Since the start of the Internet age, businesses have used this worldwide platform to sell their products to an ever-increasing share of the world’s populace. Most of us have bought items off the Internet using credit cards or bank accounts. But over the years, developers have tried to find a way to create a unique currency just for the digital marketplace. In 2009, they did with the introduction of Bitcoin.
5)The First Bitcoin Transaction Was For Pizza
On May 18, 2010, Laszlo Hanyecz posted on a forum for Bitcoin: Bitcoin Talk. At the time, Bitcoin was still in its infancy. It was incredibly volatile, and each Bitcoin was worth only a few pennies on the dollar. Hanyecz’s post was for two Papa John’s pizzas that he said he would pay 10,000 bitcoins for. This transaction would go down in Internet history as the first time that Bitcoins were actually used to buy something.
On May 22, Hanyecz posted that someone had taken him up on the offer. At the time, he just thought it was cool that he could get pizza for seemingly nothing. Hanyecz continued to buy pizza with Bitcoins until the summer when he ran out of Bitcoins. He didn’t give any of this a second thought because he believed—as many others did at the time—that Bitcoin was never going to actually go anywhere as an Internet currency.
For the next few years, it seemed that what everyone thought about Bitcoin was true. But in 2013, investors and speculators became interested in Bitcoin and began to trade it on a much larger scale. Soon, the value of Bitcoin began to skyrocket as it became a popular commodity. In the coming months, one Bitcoin went from being valued at a few pennies to $1,200. It finally settled between $500 and $700. If Hanyecz had spent 10,000 Bitcoins in mid-2014 on two pizzas, they would have been worth around $5 million.
4)Bitcoins Could Be Used For Terrorist Purposes
In 2014, someone using the name Amreeki (“American”) Witness posted a .pdf on WordPress in which he stated that it was hard for most supporters of ISIS to give money due to restrictions by the ruling government of Iraq. His remedy was to have supporters donate Bitcoins which, of course, couldn’t be tracked if the process of “mixing” the currency was used. Bitcoins could be a possible game changer for terrorism funding because of the anonymity afforded by the currency. While it can be tracked somewhat, the currency can be effectively laundered (through enough “mixing”) to any illicit group like ISIS. While groups like ISIS would still need real currency to continue operating, the Pentagon has named digital currencies like Bitcoin as a possible threat because they could be a possible source of revenue for terrorists.After the 2016 Paris attacks, however, the European Union began to crack down on possible terrorist financing. Their first target was financing through Bitcoin. The European Commission, the financial arm of the EU, is considering adding regulations to Bitcoin in which there has to be an identity attached to the Bitcoins to prevent them from going to terrorist groups.Like the Silk Road, the deep web is the preferred domain of ISIS, and this is where Bitcoins from sympathizers go. Although removing the anonymity of Bitcoins would change one of its key aspects, most Bitcoin users and exchanges would not mind the changes because most Bitcoins are used for legitimate purposes.
3)Bitcoins Might Collapse In The Future
Bitcoin enthusiast Mike Hearn believes that Bitcoins might fail in the future if they continue to follow their current path. According to Hearn, those in control of Bitcoin have lost track of the original purpose of the currency. Many discredited Hearn, but his prophecy has caused some to look deeply into Bitcoin’s functions and the reasons why he claimed Bitcoins are doomed.His first reason was that Bitcoins were initially meant to be a decentralized currency, unlike most other physical currencies. However, Bitcoins are now controlled by a small group of people, the exact opposite of what was supposed to happen.Hearn also claimed that there is an internal split at Bitcoin between those who want technology to increase transactions and those who are opposed to this. Blockchain, the technology behind the Bitcoin transactions, has become increasingly random as to the speed of transactions. Hearn said that it could take anywhere from 60 minutes to 14 hours for a transaction to go through.However, his main issue was with the small number of people (approximately 10) in control of Bitcoin. As long as it is controlled by this small number, he said, Bitcoin will be an “inescapable failure.” We don’t know whether Hearn will be proved right, but as it stands, Bitcoin has become one of the most interesting phenomena of the Internet age.
2)The Creator Of Bitcoin Is A Mystery
All that is known about the creator of Bitcoin is that he went by the name Satoshi Nakamoto. Like the currency he invented, Satoshi is almost completely anonymous. As it goes, he introduced the currency in 2009 and communicated with the first users by email—never by phone or in person. Even after the spectacular rise of Bitcoin, Satoshi continued to remain in the shadows and disappeared completely in 2011.In 2014, Newsweek ran a cover story claiming to have discovered Satoshi. They stated that Satoshi was a unemployed engineer in his sixties living in a Los Angeles suburb. Those involved with Bitcoin made it clear that he was not Satoshi.Another theory believed by many in the Bitcoin community is that Satoshi is actually a reclusive American man of Hungarian descent named Nick Szabo. However, Szabo denies that he is Satoshi, although he remains one of the key figures in Bitcoin.Satoshi hasn’t been involved with Bitcoin since 2011, so his presence really doesn’t matter in the grand scheme of things. But there are still some who speculate about his identity.In May 2016, an Australian entrepreneur named Craig Steven Wright claimed to be Satoshi, but skeptics immediately said that he was not the real Satoshi and that if the real Satoshi wished to be known, there would be no doubt as to his identity. Those who believe Wright say that it doesn’t matter either way as Bitcoin would go on with or without him.Whatever the case, at the time Satoshi left, he had as many as one million Bitcoins, which could easily be worth in the hundreds of millions of dollars today.
1)Bitcoins Are Incredibly Volatile For Many Reasons
Since Bitcoins were first launched, the price has gone from pennies on the dollar to several hundreds of dollars as of mid-2016. However, even though the price is far higher in 2016 than it once was, it still fluctuates and remains quite volatile. For this reason, many people still have reservations about the currency. Over the years, many have also come up with reasons why the price can both fall and rise spectacularly. Bitcoins follow the economic principle of supply and demand, and the course of their price can be determined by this. In 2014, the price fell by 60 percent and many took this as a sign that Bitcoin might finally die out.That year, though, several Silicon Valley companies started to invest in Bitcoins. In addition, various other companies began accepting Bitcoins as a form of payment, which caused the currency’s value to rise once again. Although it may not have taken off as a common currency among average people, its technical innovations continued to allow it to prosper.In 2015, Bitcoins again became volatile because of an apparent Russian pyramid scheme which became incredibly popular in China. As Bitcoin was the only currency taken in the Russian scheme, the Chinese began to buy in droves, causing the price to rise.This year, Chinese demand again drove up the price of Bitcoins when the yuan was devalued. This caused prices to go up by 20 percent. Although prices continue to fluctuate, experts agree that Bitcoins will mostly likely remain on the market for some time—as long as more companies adopt them as a form of payment and demand remains in place.
