Since the dawn of the publicly used internet, the reaches of the marketplace have grown vastly, reaching a fully global scale. It opened up consumers to marketplaces located across the globe, vastly increasing product availability to the world’s population. Most of us have purchased something or other on the internet using our bank accounts or credit cards, but much like the internet transformed global commerce, developers have sought to upgrade a currency unique to the digital marketplace. In 2009, they finally did with the introduction of Bitcoin.
Most shocking Facts About Bitcoin:
1. The First Bitcoin Was Used To Purchase A Pizza
Back on May 18th, 2010, Bitcoin was still in its days of infancy. It was that day, however, that Laszlo Hanyecz posted on the Bitcoin: Bitcoin Talk forum that he would pay 10,000 bitcoins for two Papa John’s pizzas.
Now, it’s important to remember that back then the very recently developed cryptocurrency was very volatile, with each bitcoin being worth just pennies on the dollar. However, this transaction would have a historic significance, marking the first time that Bitcoins were used for any type of purchase.
Three days later, on May 22, Hanyecz posted again, informing the forum that someone took him up on the offer. He thought it was fantastic that he essentially used nothing to purchase pizza, so he continued buying pizza until he ran out of Bitcoins that same summer. He wasn’t too worried, since he didn’t believe that Bitcoin would ever grow into any type of relevant, practical internet currency.
Over the next 4 years, it seemed that he was right in his lack of care, and many others began to think of Bitcoin and digital currency as a passing fad.
However, in 2013, Bitcoin drew the interest of speculators and investors, who began to trade the cryptocurrency on a larger scale. This launched Bitcoin into its meteoric rise, making it a popular and highly coveted commodity.
In just a matter of months, Bitcoin went from being worth mere pennies to an astronomical (by comparison) $1,200 per coin. Of course, the value didn’t remain that high for long, finally settling in a region between $500 and $700. By that logic, if Hanyecz spent his 10,000 Bitcoins on the two pizzas in the middle of 2014, he would have essentially paid $5 million for them.
2. The First Major Use Of Bitcoin Was On Silk Road
If you haven’t heard of Silk Road, you are clearly not up on your underground drug dealing game. Silk Road, taking its name from the famous trade route between the East and Europe, was essentially a way for buyers to purchase illegal drug orders.
Its clandestine operations ran their course when various intense investigations by multiple government agencies resulted in it being shut down. But how did they get to operate for as long as they did? It was actually due to their leveraging of the fully anonymous form of payment that was Bitcoin.
Silk Road could not be accessed readily by just anyone. People had to connect to it through the Tor anonymizing network. But once you were in, it opened doors to an underground world of drugs, hacking tools, fake IDs, and stolen credit card numbers. Anyone in search of a black market for everything from LSD to cocaine was able to find it through Silk Road.
The platform’s savvy users were able to keep law enforcement locked out of Silk Road, with the Tor network blocking out all digital identification. The most Bitcoin usage yielded were some IP addresses, with them ultimately being worth little in terms of useful information. It took the joint task force of the DHS, FBI, IRS, USPS, DEA, and the Department of Alchohol, Firearms, and Tobacco, to employ a coordinated effort named “Marco Polo,” to finally take down the seemingly invulnerable Silk Road.
The task force targeted one person specifically by the moniker of Dread Pirate Robers, the Silk Road founder and primary operator. This was unexplored digital terrain for most of these government agencies, so they were largely in the dark about how to deal with Silk Road’s intricate digital tech.
They took the down-upwards approach as they made a series of arrests of various sellers on the platform, interrogated them, collected information about how the organization functioned, and finally caught Ross Ulbricht (the mysterious Dread Pirate Roberts) in 2013. This was a hard, but important lesson for law enforcement about how simple it would be to set up an underground illegal digital operation where Bitcoin is the currency of choice, and how challenging it would be to take it down.
