When it comes to investment opportunities today, bitcoin is one of the hottest commodities out there. There’s a lot of facts and myths about bitcoin. When looking for facts about Bitcoin, you may come across websites and scammers. They may try to lure or dupe you using illegal acts and swindle you out of your hard-earned cash. Join us in uncovering the truth behind the facts and myths about bitcoin.
Since bitcoin was established in 2009, it has been surrounded by all sorts of rumors and speculations. Yet not all these rumors are factual. Some of them are downright lies. Let’s discover what’s true about bitcoin and what is not. Here are some of bitcoin’s irrefutable facts.
How many bitcoins are in existence?
Bitcoins are as valuable as they are today because they aren’t as easy to come by as they were in the early 2010s. When the entire bitcoin structure was created, the supply was capped at 21 million bitcoins. Currently, there are about 18.5million bitcoins in circulation. Like normal minerals such as gold, bitcoin has to be mined. The process of mining these coins is getting more difficult every day as the bitcoin mining process adapts over time. Upon the successful verification of a block, miners are rewarded with bitcoin. When the crypto was first launched, the reward for a successful block verification was 50 bitcoins. In 2012 the reward was halved to 25 bitcoin and then later again in 2016 to 12.5 bitcoins. It was again reduced to 6.25bitcoins in 2020 which gives us time before the 21million mark is reached.
Losing your bitcoin wallet means losing your bitcoins.
Since bitcoins are digital products, they can only be stored digitally. Digital wallets have come a long way. They are very useful in keeping cryptocurrencies safe since the key cannot be duplicated. But losing your private key or password means that you won’t be able to access your bitcoins. It’s recommended that you keep it in several and secure places online or even get a physical copy to place in a safe. Researchers have noted that about 20% of all mined bitcoins are forever lost. This is due to misplaced keys, laptops, or smartphones discarded.
Conventional payment means using apps, and bank transfers are a favorite for many people. Using these methods, transactions can be tracked and a reversal is possible if needed. But with bitcoin, transactions are irreversible once initiated. You can file a complaint with the wallet platform but all they can do is urge the recipient to send back the funds. Unfortunately, they cannot initiate the transaction themselves. Although bitcoin wallets don’t take to conventional naming, you must check the recipient’s address.
Sending bitcoins cost almost nothing.
Banks and other money transfer platforms impose certain fees on their customer’s transactions. This is to generate income and cover their overhead costs. But since bitcoin is operated on a decentralized system, there is no go-between. Most transactions can are free of charge. Although some exchanges charge a very small fee, it usually goes to those responsible for bitcoins’ mining process.
Bitcoin has come a long way. Today it is safe to say that it is the largest and most valuable digital currency ever made. But since it’s a digital currency without real-world hard backing such as gold, it’s very volatile. The rise and fall of a company’s stock price are the same as bitcoin’s value mechanisms. When demand is high and supply is low, the value of the currency spikes. The value falls when demand surpasses supply. But because of this sort of volatility, it’s very attractive to investors. They will buy when the price is low and sell when the price is high.
Bitcoin keeps financial transactions anonymous.
Many people associate bitcoins with illegal activity, which isn’t as stereotypical. In 2019, more than half of all bitcoin transactions were made on the dark web. It has been lauded as a hideout for a lot of illegal activities. Bitcoin addresses do their part to keep the sender or receiver’s details hidden. Addresses are composed of a string of 34 alphanumeric characters making it difficult to uncover the real name of a sender or recipient. Wallet platforms have mechanisms of assigning IDs and usernames. This further protects the user’s identity. But there’s always a means to reveal the account owner’s identity. The process may take time and should have permission from the host country’s privacy laws.
There are also several myths out there about bitcoin. Here are some of them.
Using bitcoin means total anonymity.
Anonymity is a huge part of bitcoin’s appeal. This is why it is favored by many people who run illegal businesses. But the notion that using bitcoin provides you with complete anonymity is not true. When a bitcoin user makes a payment, they leave a very specific pattern on their blockchain. This can pinpoint other similar transactions. Also, all platforms require your details for their records when you reach out for bitcoin exchange services.
Bitcoin and blockchain are synonymous.
This is yet another myth people believe to be true. Bitcoin is essentially the cryptocurrency, while blockchain is the foundation of bitcoin. It’s the technology from which bitcoin and all other cryptocurrencies are built on. The best way to think about blockchain is like a ledger where all the bitcoin transactions are kept. The network is decentralized and it has a central control node. It works as a ledger that is publicly available for everyone to access.
With all these facts and myths about bitcoin, one thing is for sure, bitcoin is here to stay. As more companies accept the digital currency, so does its acceptability in society. Many countries are now embracing bitcoin and even coming up with ways to regulate the currency to prevent misuse.