10 Little Known Facts About Bitcoin
Bitcoin is a cryptocurrency created by Satoshi Nakamoto. Almost everyone knows that. You may also know that Satoshi Nakamoto’s identity is a mystery and that 21 million is the total number of Bitcoins allowed to exist.
In this article, we’ve compiled 10 facts about Bitcoin that you may not know.
Bitcoin is not mentioned in the Bitcoin whitepaper
In the original white paper, “Bitcoin: A Peer-to-Peer Electronic Cash System” (above), it is surprising to see Bitcoin mentioned only twice: once in the title and again in the URL. Nakamoto described the infrastructure to implement a payment system but did not mention Bitcoin as a named currency at all.
Bitcoin cannot be transferred
Bitcoin does not physically move and cannot be transferred. Rather than the actual Bitcoin changing hands, it is the ownership of Bitcoins that is bought and sold. The amount of Bitcoin you see in your wallet is actually the ownership right that you can control. When paying with Bitcoin, you transfer your Bitcoin ownership not Bitcoin itself. Just as you transfer your ownership right while selling a property, instead of moving that property from one place to another, you permanently transfer the right to use the Bitcoin you own to another person.
Bitcoin can be divided into 100 million pieces, but the ownership rights always remain whole. For example, if you want to transfer half a Bitcoin (in a Bitcoin address in your wallet) to someone else, the ownership of 0.5 BTC is transferred to the new owner. Meanwhile the remaining amount is transferred to another Bitcoin address (called change address) in the same wallet. Before the transaction can take place, the address that holds Bitcoin’s ownership transfers all rights to two different Bitcoin addresses for one Bitcoin.
This photo you’ve seen of Satoshi Nakamoto is not the right person
If you search for images of Satoshi Nakamoto, you’ll find the above photo quite quickly. Although this man is named Satoshi Nakamoto, it is not the Satoshi Nakamoto you are looking for.
Dorian Prentice Satoshi Nakamoto, whose photo you’ve found, has no connection with Satoshi Nakamoto, pseudonymous creator of Bitcoin. On March 14, 2014, Newsweek magazine declared Dorain Nakamoto to be the currency’s creator — a claim he rejected. He also stated that he has no ties to Bitcoin. In 2014 the real Nakamoto confirmed on forum P2P Foundation that they were not the same person.
All 21 million coins will never be mined
The amount of Bitcoin has been capped since it was first produced from the Genesis Block. Although Bitcoin continues to be mined and produced, the reward of 50 BTC for each validated block halves in value every 210,000 blocks (approximately every four years). On May 11, 2020, when halving of the third block reward took place, the amount of Bitcoin produced every 10 minutes decreased to 6.25. Bitcoin production is estimated to continue until 2140. However, Bitcoin can technically be produced at most 20,999,971.02187096 units.
Lost Bitcoins make others a little more valuable
In 2013, a British man named James Howells dumped a hard drive on which there was a Bitcoin wallet containing 7,500 BTC. The currency had been mined by Howell on his laptop in 2009. When it became too costly to produce Bitcoin using his computer, he quit altogether and sold his computer to a digital marketplace. Although he disassembled then kept the hard disk that contained the Bitcoin wallet, he eventually threw it out along with some other random items in 2013. Since there was no other backup of the Bitcoin wallet, a stash of Bitcoin, worth more than $80 million today, was lost.
“Lost coins make everyone else’s coins only slightly more valuable. Think of it as a donation for everyone,” Satoshi Nakamoto told the Bitcointalk forum.
The message in the Genesis Block
When Satoshi Nakamoto created the first block of the Bitcoin blockchain on January 3, 2009, he added a headline from British newspaper The Times.
The Times 03 / Jan / 2009 Chancellor on brink of second bailout for banks
The message is thought to have been chosen both as proof that the Bitcoin blockchain was actually produced on January 3, 2009 (and not before) and as a criticism of the classical financial system.
Transferring Bitcoin without internet
To transfer Bitcoin, you need to forward your transaction to the Bitcoin network. However, two amateur radio operators managed to make a transfer without using the internet by moving Bitcoin from Toronto, Canada to Michigan, USA on February 12, 2019.
For a transfer to be carried out, the transaction must be written to the Bitcoin blockchain. However, since the internet is not used in this transfer, it is not written to the blockchain.
It is possible to transfer Bitcoin without the internet: first you need to transfer Bitcoin to a Paper Wallet. From here you can then transfer Bitcoin without using the internet by giving this wallet to the beneficiary and paying them cash. Anyone who receives the wallet from you can transfer all the Bitcoin in the paper wallet to their online wallet using its private key.
On November 16, 2011, 550,000 Bitcoin was transferred at once. 500,000 of this total consisted of 11 different addresses, each hosting 50,000 BTC, sending money to a single address. The transfer, valued at approximately $22 million at the time of the transaction, was equivalent to approximately $5.87 billion at the time you are reading this article. The recipient of the 500,000 Bitcoin remains unknown.
Bitcoin-rich FBI
Bitcoin has sometimes been associated with illegal payments. One of the best-known examples is “Silk Road”, reputedly among the largest illegal shopping platforms in the world. In 2013, the platform’s Bitcoin wallets were seized by the FBI. These wallets were stated to contain approximately 144,000 BTC (around $1.5 billion)
Bitcoin transactions are anonymous but not confidential
All transactions taking place on the Bitcoin blockchain are recorded from the first Bitcoin block. Transactions on the Bitcoin blockchain are carried out anonymously, without revealing the identities of users, but are public because all transactions are recorded. For example, when you pay a friend with Bitcoin that friend can look back at all transactions you’ve been involved in using the address you used to make the transfer to them.
Sources:
(1) Reddit
(2) Theverge
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The Times 03 / Jan / 2009 Chancellor on brink of second bailout for banks
The message is thought to have been chosen both as proof that the Bitcoin blockchain was actually produced on January 3, 2009 (and not before) and as a criticism of the classical financial system.
