During the existence of Bitcoin, many misconceptions have appeared, which continue to spread around the world. This leads to the fact that cryptocurrencies are being treated negatively since most myths about digital currencies aim to discredit them. Today, we will consider the most popular BTC myths along with the true facts you need to know. Let’s get started!
Who Launched Bitcoin?
The very first Bitcoin transaction took place in March 2009 by a person or group of people under the name Satoshi Nakamoto. By inventing blockchain technology, Nakamato managed to solve the problem of easy copying of digital currency, which prevented it from double-spending.
The first known purchase (exchanging bitcoins for tangible goods) occurred in May 2010, when a person offered 10,000 bitcoins to anyone who could arrange delivery of two pizzas to his home. At that time, the cost of one BTC was $0.0015. Today, both pizzas would be worth almost $380 million in Bitcoin.
How Large Is the Bitcoin Market?
At the time of writing, the BTC market cap is $1,035,210,870,257. This amount can be compared to the value of all physical gold in the world, which is almost $11.1 trillion.
In other words, over a period of just over 12 years, Bitcoin has reached a value of more than 9% of the value of all gold.
Predicting the volume of daily transactions is difficult because some markets sometimes exaggerate their volume data for marketing purposes. According to the market data processing company, CoinMarketCap, the daily volume of BTC transactions at the beginning of 2021 was about $60 billion, but other calculations of the actual volume ended up being much lower.
According to another market data analyst company, Nomics, the actual volume is about $12 billion. For comparison: at the end of 2019, daily physical gold trading reached $145 billion, while the daily volume of the US S&P 500 stock index was about $150 billion.
How Many Cryptocurrencies Exist?
Along with Bitcoin, there are over 4,000 other cryptocurrencies. Every week, new cryptocurrencies appear, while others, on the contrary, disappear. Three years ago, there were about 1,300 cryptocurrencies.
The total value of the cryptocurrency market exceeds $2 trillion, of which approximately 45% are bitcoins. The next largest cryptocurrency is Ethereum, with a market cap of roughly $424 billion.
Is It True That Bitcoin Consumes a Lot of Electricity?
Yes it’s true. All computers that try to solve cryptographic puzzles consume a lot of electricity. Last year, the BTC network used 77 terawatts of electricity — more than all of Australia consumes.
At the same time, it is wrong to consider this as absolutely wasted electricity. The mining process ensures the continued integrity of the blockchain and ensures that no one can sell their bitcoins to two or more buyers at once.
In this regard, the cost of electricity can be considered as the cost of maintaining the network’s security.
The higher the BTC price is, the more cost-effective new mining farms will be. Here, too, we can draw a parallel with the production of traditional goods, regardless of whether it is gold, copper, or coal mining. If the price of the relevant good rises, it is profitable to produce it even at high costs.
However, electricity consumption is becoming a bigger problem, and some cryptocurrencies will switch to other methods to keep their networks safe.
Is Bitcoin a Pyramid Scheme?
Not accepting cryptocurrencies, calling them another big bubble and a modern version of the tulip mania of 1637 in the Netherlands, is wrong. It is also not a pyramid scheme.
The financial pyramid is always characterized by promises of a huge increase in the value of an asset. Bitcoin buyers never had a guarantee about its future value.
The price of Bitcoin is entirely determined by supply and demand, just as for all other assets traded on the free market.
And although this phenomenon is not a bubble in itself, the value of both Bitcoin and other cryptocurrencies can be significantly overestimated, and thus a fall in prices will follow.
With Bitcoin, this has already happened several times over its more than 12-year history of existence. We observed a price increase last year as well, but the most rapid, explosive jump in BTC price took place in the early years of its operation.
Today, we have considered the most popular Bitcoin myths along with true facts about it. If you like this article, we will prepare the second part of interesting facts about the first and most popular cryptocurrency.
What other popular BTC myths and facts do you know? Feel free to share them in the comments below. Have a great weekend!