How important are Bitcoin and the blockchain technology, Bitcoin’s underlying technology? As Bill Gates, the founder of Microsoft, said:
“Bitcoin is a technological show of power.”
Here are a few Bitcoin facts you should know before starting trading cryptocurrency:
1. Satoshi Nakamoto Is extremely wealthy
The creator is Bitcoin is Satoshi. That’s how he declared himself to be called in the early stages of Bitcoin. Later on, he disappeared, and today nobody knows how he looks like. We don’t even know if he is just a person or a group of people. To this day, the identity of Satoshi remains a mystery, but what we know is that he has lots of Bitcoin. It has been estimated that Satoshi mined around has around 980,000 BTC.
2. The US government possesses Bitcoin
Cryptocurrencies like Bitcoin might have been created to eliminate the need of a central authority and the need of government to regulated it, but the reality is that the FBI has the second largest Bitcoin wallet following Satoshi Nakamoto.
In late 2013, the FBI shut down Silk Road, an internet drug market, and began seizing Bitcoins belonging to Ross Ulbricht (also known as Dread Pirate Roberts), the operator of this illicit website.
At the moment, the seizure led to a great deal of debate about the cryptocurrency’s future. That’s how today the FBI controls over 144,000 BTC.
3. A private key is necessary to access your Bitcoin
As I mentioned before, Bitcoin was created keeping in mind the inutility of governments and regulatory organs. But there is one big downside to the way Bitcoin works.
Because there is no third party “watching” over your assets, you wouldn’t be able to recover the access to it in the eventuality of a forfeit or theft.
If you were to lose your credit card, let’s say you would accidentally throw it in the trash without noticing, you would be able to contact the back and verify your identity, and they would issue you another card and declare null the old one.
Well, in regards to Bitcoin, it is not really simple. Bitcoin uses private keys to grant access to its owner. ‘a private key is basically a large string of numbers or combination of words. In the event you misplace your private key, you are going to lose all of your coins. Forever!
Actually, back in 2013, IT employee James Howells lost access to 7,500 Bitcoins, which were estimated to roughly $127 million at the moment. He stated that he accidentally threw the hard disk on which he stored the private key.
4. Bitcoin distribution is Limited
Central banks control the production and supply of traditional money. They can always print more money, and nothing is backing it up.
But, Bitcoin is restricted to only 21 million. Currently, over 17.7 million Bitcoins are circulating, and the last coin is due to be mined in 2140.
5. Bitcoin cannot be prohibited
It’s fairly easy to understand why governments don’t easily embrace the idea of Bitcoin or any other decentralized currency, but the fact is that the cryptocurrency cannot be prohibited, it can only be controlled.
These are some basic facts about Bitcoin you should know before starting trading cryptocurrency, which you can now easily explain to your friends. But trading requires more than this basic knowledge, so please make sure to do all the research required before trading.