Little Known Secrets About Bitcoin

Posted on 12 July 2015 at 21:15

Bitcoin is a peer-to-peer payment system that is used as an alternative to regular banking. It is something that users will never see and never touch beyond the computer screens. Exchanges are made by wallet software rather than the traditional wallet on your back pocket. No central bank or authority exists, so the value of your balance is set entirely by the supply and demand of the market.

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Bitcoin Units of Measurement

1 deciBitcoin (dBTC) = 0.1 Bitcoin

1 centiBitcoin (cBTC) = 0.01 Bitcoin

1 milliBitcoin (mBTC) = 0.001 Bitcoin

1 microBitcoin (uBTC) = 0.000001 Bitcoin

1 satoshi = 0.00000001 Bitcoin

Satoshi Nakamoto is the person behind bitcoin. Launching the software in 2009, Nakamoto passed majority control to the scientists Gaven Andresen in late 2010 and Andresen’s comments captured bitcoin perfectly. He says it’s better than gold. Nakamoto was believed to be in possession of 1 million bitcoins equivalent to 1.1 billion US dollars, but his name is probably a pseudonym. The real identity of Satoshi Nakamoto is unknown. It has been suggested that electronics companies SAMSUNG, TOSHIBA, NAKAMICHI and MOTOROLA are the founders, but there’s been no confirmation. It’s a mystery for the modern world

As with fiat money, it’s best if you’re able to spend your bitcoins. Gradually, more and more commodities are becoming available to bitcoins holders. Perhaps the most familiar company that accepts bitcoin is Virgin Galactic. Its upcoming space tourist flights are purchasable. If you prefer your transport to be a little more traditional, be happy that Lamburghini is the first motor company to give a go signal for bitcoin. If you are a fan of Spice Girl Mel B., be aware that she is the first musician to accept bitcoin as payment for her music.

Production of bitcoin is romantically called mining, which produces millions of dollars worth of bitcoin used for electronic exchange every day. Every bitcoin transaction is verified using an extremely complex algorithm, and these verifications are done by a large network of computers competing against each other. Once a miner has successfully verified a transaction, a little amount of bitcoin is given as a reward. New bitcoins are brought into the system in a similar fashion, and mining is a lot of work. At the global scale, the mining network of computers is now over 200 and 50 times more powerful than the world’s top 500 super computers combined.

With nothing to hold in your hand, bitcoin value might seem indecipherable. As a new technology, its price tends to fluctuate; however, the overall value seems increasing. In November 2011, after a crash, a bitcoin was worth two US dollars. In November 2013, one bitcoin was equivalent to $1,000 and was worth more than an ounce of gold for a brief moment. Just imagine the level of security put in place when the first bitcoin cash machine was opened in Vancouver, Canada the previous month.

An old saying says you have to speculate to accumulate, and there are plenty of speculators when it comes to bitcoin. While there are winners, there are inevitably losers, too. In February 2014, Mount Gox, the largest bitcoin exchange at one time, was forced to file for bankruptcy protection due to possible hacking, thief or mishandling of bitcoin in excess of $450 million. Bitcoin is a currency that can lose up to 80 percent of its value in seconds, so Mount Gox was in very big trouble very quickly.

Probably because of its sub-traditional banking system and its being outside the scope of government regulation, bitcoin is outlined in many countries around the world and is heavily round upon by many others. In July 2013, Thailand became the first country to completely ban the currency, though the leader relaxed the rolling. Meanwhile, China with its higher global profile prohibited banks from trading bitcoins in December of the same year. The US treasury has also exercised its governmental power by closing down a physical bitcoin production firm in 2013.

The number of bitcoin that can exist is limited to 21 million and the production rate is scheduled to be half every four years to ensure that the value of one bitcoin does not dissipate. This means that supply will run out around 2140 and although miners will no longer be rewarded with new bitcoins, they will still be paid for their efforts through transaction fees. As it stands today, over a century before the deadline, roughly 64 percent of bitcoins are set unused in their respected accounts, appreciating and depreciating with time.

The notorious organization WikiLeaks relies very heavily upon the bitcoin technology for finance. In mid-2011, the nonprofit whistle blower group began using bitcoin as a method of processing donations because other money transfer companies won’t deal with them. Becoming very reliant on a thing that's so unpredictable may not be a wise move, but thus far usage of the digital currency has not done a lot of harm to the media profile of Juliana Sash and Company.

The infamous SilkRoad website used bitcoin as its form of currency. This black market underground service made business out of selling prohibited drugs along with other legitimate products using bitcoin as the payment medium. When the alleged site founder Ross Ulbricth was arrested, his estimated fortune was so inconceivable that it was believed over half of it remained unaccounted for.

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BitCoin Trivias:

Only 0.003 of the worlds population (250,000 individuals holds a bitcoin at a minimum. Only 25% people know about bitcoin.

A bitcoin rival called Coinye was involved in a trademark dispute with Kanye West, who claimed the coin infringed on his image.

The Winklevos Twins invested in a bitcoin related venture.

Establishing a charity that receives donation in bitcoin, Jet Li made his countrymen in China become aware of the digital currency.

In 2013, James Howells accidentally threw away the hard drive that contained 7,500 bitcoins. When he realized they had grown to 7.5 million, he scoured the dump of garbage but never found it!