Crypto – a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography rather than by a centralized authority. Bitcoin is one such cryptocurrency. Assuming that you are interested in Bitcoins or are aspiring to invest in the same, here are some things to know about Bitcoins:
What is Bitcoin?
Bitcoin is a decentralized digital currency. It is transferable on a peer-to-peer network of Bitcoin. All Bitcoin transactions are verified by network nodes through cryptography. At the same time, a record of all Bit transactions is also kept in a public distributed ledger called Blockchain.
10 Interesting Things to Know About Bitcoin
The detailed mechanism of Bitcoin transaction and growth involves a fair share of highly complex mechanisms. But there are other things about Bitcoin apart from its working algorithms that you should know…
1. The Mysterious Creator
Bitcoin was introduced to the world in 2009 by a person called Satoshi Nakamoto. Satoshi soon disappeared from the internet in the year 2010. Nothing has been heard of him or from him since then. We are not quite sure if he is dead or alive.
Satoshi’s identity is shrouded in mystery and the only communication with him has been via emails and forums. His personal Bitcoin wallet has 980,000 Bitcoins!! At the current rates, this would make him one of the richest men on the planet.
In reverence to the mysterious creator of Bitcoin, the smallest unit of Bitcoin has been named ‘Satoshi’. One Satoshi is valued at approximately 0.00005 US Dollars. This is a meagre sum. Around 100 million Satoshis is what you will need to sum up to one Bitcoin. To site a more relatable example, you will need approximately 15,800 Satoshis to make 1 US Dollar. It is important to note here that Bitcoin values undergo continuous fluctuations and hence, the numbers above are mere approximations and not exact figures.
3. Losing Bitcoins
Your Bitcoin address is your private key. Losing your Bitcoin address would imply losing your unique identification along with all the bitcoins in your bitcoin wallet. A lot of people have lost their bitcoin address with no other way to access their bitcoin wallet, making 60% of all the bitcoins out there, ghost.
4. Volatility of bitcoin
Bitcoin is highly susceptible to market risks. It is highly volatile and subject to market turmoil. To add on, the system lacks transparency and regulation. This makes it difficult for countries to implement proper legislation in regard to crypto and bitcoin and consider it seriously. It should also be noted here that mining of bitcoin has several environmental drawbacks.
5. Processing Power
Mining Bitcoin is expensive in terms of time, money and electricity. It requires servers for that specific purpose. You need to process the data really fast so that you can add the blocks to the blockchain. The faster you continue adding these blocks to the chain, the more bitcoins you make.
6. Power Consumption
Ireland consumes around 5000 kWh of electrical energy each year in bitcoin mining. The country covers a stretch of 84,421 km and yet consumes less electricity than all the bitcoins’ farms combined, which consume 60 tetra-watt hours of energy.
7. Bitcoin Ban
While some countries like America and Canada have welcomed bitcoin with open arms, Bangladesh, Bolivia, Ecuador, and some other countries have completely banned it. Countries like India, Thailand and Iran haven’t completely banned crypto or bitcoin but have warned their citizens to be conscious and careful while using these technologies.
8. Limited Number of Bitcoins
The bitcoin resource is not an infinite pool. There are only a limited number of bitcoins that can exist; 21 million. Out of these 21 million, 17 million bitcoins are already circulating in the market which is around 80% of the total reserve. So will there be no more bitcoins to earn in the next few years?
Well don’t worry, we will still have bitcoins to mine in the year 2140. This is because of the rewarding process involved in bitcoin. Presently miners are rewarded with 6.25 bitcoins for each block they add to the blockchain. But this number is halved every 4 years. The next mining is supposed to occur in 2024 when the reward will be reduced to 3.125.
9. The Power of “B”
“Bitcoin” and “bitcoin” are not the same things. While bitcoin refers to the crypto used for transactions in the crypto exchange world. Bitcoin is the ledger that stores all the important data in regard to the transactions made by the users.
10. Faster than Supercomputers
Summit, which is claimed to be the fastest supercomputer in the world, works at a speed of 122.3 petaflops. The entire bitcoin network has a processing power of 80,704,290 petaflops. Bitcoin is hence way faster than the fastest super-computer ever created.
While there might not be an infinite pool of bitcoins, there sure is an infinite pool of information about bitcoin that you can come across. Since you now have a clear clue that Bitcoin is a highly complex algorithm, you can proceed to understand its bits by reading on topics like blockchain and cryptocurrency. You can also take up courses to learn thoroughly about the subject.
Frequently Asked Questions
1. Is Bitcoin legal?
Ans. bitcoin has been legalized in many countries like America and Canada. Liberland has even adopted it as its national currency. There still are countries like Bangladesh which have banned it while others like India and Thailand that refuse to either legalize it or ban it.
2. What is the current rate of bitcoin rewards?
Ans. Currently, 3.125 bitcoins are rewarded for every block you add to the blockchain.
3. Is Satoshi and bitcoin the same?
Ans. Satoshi is the smallest unit of a bitcoin. One Satoshi is valued at approximately 0.00005 US Dollars. Around 100 million Satoshis is what you will need to sum up to one Bitcoin.