Even though bitcoin has been around for some time, it’s still relatively young compared to other investment options. A lot of people are thinking of investing in cryptocurrency to diversify their portfolio. However, every new investment should be preceded by a fact-finding mission to understand the possible downfalls and advantages.
Considering its dramatic market fluctuations and its rapid popularization there is new breaking bitcoin news published every single hour. Trying to make sense of them all, people often forget to ask the most basic questions. To help you understand how bitcoin works, here are 8 things you probably didn’t know about the cryptocurrency.
No One Knows for Sure Who Created Bitcoin: There has been plenty of speculation about who is the inventor of bitcoin. Some believe it’s a single person while others think that it was created a by a team of programmers. The name of the person/group behind the coin is Satoshi Nakamoto. It’s believed that this person or group owns around 1 million bitcoins. That’s an asset worth $8.1 billion.
There Are Only 21 Million Bitcoins Available for Mining: When countries run out currencies, they just go ahead and print more to meet the demand. However, there are only a limited number of bitcoins available for mining and that number is 21 million. After all of those bitcoins are mined there will be no new coins made available.
No One Controls Bitcoins: Governments control their national currencies and take important decisions such as when to print new currencies or when to ban certain notes. However, there is no such governing agency that controls bitcoin. Instead, there is a digital ledger or blockchain that keeps track of all the transactions. The transaction details of the ledger are available to all and thus fraudulent transactions are detected and monitored by all.
Only 1000 People Own 40% of All the Bitcoin Available in Circulation: Much like regular currencies, rich people own more bitcoins than people with limited funds. It may sound unbelievable but as low as 1000 people hold 40% of the total bitcoins available in circulation.
Large Multinational Companies Now Accept Bitcoin Payments: Thanks to its global popularity companies such as Dell, Microsoft, and Expedia accept bitcoin payments. As the coins gain more acceptance, businesses are starting to accept this cryptocurrency. Dallas Mavericks owner, Mark Cuban recently announced that they are going to start accepting bitcoin payments from fans who want to buy tickets.
Your Bitcoin Assets Are for Everyone to See: While your personal identity is kept hidden, every bitcoin transaction has the public addresses of the buyer and the seller. Therefore, anyone who knows your public address could know the details of your bitcoin transaction.
Bitcoin Transactions Are Completely Illegal in Some Countries: Countries like Saudi Arabia, Nepal, Bangladesh, Algeria, Bolivia, and others have completely banned the transaction of this cryptocurrency.
If You Lose Your Bitcoin Private Key You Lose the Coins: While you can recover your Email password, there is no way to recover a forgotten bitcoin private key. This means if you lose the key you end up losing all your bitcoin assets.