3. Bitcoins Birthed The ‘Mining Industry
Bitcoin mining is the operation of generating Bitcoins through the solving of complex algorithms. Most of the ‘mines’ are located in China, with many of them operating outside the bounds of national laws in hidden facilities.
When dealing with secret organizations of this nature, the only way is to operate against them in secret as well. However, since the Chinese government issues no policies regarding Bitcoins (for or against), they were able to create massive wealth for those who mine them.
One of the country’s largest crypto mines was in a facility called Bitbank, operated by Chandler Guo. It was able to successfully generate annual revenue of $8 million. The facility’s workers would solve cryptographically generated computer problems, which would authenticate global transactions, with each solved transaction adding a unit called a “block” to the blockchain. Those who solve successfully were rewarded with Bitcoins.
The Bitbank facility operates day and night, with workers solving problems at a rate that generates a daily output of an average of 50 bitcoins. By 2016, China was in control of the lion’s share of the world’s Bitcoin mines, operating 70% of mines in the world, with 40% of Bitcoin-specific mines residing there.
This might excite some people in the Bitcoin community, but it isn’t thrilling everyone. Michael Hearn, a crypto enthusiast, points out that China’s slow internet services will actually drag down Bitcoin’s popularity, leading to the currency failing as a whole.
4. Bitcoins Are Highly Vulnerable To Theft
After claiming that about 850,000 Bitcoins, worth a massive $450 million, were stolen by hackers, Mt. Gox, the world’s largest Bitcoin exchange of its time, filed for bankruptcy in 2014. The CEO of Mt. Gox, Mark Karpeles, also claimed that an additional $27 million in cash was stolen as well. This placed an uncomfortable and severely concerning spotlight on the Bitcoin community, illustrating that the system was not equipped sufficiently to protect against such massive larceny.
The still-unknown perpetrators took advantage of the easy access to Bitcoin exchanges, and with a fair amount of hacking knowledge were able to infiltrate and rob the long-targeted-by-hackers goldmine of Mt. Gox. The theft occurred in 2011 before Karpeles took the company over. He was no innocent party himself, embezzling $2.7 million from the company’s funds. Though he was not responsible for all the missing Bitcoins, as 650,000 were still unaccounted for.
The exchanges were not the only victims of such hacking infiltrations either. One of Silk Road’s successors, Sheep Marketplace, was taken for 60 million Euros in a heist that would cause the shuttering of the site shortly after its occurrence. The hackers hid their activity by falsifying balances in people’s accounts as they drained the actual funds out.
Bitcoins don’t just vanish, so they need to be laundered into something other than actual currency. They gradually tumbled down the blockchains, mixing with other Bitcoins, until they were all gone. Luckily for many Sheep Marketplace users, the process has a digital audit trail, so they were able to find where their money was being tumbled. Ultimately, it was found that 2 Florida men committed the heist, but the stolen Bitcoins grew to a value of $6.6 million by that time.
5. Bitcoin: The Preferred Currency Of Extortionist Hackers
Hollywood Presbyterian Medical Hospital was hacked with ransomware in February 2016, with the system being held hostage by the digital invaders, impeding anyone from performing any of the necessary operations. The hospital had to think about the lives of its patients, leaving it no choice but to comply with the $17,000 in Bitcoins as a ransom demand. It was a dastardly act, but it was far from the only time it happened.
Other incidents, though demanding smaller ransom amounts, had happened in the past. For instance, a sheriff’s department in Maine made a payment of about $500 in Bitcoins, as did the Boston police department. Most of the extortionists have yet to be identified, but it is known that at least one network based in either Ukraine or Russia has hacked US victims to the combined sum of nearly $16.5 million. The extortion amounts are always in Bitcoin and have generally been around $20,000.
Digital extortionists capitalize on the fact that Bitcoin wallets are not regulated and therefore do not need to be registered with the government in any country. DD4BC has become a particularly notorious group recently, hacking corporations and not letting go of their systems until they have paid out $10,000 in Bitcoin.
