What is Bitcoin (BTC)? Learn About Bitcoin Before Investing

1.Introduction to Bitcoin

Bitcoin is the world's first cryptocurrency, introduced in 2009 by an individual or group under the pseudonym Satoshi Nakamoto. Built on blockchain technology, Bitcoin laid the foundation for today’s cryptocurrency market.

Unlike traditional fiat currencies issued by governments, Bitcoin operates on a peer-to-peer network, allowing users to transact directly without intermediaries. This reduces transaction costs and increases transparency.

2. How Bitcoin Works

The Bitcoin network consists of thousands of nodes worldwide that verify and record transactions. When a transaction is initiated, it is broadcast across the network for validation. Once confirmed, the transaction is bundled into a block and added to the blockchain.

This confirmation process is carried out by miners, who use computational power to solve complex mathematical problems. Miners are rewarded with a certain amount of Bitcoin for each successfully mined block, while the transactions in that block are permanently recorded on the blockchain.

3. Key Features of Bitcoin

3.1 Decentralization

Bitcoin is not controlled by any central authority or government. The network relies on the consensus of distributed nodes around the world, ensuring that no single entity can manipulate the system.

3.2 Security

Thanks to cryptographic mechanisms and the blockchain structure, Bitcoin transactions are immutable once confirmed. This prevents fraud and ensures data integrity.

3.3 Limited Supply

The total supply of Bitcoin is capped at 21 million coins. As of March 2024, approximately 19.6 million BTC have been mined, with only around 1 million remaining. This scarcity contributes to Bitcoin's value.

3.4 Smallest Unit: Satoshi

Bitcoin can be divided into 8 decimal places, with the smallest unit being 1 Satoshi (1 BTC = 100,000,000 Satoshis). This allows for micro-transactions, increasing its usability.