Bitcoin
Bitcoin is a decentralized digital currency and payment network that operates without central authority. Created in 2009 by the pseudonymous Satoshi Nakamoto, it enables peer-to-peer value transfer secured by cryptography and proof-of-work mining.
How It Works
Bitcoin is a monetary network that uses a distributed ledger called the blockchain to record all transactions. Every participant can verify every transaction independently, removing the need for trusted third parties like banks. New bitcoins are created through mining, a process where computers compete to solve computational puzzles, securing the network and processing transactions simultaneously.
The supply of bitcoin is capped at 21 million coins, enforced by the protocol's consensus rules. This fixed supply makes bitcoin the hardest money ever created — no government, corporation, or individual can inflate it. Every 210,000 blocks (roughly four years), the mining reward is cut in half, gradually reducing new issuance until the final satoshi is mined around the year 2140.
Bitcoin operates on a set of rules that every node enforces independently. There is no CEO, no board of directors, no central server. If you run a full node, you verify everything yourself. This is what makes Bitcoin fundamentally different from every other form of money in human history.
Key Points
- Fixed supply of 21 million coins — the hardest monetary policy ever implemented
- Fully decentralized with no single point of failure or control
- Secured by proof-of-work mining, consuming real-world energy to protect the network
- Enables permissionless, borderless value transfer without intermediaries
- Running your own full node lets you verify all rules independently