“With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.” – Satoshi Nakamoto, Bitcoin developer (and possible founder).
Few things confuse people as much as cryptocurrency. Are you interested in Bitcoin and cryptocurrency, but you’re just not sure where to begin? Here are 43 facts to help you wrap your mind around the situation.
43. Movers and Shakers
The idea of Bitcoin originated by the “Cypherpunks” of the 1990s. These were a group of people who advocated the widespread use of cryptography and privacy technologies to effect social and political change. The word “cypher” was used because they specialized in creating puzzles that were nearly impossible to solve. The idea of a digital currency outside of the power of traditional banks was talked about and experimented with, but nothing ever came of it for years. The core of their question was: “Why do we need banks?” The money comes from the people, so why can’t we just share it with each other?
42. The Original
An anonymous man named Satoshi Nakamoto began publishing his “white paper” business plans for Bitcoin. He hired computer programmers who were involved with the “cypherpunk” movement to build the technology. After a while, he completely disappeared. While there are theories, no one truly knows who he is beyond the shadow of a doubt.
41. Peer to Peer
Bitcoin works on a technology called “Blockchain.” Basically, it’s just a way to send money back and forth directly to anywhere around the world in an instant, rather than having to go through the Federal Reserve and a bank, or companies like Western Union act as a middle-man.
40. Why Did This Take So Long?
Have you ever over-drafted your bank account? Maybe you forgot that you wrote a check to somebody, and they didn’t cash it right away. Or you paid your credit card, and it took 3 days. Or your paycheck took 2 days to get to you. Almost everyone has had this happen at least once. With Blockchain, that doesn’t happen. The money is going from Point A to Point B almost instantly.
39. Getting Better
Compared to traditional currency, sending money to another country with Bitcoin and other cryptocurrencies costs only a tiny fraction of normal bank fees.
38. Banking the Unbanked
There are many countries around the world–specifically in third-world nations–where people do not have bank accounts. There are also a lot of people immigrating to a new country who are not allowed to get a bank account until they become full-fledged legal citizens. This is called “Unbanked,” and it makes it nearly impossible to get ahead in life or have the option to move somewhere else. Digital currency can potentially solve this problem, because anyone with a cell phone now has access to a way to store their money. It could be the solution to getting many people out of poverty.
37. Safety First
The Blockchain is far more secure than any online banking system that currently exists. There was a lot of bad press about cryptocurrency hacks, but this had more to do with poor management and poor wallet technology than the actually Blockchain.
36. Seeing Double
The Winklevoss Twins, who were launched into the public eye after the premier of the movie The Social Network, have decided to devote their careers to Bitcoin and cryptocurrency. They started their own wallet called Gemini, and they are looking to become brokers who can get traditional investors involved.
35. Negative Attention
BitInstant was a company that handled Bitcoin transactions. The CEO was working directly with a drug dealer who wanted to launder his money for trafficking. He ended up in jail. This hurt the reputation of Bitcoin, and brought a lot of negative media attention. However, Bitcoin has nothing to do with the scandal. The same as the Federal Reserve isn’t responsible for what people do with cash.
34. Resistance to Change
In New York City, they passed a law requiring businesses to have a “BitLicense” in order to legally operate using Bitcoin as a currency. This means they would still pay taxes to the IRS, and the FBI could still keep track of transactions. However, this defeats the purpose of what Bitcoin users are trying to do. Many businesses are refusing to sign the agreement, and leaving New York instead.
Vancouver, Canada was the first city in the world to have a Bitcoin cash machine.
32. The Hand that Feeds You
Ben Lawsky, the man who forced the BitLicense law to get passed in the first place, opened up a firm where he consults businesses on how to pay for the license to work with Bitcoin in New York.
31. Change is Hard
Many companies like eBay have been interested in incorporating Bitcoin into their currency system, just like PayPal. However, they are cautious to integrate it, since it’s all anonymous. Without regulation, companies are not sure how to move forward.
