Bitcoin is the first and largest cryptocurrency network. Launched in early 2009 by someone, or a team of people, under the pseudonym Satoshi Nakamoto, it lit the torch of a volatile crypto market that at its peak commanded close to $3 trillion. Bitcoin is the name of both the cryptocurrency, also known as BTC, and the blockchain—the ledger that powers the coin.
BTC is basically digital money. The Bitcoin blockchain is public, and anyone can interact with it to send BTC to other Bitcoin wallets, the network’s equivalent of bank accounts, or speculate on its price while trading on exchanges like Coinbase or Binance. Transactions typically cost a few dollars and take about 10 minutes to process, so a lot of people have taken to calling the coin “digital gold” rather than the “electronic cash” proposed in Nakamoto’s 2008 white paper.
To process transactions, computers engage in a process called proof of work, whereby the first computer to solve a math puzzle wins the right to add another block to Bitcoin’s public ledger. As a reward, these computers receive newly minted BTC.
The main concept that distinguishes Bitcoin from the traditional financial system is decentralization. Instead of running digital payment transfers through big data centers, like Mastercard or Visa, the Bitcoin protocol incentivizes individuals to use their computers to process transactions and maintain the ledger. And instead of having a central bank pull the levers of monetary policy, Nakamoto enshrined Bitcoin’s issuance schedule within its code. As of early 2023, the vast majority of the total supply of Bitcoins—more than 19 million—have already been issued or “mined” while the remaining amount will be issued in ever slower allotments until the year 2140. By that time, all 21 million Bitcoins will have been issued.
Nakamoto disappeared about two years after launching the network, and so today updates to its open-source code are implemented by a core community of maintainers. If a group of people doesn’t like how the project is going, they can “fork” the network with the support of miners to start their own rival blockchain.
Some major cryptocurrencies, including Bitcoin Cash and Litecoin, are forks of Bitcoin. Yet Bitcoin remains by far the most valuable cryptocurrency; when BTC hit its all-time high market cap of $1.23 trillion in November 2021, it commanded 71% of the market.
Go deeper:
Bitcoin Core landing page
Bitcoin white paper
See also:
What Is Ethereum?
Crypto investing 101
Try it:
Bitcoin explorer