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'''Bitcoin''' | |||
'''Bitcoin''' (BTC; symbol: ₿) is a decentralized digital currency that operates without a central authority, bank, or administrator. It enables peer-to-peer digital payments using cryptographic verification instead of trust. Bitcoin was introduced in 2008 by the pseudonymous creator '''Satoshi Nakamoto''' through the whitepaper ''Bitcoin: A Peer-to-Peer Electronic Cash System''. The network launched in January 2009 with the mining of the Genesis Block. | |||
Bitcoin uses blockchain technology, a distributed public ledger secured by proof-of-work (PoW), which ensures transparency, immutability, and resistance to censorship. | |||
== History == | |||
=== Early Digital Currency Concepts (1980s–2000s) === | |||
Bitcoin’s design is rooted in prior cryptographic technologies and digital-money experiments: | |||
DigiCash (David Chaum, 1989) – anonymous electronic cash, centralized. | |||
Hashcash (Adam Back, 1997) – proof-of-work system later powering Bitcoin mining. | |||
b-money (Wei Dai, 1998) – a proposal for decentralized electronic cash. | |||
Bit Gold (Nick Szabo, late 1990s) – PoW-based decentralized money concept. | |||
RPOW (Hal Finney, 2004) – reusable proof-of-work tokens. | |||
These systems inspired Bitcoin’s cryptography, decentralization, and consensus mechanisms. | |||
=== Creation and Launch (2008–2009) === | |||
Key events: | |||
31 October 2008 – Bitcoin whitepaper published. | |||
3 January 2009 – Genesis Block mined by Satoshi Nakamoto. | |||
9 January 2009 – Bitcoin v0.1 software released. | |||
12 January 2009 – First Bitcoin transaction: Satoshi → Hal Finney (10 BTC). | |||
Early users mined Bitcoin on personal computers with no monetary value attached. | |||
=== First Real Transactions (2010–2012) === | |||
22 May 2010: Laszlo Hanyecz buys 2 pizzas for 10,000 BTC (first commercial use). | |||
Bitcoin grows from $0.10 to $1 in 2011. | |||
Developer community expands rapidly. | |||
=== Growth and Challenges (2013–2014) === | |||
Bitcoin surpasses $1,000 for the first time (2013). | |||
First Bitcoin ATM launches in Canada. | |||
Mt. Gox collapse (2014) causes major exchange crisis. | |||
=== Maturation and Scaling (2015–2020) === | |||
Global exchanges mature. | |||
Japan recognizes Bitcoin for payments (2016). | |||
SegWit and Lightning Network deployed. | |||
Bitcoin reaches $19,666 in 2017. | |||
CME launches Bitcoin futures. | |||
COVID-19 accelerates crypto adoption (2020). | |||
=== Institutional Adoption (2021–2023) === | |||
Bitcoin surpasses $60,000+ in 2021. | |||
Tesla, MicroStrategy, BlackRock adopt Bitcoin strategies. | |||
First U.S. Bitcoin futures ETF launches. | |||
Market volatility increases during 2022–2023 events. | |||
=== 2024 Landmark: Spot Bitcoin ETFs === | |||
The U.S. SEC approves multiple spot Bitcoin ETFs, driving global legitimacy and institutional participation. | |||
=== 2025 Developments === | |||
PDF-based highlights: | |||
Government-level Bitcoin frameworks evolve. | |||
Strategic Bitcoin reserves appear. | |||
Market crosses $110,000 in early 2025. | |||
== Bitcoin Design == | |||
Bitcoin is designed for: | |||
decentralization | |||
censorship resistance | |||
cryptographic security | |||
peer-to-peer digital payments | |||
predictable monetary supply | |||
It uses a network of nodes enforcing consensus rules without central control. | |||
== Units and Divisibility == | |||
Bitcoin uses several units: | |||
1 BTC = 1 bitcoin | |||
1 mBTC = 0.001 BTC | |||
1 μBTC (bit) = 0.000001 BTC | |||
1 satoshi = 0.00000001 BTC | |||