An email made public from the group read “Do not ignore me, as it will increase the price. […] Once you pay me, you are free from me for the lifetime of your site.” A variety of security protocols have been suggested to combat these extortionist actions, such as issuing each Bitcoin a digital marker much like how cash bills are tracked. This has yet, however, to thwart the extortion attempts.
6. Bitcoins Are Easy To Scam
Scammers are another crew that is drawn to Bitcoin as they see how easy it is to perpetrate other Bitcoin-related crimes. Southern Methodist University generated a report identifying some of the most common scams using Bitcoin. Between the 41 noted scams that played out between 2011 and 2014, more than $11 million was ripped off.
In many ways, Bitcoin schemes are not dissimilar to Ponzi schemes, whereas investors are assured that they can get suspiciously high yields, but their funds are essentially deposited into the scammer’s wallet. One scam involved the promise of mining Bitcoins for a fee, which they then proceed to keep for themselves.
Another set of scams involved the depositing of Bitcoins into a seemingly legitimate and verified wallet, that turns out to be a transfer to the scammer. Some others involve promising low exchange rates of converting Bitcoins to currency, but once the Bitcoins are supplied, the scammer never delivers on the exchange.
In a particularly twisted scam in June of 2016, scammers set up a Twitter account that claimed to be for the Pulse nightclub that was shot up in a tragedy that occurred earlier in Orlando. They accepted Bitcoin donations from empathetic donors and taking advantage of the fact that they could not be tracked, scammers tried to pocket the money for themselves.
Luckily, most Twitter users who clicked the provided link, recognized that the donation page was just 6 months old with many grammatical and spelling errors. The scam was taken down after collecting a mere $30.
7. Bitcoins Are Used To Fund Terrorists
A .pdf posted to WordPress by someone named Amreeki (“American”) Witness in 2014 noted that getting donations from ISIS sympathizers was challenging due to the restrictions imposed by Iraq’s ruling government. He went on to suggest that instead, supporters donate Bitcoins as they could not be tracked.
The anonymity inherent to Bitcoin transactions makes them a game changer for terrorist funding. While the transactions are now trackable, they have been laundered through fund “mixing” before they make their way to groups like ISIS. Of course, ISIS still needs fiat currency to operate with the money, leading the Pentagon to classify Bitcoin and other digital currencies as potential threats due to their potential for serving as terrorist group revenue.
The real crackdown began after the 2016 Parisian attack. The EU began an effort to combat and crack down on potential terrorist financing, setting their eyes on Bitcoin first and foremost. One of the prime considerations made by the European Commission is to add regulations that would require Bitcoins to have an identity attached to them to prevent them from potentially being funneled to terrorist groups.
Bitcoins from ISIS sympathizers, therefore, have to operate on the deep web, much like Silk Road used to. Removing Bitcoin anonymity protocols would be a big factor in this effort, but some express concerns about this being unfair to Bitcoin users overall who like the privacy of their transactions. As it turns out, most exchanges and users are fine with these sorts of changes since their Bitcoin utility is generally legitimate.
8. The Mysterious Creator Of The Bitcoin
Satoshi Nakamoto is the name that the Bitcoin creator went by. That is about as much as is known about the individual, however. Much like his invented currency, Satoshi is nearly completely anonymous. When he created the currency in 2009, his communication with its first users was exclusively through email. Even with Bitcoin as prominent as it has become, Satoshi had managed to keep in the shadows, falling out of the scene entirely in 2011.
A 2014 Newsweek cover story claimed to have identified the mysterious Satoshi, reporting that it was an unemployment engineer in his 60s and a resident of a suburban Los Angeles community. Those in the know clarified that he was not Satoshi at all. Some other leads pointed to a Hungarian native Nick Szabo, who resided in the US. While Szabo denies being Satoshi, he is still one of Bitcoin’s most prominent features.
The truth is that Satoshi’s identity is not that vital, especially since he has been out of the Bitcoin game since 2011, but some still enjoy the speculation about his identity. Some people have actually come out and claimed to be Satoshi, like Australian entrepreneur Craig Steven Wright did in May 2016.
