Bitcoin (BTC) BTC

Bitcoin (BTC) is the first cryptocurrency: a digital currency that people can send to each other over the internet without a bank or any central operator. Its rules are enforced by thousands of computers running open-source software, and its supply is capped at 21 million coins. This page explains how Bitcoin works, where it comes from, what it is used for and what can go wrong. For a gentler introduction, read our guide What is Bitcoin?.

What is Bitcoin?

Bitcoin is both a network and the asset that moves on it. The network is a public ledger, the blockchain, that records every transaction since January 2009. Anyone can download it, check it and add transactions. The asset, bitcoin with a lowercase b, is divisible into 100 million units called satoshis, so you never need to buy a whole coin.

Bitcoin was described in a nine-page whitepaper published on 31 October 2008 under the name Satoshi Nakamoto. The real identity of Nakamoto has never been confirmed, and the project has no company, CEO or foundation in charge of it.

How Bitcoin works

Mining and proof of work

New transactions are grouped into blocks roughly every 10 minutes. To add a block, miners compete to solve a costly SHA-256 puzzle, a method called proof of work. The winner receives newly created bitcoin plus the fees paid by users. The difficulty of the puzzle adjusts every 2,016 blocks so that blocks keep arriving at the same pace, whatever the computing power on the network.

Rewriting past transactions would require redoing that work faster than the rest of the network combined, which is what makes the ledger hard to tamper with.

A fixed supply of 21 million

The block reward started at 50 BTC and is cut in half every 210,000 blocks, roughly every four years. This event is known as the Bitcoin halving. The latest halving took place on 20 April 2024 at block 840,000 and reduced the reward to 3.125 BTC. The next one is expected in 2028. Because of this schedule, the total supply can never exceed 21 million BTC, and the last fractions should be mined around the year 2140.

A short history of Bitcoin

• 31 October 2008: the whitepaper is posted to a cryptography mailing list.
• 3 January 2009: the genesis block is mined; version 0.1 of the software follows on 9 January.
• 22 May 2010: a programmer pays 10,000 BTC for two pizzas, the first well-known purchase with bitcoin.
• September 2021: El Salvador makes bitcoin legal tender; the obligation to accept it was removed in January 2025.
• November 2021: the Taproot upgrade activates, adding Schnorr signatures and more flexible scripts.
• 10 January 2024: the US SEC approves the first spot bitcoin exchange-traded products, which start trading the next day.
• 20 April 2024: fourth halving, the block reward falls to 3.125 BTC.
• March 2025: a US executive order creates a Strategic Bitcoin Reserve from bitcoin already held by the federal government.

What Bitcoin is used for

Most people hold bitcoin as a long-term store of value, often compared to digital gold because of its fixed supply. It is also used to move value across borders at any hour, without asking permission from a bank. Payments are possible on the main chain or, for small amounts, through second-layer systems such as the Lightning Network. Since 2024, investors can also get exposure through regulated funds without holding the coins themselves.

What makes Bitcoin different

• No issuer: no company can change the rules or create extra coins; changes require broad agreement among node operators.
• Predictable monetary policy: the issuance schedule has been known since 2009.
• Track record: the network has run since January 2009 and is supported by virtually every exchange, wallet and crypto fund.
• Simplicity: Bitcoin focuses on transferring value; its scripting language is deliberately limited compared with smart-contract platforms.

Risks and criticism

The price of bitcoin is highly volatile and has fallen by more than 50% several times in its history. You should only invest money you can afford to lose. Transactions are irreversible: a payment sent to the wrong address, or to a scammer, cannot be cancelled.

Mining uses a lot of electricity. A Cambridge Centre for Alternative Finance estimate put it at around 0.5% of global electricity consumption, partly from fossil fuels, and critics also point to electronic waste from specialised machines. Bitcoin is pseudonymous rather than anonymous, so transactions can often be traced. Finally, rules on crypto assets keep changing: in the US, the IRS treats digital assets as property, and brokers report sales on Form 1099-DA for transactions since 1 January 2025.

How to store bitcoin

You can leave bitcoin on an exchange, which is convenient but means the platform holds your coins. For larger amounts, many holders prefer a self-custody wallet, where only you control the private keys. A hardware wallet keeps those keys offline; our guide how to set up a hardware wallet walks you through it. Whatever you choose, write down your recovery phrase on paper, store it somewhere safe and never share it with anyone, including people who claim to work for a wallet or an exchange.

To read the original design in Satoshi Nakamoto’s own words, see the Bitcoin whitepaper.