Fascinating Insights into Bitcoin: 21 Facts You Should Know
Written on
Chapter 1: Introduction to Bitcoin
Bitcoin, the revolutionary digital currency, was introduced by an enigmatic individual or group under the pseudonym Satoshi Nakamoto. Despite extensive speculation, their true identity remains unknown. The foundational whitepaper detailing Bitcoin's principles was shared by Satoshi on a cryptography mailing list on October 31, 2008.
On May 10, 2010, a milestone event occurred when Laszlo Hanyecz made the first documented purchase using Bitcoin, exchanging 10,000 BTC for two pizzas from Papa John’s in Florida. At that time, this transaction was valued at around $40, but today those coins are valued at over $460 million.
The security of the Bitcoin network is ensured by a decentralized system that operates across the internet. This is achieved through a mechanism known as Proof-of-Work (PoW) mining. PoW requires network participants to solve complex mathematical puzzles to maintain system integrity and prevent manipulation.
Bitcoin miners, the individuals or groups engaged in this process, receive rewards in the form of Bitcoin for confirming new transaction blocks. Each successful validation earns miners a reward of 6.25 BTC. Many miners collaborate in mining pools, where they receive smaller, but more frequent rewards.
The final Bitcoin is projected to be mined by the year 2140.
Section 1.1: Mining Technology
The specialized chips utilized for Bitcoin mining are referred to as ASICs (Application-Specific Integrated Circuits). A premium model like the Antminer S19 Pro can cost between $15,000 and $17,000.
Section 1.2: How Transactions Work
Bitcoin transactions are documented on the network via blocks, which serve as permanent records of transaction data. Each block encompasses recent transactions that await validation, and once confirmed, it is finalized.
These blocks are sequentially linked, forming a comprehensive chain known as the blockchain.
Chapter 2: The Bitcoin Ecosystem
As of now, the Bitcoin network operates at a hash rate of approximately 200 million terahashes per second. This metric indicates how many times per second the network processes hashing data to authenticate transactions and maintain security.
Another critical component of the Bitcoin infrastructure is the Bitcoin node. This refers to any computer that runs a Bitcoin software implementation and retains a complete copy of the blockchain. Nodes verify each block and transaction before they are added to the chain. Currently, there are over 15,000 accessible Bitcoin nodes distributed across 86 countries, with the highest concentrations in the United States, Germany, France, the Netherlands, and Canada.
In this video titled "Bitcoin Q&A: The 21 Million Supply Cap," viewers can gain insights into Bitcoin's finite supply and the implications of this unique characteristic.
Section 2.1: Understanding Hard Forks
A Bitcoin hard fork represents a significant change in the protocol of Bitcoin's blockchain, resulting in two separate branches: one adhering to the old protocol and the other to the new version. Since 2017, numerous hard forks and copies have emerged, with Bitcoin Cash (BCH) being the most notable. BCH itself later hard forked into Bitcoin Satoshi Vision (BSV).
Section 2.2: Corporate Holdings in Bitcoin
Currently, the largest corporate holder of Bitcoin is Grayscale Bitcoin Trust, possessing 654,885 BTC, which constitutes approximately 3.12% of the total supply. MicroStrategy follows closely, holding 125,051 BTC. In a groundbreaking move in 2021, Tesla became the first member of the S&P 500 to invest in Bitcoin, acquiring 43,200 BTC for their balance sheet.
Only 21 million Bitcoins will ever exist, but estimates suggest that around 3.7 million Bitcoins have been irretrievably lost, leaving approximately 17.3 million available for access and sale. Currently, about 2.3 million Bitcoins can be purchased on cryptocurrency exchanges.
As of now, there are approximately 36,614 Bitcoin ATMs operating worldwide, according to Coin ATM Radar. In 2021, El Salvador made headlines by declaring Bitcoin legal tender alongside the US Dollar.
The video titled "Why you need Bitcoin right now | Bram Kanstein on 21 Voices" discusses the urgency and relevance of investing in Bitcoin in today's financial landscape.
This content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Only invest what you can afford to lose. The author may hold assets mentioned in this document.