Bitcoin Facts: Myths & Truths

Bitcoin is a cryptocurrency that emerged in 2008. In essence, a cryptocurrency is a digital currency. However, the transactions are verified by an uncentralized system rather than a central authority. BTC also means Bitcoin abbreviated.

The actual Bitcoin currency, known worldwide, was started in 2009. The most important thing to know about Bitcoin is the lack of government or bank involvement. Privacy is key with Bitcoin. You can not retrieve personal or financial information while bitcoin transactions are recorded in what is called a blockchain ledger.

Bitcoin Facts

Recently Bitcoin has become very popular and attractive for investment. Trading and exchanging Bitcoin has increased the amount of money that can be made overall. Learn more about this fascinating digital currency.

Bitcoin’s Origin and Founding Purpose was Built on Economics

Bitcoin’s Origin

The whole concept of what Bitcoin is today started in 2008. The cause and main influence for the idea to begin Bitcoin emerged from the financial crisis of 2008.

Bitcoin was born to be a decentralized digital currency that would be an alternative. One of the various Bitcoin founders, Satoshi Nakamoto, laid out a plan for Bitcoin. The motivation was to create something decentralized and not detectable at first. Also, Bitcoin started as a large criticism to the financial system of the world.

In general, Bitcoin being decentralized means transactions that can be validated by a public ledger of transactions that people can store on their computer. So, you could take Bitcoins from someone on a peer-to-peer Bitcoin network without the “need for any intermediaries.”


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The Founders Responsible for Creating Bitcoin as a Concept are a Mystery and Controversial

Founders Responsible for Creating Bitcoin

In 2008, it is agreed that Bitcoin was founded. Basically, there has not been one agreed person or group who took full credit for creating Bitcoin.

The Japanese name, Satoshi Nakamoto, has been credited as a founder of Bitcoin. However, the name “Satoshi Nakamoto” has been proven to be a pseudonym of a person or a group.

Satoshi is a historical figure in cryptocurrency for the development of this system. There have been a few claims by certain people like Craig Wright, Nick Szabo, and Dorian Satoshi that have started Bitcoin. However, nothing has been proven.


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Bitcoin has No Set or Established Value or Set Price

bitcoin has 0 value

All currency has a set value. For example, a dollar bill is worth $1. Bitcoin by design is to be the opposite type of currency. The possibilities of this digital currency are limitless at this point.

Since bitcoin is not administered or controlled by a central bank or government then the value of the BTS is not set.So, anything like inflation rates, economic growth, and more will not affect bitcoin.

What influences Bitcoin are two factors overall; first it is the amount or supply of Bitcoin and then the real demand for it. These two factors will influence how much Bitcoin will be valued. So, the price people are willing to pay or  trade real goods/services for will determine the price of each Bitcoin.


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Bitcoin was First Used as a Purchase for Pizza

Bitcoin Pizza Day

The value of Bitcoin was always doubtful until someone actually made a purchase. It was not until May 22, 2010 that someone bought a pizza with Bitcoin. And, it is today that we now call May 22 Bitcoin Pizza Day.

It took some time before any retailer would accept Bitcoin. However, it was one business that accepted bitcoins for goods and services. Papa John’s Pizzas were exchanged for Bitcoin by Laszlo Hanyecz for 10,000 Bitcoins.

In 2019, the value of 10,000 BTC was $41. Today, an estimated 10,000 BTC is $453 million dollars.


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Bitcoin and Other Cryptocurrencies Need Blockchains to Function

cryptocurrencies blockchain

Blockchain is the technology that makes Bitcoin and other cryptocurrencies very secure. It’s an open-source and distributed database that is stored in nodes or computers within the network.

By definition, a blockchain is an ever increasing list of records or blocks. These blocks are linked or binded using cryptography. Every block has a cryptographic hash of the previous block, a timestamp, and transactional data and information. The timestamp is one of the few traceable records of any transaction.

As innovative as this technology is there are problems. For example, the blockchain if it gets bigger requires a lot of gigabytes of data. The increased bandwidth and storage capacity issues on computers will need to be simplified.


