Today (3 Jan 2019) marks the 10th Anniversary of the creation of the first block on the Bitcoin Blockchain. Named the Genesis Block, it marks also the beginning of Blockchain itself, so it’s a milestone in the modern history of money and the beginning of the decentralization model we are most certainly all headed towards. So what better time to bring to the public focus some of the key facts that every investor in crypto (and Bitcoin in particular) should know.
I covered these in today’s episode of the Crypto Corner Podcast which you can see below.
Here’s just a taster of what’s in the video, I do recommend watching it though.
On 18 August 2008, the domain name bitcoin.org was registered. Later that year on 31 October, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list. This paper detailed methods of using a peer-to-peer network to generate what was described as “a system for electronic transactions without relying on trust”
On 3 January 2009, the bitcoin network came into existence with Satoshi Nakamoto mining the genesis block of bitcoin (block number 0), which had a reward of 50 BTC. Embedded in the coinbase of this block was the text:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.
The text refers to a headline in The Times published on 3 January 2009. This note has been interpreted as both a timestamp of the genesis date and a derisive comment on the instability caused by fractional-reserve banking
Cryptocurrencies are the Easiest Form of Money To Lose…
James Howells, an IT guy, lost 7,500 bitcoins in November 2013. While he was cleaning his desk at home, he threw away his hard disk containing the private keys of bitcoins which he had mined in 2010. This today amounts to about $30 mln (at $4000) and at the peak of Bitcoin’s price at close to $20K the amount was a whopping $150 mln
Bitcoin is not created out of thin air.
Bitcoin is created through a process called mining. Blockchain, the technology that bitcoin is built on top of, is dependent on a network of nodes that ensures the integrity of transaction history by achieving consensus. (To understand more about blockchain, you can reference this article.) Validation is one part of the process. After validating a transaction, the nodes then need to race, using trial and error, to solve a difficult mathematical puzzle that requires heavy computing resources. The first computer in the network that solves the equation will be rewarded with bitcoins. This is known as ‘mining bitcoins’. This protocol is referred to as Proof of Work (PoW).
Bitcoin has experienced 5 major price corrections (aka Crashes or Bubbles)
-94% June-Nov 2011 $30 drop from $32 to $2
164 days correction triggered by the infamous HACK of the biggest Bitcoin exchange at the time – the Chinese Mt Gox
-82.6% April 2013 $214 drop from $260 to $46
87 days correction – Mt Gox stops trading
-86.7% Nov’13-Aug’15 $1000 drop from $1155 – $155
420 days correction triggered by Mt Gox announcing its closure
-40% Sep 2017 $2000 drop from $5000 to $2972
15 days correction triggered by the Chinese (temporary) ban on ICOs and trading suspension
-83.3% Dec 2017 – Dec 2018 $16,500 drop from $19700 to $3100
364 days correction triggered by a bubble-like parabolic uptrend in Q4 of 2017 and South Korean Ban on anonymous trading of crypto in Jan 2018
These are just a handful of the facts I listed in my video, so watch it here and enjoy!