What is Bitcoin to you? We won’t bore you with the regular bitcoin explanation all over again. Instead, we’ve gathered 10 facts, 2 mysteries, and 1 truth about the Bitcoin that you probably haven’t heard yet.
1. Blockchain vs Bitcoin
As sophisticated as we are, we understand that Bitcoin and blockchain are not synonymous.
What are they then?
The first digital currency is more likely to be a cog in the wheel of the diverse blockchain system. A blockchain is a data ledger that cannot be compromised, recognizes no authority, and represents democracy at its finest. Bitcoin, on the other hand, is the blockchain’s first project, and showed that we can truly own our money.
However, Bitcoin’s protocol is less adaptable to other needs, that’s why a lot of other blockchains, like Ethereum with its smart contract system, quickly emerged.
Outstanding blockchain projects get roughly $1 million of investments. The average income for US-based blockchain devs is $130,000 a year. At the moment of writing, Bitcoin’s market cap equals $ 176 billion. The technology behind the first digital currency in less than a decade managed to attract a tremendous amount of fiat funds and keeps growing.
The big question is, who stands behind this new system and what makes him, her, or them stay anonymous?
2. Who Created Bitcoin? Satoshi Nakamoto?
The Biggest Bitcoin Mystery.
Until now, the creator of Bitcoin and the blockchain stays unknown, and there must be a solid reason behind that. There are a few explanations that sound reasonable. Conspiracy theories suggest that behind Satoshi Nakamoto, there is a group of people who went against the system. Some people say Satoshi is or was a government agent.
The truth is, it might be good that we don’t know.
- Bitcoin is private so it’s only fair that its creator wants to keep his privacy as well. Not everyone craves power and glory.
- The underlying philosophy behind the first digital currency and blockchain does not tolerate any authority and Satoshi Nakamoto made a decision to escape the role of the leader.
But people love a mystery. Hal Finney, Nick Szabo, Dorian Nakamoto, Elon Musk are all curious minds that have come up with endless theories about the blockchain’s inventor.
At the very least, there’s one person we can boldly take off the list of candidates.
Craig Wright, also known as ‘Fake Satoshi’, has managed to get under the skin of the entire crypto community. First, he proclaimed himself the creator of Bitcoin,without any persuasive argument. Then he tried to sue a bunch of crypto activists, including Roger Ver and Peter Mc Cormack. He also falsified documents, claimed the authorship of Bitcoin WP, and that’s only a few highlights. Don’t be like Craig.
Sometimes it’s wise to let it be, and allow a secret to stay secret. Whoever Satoshi Nakamoto is – a man, a woman, or a group of people, they’ve created a revolutionary system of handling data. The system is powered by mining.
3. What Bitcoin Mining is About
Blockchain and mining confuse a lot of laymen. In reality, it’s not that hard. Decentralized systems require a group of participants who control its work.
Mining is carried out by computers that solve math problems and, as a result, create new coins. Miners confirm the blockchain’s transaction data and get paid for it in Bitcoins.
The most expensive country for Bitcoin mining is South Korea: it costs more than $26,000 to mine one BTC. The cheapest one is Venezuela with slightly more than $500 per coin.
Bitcoin mining will eventually terminate as the protocol limits the total amount to 21 million coins. According to estimates, the last coin will be mined in the next century and after that, blockchain transaction fees will start benefiting record keepers.
But for now, the primary task of miners is to verify transactions.
4. Bitcoin Transactions on the Blockchain
Blockchain transactions are transparent and are supposed to be more efficient, secure, and private. For instance, the security part depends heavily on the user. It is important to choose the right blockchain wallet to keep your funds safe. Lumi Wallet takes care of security and anonymity, but efficiency lies within the blockchain.
The case of $194 million in Bitcoin moved from one account to another with only $0.1 fee is iconic. An average US bank would charge a $10,000 per million commission for a similar transaction.
Sounds like a threat to the whole banking system. Is it even legal?
The legality part is complex. Ever since Bitcoin and the blockchain gained their credibility, governments have pondered over the best regulation system. It’s curious that many countries give the green light to blockchain tech but are not so keen on Bitcoin.
India and China are the most Bitcoin unfriendly countries right now, meanwhile Malta, Switzerland, Japan, and South Korea are ready to embrace the digital coin. Although the US is an unshakable leader in the crypto industry, the country is governed by a number of regulatory commissions, not to mention local state laws, and has a lot to figure out yet.
Regulated or not, it doesn’t stop people from trading it.
6. Trading Bitcoin
Bitcoin is highly volatile, which is a blessing for a trader.
Currently, roughly 99% of crypto transactions are executed via centralized exchanges. Decentralized exchanges might be the ones who stay devoted to the original idea of blockchain, financial independency, and P2P transacting, but they still remain unpopular and lack liquidity.
And yet, Bitcoin’s decentralization is a controversial topic. There are some rumors about it.
7. Who Controls Bitcoin and What The Second Mystery is?
So here’s another fact for you.
They say, 1,000 people own 40% of the Bitcoin market. And the situation with other major digital currencies is not too different.
Who are those people and what will happen if they decide to use their digital assets for their own benefit? Or are they doing it already? Are they the blockchain’s early adopters or only interested in profits?
There are more questions than answers, so we better switch from mysteries to misconceptions.
8. Is Bitcoin Anonymous?
Many newcomers firmly believe that Bitcoin is anonymous. That’s not entirely true. This digital coin is private, but not anonymous. If you don’t run to cover, they can trace your digital assets.
You can take measures to increase the level of anonymity when dealing with Bitcoin. Use Tor browser to execute web transactions and always turn on a VPN on your mobile. Do not use centralized exchanges and keep your digital assets in HD wallets.
And there are also other blockchains like Dash, Zcash, or Monero that specialize specifically on the anonymity aspect.
A certain level of privacy serves well for certain purposes, and not necessarily for the noblest ones.
9. What is the Dark Side of Bitcoin?
Blockchain and Bitcoin antagonists often use Bitcoin’s darknet activity as an argument against it. But when you look at the numbers, you see they’re not significant.
The Bitcoin darknet market has already made about $1 Billion in 2019. However, illegal activity has accounted for less than 1% of all Bitcoin whereabouts. Now, how much fiat money has served a criminal purpose so far?
There is no doubt that digital and fiat currencies are not entirely alike, and later we may find out that Bitcoin has a different purpose.
10. What’s Next for Bitcoin
One can only speculate about what the future holds for Bitcoin.What is Bitcoin to you? We won’t bore you with the regular bitcoin explanation all over again. Instead, we’ve gathered 10 facts about the crypto space that you probably haven’t heard yet.
Not too many people are using Bitcoin as a medium of exchange. In fact, according to the data from Chainalysis, only 1.3% of BTC transactions came from merchants during the first months of 2019.
Is speculation the only possible use for this digital currency? It cannot be that simple. For instance, it may become a store of value. Or we will find a way to program Bitcoin smart contracts.
The beauty of Bitcoin is that it’s unpredictable and does not allow the system to control itself. Blockchain, in turn, has remarkable potential.
The Bottom Line
We’ve stated 10 facts, established two Bitcoin mysteries, now, what’s the only truth behind it? Digital currencies will stay up as long as people keep spreading the word about them.