Is it possible to make money on bitcoin in Kyrgyzstan?

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The past year is unofficially called the year of bitcoin. In just a few months, technology, which was previously discussed only in narrow circles of the fintech industry, has become a favorite topic of “kitchen” discussions. People who have not yet figured out how to use the iPhone are now expressing their position on what Bitcoin is and making predictions about when this bubble will finally burst.

The more nimble of them have already collected a certain amount of money and started making money on what is now called the buzzword “HYIP”. This is understandable, because since the beginning of the year, the rate of the most popular cryptocurrency has been growing at lightning speed – from $ 1,000 in January to $ 20,000 by December 2017. Press headlines changed one after another, announcing the next all-time high in Bitcoin.

The value of other electronic coins has also increased. The world has gone crazy: the cryptocurrency fever seemed to take over the whole world and did not bypass the Kyrgyz Republic. True, we do not have many daredevils who decided to get involved in this adventure. The level of financial literacy of the population in the republic is still stuck at the stage of studying bank cards. However, the thirst for profit still pushes the Kyrgyz people to become better acquainted with new technologies and, if possible, make money on it while the exchange rate is growing.

Bitcoin in Kyrgyzstan

Ordinary people think that bitcoin came out of the blue and out of nowhere. But it has been nine years since the emergence of the blockchain technology that powers bitcoin. In the country, interest in cryptocurrency began to manifest itself last year. More advanced Kyrgyz people interested in IT technologies became interested in the new technology five years before it became mainstream. Bitcoin and blockchain expert Daniil Vartanov is one of the pioneers of the cryptocurrency movement in the Kyrgyz Republic. He began to take an interest in this back in 2013 and during this time he got to know the market so well that now he gives open lectures on this topic.

“I gave my very first public lecture about bitcoin in 2014. By this time, almost no one in Kyrgyzstan was interested in cryptocurrency. However, even in those days, my wife received a salary from one of the projects in bitcoins. It was cheap then. We decided not to spend it, but leave it as savings, ”says Vartanov.

While the residents of the capital were studying the first bitcoin terminal, the Kyrgyz citizen Kuduret Talasbekov was seriously interested in studying the technology itself, and a little later he started trading – selling cryptocurrency on the exchange.

The crypto community in the Kyrgyz Republic is still small. It is difficult to call it a community yet. Rather, it is a group of guys who exchange opinions, share a small, but still experience in selling or mining cryptocurrency. Most often, discussions take place in Telegram groups, the largest of which has about 300 people. Someone is just planning How to buy Bitcoin, someone has been doing this for a long time. And while the first bitcoin billionaires, the Winklevoss brothers, are thinking about where else to invest, we decided to find out whether it is realistic to make money on cryptocurrency in Kyrgyzstan.

Trading

The most popular way to increase your capital is trading – in other words, trading cryptocurrency on an exchange. The main principle is to capitalize on exchange rate fluctuations. Despite the fact that, at first glance, trading seems to be a simple matter, without certain skills, money cannot be earned, and therefore more than 95% of newcomers who invest lose their funds.

“The mistake of many newbies is that as soon as the rate starts to go down, they panic and immediately sell investments, just to get out of the situation faster. People who have just come to the exchange do not know that these are normal processes, when the rate either falls or rises sharply. The problem is that many people imagine bitcoin as a soap bubble and with every swing they think that the bubble is bursting, ”Talasbekov notes.

The trader assures that all processes on the exchange should be treated more easily. Patience and good analytical skills are what traders should have in order to at least not lose their deposit funds.

Advice advice, and everyone, of course, is interested in whether you can actually make money on it. Talasbekov says that it is possible. Trading is one of the main sources of income for him. However, it was difficult to name specific amounts, since income depends on many factors.

“It is difficult to say how much a trader can earn on a cryptocurrency exchange, because it depends on the amount of the deposit, the amount that a person is willing to risk, how well he feels the market and knows all the processes. What I earn is enough for me both to live and to make small investments in other projects. It is difficult to name specific amounts, but one thing I can say for sure: if a person comes to this sphere and wants to increase capital in a month, it is unrealistic, ”he assures.

Mining

Another popular way to earn free Bitcoins instantly is mining, that is, the extraction of cryptocurrency. The main requirement here is equipment. Cryptocurrency is mined using a mining farm, which at the initial stage can be assembled from one computer and several powerful video cards. Usually four or six video cards are enough. More advanced miners build farms of ten or more computers, each of which also has several video cards. Their task is to process data and solve mathematical algorithms, after which a reward is accrued in the form of mined cryptocurrency. It doesn’t have to be bitcoin. It is just now the hardest to mine.

“It is unrealistic to mine bitcoin now. When the hype started, too many people began to mine it. The complexity of decrypting data blocks has increased every time, and nowadays bitcoin is difficult to mine. It is easier and more profitable to mine other coins such as ether (ethereum). There are calculators on the Internet that calculate which e-currency is more profitable to mine with your number of video cards. The extracted cryptocurrency is credited to an electronic wallet, then coins can be exchanged for bitcoin on the exchange and then withdrawn in dollars, ”says Alexey, a programmer who is involved in the technical support of a mining farm in Bishkek.

