What is Bitcoin?

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Bitcoin is an open source, decentralized peer-to-peer network where users can send and receive the native cryptocurrency, Bitcoin (BTC). The blockchain was launched in 2009 and developed by the pseudonymous Satoshi Nakamoto. Bitcoin introduced the idea of cryptocurrencies to the world and thousands of cryptocurrencies have been launched in its wake.

Bitcoin is an open-source, decentralized network of computer nodes that record and validate BTC transactions in blocks using a Proof-of-Work consensus mechanism. Nodes or “miners” compete to solve a complex mathematical puzzle based on the transactions in the block.

Whoever solves the problem, “mines” the block. Once a block is added to the blockchain, new BTC tokens are issued to the mining node as a reward. 

The amount of BTC issued initially was 50 BTC per block but every four years this amount halves and currently, 6.25 BTC are issued per block. This is designed to have a deflationary effect on the currency and will eventually lead to the max supply of 21 million BTC.

Mining Bitcoin is a very resource intensive process which uses a lot of electricity. Currently most mining is done by a handful of organizations who use specialized mining rigs.

Bitcoin has experienced several hard forks since its launch including the creation of Bitcoin Cash in 2017 but the core community has grown and remained passionate. The price of Bitcoin reached an all-time high in 2021 of $68,000. This price has dropped and BTC seems to be maintaining a value of between $30,000 and $40,000 since.

It has gone from being seen as an outlier in the financial world to being accepted globally. In 2021, El Salvador recognized Bitcoin as legal tender. While other cryptocurrencies like Ethereum have a wider range of DeFi services, Bitcoin has remained a leader in the crypto space.

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