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All Bitcoin Transactions Cannot be Traced Like Other Financial Transactions

untraceable Bitcoin Transactions

If you do a bank or online transaction then there will be a good chance that you can trace the activity. The digital stamp is clear and recoverable, but a Bitcoin holder is able to act in secrecy.

Bitcoin transactions are untraceable because they are only recorded in what is a blockchain.

Blockchains if used can be hidden. Because If personal financial information is on a blockchain then owners of this specific information can control and manage when and how a third party can access it in any way. The transaction history is hidden unless revealed.

Moreover, a bitcoin user can as well hide their IP address using different services or a VPN. Bitcoin offers incredible privacy to the users and permits transactions worldwide without the worry of being tracked or traced.


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If You Lose Your Bitcoin Passcode or Private Key Then You Lose Everything You Invested in

Bitcoin Private Key

If you lose your Bitcoin private key, you lose your bitcoins. For example, a British IT worker named James Howells, misplaced and lost his hard disk with Bitcoin private key to 7.500 Bitcoins. The private key was lost while James was cleaning in 2010.

If you don’t have the private key for your Bitcoin then you have lost the money attached to the BTC. It is unrecoverable without the private key. At present, 7,500 BTC is $336 Million dollars.

James Howells is offering $70 million dollars to his city trash dump who can help him recover the hard drive with the private key. the city dump where he is from in the UK. Currently, around 25% of all Bitcoins have been permanently lost.


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A Whale in Bitcoin is a Cryptocurrency Term that Refers to Value

bitcoin whale

A bitcoin whale is a term for currency not mammals. For example, a Bitcoin holder with a lot of units of Bitcoin would be called a Whale holder. Also, Whale Bitcoin users need to have large amounts of cryptocurrency and value.

The reason why they are called whales is because these users possess so much BItcoin they can disrupt the waters of the smaller fish.

In financial terms, a whale is problematic. Because Whales have a lot of Bitcoin value or wealth, which if not active, decreases liquidity and increases price volatility.


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It is Possible to Acquire Bitcoin Through an ATM or Bank Machine

Bitcoin Through an ATM

Not many people would realize that Bitcoin can be purchased that easily. However, it is now possible to let people without any cryptocurrency experience or background to invest in Bitcoin. How? Simply through an ATM machine; last count it was around 10,000 machines in total.

The Bitcoin accessible ATM is different. For example, the machines are listed as BATM. Basically, these ATm machines give you the ability to connect anyone to a Bitcoin exchange. Also, these specialized ATM machines can buy and sell Bitcoin with just cash or a credit card.


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Nearly 10% of All Bitcoin Assets has been Inactive for Over a Decade

Bitcoin Inactivity

Basically, there are many inactive accounts for Bitcoin around the world. The estimated worth of these accounts is now perhaps over $29 Billion. Also, as the data changes, the amount of Bitcoins that has not moved or had any activity is over 60%.

All in all, 10% of Bitcoin’s supply has not had any activity at all for over 10-12 years. In total, 1.8 million Bitcoin accounts  have been locked in inactive Bitcoin addresses.


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Developing and Mining Bitcoin Requires More Electricity than Expected

Developing and Mining Bitcoin

The amount of electricity that necessitates mining Bitcoins depends on Blockchains. A blockchain is defined as the technology that can make digital currencies secure and safe. For example, it is primarily an open source database that is built or stored within computers.

In summary, the more powerful a computer system is then the more you can increase mining capacity for Bitcoin. Therefore, electricity is an issue for some Bitcoin holders who want to harvest and grow their cryptocurrency.

All in all, if you were to estimate the monthly power bill of the total Bitcoin network then it will surprise many people. It has been claimed that the total amount of electricity to mine Bitcoin is more electricity than is used by the Republic of Ireland.


Conclusion

Bitcoin is the most groundbreaking financial innovation in the last 20 years. Since Bitcoin started, many cryptocurrencies have appeared and some have failed. In general, digital currencies are a long-term investment because of their high market demand. And today, Bitcoin remains and is growing still.

Author: Jay Garr

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