Even people who understand other complicated technologies can have a hard time understanding Bitcoin. It’s a popular and sometimes controversial topic among entrepreneurs, investors, tech thought leaders and government officials. So if you don’t already know all about it, you should at least learn some basic principles of Bitcoin because it’s not going away anytime soon.
Let’s begin with an elementary explanation of Bitcoin. It’s a digital currency, also better known as a cryptocurrency, as of March 2018 there are over 1,658 different cryptocurrencies. What makes Bitcoin distinctive is that it is decentralized, this means that a central authority like a government or a bank doesn’t control Bitcoin.
Bitcoin is powered by “miners,” who use specialized hardware and computers secure the currency’s network, process transactions and then compensated in bitcoins for their contribution. Bitcoin advocates believe that this allows more secure transactions over the network than it would be with a centralized authority. The records of every transaction get documented on a public digital ledger unique to blockchain technology.
Bitcoin is the oldest and currently the most highly valued cryptocurrencyin existence. It’s only approximately nine years old, but it’s already had its fair share of controversy. But, it’s also attracted some high-profile supporters, likeAl Gore and Peter Thiel to name a few.
Here are 10 facts about Bitcoin that beginners should know.
1.) Bitcoin was incepted back in 2008, when the proof of concept for Bitcoin was written by Satoshi Nakamoto, the creator of Bitcoin. The proof of concept for Bitcoin was released to cryptocurrency groups in 2009.
In 2010 Nakamoto disappeared from the project, but other developers picked up the project since then. Nakamoto mined the first 50 units of Bitcoin on January 3rd.
2.) One of the most intriguing facts about Bitcoin is that the creator Satoshi Nakamoto’s identity has never been confirmed. In 2014 Newsweek claimed Temple City, California, resident Dorian Satoshi Nakamoto was the real Satoshi Nakamoto. But he’s vehemently denied this claim.
An Australian entrepreneur, Craig Wright claimed he was Satoshi Nakamoto in 2015, but didn’t have any evidence to back it up. Nakamoto is most likely one of the wealthiest people in the world because it is estimated he mined a million bitcoins when it started.
3.) On May 22, 2010, the first Bitcoin transaction took place when Laszlo Hanyecz successfully used 10,000 bitcoins to pay for two pizzas. As of May 29th, 10,000 bitcoins are worth about $74 million. Hopefully, the pizza store held onto at least some of the Bitcoins.
5.) In 2013, the U.S. government was one of the largest holders of Bitcoin. This odd occurrence happened when the FBI shut down Silk Road.Silk Road was a darknet site that sold drugs and other illicit services. The FBI it took possession of the Bitcoin wallets that were attached to the site. One of the wallets was rumored to have 144,000 bitcoins.
6.) Bitcoin suffered a massive loss in 2014 when Mt. Gox, a Japanese exchange and the largest exchange at the time experienced a hack. This hack caused the most substantial loss of Bitcoins to date with approximately $460 million in 2014 value, was lost to hackers. This incident raised many concerns about the security of Bitcoin.
7.) One of the most significant critics of Bitcoin is Warren Buffet. He said to CNBC “Stay away from it. It’s a mirage, basically…”
8.) Cameron and Tyler Winklevoss were reported as the first Bitcoin Billionaires in December 2017 when Bitcoin’s value reached approximately $11,000. In 2013, they bought roughly $11 million of the cryptocurrency. Their position in Bitcoin was approximately 1 percent of all bitcoins at the time of purchase. They also own Gemini, a retail cryptocurrency exchange.
9.) Another notable Bitcoin investor is Erik Finman. He invested $1,000 into Bitcoin at the young age of 14, and he is now a millionaire.
10.) The CBOE started trading Bitcoin futures on December 10, 2017.The CBOE is one of the largest derivatives exchanges in the world. This exchange gives investors another way to gain a profit in Bitcoin without having to own the cryptocurrency.
Some people argue it will help stabilize the price of Bitcoin. Other people blame the exchange for the meteoric rise and then fall of Bitcoin that started in late December.
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