10 Interesting Facts About Bitcoin

Bitcoin has been in existence since 2009, and yet, nine years after, even tech-savvy individuals are having a hard time getting a deep understanding of what bitcoin is. You can hear it on coffee shops, on meetings or just anywhere, being a hot topic among entrepreneurs, young professionals, investors, stockholders and even us, options traders. But really, what is it and how does it work? Below is the simplest explanation about bitcoin:

  • It is a digital currency
  • It is decentralized ā€“ meaning there is no central authority governing its operation.
  • Bitcoin can be mined ā€“ Yes, mined just like diamond or gold or silver. But instead of traditional mining, you mine bitcoin digitally.
  • It has a finite number of coins to be mined ā€“ And just like diamond, gold or silver, there is a limit to the supply in bitcoin. It is believed that there are only 21 million bitcoins to be mined, after that, miners will only rely on the transaction fees to maintain operations.
  • It uses blockchain technology ā€“ whereby transactions are recorded in a chronological manner in a public ledger.

Now, let’s dive dipper into the bitcoin world:

The Kick-Of

Bitcoin was introduced by the elusive Satoshi Nakamoto in 2008 when he published its proof of concept but bitcoin’s birthday was January 3, 2009, when Nakamoto himself mined the first 50 units of currency. A year after, he disappeared, but hey, bitcoin is still in circulation at a much higher price than when it started because of the other developers who picked up the work.

Bitcoin’s First Real-World Transaction

Its first real-world transaction is the pizza purchase at Papa John’s for 10,000 bitcoins by Laszlo Hanyecz, a Florida programmer. Even at 66% down from December 2017’s price, that 10,000 bitcoin is still worth $64 million. Some of you may now be google searching Laszlo Hanyecz or maybe wondering who is that British user who run the errand for Hanyecz. Did he hold that 10k bitcoins? Or sold/exchanged it right there and then? If he had led, that lad for sure is filthy rich by now.

Bitcoin as a Currency

Entities accepting bitcoin as payment may still be limited, but it’s growing, while the majority is hodling their coins, there are others who spend it as they spend their money. Below are some of the companies:

Overstock.com ā€“Ā You can buy from rugs to furniture and even computers in this online retail store by using your bitcoin. Just click the option to purchase bitcoin upon checkout and pronto, you are now officially spending your bitcoin on a regular transaction.

Egifter ā€“Ā In need of a gift card? Spend your bitcoin in this popular gift card site, here, and you can buy Itunes gift card, Macy’s, Best Buy, Lowes and many others.

 

 

Newegg ā€“Ā If you’re a gadget junky with spare bitcoin then shop here now. Upon check-out after filling in your shipping info, you can choose bitcoin under the payments method.

Bitcoin and FBI

FBI at one time became the world’s biggest owner of bitcoin wallet. It happened in 2013 when they seized Silk Road ā€“ the online drug and illicit goods marketplace. A total of 144,000 bitcoins were confiscated in one of its addresses and another at 30,000 bitcoins.

The FBI, however, sold off its 144,000 bitcoins at auctions in 2014 and 2015 respectively at only $48 million and even at 65% down from December 2017 hype, these large number of bitcoins would still be worth $904.5 million.

A Series of Plunges and Comebacks

Bitcoin experienced several setbacks as exchanges were allegedly hacked.

Mt. Gox ā€“Ā This exchange was not hacked once, it was hacked twice. The first one happened in 2011 and then in 2014. In 2011, they lost 2609 bitcoins, but the 2014 event was enough to sink the boat when they lost 750,000 bitcoins according to their bankruptcy report.

Bitfloor ā€“Ā This exchange was hacked in 2012 with a total of 24,000 bitcoins forever lost, but unlike Mt. Gox, they were able to refund their investors. In 2013 however, they finally closed doors with the bank regulatory measures as its reason according to the founder.