30. Should Have Started Sooner
In 2010, one bitcoin was only $.003 cents. So, for $100, you would have gotten 3,333.33 Bitcoin.
At the time that this article was written, Bitcoin is worth $4,662.58. So if you invested $100 dollars in Bitcoin in 2010 it would be worth $15,541,917.79.
For anyone who is worried about losing their Bitcoin from a hacker, they can use what is called “cold storage.” This is simply saving the data on your computer, or a “hard wallet,” which is a tiny computer, kind of like a flash drive, that has your money saved on it.
28. Gone Forever
A man named Campbell Simpson got into Bitcoin when it was still new. He got bored with it, and totally forgot all about it. He moved, and threw away his old computer. His original $25 investment would have made him a millionaire. By now, his old computer was probably dissected and melted down for recycled metal.
Bitcoin was the original cryptocurrency. As the years go on, more and more companies are jumping on the bandwagon. These other coins are called “Alt Coins.”
26. The Next Big Thing
At the time this article was written, there are over 800 “Alt Coins” on the market. It is quickly becoming the next Stock Market.
Some of the “alt coins” are downright silly. There is DogeCoin, NyanCatCoin, and more. With so many coins on the market, it takes a very long time to research which ones have potential and which ones are junk.
24. Buried Treasure
“Mining” is a term for when computers have to decrypt a long string of code, and when they are finished, they are rewarded with a bitcoin. Every day, new Bitcoins are born. However, the longer Bitcoin exists, the harder it is to mine it. At its current rate, a computer would take over 400 years to mine one Bitcoin. It is possible to mine “alt coins” much faster than Bitcoin, but there is no way of telling if they will ever be as valuable.
23. Getting in Early
In the stock market, when a private company decides to open shares to the public, the day it goes up for sale is called an “IPO” or “Initial Public Offering”. In the world of cryptocurrency, it’s called an “ICO” or “Initial Coin Offering.”
22. Good as Gold
Many people don’t know this, but every major bank needs bars of gold as “liquidity.” Ever see big signs saying, “Liquidation Sale: Everything Must Go!?” That means that they’re failing, and they need to get rid of anything they have that’s worth money. The value of gold may go up and down a little bit, but it will probably be valuable forever. In the digital world of cryptocurrency, Bitcoin is considered “the new gold,” and it is currently the “safest” coin to invest in.
21. The Answer to The Problem
Ripple is a company that is trying to work together with banks, instead of hoping that the world’s financial system is going to fall into total anarchy. Their coin is called “XRP.” No matter what, their plans to help the banks is going to solve a ton of issues with international money transfers. Once Ripple is activated in the global banking system, transfers can happen instantly.
A law has passed in Japan that allows all retail locations in the country to accept Bitcoin. The majority of Japan’s banks have already agreed to purchase and start using Ripple XRP as their digital currency to make transactions. One of the reasons is because it makes financial transfers much faster than Bitcoin.
Just like the stock market, nobody really knows when the price of any coin is going up or down. This means that forums like Reddit are filled with people speculating what will happen next.
18. Sunshine State
Silicon Valley, California is the best place to be if you’re into Bitcoin. They even have Bitcoin ATM machines, and multiple businesses who will accept it in their stores instead of cash.
17. Lady Luck
Whenever money is involved, people love to gamble with it. There are actually websites that allow legal gambling with Bitcoin. The Grand Prize on these games are 5 Bitcoin.
16. Win-Win Situation.
The beauty about cryptocurrency is that people are more than willing to share their research, rather than keeping it all secret, because the more people that invest, the higher the price will go–and the more money everyone makes. This is the total opposite of most businesses, where everyone keeps their money-making “secrets” to themselves.
15. To Infinity and Beyond!
One of the slang terms in the cryptocurrency community is: “TO THE MOON.” It basically just refers to the moment when we all make it rich…If that ever happens. People hope that one of their alt-coins, which are actually affordable to buy multiple shares, will someday be as valuable as Bitcoin. Only time will tell.
