Bitcoin Security and Crypto Scams
Bitcoin’s blockchain has never been hacked, but wallets and exchanges have. Watch out for:
Phishing (fake sites or messages)
Impersonation scams (fake giveaways or people)
Pig butchering (fake relationships or platforms)
Extortion/blackmail
Ponzi schemes
Bitcoin ATM scams
Bitcoin has achieved significant milestones on its journey towards mainstream adoption, yet debates persist about its future role in the financial system. Is Bitcoin the future of money or just fool’s gold? In my main video video “Bitcoin Explained” I cover everything that you need to know about Bitcoin, including the origins of Bitcoin, what Bitcoin is and how it works, the reasons behind its growing adoption, its criticisms, and the future outlook of Bitcoin. This video is intended solely for informational purposes. I want to emphasize that Bitcoin is a very volatile asset and can decline in price just as fast as it rallies up.
Who Created Bitcoin?
On October 31st, during the financial crisis, someone using the name Satoshi Nakamoto published a white paper introducing Bitcoin. The network launched on January 3rd, 2009. Nakamoto mined 1.1 million bitcoins and disappeared in 2011. Their identity remains unknown.
What Is Bitcoin?
Bitcoin is the first cryptocurrency—“crypto” meaning secret, “currency” meaning money. It’s known as BTC and has a max supply of 21 million coins. It’s decentralized, meaning no government or bank controls it. Instead, it runs on a peer-to-peer network of nodes (computers) verifying transactions.
Each node keeps a public ledger called the blockchain. If someone tries to alter a transaction, most nodes will reject it. This protects the network and stops any single entity from taking over.
Who Runs the Network?
Nodes are owned by individuals, businesses, and miners:
Individuals are privacy-focused users helping to verify transactions. Businesses like exchanges run nodes for secure, independent transaction processing. Miners use powerful computers to validate transactions and add blocks to the blockchain. They’re rewarded with new Bitcoins and transaction fees.
As of mid-March 2025, around 19.8 million Bitcoins have been mined. The rest will be mined by ~2140 due to a built-in mechanism called halving, which reduces mining rewards every four years.
Why Is Bitcoin Valuable?
Bitcoin has a fixed supply. Unlike government currency, no one can create more of it. As adoption grows, scarcity increases its value. The U.S. dollar has lost value over time due to inflation. A $15 meal today cost 50 cents a hundred years ago. Bitcoin’s appeal is that 200 years from now, there will still only be 21 million coins. People trust it will be worth more as it becomes less volatile and more adopted.
Can Bitcoin Replace Government Currency?
Right now, the U.S. dollar is more stable due to adoption and predictable inflation. Bitcoin is seen more like “digital gold.” For it to replace traditional money, its volatility needs to be solved.
Example: If a car dealer sells a car for 1 BTC worth $100K, that Bitcoin could be worth $90K the next day and $70K by the end of the month. That unpredictability makes it hard to run a business.
Bitcoin’s Limitations and Fixes
Challenges include energy use, low transaction speeds, and high fees. Solutions like the Lightning Network allow faster off-chain transactions. You can open a channel, make unlimited private transactions, and close it by updating the blockchain.
Global Legality
Some countries regulate Bitcoin. Others ban it. U.S. and China hold large amounts, mostly from seizures:
U.S. holds ~207K BTC
China holds ~194K BTC
El Salvador bought Bitcoin for use as legal tender. Bhutan mined 13K BTC using hydropower. China bans crypto but still provides ~55% of Bitcoin’s hash rate through underground mining. No official change is planned yet.
Institutional Investment
Bitcoin ETFs and corporate adoption helped its legitimacy. Tesla, PayPal, Square, and MicroStrategy made big buys. In 2024, the SEC approved 11 spot Bitcoin ETFs from companies like BlackRock and Fidelity.
But ownership is highly concentrated. Less than 2% of wallets hold 90% of BTC. The top 10% of miners control 90% of mining, and just 0.1% (~50 miners) control 50%. This opens the door to market manipulation and raises concerns about true decentralization.
Volatility Risks
Price swings come from whale trades, regulation, global news, institutional moves, security breaches, altcoin competition, and geopolitics. Negative sentiment can cause panic selling, triggering more drops. These are called crypto bear markets or winters. Bitcoin has lost 75%+ in the past and taken years to recover. Only invest what you can afford to lose or leave long term.
Quantum Computing Threat?
It’s a valid concern, but Bitcoin’s open-source protocol can adapt. If quantum breaks Bitcoin, government systems would be at risk too. That’s why it’s likely developers will fix this before it becomes a real problem.
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