Poloniex ā€“Ā It was hacked in 2014 whereby 12.3% of its total BTC was lost. The hackers exploited the exchange’s faulty withdrawal code, it was addressed later on but after several BTC’s were lost. As of date, Poloniex still runs smoothly, and investors who lost BTCs were refunded. In 2017, there were several buzzes that it was again hacked, but the exchange did nothing to verify the claims.

Bitstamp ā€“Ā Founded in 2011, it was supposed to be an alternative to Mt. Gox but just like the latter, it was also hacked in 2015 and lost 19,000 BTCs. But unlike Mt. Gox, Bitstamp was able to come back and is currently in smooth operations, and the users once again trusted the exchanged.

Bitfinex ā€“Ā The 2nd most massive hack was in 2016 when Bitfinex lost 120,000 BTCs. Good thing they issued BFX tokens redeemable in USD for victims of the said heist. Investors were eventually refunded with the use of these tokens slowly and steadily. And like, Poloniex and Bitstamp, Bitfinex is still one of the busiest exchanges currently.

Every time there is news of hacks or government seizes, Bitcoin prices plunge below, and investors face a dilemma that it will one day just cease to exist. As stated above, Bitcoin has been in existence since 2009, but it is still relatively new as adoption and understanding have been slow. News small and large dramatically affects its prices as most of the investors got into this business without understanding how bitcoin works. But despite this, Bitcoin price has risen exponentially in the 9years of its existence. Same day and month in 2013 it was only $95.58, now its $6,295.12.

The First Bitcoin Billionaires

Aside of course from Satoshi Nakamoto, Cameron and Tyler Winklevoss became the first bitcoin billionaires in December 2017 when the bitcoin value reached 2017. They bought $11 million worth of bitcoin in 2013 which in December 2017 became worth more than a billion dollars.

The Celebrities in the Bitcoin World

Celebrities also want a slice in the bitcoin industry, and some of them has already dived into the crypto world and is proud of it. Here are some of them:

Floyd Mayweather ā€“Ā Few days before his fight with McGregor, he hyped up Hubii Network ICO. He also proudly posts in his IG regarding his investments.

Ashton Kutcher ā€“Ā This Hollywood actor is a longtime supporter of the blockchain technology as evidenced in his 2014 tweet about Ethereum. He has investments in Bitbay while his firm Sound Ventures is backing up Unikrn, an eSports betting digital platform.

Myke Tyson ā€“Ā This boxing legend partnered with Bitcoin Direct in 2015 to introduce Bitcoin ATM, and he is proud to have been part of the bitcoin revolution.

Lionel Messi ā€“Ā This football superstar who has who has over 90million FB and IG followers is a global brand ambassador for Sirin Labs, blockchain based secure smartphone and all-in-one PC developer.

Luis Suarez ā€“Ā On his August 25, 2017, post, he encouraged his 25M IG followers to join him in signing up to Ethereum-based prediction market platform STOX.

The Hard Fork

On August 1, 2017, Bitcoin had what it’s called is a hard fork. A Hard Fork is a permanent deviation from the previous version of the blockchain and nodes running on old version will no longer be accepted to the newest one. It is called fork because there will be two paths, those following the new path and those who will stick on the old path.

Given the limited number transactions the bitcoin blockchain can process per second, there are others who wanted to address the issue. There has been a debate about whether to address this issue or preserve the bitcoin network’s decentralized and independent nature and this eventually led to a hard fork. This fork gave birth to Bitcoin cash which allows more transactions per second and a larger block of currency.

The Bitcoin Hype

In the last quarter of 2017, everyone talked about bitcoin, and there are a lot of people who got into the boat without even the basic knowledge about bitcoin. This made the bitcoin price to rise exponentially, in December 2017 the price of bitcoin reached more than 19thousand with a market cap of 326million which is way more than higher than Disney, Mcdo IBM, and GE.

The Publicly Traded Bitcoin

As of December 2017, Bitcoin futures became available in CBOE. There are some speculations that this can make the price to stabilize.

Power Consumption of Bitcoin

The cost of mining bitcoin is not only limited to the purchase of computer and other software needed but also with the amount of power such as mining is consuming. It is estimated that more electricity than 159 countries combined.