Bitcoin

What is Bitcoin?

Bitcoin (BTC) is the first and most well-known cryptocurrency, created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It introduced the concept of a decentralized digital currency that operates without the need for a central authority like a bank or government.

How Bitcoin Works

Bitcoin operates on a peer-to-peer network using blockchain technology. Transactions are verified by network nodes through cryptography and recorded on a public distributed ledger. The process of verifying and adding transactions to the blockchain is called mining, which also creates new bitcoins as a reward.

Key Features

• Decentralized: No single entity controls Bitcoin
• Limited Supply: Only 21 million BTC will ever exist
• Proof of Work: Miners compete to solve complex puzzles
• Pseudonymous: Transactions are public but identities are hidden
• Immutable: Once confirmed, transactions cannot be reversed

Tokenomics

• Maximum Supply: 21,000,000 BTC
• Block Time: ~10 minutes
• Halving: Every 210,000 blocks (~4 years)
• Current Block Reward: 3.125 BTC (after 2024 halving)
• Consensus: Proof of Work (SHA-256)

Use Cases

• Store of value ("Digital Gold")
• Cross-border payments and remittances
• Hedge against inflation
• Portfolio diversification
• Payment for goods and services

Historical Significance

Bitcoin was revolutionary in solving the "double-spending problem" for digital currencies without requiring a trusted third party. Its creation sparked the entire cryptocurrency industry and continues to be the benchmark against which other cryptocurrencies are measured.