Here are 10 facts about the cryptocurrency known as Bitcoin, or BTC! From mining to blockchain technology, I'll tell you everything you need to know about Bitcoin basics.
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Bitcoin is a decentralized digital currency created in 2009 whose transactions are 1) peer-to-peer, and 2) recorded on a public ledger. While you technically can print your private key on paper in the form of a paper wallet, this is merely a code that gives you access to your electronic funds. Each transaction of this crypto currency recorded & verified on an open ledger so that each & every transaction (plus the transaction amount) is open & available to the public. But don’t worry, because despite transactions being broadcast out into the open, the identities of both the sender & receiver are protected by cryptographically-hidden serial numbers called public keys, which are long strings of numbers & letters that make it pretty much impossible to expose the identity behind it. The underlying technology is called the blockchain, which is the public ledger where each & every Bitcoin transaction is recorded, no matter how small or large the amount. The blockchain is made up of a network of nodes--or computers--that communicate with one another in order to ensure that the ledger is accurate. As soon as I send this Bitcoin, the transaction is broadcast to the blockchain, and several nodes within the network proceed to verify this transaction, add it to the public ledger, then send an updated copy of the ledger to all the other nodes in the network. It’s grouped into a “block” of other transactions & added to the chain of past blocks to forever go down in accounting history; hence the name “blockchain.” This sophisticated system of verification removes any possibility of double-spending a Bitcoin because if two or more nodes validating the same transaction come up with different amounts--and ultimately, differing ledgers--the transaction becomes void. As I stated earlier, the blockchain is comprised of a network of nodes, or computers. These nodes are responsible for maintaining the integrity of the blockchain by verifying transactions, updating the public ledger, and broadcasting this new version of the ledger to all the other nodes in the network. This whole process is called “mining,” and miners are incentivized by being rewarded a certain amount of Bitcoin for every transaction they verify. There’s a total available supply of 21,000,000 Bitcoin to be mined. As of today, new blocks are mined every 10 minutes on average, with each block generating 12.5 new Bitcoin as rewards to miners. This rate will continue until the year 2020, when 6.25 new Bitcoin are rewarded per mined block. Four years later, rewards will be halved again at 3.125 new Bitcoin rewarded per block. This “halving” process is set to occur every four years until the year 2140, when all 21,000,000 Bitcoin will have been mined & in circulation. Bitcoin was created by an unknown person who goes by the name Satoshi Nakamoto. The New Yorker believes it to be Irish cryptography student Michael Clear, while Vice thinks it’s either Gavin Andresen, Jed McCaleb, or Shinichi Mochizuki. Newsweek magazine claims it’s an old Japanese engineer from California whose name is actually Satoshi Nakomoto. Regarding safety, close to 32,500,000 blocks were mined in 2009 alone with a reward rate of 50 Bitcoin per block. Bit coin had just reached its all-time high of over $6,300 per coin. The Bitcoin crypto currency has come a long way since its inception in 2009. In fact, back in 2009, a man named Kristoffer Koch bought 5,000 Bitcoin for $27...that’s just over half a cent per Bitcoin! At the all-time high rate of $6,300 per Bitcoin, his 5,000 Bitcoin wallet would now be worth $31.5 million! Despite its price volatility, financial analysts & economists are predicting prices of this cryptocurrency to go up even further. 2015 reported over 100,000 merchants who officially accept the cryptocurrency called Bitcoin, the likes of which include PayPal, Expedia, & all Shopify-based stores. It’s been so revolutionary to the financial industry that banks, hedge funds, and even national governments are researching ways in which they can implement crypto currency both Bit coin & blockchain technology into their infrastructure. Early adopters show strong support for Bit coin due to its decentralized nature & how it can topple governments & financial institutions. But much of the rise in popularity can also be credited to pure hype. Its first all-time high peaked in 2013 at over $1,200 per coin, which “piqued” a lot of interest at the time.
Disclaimer: This is not financial advice. I absolve myself of all responsibility (directly or indirectly) for any damage, loss caused, alleged to be caused by, or in connection with the use of or reliance on any content, goods or services mentioned in this article. As usual, DYOR.