The executives of the company he works for came from Russia. Before that, they had not been involved in mining, but they decided to open the first farm in the Kyrgyz Republic for one simple reason – cheap electricity. The uninterrupted operation of 30 computers with powerful video cards consumes a lot of electricity per month. The programmer does not know exactly how much comes out according to the accounts. However, in relation to the amount of income, the costs are insignificant. Without deducting the costs of the Internet, electricity and rental of premises, about $ 7 thousand per month comes out, while the farm does not require constant monitoring.

Another mining farm in Bishkek is much smaller in size. Rather, it serves as a means for additional income for the guys who launched it.

“We have several computers with powerful video cards, each of which costs about $ 800. In total, our equipment is estimated at $ 6.5 thousand. We started mining in May last year and recouped the cost of the equipment in six months. Our income depends on the rate of the mined cryptocurrency and the complexity of block processing. On average, about $ 1 thousand 500 is released per month, ”says the miner, who wished to remain anonymous.

Alexey also has a small mining farm at home – just one computer with three video cards.

“As an additional income, this is a good option. You can earn up to $ 200 per month from one computer, and you don’t need to be around all the time. The computer works by itself, it only needs to be checked periodically, ”he notes.

IT specialist Anton Kirsanov considers mining a safer way to make money, as opposed to trading.

“Mining is safe if you don’t buy specialized hardware. Computers and video cards in which case it will be possible to sell and return at least part of the investment. But some miners buy ASICs – specialized mining schemes that are much more powerful than video cards, while consuming less energy. They are not cheap, but thanks to them, you can mine better and faster. However, “ASICs” solve only specific problems, and in the event of a fall in the rate of cryptocurrency, you risk being left with a bunch of expensive hardware that no one needs, “he explains.

ICO

ICO, or Initial Coin Offering (initial placement of tokens) is attracting investment in the form of selling virtual money – tokens. By buying them, you become a holder of digital shares of a blockchain startup. The project may take off, which is why your “digital” stocks will rise in price, or may not be launched at all.

“In order to invest in ICO, you need to carefully evaluate the project so as not to run into scammers. 95% of ICO projects are scams (scammers) without technology, teams and ideas as such. People just make money on the hype. It is difficult to say for sure which project is real and which one will definitely shoot. You have to be able to analyze every detail before investing, ”Talasbekov warns.

Kirsanov also believes that ICO entails huge risks, which are extremely difficult to predict.

“Where there is a hype, there are always scammers. Now there are many projects that, apart from a website, have nothing, but they present themselves as a promising blockchain startup. Such guys calmly collect $ 50 million and then disappear. However, despite this, people are currently going crazy and running to invest in dubious projects. I even have acquaintances who have already invested in incomprehensible ICOs, ”says an IT specialist.

If you have enough knowledge and experience, you can still find a good project for acquiring digital stocks. Talasbekov has already purchased tokens of one of the Russian projects, which should be published soon.

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The best investment is knowledge

It is possible to make money on cryptocurrency in Kyrgyzstan, just like in any other country, but on one condition. Market experts, miners, traders – all unanimously declare that the main thing in this matter is knowledge. No matter how much you invest, be it $ 1,000 or $ 100,000, with a 99% probability you will lose it if you don’t know what bitcoin is for and how it works.

“A person without knowledge will not be able to make money in this market, whatever the course may be. Cryptocurrency trading is no different from other types of exchange trading. It’s like the same “Forex”, the rules are the same. 99% of newbies lose their money in the first three years. As for mining, you can also make money on it. But this is a highly specialized technology business, where you need to invest a lot of money and have a lot of knowledge, ”says Vartanov.

You shouldn’t look for funds at breakneck speed and try to invest them in the cryptocurrency market in order to quickly “weld” on the growing rate, Kirsanov said.

Lack of knowledge and thirst for easy money increase the likelihood of “running into” scammers.

“In order to trade, you need to know at least ten basic electronic coins, what they are for and how they differ from each other. Many do not even know this, but simply give their money in trust to unscrupulous traders who promise to increase the amount several times in a month. This does not happen. These are scammers, says Talasbekov – If you understand that blockchain technology is the future, then invest your money now in knowledge about cryptocurrency. These investments will pay off 100%, because in the next decades the blockchain will develop rapidly, and there will be a need for competent specialists.”

The expert advises buying various cryptocurrencies now, but not at all in order to sell at the first rise in the rate.

“Buy them now and forget them for the next year. During this time, study the market properly, see how it behaves. Wherever the course is heading – up or down, do not touch the reserves. You will need them more in the future, ”he advises.

Will the bubble burst?

Experts say it will burst. But that’s when a completely new direction in the development of cryptocurrency will begin.

“The bubble that is now inflated is not a Bitcoin bubble. This is a bubble over the exchange rate. These have burst more than once. I work in the internet start-up space and remember the bubble in 2000 over the price of startups. People bought them not because they understood their value and prospects, but in order to sell them at a higher price. As a result, this bubble burst, and it was then that the professionals were able to work normally. Global startups such as Facebook, Instagram and many more have emerged. When people leave the market who do not understand what Bitcoin is and what to do with it, the exchange rate will return to the level at which it should be. And it will be measured by how many real goods and services can be purchased for it, ”Vartanov summed up.

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