a record of recent money transfers in the currency exchange, a matter of a great deal of information. The motivation to continue recording all these transfers around the clock is the pay they receive for this complex processing process that requires time, electricity and dedicated hardware.
The calculation of the reward for the creation of the blocks was created by an algorithm written by the Bitcoin developers upon its launch. While in 2009 the payment for the successful processing of the block was 50 coins in Bitcoin, in 2014 it stood at 25 coins and in July 2016 it fell to 12.5 coins. This process is built into the currency code, and it ensures a fixed-rate issue known in advance. According to the plan, the last Bitcoin coin will be sold in 2140. All this assumes that the more coins are in use, the greater the volume of activity and the financial viability of the miners will be maintained through the commissions that are expected to increase accordingly.

The other familiar platform is the etherium that came into the world in 2014. Like Bitcoin, etherium is also based on a decentralized network that relies on user computers, and all operations are documented in the block chain written on all network computers. While Bitcoin uses this network for money transfer management, the network is also supported by application and smart contracts, which are managed and enforced only by the software. Here, too, the payment is for those who operate the computer equipment at the end.
At the same time, Etherium also had squeaks: last year the project was split into two different block chains following the collapse of the DAO project, which operated the platform. Each chain has a different number of users. The smaller is now called the Atrium Classic, while the larger number of users has retained its original name.