4 Important Facts about Bitcoin that You Really Want to Know

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Bitcoin

Bitcoin transparency is of great importance for determining the price of a digital currency. The market moves to where money is spinning. However, it is much more difficult to find out to whom the money flows.

Financial markets are determined by the ratio of supply and demand. Also, the information who owns the assets and who wants to buy these assets is important. This, of course, depends on the transparency of the market. Traders and insiders monitor what hedge funds and pension funds do with their shareholdings.

In this sense, cryptocurrency is somewhat different. The digital currency is transparent, but it is anonymous at the same time.

1. Information about Bitcoin owners is not transparent

Bitcoin transactions and flow are visible in the blockchain. However, users prefer to remain anonymous. Their name is just a string of untracked letters and numbers.

This, of course, makes it difficult to determine the owner of Bitcoin. At the same time, it is considered a positive characteristic of the digital currency.

In the digital world, cybercrime and hacking activity are frequent. As a result, huge holders of Bitcoin would prefer to remain anonymous to not to become a walking target for scammers. In addition, Bitcoins are distributed to different purses for security reasons.

2. IRS lying

IRS scam

Of course, the inability to link large fortune with certain people upsets financial regulators. It’s their job to track legitimate and illegal money transactions.

The IRS had to rely on users to declare taxable profits. However, in 2015 only 802 people reported profit or loss in Bitcoin transactions. Therefore, it became clear that anonymity was being abused.

Nevertheless, there are tools by which government agencies can track users and their accumulated coins. That, of course, meets resistance.

3. List of Rich addresses

rich Bitcoin wallets

According to BitcoinRichList, 100 Bitcoin addresses own 17% of all bitcoins.

In August 2016, this figure was close to 20%. We can assume that the subsequent 800% rally of prices brought big profits to large holders.

4. Anonymity violation

Anonymous coin

It’s the fact that Bitcoin provides anonymity. However, many proudly demonstrate their investments in the digital currency.

One of the most famous and high-profile names is Cameron and Tyler Winklevoss. They once said they own 1% of all bitcoins. At the current level of mining, it is about 1.65 million.

Also, we can’t put the mysterious creator of Bitcoin Satoshi Nakamoto off the scales. As the rumor goes, he has more than a million coins distributed to different purses. (read more about its history).

Other major players are those who participate in the development, mining or the exchange of digital currency. For example, Tony Gallippi, chairman of the virtual currency processor Bitpay. He reportedly invested $ 20 million in Bitcoin. Dave Carlson, a software engineer who created MegaBigPower company for Bitcoin mining.

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