The cryptocurrency sector is expanding rapidly. Many people are familiar with names like Bitcoin or Ethereum, but few know anything beyond the basics of how they work. We cannot go deep into this world in a single article, but here you will find some of the top surprising facts about cryptocurrencies that you probably haven’t heard of before.
1. It is estimated that 4 million Bitcoins have been lost
What would you do if you had a stash of Bitcoins that you could not access because you have lost the keys, damaged your hardware or sent it to a so-called burn address?
Well, guess what? An estimated 4 million Bitcoins have been lost forever. The number is significant, considering that only 21 million BTCs will ever be mined. Experts believe that over 20 percent of the lost coins cannot be retrieved.
Scary, right? How does something like this happen?
The BTC blockchain is immutable and irreversible. This means that once a transaction is completed, it cannot be canceled or reverted. If you send your crypto assets to the wrong wallet, they are gone.
The cryptography used to secure these coins has no empathy. It doesn’t care if you are on the verge of having a heart attack. If you do not use the correct key, you will not access the wallet. Maybe a quantum computer could crack a private key, but decades may pass before it happens. Besides, it may not be possible even with the next generation of computers because developers are already working on creating quantum-proof solutions.
2. There was life in crypto before Bitcoin
The concept of a peer-to-peer digital currency that could not be tracked was created back in 1983 by David Chaum, an American IT expert. The same year he published his theory about cryptographic digital cash in a scientific journal and by the end of 1989, he founded the company Digicash.
Chaum created Digicash hoping that enough people would support the idea, thus convincing sellers to accept the new payment method. Unlike today’s cryptocurrencies, the concept was that users would buy the digital currency from Chaum’s bank operating as a central entity. The bank would have information that funds were acquired, but no information on how they were used. The coin was created to ensure online transaction safety. This was made possible thanks to blind signatures to ensure that the transactions were anonymous.
Digicash didn’t do too well. By 1996 the company filed for bankruptcy. At that time, few other digital currencies were launched. Ecash, e-gold and b-money did comparatively better than their predecessor.
Later, the boom in e-commerce catalyzed the development of digital cash and payment methods, making it popular despite Chaum’s failure with Digicash. Digital money was around long before BTC, and Satoshi Nakamoto even referenced some previous projects in the Bitcoin whitepaper.
3. HODL was born in a moment of desperation
HODL is one of the most peculiar cryptocurrency jargon terms. It was coined by a Bitcoin enthusiast who responded to the so-called crypto experts who mocked him for not selling his coins. On the forum, he wrote: “I AM HODLING.”
Although this was an apparent typo, it soon got popular and was used to describe the strategy adopted by beginners who don’t know how to trade crypto but still believe in cryptocurrencies.
Today, hodling is a common strategy in crypto trading across the globe. The original typo is also known as an acronym for the phrase “hold on for dear life.”
4. Satoshi Nakamoto is a hodler
In 2013, Sergio Demian Lerner, known in the crypto world as the designer of the smart contract platform RSK, pointed out that there are still over one million Bitcoins in what is assumed to be Satoshi Nakamoto’s wallet.
According to Lerner’s findings, between January 2009 and January 2010, there was one dominant BTC miner before others joined the bandwagon. This person used a single rig to mine thousands of blocks, which amounted to over one million Bitcoins. To date, Satoshi has not moved the coins from the wallet, causing speculation as to why he or she has never touched that handsome stash. If exchanged for fiat currency, the wallet would make Satoshi one of the top 50 richest persons in the world.
5. Bitcoin has been forked over a hundred times
Believe it or not, Bitcoin has been forked over 100 times. And it does not mean poking by the devil’s trident. “Forked” means that its source code has been copied to create new features, functions and, in some cases, even new coins. Bitcoin, as most cryptocurrencies, was built with an open-source code, allowing it to be easily copied and modified according to the developer’s needs.
There are two types of forks: the hard fork and the soft fork.
A soft fork is generally used to implement changes and upgrades on the blockchain, while a hard fork is commonly used for significant security upgrades or to create a new coin. The main difference between the two is that a soft fork is backward-compatible, meaning that old versions of the coin can also be updated with new features. Hard forks are not backward-compatible and are only used in cases where major security upgrades are required or to create a new coin using the same blockchain algorithm.
6. Crypto wallets do not store your crypto
Contrary to popular belief, cryptocurrencies are not stored in crypto wallets. The only things that are stored there are the private and public keys. The funds are recorded on the blockchain and can only be accessed by someone with the correct public and private key.
Public keys are like bank account numbers, which are shared with people in order to receive transfers. Private keys are like your debit card pin code, allowing you to get into the account and make transactions. Without these keys, there is no way any transaction can be carried out.
7. There are nearly 2,000 dead coins
In just over a decade, many cryptocurrency projects have failed.
Coinopsy, a website that tracks dead coins, shows that there were 1,854 deceased cryptocurrencies at the time of writing this article, and this number is expected to rise.
But what exactly are these dead coins?
These are cryptocurrency projects that were abandoned, have no nodes, stopped being developed, turned out to be scams, have low volume or their website is down.