There’s a lot to know about cyber-currencies, but these top 09 things you need to know about Bitcoin can offer a good start.
With all the excitement around Bitcoin, we think there are a few extra important pieces of information you should know. Here are our top 10 interesting facts about Bitcoin:
The first (legal) purchase with Bitcoin was pizza…there’s even a day dedicated to it
If you’re depressed hearing that the world spends its new, exciting currency mostly on illegal substances on the black market, you’ll be relieved, and amused to know that Laszlo Hanyecz—a Bitcoin holder and computer programmer—decided the best way to spend his bitcoins was on pizza.
He offered 10,000 bitcoins (about $40 back then) for two Papa John’s pizzas… At today’s price (December 18, 2017), that’s a pizza valued at… wait for it… more than $198 million.
You need to account for Bitcoin on your taxes
While the regulations for Bitcoin are still in the works, the U.S. government views it as a very real currency. According to the IRS, Bitcoin (and other cryptocurrencies) are capital assets just like stocks and bonds. If you don’t account for it like you do your other investments, you could be on the hook for tax evasion.
The FBI owns one of the largest Bitcoin wallets
A few years back, the FBI shut down the Silk Road—a major black market site. As with any black market site, Bitcoin was used frequently to make purchases. This means that the FBI inadvertently acquired all the bitcoins circulating around the site.
As of October, the FBI owns 1.5 percent of the world’s Bitcoin. That doesn’t sound like much in the grand scheme of things, but when you consider how few people in the world own a substantial amount of Bitcoin—1.5 percent is a huge amount for one entity to own.
It’s not just used on the black market
Yes, Bitcoin is used frequently on the black market due to its relative anonymity, but there are plenty of places, at least within the U.S., that allow Bitcoin transactions.
Microsoft, Dell, REEDS Jewelers, Expedia, and Overstock.com are just a few places that accept Bitcoin as a legitimate payment. As Bitcoin gains popularity, more and more places will likely allow the use of Bitcoin.
Bitcoin is more popular than you might think
At the time of the publishing of this article, the value of a single bitcoin is well over $14,000. That price would make anyone want to invest in Bitcoin—and people have started doing so more frequently. Even governments, such as China are trying to break into the Bitcoin world. Recently, China has tried to crackdown on their citizens buying and selling Bitcoin by closing exchanges, but that has only made it more popular.
Bitcoin has been called “the new gold.” Think about the Gold Rush and the country’s push to mine as much of it as possible. That’s how Bitcoin is now.
It’s not the only cyber currency
Even though Bitcoin gets all the media coverage, it’s not the only cyber currency in existence.
Ether, for example, is the next best known crypto-currency. Like Bitcoin, a limited amount (16 million) were created back in 2014.
Unlike Bitcoin, however, it exists within its own network—the Ethereum network. It’s used more for gambling and investing than everyday purchases.
There’s a limited amount
When Bitcoin was founded—the creator (see number six below) only made a limited amount. 21 million to be exact. Currently, over 16 million are in circulation, but more are being mined every day.
Different countries regard Bitcoin differently
Typically, Bitcoin is not regulated by national governments—which is part of the reason it’s so popular. But the laws around Bitcoin range from it being recognized as legal currency to being “discouraged” by governments.
Australia and Japan, for example, treat Bitcoin like any other form of currency. While Jordan and Lebanon have issued official statements saying they don’t support the use of Bitcoin. This doesn’t prevent citizens of these countries from using Bitcoin, however.
It’s not really anonymous
Trying to explain the entirety of why Bitcoin isn’t anonymous would take forever, and even I don’t understand it as well as hackers and other technology junkies.
Bitcoin isn’t completely anonymous.
Hackers and government agencies have the means to track pretty much anything, including Bitcoin. If someone can connect multiple nodes to the Bitcoin network, the combined data collected from these different nodes might be enough to determine where a transaction originated.