Once a relatively unknown digital currency, Bitcoin (BTC) is now a popular and valuable form of decentralized finance free from government interference. It had a market cap of more than $836 billion and one BTC token was worth more than $46,000 as of September 13, 2021. The creation of BTC in 2009 has spawned thousands of other cryptocurrencies, all of which are known as altcoins.
BTC, and all other cryptocurrencies, is created, or “mined,” via blockchain technology. This decentralized ledger operates with support from a system of computers known as “nodes” or “miners.” These are just some of the terms that prospective investors need to know about before they enter the crypto market. Below is a look at three others.
BTC had roughly 10,000 nodes as of June 2021. A prospective cyber-criminal seeking to take down the system or commit other nefarious acts would have to take control of at least 51 percent of BTC’s computing power. This is unlikely but not without precedence. Even if this does not occur due to criminal activity, BTC miners could “fork” to a new blockchain. This means they would alter its rules and ultimately create a new path.
Bitcoin SV (BSV) is one of many BTC forks. It was created in November 2018 out of another BTC fork, Bitcoin Cash, in response to disagreements between developers as to how to grow the cryptocurrency. BSV was targeted in a 51 percent attack this past August.
“While the motive isn’t entirely clear at present it seems likely it is little more than theft and profiteering and the fact that we can now repel such actions is very encouraging,” nChain chief technology officer Steve Shadders told Forbes following the attack.
Launched in 2014, Ethereum is the most valuable altcoin with a market cap of more than $375 billion as of September 13, 2021. The decentralized software platform was created by Joe Lubin as an open-source platform to allow developers to publish smart contracts and other financial products that can be accessed freely by anybody worldwide. This makes it especially appealing to those without access to traditional banking systems.
HODL originated from a misspelled BTC forum post in 2013 in which user GameKyuubi stated “I AM HODLING.” The price of BTC was plummeting at the time and, because he had limited trading experience, his inclination was to hold the token as opposed to sell it. It has since come to serve as an acronym for “Hold On for Dear Life” and represents the passive investment strategy employed by many in regard to BTC and other cryptocurrencies.