What is Bitcoin: 7 important things you should not miss

what is bitcoin

When you hear about Bitcoin for the first time, you are going to search “What is Bitcoin”. Among the things you find, there are some important things you should not miss about Bitcoin. If you already missed these things now is the time to evaluate what you already know.

1. Bitcoin is a peer to peer electronic cash system.

This is the title of the Bitcoin whitepaper which was released in 2008. Satoshi Nakamoto invented Bitcoin to use it as an electronic cash system. Nowadays what people don’t really do is use it as cash but hold it as a speculative digital asset, referring to it as Digital Gold. The real reason why Bitcoin was invented is to use as cash, not to hold.

2. Bitcoin’s first ticker symbol was not BTC.

Early days people used XBT as the Bitcoin’s ticker symbol. But nowadays most people and services refer to Bitcoin as BTC. Some services still use the old ticker symbol XBT. Bitmex is a popular trading platform who still keeps XBT as the Bitcoin’s ticker symbol.

3. Bitcoin name has 3 main contenders.

There are 3 main cryptocurrencies (BTC, BCH, BSV) fighting for the name “Bitcoin”. Most of the cryptocurrency community refers to BTC as Bitcoin because it’s has the largest price appreciation and the miner support. This might change in the future as the controversial fight is still on. Bitcoin Cash (BCH) and Bitcoin SV (BSV) were invented later as Bitcoin forks. Among the 3 competing Bitcoins, BSV is the only coin trying to follow the Bitcoin whitepaper released by Satoshi in 2008.

Learn more about the Bitcoin Fork Wars.

4. Bitcoin is not anonymous. It’s private.

Bitcoin is a public ledger where all the transactions are recorded. Therefore, each and every transaction can be traced back to its origin. It can be hard for some cases but it’s not impossible. There is a myth that Bitcoin is anonymous and if you do crimes using bitcoins you cannot be traced. So, be careful if you are thinking of using Bitcoin for crimes. Your transactions will lead the FBI to your doorstep.

5. The first Bitcoin faucet rewarded 5 free Bitcoins per person a day.

Bitcoin faucets were popular in the early days of Bitcoin. Before Satoshi disappeared from Bitcoin, he handed over the Bitcoin project to Gavin Andresen. Gavin started the first Bitcoin faucet and gave away 5 Bitcoins per person a day. The faucet gave away a total of 19,715 Bitcoins for free until he closed it in early 2011.

6. A guy spent 10,000 Bitcoins to buy 2 Pizzas

On May 22nd, 2010, A guy named Laszlo Hanyecz, later called as “The Bitcoin Pizza Guy” bought 2 pizzas with 10,000 Bitcoins. It was worth $30 at that time. The value of those 2 Pizzas reached nearly 600 million USD (approximately 1 BTC = 60000 USD at last all time high). The Bitcoin community celebrates the Bitcoin Pizza Day every year to remember this historical purchase.

7. Bitcoin reached its maximum transaction capacity in 2017

Scaling Bitcoin was a controversial debate for many years. Some wanted to increase the current block size limit, which was put by Satoshi as a temporary limitation. Some wanted to keep the limit intact and take the transactions off to side chains. But the Bitcoin community couldn’t come to an agreement until it reached its maximum transaction throughput capacity in 2017.

During the 2017 Bitcoin price rally, Bitcoin Blocks became full and the average transaction fee reached as high as 50 USD. Transactions became extremely slow. Bitcoin was created as peer to peer electronic cash, but you can’t use it as cash if it is slow and costs 50 dollars to transact. Therefore, many Bitcoiners regarded this as a failure. Since they couldn’t get the Bitcoin core development team to increase the block size limit, they created altered versions (BCH and BSV) of Bitcoin with increased block size limits. Since then, Bitcoin (BTC) reached its maximum capacity few more times and its scaling solution lightning network is still not performing as expected. Meanwhile Bitcoin SV has removed all block size limits and has successfully scaled to process more transactions than BTC or any other cryptocurrency for that matter.

Read the Bitcoin Fork Wars for more details.

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