1 millisatoshi (msat) = used in Lightning Network | |||
Unicode standardized the symbol ₿ in 2017. | |||
== Blockchain Architecture == | |||
Bitcoin’s blockchain is a decentralized ledger of blocks linked cryptographically. | |||
=== Keys and Addresses === | |||
Bitcoin addresses are derived from: | |||
private key → public key → hashed address | |||
Types of addresses: | |||
Legacy (1…) | |||
P2SH (3…) | |||
SegWit (bc1…) | |||
Taproot (bc1p…) | |||
Mnemonic seed phrases allow wallet backups. | |||
=== Transactions === | |||
A transaction contains: | |||
inputs (previous outputs) | |||
outputs | |||
digital signatures | |||
locking/unlocking scripts | |||
Nodes validate every transaction before adding it to the blockchain. | |||
=== Timestamp Server === | |||
Bitcoin timestamps data by hashing blocks into an immutable chain, preventing double spending. | |||
=== Proof of Work (PoW) === | |||
Bitcoin mining uses SHA-256 hashing, requiring miners to find a valid hash below a target value. | |||
Benefits: | |||
decentralized security | |||
attack resistance | |||
permissionless participation | |||
=== Network Operation === | |||
Nodes: | |||
validate transactions | |||
enforce consensus rules | |||
relay messages | |||
store the blockchain | |||
SPV wallets verify payments using block headers only. | |||
== Privacy == | |||
Bitcoin is pseudonymous, not anonymous. | |||
All transactions are public, but identities are not tied to addresses. | |||
Privacy-enhancing methods: | |||
CoinJoin | |||
Tor / VPN | |||
Taproot script-path hiding | |||
Avoiding address reuse | |||
Lightning Network usage | |||
== Wallets == | |||
Wallet types include: | |||
hot wallets (online) | |||
cold wallets (hardware, paper) | |||
desktop/mobile software wallets | |||
multisignature wallets | |||
Lightning-enabled wallets | |||
Backups and seed phrase security are crucial for users. | |||
== Scalability == | |||
Bitcoin processes ~3–7 TPS. | |||
Scalability improvements: | |||
SegWit | |||
Lightning Network | |||
Batch transactions | |||
Schnorr signatures | |||
Taproot enhancements | |||
Sidechains (Liquid, RSK) | |||
== Economics == | |||
Bitcoin’s economics include: | |||
fixed supply: 21 million BTC | |||
block reward halving every 210,000 blocks | |||
decentralized monetary issuance | |||
open global market pricing | |||
Bitcoin is often considered “digital gold.” | |||
== Legal Status == | |||
Regulatory stance varies globally: | |||
Legal tender: El Salvador | |||
Regulated as property: United States | |||
Permitted for payments: Japan | |||
Restricted/Banned: China, Algeria, Nepal, Bolivia | |||
== Payments and Use Cases == | |||
Bitcoin is used for: | |||
cross-border payments | |||
remittances | |||
e-commerce | |||
store-of-value | |||
Lightning micropayments | |||
merchant transactions | |||
== Investment == | |||
Bitcoin is treated as: | |||
a long-term investment | |||
an inflation hedge | |||
digital gold | |||
a speculative asset | |||
Institutional adoption has grown significantly since 2020. | |||
== Criticism == | |||
Criticisms include: | |||
high volatility | |||
price speculation | |||
energy consumption | |||
illegal-use concerns | |||
scalability limitations | |||
risk of market manipulation | |||
Prominent economists like Joseph Stiglitz, Kenneth Rogoff, and Nouriel Roubini have raised objections. | |||
== Market Characteristics == | |||
Bitcoin markets operate 24/7 globally and include: | |||
spot markets | |||
futures and options | |||
ETFs | |||
OTC trades | |||
decentralized exchanges | |||
