Fact Box: Bitcoin
Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Later, Nakamoto dropped off as bitcoin began to attract widespread attention.
Virtual Currency Bitcoin was in news in May-June 2017 after a massive ransomware attack triggered by the WannaCry virus affected systems in over 100 countries. The cyber criminals demanded a fee of about USD 300 in crypto-currencies like bitcoin for unlocking affected devices.
It has also been in the news for a sharp rise in its price. Today on 11 August 2017, the digital exchange rate of Bitcoin is USD 3453.10. However, a year before that is in August 2016, it was priced around USD 600.
• Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Later, Nakamoto dropped off as bitcoin began to attract widespread attention.
• Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously.
• The coins can be bought and sold on exchanges with US dollars and other currencies.
• Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next.
• The currency has become popular enough that more than 300000 daily transactions occur now.
• Bitcoin is traded through Blockchain Technology, a financial ledger maintained by a network of computers that can track the movement of any asset without the need for a central regulator.
• The blockchain prevents the sale of the same bitcoin twice, and the bitcoin miners, who keep a track on blockchain, are rewarded for their efforts by being gifted with the occasional bitcoin.
• Mining bitcoins means using a computer program to solve mathematical problems to verify various bitcoin transactions around the world.
• Bitcoins are saved in bitcoin wallet. But, if you lose bitcoin wallet, your bitcoins are lost forever.
• There are finite number of bitcoins in existence. Presently, there are exactly 21000000 bitcoins.
• The exceptional thing about Bitcoin is that it is completely transparent in terms of transactions.
• Bitcoin’s recent surge is attributed to the increase in demand for other cryptocurrencies such as litecoin, peercoin, namecoin, ether and primecoin through initial coin offerings (ICOs).
• First recorded purchase through bitcoin was made for buying USD 25 pizza against 10000 bitcoins on 22 May, which is now observed as Bitcoin Pizza Day.
• Bitcoin has also been sent into outer space in 2016 by Genesis Mining company through a 3D bitcoin model and bitcoin paper wallet, which were tied to weather balloon.
• In 2017, market saw the arrival of a new crypto-currency called Bitcoin cash which is created by splitting bitcoins.
• The main difference between bitcoin and bitcoin cash is the increase in the block size and code. For instance, the block size of a bitcoin is 1 MB while bitcoin cash has a block size of 8 MB.
• With this split, Bitcoin now exists on both blockchains in parallel, resulting in two versions of the cryptocurrency.
• The surge in Bitcoin trade has engulfed various Governments and banks.
• Banks are at threat with Bitcoin and Blockchain as more and more firms are building systems that can create and exchange ‘blocks’ completely legally without the need of banks.