10 Things Satoshi Nakamoto Wishes You Knew About Bitcoin Right Now
If you've come here out of curiosity to know about Bitcoin and have come across this fancy word for this first time, where have you been all this while? Did you know that Bitcoin was worth $20,000 by the end of Dec'17? Also, for those who know & love bitcoin, we are willing to share things you didn't know about bitcoin. We bet, you may not know everything about bitcoin.
This post is especially for those to whom bitcoin is absolutely alien topic. And also for those who're aware of the fancy words like Bitcoin, Blockchain, Cryptocurrency etc. It would be fun to test your knowledge on Bitcoin.
But before we see that, we respect the curiosity of the new comers and let us explain a bit about bitcoin first.
With that said, let's begin the flow.
What is Bitcoin? Why should You Even Bother About it's Existence?
Do you remember the times when digital era did not take over and everything in the bank or any financial body for that matter, was managed manually on papers? It was time consuming, tiring for all the parties involved and there was always a risk of losing those paper by accident. Amidst all this, the cost involved in making things run smooth is always high.
Then came, the digital era. The internet became the ginnie of this era and did everything you wanted at tap of a button. As more and more people started getting involved in this, it became more and more translucent.
We are readily aware of the problems traditional financial system has. It is centralized, fees at every single step, a lot of third parties involved, threat of cyber attacks, system failures, lack of trust and the list goes on.
Bitcoin disrupted the traditional financial system and the problems it had in one go. Bitcoin is decentralized, it is a peer-to-peer payment system(no third party involved), cyber attack is next to impossible(we'll explain how) cent percent trust based system. You don't have to rely on anyone to send payments to anyone.
The worst part of the traditional financial system is that all the financial details are stored in a central server. Whenever a cyber attack happens, all those details are compromised in one go. This is not at all possible in bitcoin network.
Bitcoin is a blockchain based application that runs on cryptographic algorithms. In simple words, bitcoin is a piece of code with monetary value. Just like you spend the paper currency, you can use bitcoin (and other cryptocurrencies) to buy things.
You don't need central systems like bank to send money to your friends & family. Moreover, transferring funds using bitcoin is faster than traditional financial system. Furthermore, your money is actually your money. Unlike banks that just makes an ledger entry of the funds transferred. In this blockchain application, you own your funds and you're responsible for whatever happens to it.
We have a detailed guide that contains everything you should know about Bitcoin. There you go.
Next, let's see a bit about the technology that powers bitcoin.
What is Blockchain? How is it changing your life right now?
Imagine a group of 10 ladies in a kitty party. All put $100 to the party and play games, have fun, food and enjoy the party. At the end of the party, all 10 ladies come together for the lucky draw and one out of the 10 will win $1000.
Imagine you're one of the 10 ladies and who would you trust on this lucky draw? Wouldn't you whole heartedly accept the result of the lucky draw? The trust has been devided among the 10 ladies and they know that everyone is directly involved in this lucky draw & have invigilated thoroughly.
If you have to win that lucky draw illicitly, you'd have to convince the other 9 ladies to let you win. That's not gonna happen.
Blockchain is similar to this kitty party thing. Blockchain is an open source public ledger that is accessible via internet. Just like the ladies were involved in the kitty party, there are nodes that play the role those ladies were playing in the lucky draw.
Node is nothing but a computer that is designed to perform certain algorithmic tasks. The person who operates the node is called the miner. Mining is a very important task that keeps the blockchain & its applications running.
Again, Blockchain is a very vast topic which is not decided to explain in this post. Here's a guide that will help you understand blockchain in absolute detail.
That being said, let us share 10 things you didn't know about bitcoin
Things You Didn't Know About Bitcoin
#10 The First Bitcoin Transaction Was To Buy Two Pizzas
A programmer had invested in Bitcoin and bought 10,000 bitcoins soon after it launched. It was May 22, 2010 when a programmer lost faith and wanted to get rid of 10,000 bitcoins by buying two pizzas from Papa John's. Had he not bought pizzas that day, he'd be millionaire owning around 37 million dollars today. With this being a part of history, May 22 is known as Bitcoin Pizza Day.
#09 NSA Knows The Annonymous Developer Of Bitcoin
The Bitcoin Whitepaper was sent to the cryptographic mailing list signed by an annonymous developer named Satoshi Nakamoto. NSA was more than just curious to know who this person/group/company is. NSA analyzed the writing and was able to figure the person behind this psuedo name Satoshi Nakamoto.
But they kept it hidden and did not made the name public. Not sure what NSA did after knowing about the person. May be they're keeping a close eye on him to see what he's upto next.