14. Never Let Go
Another slang term in the community is “HODL.” It’s a misspelling of the world “hold,” and it stands for “Hold On For Dear Life.” It is what it sounds like–the strategy to get as many coins as possible, and not sell, no matter how many highs and lows may happen.
13. Bad Examples
Bitcoin got a bad wrap when The Silk Road got into the news. If you weren’t aware, The Silk Road is a drug trafficking website on the Dark Web. However, in the real world, drug dealers use cash, so there is no paper trail. That doesn’t make cash bad. Despite this flawed logic, the price of Bitcoin plummeted for years after getting this bad press.
12. As You Wish
The founder of The Silk Road has been nicknamed “The Dread Pirate Roberts,” like the character from The Princess Bride. A man named Ross Ulbricht was identified as The Dread Pirate Roberts, but later, Wired Magazine identified one of the critical staffers (and possible ringleader) of The Silk Road as a user operating under the pseudonym “Variety Jones.” Who is Variety Jones? The mystery is still unsolved. Additionally, the FBI has only been able to seize a very small amount of Dread Pirate Robert’s fortune.
The US government auctions off items that they have seized after busting crimes. In 2014, they auctioned off 44,341 Bitcoins that they grabbed during a bust of Silk Road drug dealers. As of the time this article was written, this Bitcoinf fortune is now worth Over $200 million. Whoever bought those at auction got them for a fraction of the price.
10. Oldie But a Goodie
Many people apply traditional stock market techniques to the cryptocurrency market in order to make money.
At this point, Bitcoin is worth so much money that if you pay with any other currency, you’re going to receive a fraction of one bitcoin. All of those 0’s in your Bitcoin have been nicknamed “Satoshis” after the mysterious founder.
8. Watch and Learn
There is a documentary on Netflix called Banking on Bitcoin that gives a very in-depth look as to what Bitcoin is, how it works, and how it can change the world.
7. Coins in Caracas
Venezuela’s currency, the “Bolivar” has a value that is plummeting. In order to maintain the value in their money, many Venezuelans have begun investing their money in Bitcoin instead.
6. Swimming with Sharks
Mark Cuban, a venture capitalist who became famous from the TV show “Shark Tank,” has decided to create his own Bitcoin investment firm.
5. The People’s Republic
In China, many businesses are already using Bitcoin. They see this as the answer to the problems they are facing with bank transfers, since they manufacture goods to send all over the world. Ripple (XRP) is already hiring over 200 new employees in China to help facilitate their integration of Blockchain into their banking system.
4. Job Openings
All of the major banks have hired Bitcoin Specialists, because they are preparing for the inevitable reality of converting (at least partially) to cryptocurrency, or at least incorporating it into the system that already exists.
3. It Better Be Good Pizza
In 2010, a man named Laszlo Hanyecz was experimenting in Bitcoin back when it was still very cheap. He decided to use 10,000 coins to buy two pizzas with his friends. At of the time this article was written, those coins would have been worth more than $45 million.
2. Blast Off
The price of Bitcoin keeps going up. Some people believe that some day, one Bitcoin could be worth $25,000 or more. Others insist it will crash, so we’ll leave it to you to make your own decisions.
1.Will the Real Satoshi Please Stand Up?
The origin story of Bitcoin is a true unsolved mystery. There are many theories about who the real Satoshi Nakamoto actually is. In fact, 16 different men have claimed that they are the real Satoshi. In 2014, a Japanese-American man named Dorian Satoshi Nakamoto was found living in California. He denied having any connection to Bitcoin, saying “I’m no longer involved in that.” One of his neighbors, however, did. A man named Hal Finney was one of the original “cypherpunks,” and he lived very close to Satoshi Nakamoto. By the time Forbes writer Andy Greenberg interviewed him, Finney was already wasting away from ALS–the same illness that plagues Stephen Hawking. When asked if he was the real Satoshi Nakamoto, he started to smile, but said “no.”