Bitcoins have been generating a buzz over the past few years; smashing records and reaching all time price highs. However, opinion worldwide as to the cryptocurrency’s level of acceptability is still divided.
Bitcoin was created to provide an alternative to the Banking system. This is because it is an open accounting system that allows thousands of computers from around the world to track ownership of digital tokens – the Bitcoin – as part of a purchase transaction.
Here are facts that I think people should be aware about Bitcoins
- Bitcoin was developed by an anonymous person or group people called Satoshi Nakamoto. In 2016, Craig Wright, an Australian entrepreneur announced in an interview with BBC that he was the inventor of the digital currency though his claim has no verifiable proof.
- Bitcoins are generated all over the internet by anybody running a free application called a Bitcoin miner. Mining will require a certain amount of work for each coin. This amount is automatically adjusted by the network, such that the Bitcoins are always created at a predictable and limited rate.
- The money supply for Bitcoins is limited. Only 21 million Bitcoins will ever be created. No one can just print (or mine) more Bitcoins and introduce inflation.Once the number reaches 21 million, no more will be made. There are almost 11,000 Bitcoin nodes presently reachable globally.
- The smallest unit of a Bitcoin is called a Satoshi – which is a 100 Millionth of a Bitcoin, or 0.00000001.
- Every transaction made on Bitcoin system is recorded. There is a general ledger worldwide that keeps track of all Bitcoin transactions. This ledger is maintained by Blockchain.
- Every Bitcoin transaction is irreversible. Like cash, once exchanged in a transaction, it cannot be reversed unless the recipient solely decides to return it. This serves as a deterrent for scammers who might want to recall transactions after getting value.
- Vancouver, Canada has the world’s first Bitcoin ATM.
- Bitcoin transactions are anonymous. You only have a number, but no idea of who the person behind that number is. Payments are made to that number only.
- Bitcoins are stored in wallets. If you lose the wallet, you lose your money. If you opt for a wallet online and the currency in it gets stolen due to a compromised site, there is no insurance for this.
- Like any currency, Bitcoin is vulnerable to thefts; one of the largest heists in the history of Bitcoin occurred when hackers plundered the illegal bazaar known as Sheep Marketplace. $100 million worth of Bitcoins was stolen from customers.
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