10 surprising facts about bitcoin
The often misunderstood “money of the Internet”, bitcoin has steadily risen in popularity over the last 10 years and is undoubtedly the undisputed king of cryptocurrencies.
While some are actively using bitcoin for both investment purposes and daily transactions, others probably will never even buy a fraction of a bitcoin. These people have yet to see the benefit of cryptocurrencies. Here are 10 little-known facts about bitcoins you need to know:
1. The first thing purchased with bitcoin was pizza
So why is May 22 celebrated as the Bitcoin Pizza Day?
When bitcoins were new, they were nearly worthless as it cost fractions of a cent to buy BTC. But on May 22, 2010, someone purchased something with bitcoins. It was a big deal, because at the time, no other retailer was accepting the digital currency.
On this day, two Papa John’s pizzas were purchased by Laszlo Hanyecz for 10,000 BTC. This was the first official documented purchase of goods using bitcoins. At that time, the value of 10,000 BTC was around $41, not too bad for two pizzas.
At the time of writing this article, the worth of 10,000 BTC is around $64,2 million. We really hope that pizza tasted amazing.
2. The inventor of bitcoin is a mystery
Since its inception, there has been constant speculation about the father of bitcoin. The bitcoin whitepaper was written under the pseudonym of Satoshi Nakamoto. The identity of “Satoshi” is still a mystery yet to be solved.
Without a concrete ‘inventor,’ many have come forward to claim they are the originator. Craig Wright, an Australian entrepreneur, claimed to the be the inventor of bitcoin in May of 2016. It didn’t take long for him to be added to a long list of scammers trying to claim that they came up with the incredibly successful digital currency.
3. Bitcoin is untraceable but bitcoin transactions can be traced
When making bitcoin transactions, your name/identity is not used in any form. Only your public address is available. But… The bitcoin blockchain is a permanent ledger, which is transparent. If anyone knows your bitcoin public address, they can see how many bitcoins you hold and what transactions you have made. This is how the FBI was able to bust the owner of the Silk Road online marketplace.
If users of bitcoin want to hide their public address or IP, it can be done by using services like Bitmixer or a VPN. This isn’t a foolproof method to maintain your anonymity, which is a flaw that has been addressed by newer currencies.
4. Bitcoin doesn’t grow on trees
Just like conventional currency, bitcoins don’t grow on trees. But unlike traditional paper money, you can’t touch, feel, or print bitcoin. Bitcoins are mined on a blockchain network, and they come into existence only when miners successfully mine bitcoin blocks.
At present, the mining power of bitcoin’s network is 300 times more powerful than the world’s top 5 supercomputers combined.
5. The value of bitcoin has steadily increased every year but one
Every year since it was introduced, the bitcoin price has gone up, often significantly. In 2010, you could buy a bitcoin for only $0.01, which would have peaked in value last year at almost $19,000. In 2014, bitcoin prices plummeted, incurring a 62% loss to investors.
The loss was due to the MtGox hack in 2014, causing the price to drop from $751 to $285. The fear of a blockchain hack spread among investors, but it was not the blockchain which was compromised. MtGox (the most heavily used exchange at the time) was the source of the problem, with hackers exploiting security flaws.
6. There is a limit to the overall amount of bitcoins
Bitcoin’s supply is finite, and there is a lifetime maximum of 21 million bitcoins. At present, 17.3 million have already been mined and are being traded. The last bitcoin will be mined in 2140. After that, no new bitcoins can be mined.
7. You can lose all your coins if you lose your private key
James Howells, an IT guy, lost 7,500 bitcoins in November 2013. While cleaning his desk, he threw away his hard disk containing the private keys of bitcoins which he had mined in 2010. After seeing a news story of a Norwegian man who had made millions off an early investment, he realized that he was all set. Even though he searched and searched, he could not find his hard disk.
At present, the worth of 7,500 BTC is approximately $48.1 million. Without the private key, the funds are lost forever and no one can use them. It’s estimated that around 25% of all bitcoins have been forever lost.
8. There are lots of products you can buy with bitcoin
People always wonder what you can buy with using bitcoin, but the real question might be: what can’t you buy?
Here’s our list that includes a wide range of goods and services that you’re currently able to buy with bitcoin.
Additionally, you can also order space travel with Virgin Galactic, buy Tesla, order a computer from Dell or Microsoft, and even pay for your Dish TV Subscription! Additionally, the world’s largest coffee chain, Starbucks, has teamed up with Microsoft and is currently working on the development of a system that would allow them to accept payments in crypto.
9. Despite the rhetoric, bitcoin can’t be ‘banned’
Due to the nature of bitcoin, there is often talk of “banning” it. This hostility towards bitcoin is because it doesn’t rely on the legacy institutions that have governed the banking industry for generations.
Regardless, many countries have tried to ban it, including Bangladesh, Bolivia, Thailand, and Vietnam. On the other hand, there are some countries that have made bitcoin an official legal tender, including Australia, Russia, Japan, and Venezuela. Some countries, including the U.S., have yet to make a clear policy involving cryptocurrency.
The very design of the blockchain system means that bitcoin can never be banned, only regulated. As long as you have an Internet connection and a bitcoin wallet, you can interact with the system.
10. There are thousands of bitcoin ATMs around the world
Many people are starting to understand blockchain and the nature of the online exchanges that trade them, but did you know there are ATMs where you can insert cash to buy bitcoin? With over 3,500 of them worldwide, chances are there’s one near you. Just this past week, on November 1, Coinsource Inc. received the so-called Bitlicense authorizing them to operate bitcoin ATMs throughout the state of New York.
Some of the machines are even two-way, and allow you to sell your bitcoins for cash, but don’t expect the machine to have an unlimited supply of paper money.
As you can see, there’s lots of interesting bitcoin news that many people don’t know about. With any new technology, there are some bumps in the road, but blockchain and cryptocurrencies are here to stay, and can be a great investment or way to purchase goods and services, especially internationally. Additionally, there are also many benefits compared to fiat currency, including security, transparency, and not having to rely on governments or institutions to give it value.