In the past few years, more people have become interested in cryptocurrencies—decentralized digital currencies that utilize encryption to verify transactions. While the digital currency Bitcoin has been making headlines recently due to the massive fluctuations in its value, many experts predict that these cryptocurrencies will forever change how we understand and interact with money, and there will be no future without them!
But, before testing your luck by investing in Bitcoin or any other digital currency, here are 11 key facts everyone should know about cryptocurrency.
1- Cryptocurrency can’t be physically banned
Many governments worldwide have been discussing banning cryptocurrencies and some have already banned them, claiming that banks are losing business and there is no control over these digital currencies because of their decentralized nature. However, despite all these restrictions and regulations, it is “physically” impossible to ban cryptocurrency—anyone can get a crypto wallet. In other words, these countries’ regulations won’t stop the crypto market!
Algeria, Egypt, Morocco, Saudi Arabia, Qatar, and Jordan are among a list of countries that have banned cryptocurrencies
2- Countries banning cryptocurrency
There’s an ever-growing conflict between governments and cryptocurrencies. A few countries have explicitly banned buying, owning, and trading digital currencies, such as Algeria, Egypt, Morocco, Nepal, Ecuador, Bolivia, and Bangladesh. Other countries have taken a different route and have prohibited banks from dealing with crypto and enacted a ban on cryptocurrency payments, such as Qatar, Turkey, Nigeria, Thailand, China, Saudi Arabia, Jordan, Russia, Iran, Taiwan, Vietnam, and Cambodia. At any rate, the bans on virtual currencies and digital money often change, and these lists aren’t exhaustive.
As of July 2021, there are 5,913 cryptocurrencies worldwide, according to Statista
3- There are almost 6,000 currencies out there!
As of July 2021, there are 5,913 cryptocurrencies worldwide, according to Statista. New digital currencies are popping up daily, but most of these currencies aren’t worth much. While Bitcoin is widely seen as the “king of cryptocurrencies” and the pioneer of this industry, there are also other important cryptocurrencies, like Ethereum (ETH), Litecoin (LTC), Cardano (ADA), Polkadot (DOT), Stellar (XLM), Binance Coin (BNB), Tether (USDT), and Monero (XMR).
4- China is the biggest cryptocurrency miner
For those who aren’t familiar with the term “crypto mining,” it’s the process of verifying different forms of transactions before they’re placed on the Blockchain’s distributed ledger. Although it has a negative impact on the environment, crypto mining is a very lucrative business, and China controls around 46% of the mining network, down sharply from 75.5% in 2019. The U.S. is the world’s second-largest player in the industry, while Kazakhstan, Russia, and Iran are the third, fourth, and fifth-largest countries for Bitcoin mining, respectively.
5- Bitcoin’s inventor is unknown
Though the world’s first cryptocurrency, the Bitcoin, is still the top cryptocurrency worldwide by market value, there’s some ambiguity surrounding its creation. Who invented Bitcoin? Was it created by Satoshi Nakamoto as some people say? Or perhaps “Satoshi Nakamoto” isn’t the name of a person, but an acronym for leading tech companies: Samsung-Toshiba-Nakamichi-Motorola? At any rate, the so-called “father of Bitcoin” or the organization that created Bitcoin is still unknown!
6- Cryptocurrency value is highly volatile
In fact, the cryptocurrency market has been volatile from the very beginning, but the value of the virtual currencies has been associated with a period of high volatility and investor uncertainty only in the past few years. Some of the reasons for this volatility may be related to the limited supply and the lack of a central bank to control that supply. News of the Chinese government’s crack down on banks completing crypto transactions, and Tesla’s recent decision to no longer accept Bitcoin as a form of payment, helped to plunge the value of the Bitcoin 30% to near $30,000 in May, from a record high of $64,829 in mid-April!
7- Cryptocurrencies are built on Blockchain technology!
Cryptocurrencies like Bitcoin are built on Blockchain technology. The latter is an open, decentralized ledger that records payment and transfers transactions efficiently and safely. The digital ledger itself can also be programmed to trigger transactions automatically.
The satoshi is a 100 Millionth of a Bitcoin, or 0.00000001 BTC
The satoshi is the smallest unit of the Bitcoin currency recorded on the Blockchain. It’s a 100 Millionth of a Bitcoin, or 0.00000001 BTC. This unit is named after the presumed original creator and the father of Bitcoin, Satoshi Nakamoto.
El Salvador will become the first country in the world to make Bitcoin a legal currency
9- El Salvador
El Salvador will become the first country in the world to make Bitcoin a legal currency as El Salvador’s congress has recently passed a new law to allow citizens to use Bitcoin to do everything from paying taxes to buying goods and services.
10- Supply of Bitcoin is limited to 21 million!
When Satoshi Nakamoto created Bitcoin in 2009, he designed his digital currency around the principle of a finite supply. He installed a limit on the number of Bitcoin that will ever be created. There will never be more than 21 million coins. According to Statista, based on data from 2017, the forecast for the last Bitcoin to be mined will be around the year 2140—on the grounds that the rate of mining halves every four years. For this reason, digital currencies like Bitcoin continue to increase in value as the supply goes down.
11- Bitcoin is vulnerable to theft!
Bitcoins are stored in digital wallets that have public and private keys. So if you, for any reason, lost the private key that allows you to gain access to your wallet, the chances of getting it back are close to zero. Thanks to Blockchain technology, there’s very little chance of getting hacked, but you might have coins stolen due to a compromised site! There’s no guarantee with this, so you need to be very careful!