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What is Bitcoin?
Bitcoin is the world's first cryptocurrency. It was invented on 31 October, 2008, and formally launched on 3 January, 2009 by an anonymous entity known as Satoshi Nakamoto. Since then, it has been on a trajectory of worldwide adoption.
The word Bitcoin can be used interchangeably to describe 3 things:
- The digital currency, Bitcoin (BTC)
- The Bitcoin blockchain
- The Bitcoin network
Bitcoin (BTC) is Internet money that can be transferred to and from anyone with an Internet connection. Every transfer is a transaction, and each transaction is recorded in a database called the Bitcoin blockchain.
The Bitcoin blockchain contains a full record of every Bitcoin transaction that has ever taken place since 3 January 2009. The blockchain is replicated and continuously synchronized on every single computer that runs the Bitcoin network.
The Bitcoin network is made up of thousands of computers all over the world run by individuals, small businesses and large companies. Each computer that makes up the network is called a node.
Bitcoin has no CEO, headquarters, or official spokesperson. None of the computers that run the Bitcoin network are any more important than any other computer, giving Bitcoin an essential quality of robustness and egalitarianism. Since the network is run by thousands of computers globally, yet simultaneously governed by no-one, it is considered to be highly decentralized.
Bitcoin price chart:
Everything you need to know about Bitcoin
How does Bitcoin work?
Bitcoin is made possible by the underlying technology it is built upon – the blockchain.
As the name suggests, a blockchain is a series of blocks chained together. Each new block contains the latest set of transactional data. The blockchain is stored and synchronised across thousands of participant computers worldwide, otherwise known as "nodes".
When a user transfers Bitcoin (BTC) from their address to a recipient's address, that transaction is sent to the Bitcoin network to be processed. The transactions are grouped into blocks and added to the blockchain when a block has been "mined". Once a block has been mined, it is permanently added to the blockchain. Both the block and the transactions within the block cannot be changed once the block has been added to the rest of the chain. A new block of transactions is created roughly every 10 minutes.
What are Bitcoin block rewards?
The Bitcoin network offers computers an incentive to contribute their computational power to the network. Any computer may join, but the stronger the computer, the more likely that the computer will mine a block and earn a block reward. Bitcoin block rewards are paid out in Bitcoin, and are a predetermined amount of new Bitcoin not yet released into circulation, in addition to all of the fees paid on the transactions included in the block that was just mined.
What are Bitcoin halvening events?
Halvening events are a permanent reduction in the Bitcoin block reward. These halvening events take place every 210,000 blocks, or roughly every 4 years. When a halvening takes place, the block reward is reduced by half. When the Bitcoin blockchain began in 2009, the reward was 50 Bitcoin per block. Then 210,000 blocks later in 2012, the reward was reduced to 25. In total, there have been 3 halvenings in history – the last 2 taking place in 2016 and 2020. The current reward for mining a block is 6.25 Bitcoin.
Why is there only 21 million Bitcoin?
The fact there is only 21 million Bitcoin is a side effect of this halvening cycle described above. Because a Bitcoin can be divided into 100 million pieces (called Satoshis), there will come a day wherein the block reward is smaller than the smallest unit of Bitcoin. At this point and time, there will be no more Bitcoin added to circulation, and the total circulating supply will be 21 million Bitcoin. This event will take place somewhere around the year 2140. At this point in time, the miners in the network will be earning rewards solely from transaction fees.
BTC adoption
Bitcoin (BTC) is the most popular coin with 37% of crypto owners saying they hold BTC, according to Finder's Cryptocurrency Adoption Index. Australia sits atop the table, with 60% of crypto owners holding BTC. At the other end is Mexico, where roughly 21% of crypto owners say they own Bitcoin.
While the percentage of US crypto owners who say they own BTC is slightly up in August (36%) compared to July (35%), it lags behind the global average of 37%.
History of Bitcoin
Bitcoin has been active for 15 years. During this time, many events have transpired that have led to Bitcoin becoming the largest cryptocurrency in the world. This is both in user base and market capitalization. Understanding the history of Bitcoin is a great way to understand the technology as a whole, and where it is headed in the future.
The launch of the Bitcoin whitepaper
Bitcoin recent developments
Bitcoin FAQ
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