10 things you might not know about Bitcoin
With all the noise surrounding Bitcoin lately, it’s important to have a good handle on what’s going on. Below, we’ve provided you with a primer, highlighting 10 key points about the world’s most well-known cryptocurrency.
Bitcoin has performed better than any fiat currency since 2011, with the exception of 2014. In 2017, it performed better than any asset…registering growth in excess of 1,000%. And this is before it’s been accepted on a mass level by merchants.
One of the factors driving Bitcoin’s price is its limited supply – it has been designed to be limited to 21 million Bitcoins, with the limit expected sometime in 2140. Around 12.5 new Bitcoins are mined every 10 minutes or so, through the process complex of…wait for it…
This is the process by which sophisticated computers solve extremely complex algorithms, releasing new Bitcoins and thus justifying the process. It’s far from energy efficient, but the ones doing the mining view it as worthwhile. The energy consumption used to mine one Bitcoin? That currently stands at around 220 kilowatt hours.
Bits of Bitcoin
Like any currency, different amounts of Bitcoin (in this case, ‘bits’) can be be exchanged. The smallest denomination is a Satoshi, named after the Bitcoin’s creator. At less than 1c per Satoshi, there’s no reason that even lay people can’t get involved in the Bitcoin phenomenon.
More on Bitcoin’s creator
We know that the creator (or indeed, creators) of Bitcoin is/are Satoshi Nakamoto… and little else. Several people have made curious names about being Satoshi, while several others are sometimes thought to be behind the pseudonym. Whoever the mystery genius is, right now they’re very wealthy indeed.
Bitcoin is global
It took about 2,000 years for China’s currency to enter the global currency basket. At the rate Bitcoin is internationalizing, it should only take about 15 years. The currency is used in just about country on the planet. At one stage, over 90% of its transactions were accounted for by those within China, but that’s fallen back to 20% as other countries have picked up the slack.
Bitcoin is safe…most of the time
Despite claims that Bitcoin is 100% safe, there have been instances of Bitcoin theft since its inception in 2008. In all, close to 1 million Bitcoins have been stolen through one means or another. Still some way off robberies of fiat currencies, however…
Bitcoin is the leader in a crowded field
Bitcoin is now just one of a number of cryptocurrencies, which may add to its legitimacy over the longer run. Think of the paper money that was introduced all those years ago. The first paper money must have drawn skepticism…but then it caught on, and we’ve been using paper money ever since. Bitcoin, in this sense, could be like the first paper money.
The total size of the Bitcoin market is huge
The total value of all Bitcoins on the market depends on the price being traded on that day, but right now, it’s somewhere near $200bn. This would have put it among the top 50 GDPs in the world in 2017 – somewhere near the countries of Peru and Portugal.
Is Bitcoin a bubble?
Let’s finish with the most commonly asked question of all – the question that keeps the financial press in business. In late 2013, Bitcoin was called a bubble when it passed $1,000. Now, depending on the day, it’s over $16,000 and has just been added to the CBOE. You decide whether it’s a bubble or not.