Top 10 fascinating facts about Bitcoin
Top 10 fascinating facts about Bitcoin1. Bitcoins Might Collapse In The Future
Bitcoin enthusiast Mike Hearn believes that Bitcoins might fail in the future if they continue to follow their current path. According to Hearn, those in control of Bitcoin have lost track of the original purpose of the currency. Many discredited Hearn, but his prophecy has caused some to look deeply into Bitcoin’s functions and the reasons why he claimed Bitcoins are doomed. His first reason was that Bitcoins were initially meant to be a decentralized currency, unlike most other physical currencies. However, Bitcoins are now controlled by a small group of people, the exact opposite of what was supposed to happen.
2. Bitcoins Are Incredibly Volatile For Many Reasons
Bitcoins were first launched, the price has gone from pennies on the dollar to several hundreds of dollars as of mid-2016. However, even though the price is far higher in 2016 than it once was, it still fluctuates and remains quite volatile. In 2014, the price fell by 60 percent and many took this as a sign that Bitcoin might finally die out, In 2015, Bitcoins again became volatile because of an apparent Russian pyramid scheme which became incredibly popular in China. As Bitcoin was the only currency taken in the Russian scheme, the Chinese began to buy in droves, causing the price to rise. This year, Chinese demand again drove up the price of Bitcoins when the yuan was devalued. This caused prices to go up by 20 percent.
3. The Creator Of Bitcoin Is A Mystery
All that is known about the creator of Bitcoin is that he went by the name Satoshi Nakamoto. Like the currency he invented, Satoshi is almost completely anonymous. As it goes, he introduced the currency in 2009 and communicated with the first users by email never by phone or in person. Even after the spectacular rise of Bitcoin, Satoshi continued to remain in the shadows and disappeared completely in 2011.
4. Bitcoins Could Be Used For Terrorist Purposes
In 2014, someone using the name Amreeki Witness posted a .pdf on WordPress in which he stated that it was hard for most supporters of ISIS to give money due to restrictions by the ruling government of Iraq. His remedy was to have supporters donate Bitcoins which, of course, couldn’t be tracked if the process of “mixing” the currency was used. Bitcoins could be a possible game changer for terrorism funding because of the anonymity afforded by the currency. While it can be tracked somewhat, the currency can be effectively laundered to any illicit group like ISIS. While groups like ISIS would still need real currency to continue operating, the Pentagon has named digital currencies like Bitcoin as a possible threat because they could be a possible source of revenue for terrorists.
5. Bitcoins Allow For Easy Scamming
Bitcoin investment scams are fairly simple and are similar to Ponzi schemes. Investors are told that they can receive unreasonably high yields, but ultimately, they are just dumping money into the scammers wallet. For example, with fake Bitcoin mines, scammers claim to be mining Bitcoins for you for a fee but are in fact just pocketing the fee. There are also Bitcoin wallet scams in which you are seemingly depositing your money into a verified Bitcoin wallet, but all the funds are actually transferred to the scammers at a certain point. The last scam is a Bitcoin exchange in which low exchange rates from turning Bitcoins into currency are offered, but the scammers never deliver on their side of the exchange.
6. Bitcoins Are Currency For Extortionist Hackers
In February 2016, Hollywood Presbyterian Medical Hospital was hacked and its system held for ransom. With its system being held by hackers, none of the operations could be moved forward. With lives on the line, the hospital could do nothing but comply with the hackers demands: $17,000 in Bitcoins. Although the extortionists have not been identified yet, it is known that one network based in either Russia or Ukraine has generated almost $16.5 million in Bitcoin income from hacking victims in the United States. The extortion payments are usually in the amount of $20,000 and always in Bitcoin.
7. Bitcoins Are Incredibly Easy To Steal
In 2014, the world’s largest Bitcoin exchange, Mt. Gox, filed for bankruptcy after claiming that around 850,000 Bitcoins were stolen by hackers. At the time, the stolen Bitcoins were worth $450 million. Mark Karpeles, the CEO of Mt. Gox, claimed that $27 million in cash was also stolen. This sent troubling shock waves through the community because it exposed how easy it was to steal Bitcoins with very little effort. With a fair knowledge of hacking, one can easily access Bitcoin exchanges, which was exactly what the still-unknown perpetrators did. Mt. Gox had long been the target of hackers, with 80,000 Bitcoins stolen by hackers before Karpeles took over the company in 2011.
8. Bitcoins Have Created An Entire ‘Mining’ Industry
Bitcoin “mines” are where complex algorithms are solved and Bitcoins themselves are generated. The majority of these mines are located in China where they are often hidden facilities that operate outside the law. As a result, the operations have to be highly secretive. The Chinese government has not issued a policy for or against Bitcoins, so for the time being, they have been used to generate fortunes for their miners. One facility called Bitbank, which is operated by entrepreneur Chandler Guo, has generated $8 million a year and is considered one of the largest mines in the country. Workers at the facility solve cryptographic problems on computers to authenticate transactions around the world.
9. Bitcoin’s First Major Use Was On The Silk Road
For those unaware of the Silk Road, it served as a way for anonymous Internet buyers to order illegal drugs. Named after the famed trade route between Europe and the Orient, it operated clandestinely from its conception until it was taken down in 2013 after an intensive investigation by various government agencies. One of the keys to the Silk Road’s success was the use of a completely anonymous form of payment: Bitcoin. Due to the nature of its operations, the Silk Road could only be accessed through the Tor anonymizing network. Once you entered the Silk Road, you could buy drugs from cocaine to LSD along with other items like fake IDs, stolen credit card numbers, and hacking tools.
10. The First Bitcoin Transaction Was For Pizza
On May 18, 2010, Laszlo Hanyecz posted on a forum for Bitcoin: Bitcoin Talk. At the time, Bitcoin was still in its infancy. It was incredibly volatile, and each Bitcoin was worth only a few pennies on the dollar. Hanyecz’s post was for two Papa John’s pizzas that he said he would pay 10,000 bitcoins for. This transaction would go down in Internet history as the first time that Bitcoins were actually used to buy something. If Hanyecz had spent 10,000 Bitcoins in mid-2014 on two pizzas, they would have been worth around $5 million.