Bitcoin influences the wider crypto ecosystem of tokens, NFTs, and DeFi. | |||
Revision as of 08:23, 18 November 2025
| Bitcoin | |
|---|---|
| |
| Commonly used logo of bitcoin | |
| Denominations | |
| Plural | Bitcoins |
| Symbol | ₿ (Unicode: U+20BF ₿ BITCOIN SIGN) |
| Code | BTC |
| Precision | 10⁻⁸ |
| Subunits |
59 Markets.com, “Crypto market analysis: What are the features of cryptocurrency?” Archived. Retrieved October 2025 |
| Development | |
| Original author | Satoshi Nakamoto |
| White paper | Bitcoin: A Peer-to-Peer Electronic Cash System |
| Implementation | Bitcoin Core |
| Initial release | 0.1.0 / 9 January 2009 (16 years ago) |
| Latest release | 30.0.0 / 11 October 2025 (34 days ago) |
| Code repository | GitHub |
| Development status | Active |
| Written in | C++ |
| Source model | Free and Open Source Software |
| License | MIT Licence |
| Ledger | |
| Ledger start | 3 January 2009 (16 years ago) |
| Timestamping scheme | Proof of work (partial hash inversion) |
| Hash function | SHA-256 (two rounds) |
| Issuance | Decentralized (block reward), Initially ₿50 per block, halved every 210,000 blocks |
| Block reward | ₿3.125 (as of 2025) |
| Block time | 10 minutes |
| Circulating supply | ₿19,934,271 (as of 14 October 2025) |
| Supply limit | ₿21,000,000 |
| Valuation | |
| Exchange rate | Floating |
| Website | bitcoin.org |
Bitcoin
Bitcoin (BTC; symbol: ₿) is a decentralized digital currency that operates without a central authority, bank, or administrator. It enables peer-to-peer digital payments using cryptographic verification instead of trust. Bitcoin was introduced in 2008 by the pseudonymous creator Satoshi Nakamoto through the whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System. The network launched in January 2009 with the mining of the Genesis Block.
Bitcoin uses blockchain technology, a distributed public ledger secured by proof-of-work (PoW), which ensures transparency, immutability, and resistance to censorship.
History
Early Digital Currency Concepts (1980s–2000s)
Bitcoin’s design is rooted in prior cryptographic technologies and digital-money experiments:
DigiCash (David Chaum, 1989) – anonymous electronic cash, centralized.
Hashcash (Adam Back, 1997) – proof-of-work system later powering Bitcoin mining.
b-money (Wei Dai, 1998) – a proposal for decentralized electronic cash.
Bit Gold (Nick Szabo, late 1990s) – PoW-based decentralized money concept.
RPOW (Hal Finney, 2004) – reusable proof-of-work tokens.
These systems inspired Bitcoin’s cryptography, decentralization, and consensus mechanisms.
Creation and Launch (2008–2009)
Key events:
31 October 2008 – Bitcoin whitepaper published.
3 January 2009 – Genesis Block mined by Satoshi Nakamoto.
9 January 2009 – Bitcoin v0.1 software released.
12 January 2009 – First Bitcoin transaction: Satoshi → Hal Finney (10 BTC).
Early users mined Bitcoin on personal computers with no monetary value attached.
First Real Transactions (2010–2012)
22 May 2010: Laszlo Hanyecz buys 2 pizzas for 10,000 BTC (first commercial use).
Bitcoin grows from $0.10 to $1 in 2011.
Developer community expands rapidly.
Growth and Challenges (2013–2014)
Bitcoin surpasses $1,000 for the first time (2013).
First Bitcoin ATM launches in Canada.
Mt. Gox collapse (2014) causes major exchange crisis.
Maturation and Scaling (2015–2020)
Global exchanges mature.
Japan recognizes Bitcoin for payments (2016).
SegWit and Lightning Network deployed.
Bitcoin reaches $19,666 in 2017.
CME launches Bitcoin futures.
COVID-19 accelerates crypto adoption (2020).
Institutional Adoption (2021–2023)
Bitcoin surpasses $60,000+ in 2021.
