Bitcoin facts you must know!
Are you a bitcoin investor? So, you believe you know everything about the cryptocurrency? Put your knowledge to the test. Find out the most interesting facts about below.
Bitcoin Pizza Day
May 22nd is celebrated across the bitcoin world as the world’s bitcoin pizza day. How did it all happen? On the same date in 2010, developer Laszlo Hanyecz used 10,000 bitcoins he had mined to purchase two large pizzas worth $25 at the time. He publicized his offer for the pizzas on the popular forum, bitcointalk.org.
A British businessman accepted the offer and arranged for two pizzas be delivered by Papa John’s pizzeria. At the time, bitcoin was worth cents. Seven years later, the 10,000 bitcoins were worth $100 million.
With bitcoin’s stupendous growth, bitcoin pizza day is used to celebrate how far Bitcoin has come from. Investors also use the story to poke fun at anyone who tries to undermine the cryptocurrency.
Mysterious Founder went MIA
If you have read about bitcoin before, you probably know the virtual currency’s founder has never been identified. After launching bitcoin in 2009 under the pseudonym Satoshi Nakamoto, he/she/they went silent in 2010.
Satoshi Nakamoto had mined 980,000 bitcoins when he stopped giving updates about the network. The bitcoins were valued for $20 billion when bitcoin was trading for $19,000 in December 2017. With no one having the private keys needed to withdraw them, Satoshi’s bitcoins will likely remain unused for a long time.
No Government Control
One of the most interesting facts about bitcoin is that it can’t be controlled by governments. Sure, some countries have banned the use of bitcoins in the past. But not even the federal US government can shut down the payment protocol.
With its decentralized network, no one can break bitcoin. Experts estimate bitcoin’s security is much better than 500 supercomputers combined. The only way to hack the payment protocol would be to take control of 51% of bitcoin nodes. If that happened, the protocol would become useless as bitcoin’s value would plummet immediately.
Almost every major retailer nowadays accepts bitcoin. Want to visit space via the Virgin Galactic? Richard Branson accepts crypto payments. Many grocery stores, airlines, sports franchises, and clothing lines accept bitcoins.
If you thought the cryptocurrency was useless, think again. While it can be used to purchase anything, businesses are increasingly accepting bitcoin. From casinos to operators on the dark web, the days when bitcoin was considered useless are gone.
Bitcoins are Finite
You know how governments always print money to lower its value? They can’t do that with bitcoin. When Satoshi created the cryptocurrency, he limited the total number of bitcoins to 21 million. That way, the currency’s value is controlled by the law of demand and supply.
With a limited supply and its demand rising every year, the cryptocurrency has been growing at unprecedented speeds. Between 2010 and 2018, bitcoin failed to grow by more than 100% in only two years. Investors who purchased the cryptocurrency in 2010 and held onto their funds have made more than 50,000% in returns. No other currency has ever gained such value within one decade.
Bitcoin is Transparent
Unlike credit cards, you can’t cheat a bitcoin transaction. Bitcoin transactions are verified by multiple, independent computer nodes before being added to a digital, publicly viewable ledger. The whole process is called mining and leads to the distribution of new coins.
Miners run transaction details against the blockchain to verify such a transaction has never been made before. They also confirm the transaction is legitimate and not something you made up. Because of its security and transparency, the ledger is being adopted by governments and corporations around the world.
Banks have found use in the blockchain is sending payments securely. Businesses are using the ledger to store data or manage their chains of supply. And since the bitcoin software is open-source, Satoshi paved way for other cryptocurrencies. There are over 1000 new blockchains in the industry. Some are direct competitors to bitcoins. A few improve on bitcoin but many are designed to offer specialized services.
Wallets don’t Store actual Bitcoins
Bitcoins are secured by special types of wallets. So important are these storage programs that using the wrong wallet can lead to the loss of all your bitcoins. But surprisingly, the wallets don’t hold any bitcoins. They store the keys and addresses used to recognize you as the rightful bitcoin owner.
The real bitcoins stay as strands of records on the blockchain. People can see the records on the ledger but they can’t know the real owners. Does that mean all bitcoin wallets are the same? No, they are not. Since the wallets secure your coins, the reliability of a wallet depends on its ability to keep your funds secure.
Bitcoins’ distribution is Halved every 4 Years
Bitcoin miners are rewarded with a set of bitcoins every time they complete a bitcoin block. It was part of Satoshi’s proposals when he developed the payment protocol. Between 2009 and 2012, miners got 50 bitcoins for completing a block. In the following four years, the mining reward was 25.
Bitcoin halving occurs after every 210,000 blocks mined. One block contains hundreds or thousands of bitcoin transactions. As per Satoshi’s plans, a block is completed every 10 minutes. The person who completes the block gets the bitcoins distributed at the time and transactions involved. The last halving occurred in 2016, bringing down the mining reward to 12.5 bitcoins. This will go on until 2040 when the last bitcoin is believed to be mined.
Bitcoin is one of the most interesting innovations of the last decade. Changing how we bank, millions of people use the virtual currency regularly. Investors speak of it highly. Banks, while they reject the currency, are fast experimenting with the blockchain. With bitcoins in your wallet, you are not limited to what you can do. Buy clothes, play casino games or trade them off for profits. It’s all possible because every modern business accepts bitcoin for payment.