Skeptics quickly shot this down, however, noting that if the real Satoshi wanted his identity revealed, there would not be many obscurities to who he or she was. Even if Wright was Satoshi, Bitcoin’s operations would not be affected by his identification in any way. When Satoshi left, he owned at least a million bitcoins, which would be worth hundreds of millions by today’s standards.
9. Bitcoins Are Incredibly Volatile
From its launch with prices that were pennies on the dollar, Bitcoin experienced a meteoric ascension to being worth several hundred per Bitcoin by mid-2106. But even with the price being as high as it was in 2016, the value of Bitcoin still fluctuates frequently, keeping the currency extremely volatile, and giving most people reservations about trusting it.
Many reasons have also been identified about why the price points of Bitcoin can swing so dramatically. Bitcoin’s price follows the basic economic principle of supply and demand. 2014 experienced a price drop to the tune of 60%, leading many to believe that this was the end of Bitcoin. However, that same year a lot of investments into Bitcoin were made by Silicon Valley companies, on top of the fact that many other companies began accepting Bitcoin as a payment form.
With the rise in demand, the currency grew in value again. While average people have rarely adopted it as a viable currency, technical innovations have allowed it to prosper in the business world.
2015 marked another period of high volatility due to a potential Russian pyramid scheme that grew popular in China. Since the Russian scheme involved only taking Bitcoins for currency, the Chinese started mass buying them. As a result, the price rose. More recently, the Chinese booster the Bitcoin demand to correlate with the devaluation of the yuan, causing the price to once again go up, this time by about 20%.
The fluctuating prices are expected to continue, though experts agree that Bitcoin will not be leaving the market in the foreseeable future, especially with the demand present and more companies adopting it as an excepted payment form.
10. In The Future Bitcoin Could Still Suffer A Collapse
If Bitcoins continue on their current trajectory, Bitcoin enthusiast Miek Hearn believes that the currency might still fail in the future. He reasons that the original purpose of the currency has been largely lost by those who control it. He was discredited, but his theories did resonate with some who looked into Bitcoin functions and studies his reasoning for thinking that the currency will ultimately die out.
Chief among his reasons was that Bitcoin was intended to be a decentralized currency, unlike its physical counterparts, but with Bitcoin now being controlled by a small group of people, the opposite effect has occurred.
He also noted that there are two sides to the Bitcoin approach. One side involves those who seek technology to increase Bitcoin transactions and those who want to curtail it instead. Blockchains have grown increasingly random in their transaction speed, with Hearn predicting that it might take from 1 to 14 hours for a transaction to process.
His biggest contention still boils down to the fact that around 10 people control the Bitcoin currency, and as long as its control is in the hands of the few, Bitcoin cannot escape failure. Perhaps he will be proved right, but as it stands right now, Bitcoin continues to remain the internet’s age’s most dominant crypto phenomenon.
Facts About Bitcoin Conclusion:
In conclusion, Bitcoin is a fascinating digital currency with many surprising and little-known facts. From its anonymous creator to its limited supply, it captivates and intrigues people worldwide. If you’re interested in learning more about unique and unusual ways to make money, read the following article on “Where Can You Sell Your Poop for Money.“
Frequently asked questions:
Where to buy micro bitcoin?
Micro bitcoins can be purchased on various cryptocurrency exchanges, including Binance, Coinbase, and Kraken. You can buy micro bitcoins by depositing fiat currency or another cryptocurrency and then placing an order on the exchange. It is recommended to thoroughly research and compare different exchanges before making a purchase to ensure you get the best deal and use a secure platform.
Is bitcoin bonus a scam?
Whether or not a bitcoin bonus is a scam depends on the specific offer and the company or individual behind it. Some bonuses may be legitimate, while others may be fraudulent schemes designed to steal your personal information or funds. It is important to thoroughly research and vet any bitcoin bonus before participating, and to be cautious of offers that seem too good to be true.
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