Tesla, MicroStrategy, BlackRock adopt Bitcoin strategies.
First U.S. Bitcoin futures ETF launches.
Market volatility increases during 2022–2023 events.
2024 Landmark: Spot Bitcoin ETFs
The U.S. SEC approves multiple spot Bitcoin ETFs, driving global legitimacy and institutional participation.
2025 Developments
PDF-based highlights:
Government-level Bitcoin frameworks evolve.
Strategic Bitcoin reserves appear.
Market crosses $110,000 in early 2025.
Bitcoin Design
Bitcoin is designed for:
decentralization
censorship resistance
cryptographic security
peer-to-peer digital payments
predictable monetary supply
It uses a network of nodes enforcing consensus rules without central control.
Units and Divisibility
Bitcoin uses several units:
1 BTC = 1 bitcoin
1 mBTC = 0.001 BTC
1 μBTC (bit) = 0.000001 BTC
1 satoshi = 0.00000001 BTC
1 millisatoshi (msat) = used in Lightning Network
Unicode standardized the symbol ₿ in 2017.
Blockchain Architecture
Bitcoin’s blockchain is a decentralized ledger of blocks linked cryptographically.
Keys and Addresses
Bitcoin addresses are derived from:
private key → public key → hashed address
Types of addresses:
Legacy (1…)
P2SH (3…)
SegWit (bc1…)
Taproot (bc1p…)
Mnemonic seed phrases allow wallet backups.
Transactions
A transaction contains:
inputs (previous outputs)
outputs
digital signatures
locking/unlocking scripts
Nodes validate every transaction before adding it to the blockchain.
Timestamp Server
Bitcoin timestamps data by hashing blocks into an immutable chain, preventing double spending.
Proof of Work (PoW)
Bitcoin mining uses SHA-256 hashing, requiring miners to find a valid hash below a target value.
Benefits:
decentralized security
attack resistance
permissionless participation
Network Operation
Nodes:
validate transactions
enforce consensus rules
relay messages
store the blockchain
SPV wallets verify payments using block headers only.
Privacy
Bitcoin is pseudonymous, not anonymous. All transactions are public, but identities are not tied to addresses.
Privacy-enhancing methods:
CoinJoin
Tor / VPN
Taproot script-path hiding
Avoiding address reuse
Lightning Network usage
Wallets
Wallet types include:
hot wallets (online)
cold wallets (hardware, paper)
desktop/mobile software wallets
multisignature wallets
Lightning-enabled wallets
Backups and seed phrase security are crucial for users.
Scalability
Bitcoin processes ~3–7 TPS.
Scalability improvements:
SegWit
Lightning Network
Batch transactions
Schnorr signatures
Taproot enhancements
Sidechains (Liquid, RSK)
Economics
Bitcoin’s economics include:
fixed supply: 21 million BTC
block reward halving every 210,000 blocks
decentralized monetary issuance
open global market pricing
Bitcoin is often considered “digital gold.”
Legal Status
Regulatory stance varies globally:
Legal tender: El Salvador
Regulated as property: United States
Permitted for payments: Japan
Restricted/Banned: China, Algeria, Nepal, Bolivia
Payments and Use Cases
Bitcoin is used for:
cross-border payments
remittances
e-commerce
store-of-value
Lightning micropayments
merchant transactions
Investment
Bitcoin is treated as:
a long-term investment
an inflation hedge
digital gold
a speculative asset
Institutional adoption has grown significantly since 2020.
Criticism
Criticisms include:
high volatility
price speculation
energy consumption
illegal-use concerns
scalability limitations
risk of market manipulation
Prominent economists like Joseph Stiglitz, Kenneth Rogoff, and Nouriel Roubini have raised objections.
Market Characteristics
Bitcoin markets operate 24/7 globally and include:
spot markets
futures and options
ETFs
OTC trades
decentralized exchanges
Bitcoin influences the wider crypto ecosystem of tokens, NFTs, and DeFi.