#08 Whoever has the private key, owns the bitcoins
Private key is the most important thing you have while managing bitcoins. It's like whoever has your twitter password owns the account. There are two elements to access your digital wallet where you can store bitcoins. One is public key, which is used to receive bitcoin. You can share this with anyone. On the other hand, private key is the key by which you send bitcoins. You need to confirm sending bitcoins by entering the private key.
Public key is like the username of your social media account and private key is the password to login to that social media account.
#07 Bitcoin Mining Became A Passive Source Of Income
Bitcoin Mining is process to generate new units of bitcoins and confirm the pending transactions. Bitcoin mining went so popular that a Japanese man mined bitcoins in the dormitory of his work place. This was illegal and hence the company fired him but he made enough to survive the coming months.
Lately, bitcoin mining has gone a one man show. Bitcoin mining has gone more and more expensive as there are millions of users which slowed down the network. To manage this load, it takes a really powerful machine which is not pocket friendly for individuals.
Sure, you can get into bitcoin mining right now but the margin you make will be too less to survive long in that space. Furthermore, the price of bitcoin mining keeps increasing each day passing. Technically, the bitcoin algorithm is designed to make the bitcoin mining profits slimmer & slimmer so that more bitcoins would reach market & make the network even more stronger.
#6 Stronger Network Than Supercomputer
Thanks to blockchain, supercomputers are not needed to run a huge network seamlessly. Bitcoin as a network is much more stronger than many supercomputers, probably stronger than the supercomputers in the future.
Even if better supercomputer are come to existence in the future, it will never be able to be as decentralized as bitcoin network is. All the force of the nodes involved in the network come together and be way more stronger than any supercomputer. Speaking of power, bitcoin power runs over 64 exaFLOPS.
Here's an easy calculation. Take 500 super computers, the power they generate is quarter of a single exaFLOP. Isn't that beyond imagination? Now you know you matter and can make a difference.
#5 Trrorism Has Been Funded With Bitcoin
The privacy that bitcoin provides is second to none. It's no secret that bitcoin has changed the way we send payments. The transactions you make is completely anonymous & there's no way one can figure out your identity with the data they can see on the blockchain.
If you look at a transaction, you can see the public addresses, amount transferred and timestamp. Which is not enough to figure out anything about the two parties involved. This has been misused by terrorist group use it to fund their groups and raise funds. One such incident where a person named Amreeki tried to raise funds stating that ISIS is not able to raise donations due to international restrictions. Therefore, Amreeki encouraged people to send bitcoins as donations.
Still wondering why government hate bitcoin?
#4 FBI Has Second Largest Bitcoin Wallet In The World
Remember FBI took down silk road and website similar to it? FBI confiscated all the earnings in their bitcoin wallet. Obviously, Satoshi Nakamoto is the who has the highest number of bitcoins in the world.
#3 Bitcoin Has Been To Space
Bitcoin, along with a paper wallet was tied to a weather ballon and was sent into the sky. Thanks to mining company, Genesis Mining. Once the ballon reached around 13 miles into the sky, the mining company added bitcoin to that paper wallet.
Furthermore, the weather ballon went as high as 22 miles which is stratosphere of our planet. That day, bitcoin price was sky high ;)
#2 Bitcoin Is Power Hungry Beast
Remeber we mentioned that bitcoin mining is expensive as machines that run the algorithms costs a bomb? Not only this, Bitcoin Mining even consumes a lot of energy. Those energy hungry beasts need a lot of energy and they heat up a lot. Therefore they need air conditioning too.
This makes, Bitcoin Mining profits slimmer and slimmer each day passing by. To make it worse, bitcoin mining algorithm is designed to keep the bitcoin mining difficuly get tougher & tougher with each block mined. With this, the machines will consume even more power and mine comparatively lesser number of bitcoins.
There was a time when mining one block would get an incentive of 25 bitcoins.Which is almost a $100k at the time of writing this post. It take around 10 minutes to mine one block, and the incentive is halved every 4 years. You get 12.5 BTC to mine one block. The setup required to mine one block is not affordable for an individual. Considering you partner up with someone, the machine cost, & the electricity bills will leave with a very very slim profit margin. Which will eventually turn out to be useless in long run.
#1 $460 Million Worth Bitcoin Were Stolen From Single Company
In early 2014, Mt. Gox, a bitcoin exchange company lost $460 million worth bitcoin (price of 2014). In 2014, average price of bitcoin was $347, which is 10 fold less in today's date. With that calculation, Mt. Gox faced a loss of $4.6 billion.
This was a nasty blow to the whole cryptoverse and raised enough eyebrows to question the security of a centralized system for a decentralized application. This is why there have been so many breakthroughs that have come up with decentralized exchange platforms.
We hope you like this list. Feel free to share this in your network and spread awareness about bitcoin. It has a potential to change our lives for good.