Overview
Bitcoin is the world's first successful decentralized digital currency, introduced through a whitepaper published by the pseudonymous Satoshi Nakamoto on October 31, 2008. The network launched on January 3, 2009, when Nakamoto mined the genesis block. Bitcoin solved the long-standing double-spending problem for digital currencies without requiring a trusted third party.
Core Properties
- Fixed supply: Only 21 million bitcoin will ever exist, enforced by consensus rules
- Decentralized: No single entity controls the network; thousands of nodes independently validate all transactions
- Permissionless: Anyone can participate without approval
- Censorship-resistant: No authority can prevent valid transactions from being confirmed
- Pseudonymous: Transactions are public, but identities behind addresses are not inherently revealed
How It Works
Alice wants to send 0.5 BTC to Bob:
1. Alice creates a transaction signed with her private key
2. Transaction is broadcast to the peer-to-peer network
3. Nodes validate the transaction against consensus rules
4. Miners include the transaction in a candidate block
5. A miner finds a valid proof of work and publishes the block
6. Other nodes verify and accept the block
7. Bob's wallet reflects the received payment
Monetary Policy
Bitcoin's issuance schedule is predetermined and immutable. New bitcoin enters circulation through block rewards, which started at 50 BTC per block and halve approximately every four years. This disinflationary schedule will continue until approximately the year 2140, when the last fraction of a bitcoin is mined.
Units
One bitcoin (1 BTC) is divisible to eight decimal places. The smallest unit, 0.00000001 BTC, is called a satoshi (sat). The Lightning Network enables payments of even smaller fractions called millisatoshis.