Bitcoin

Bitcoin was created by Satoshi Nakamoto.

Bitcoin was launched in 2009 after publication of the white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System."

Bitcoin runs on a decentralized ledger technology called the blockchain, which records all transactions that occur on the network. Each block in the blockchain contains a group of transactions, and new blocks are created through a process called mining, where miners compete to solve complex cryptographic puzzles. Once a puzzle is solved, a new block is added to the chain, and the miner is rewarded with newly created Bitcoin's.

Bitcoin has a range of uses, from serving as an alternative currency to acting as a long-term investment:

• Peer-to-Peer Payments: Bitcoin allows users to send and receive payments directly, without intermediaries, which can reduce transaction fees and speed up processing times.
• Store of Value: Many people view Bitcoin as a digital version of gold—a scarce asset that can act as a hedge against inflation and economic instability.
• International Transfers: Bitcoin makes it possible to send funds across borders quickly and at lower costs compared to traditional banking systems.
• Investment: Bitcoin is considered by some as an investment asset due to its historical price appreciation and potential for long-term gains.

Bitcoin’s design includes several features that differentiate it from traditional currencies and other cryptocurrencies:

• Proof-of-Work Mining: Bitcoin is secured by proof-of-work: miners compete to find each new block by computing SHA-256 hashes, and the mining difficulty adjusts automatically so that a new block is added roughly every 10 minutes.
• Fixed Supply: There will never be more than 21 million BTC. The reward miners receive for each block is cut in half every 210,000 blocks (roughly every four years) in an event known as the halving, so new supply keeps shrinking until the cap is reached.
• UTXO Model and Script: Instead of account balances, Bitcoin tracks unspent transaction outputs (UTXOs). Each output is locked by a short program written in Script, Bitcoin’s deliberately limited scripting language, which enables features such as multisignature wallets and timelocks.
• SegWit and Taproot: The Segregated Witness (SegWit) upgrade in 2017 fixed transaction malleability and increased block capacity, and the Taproot upgrade in 2021 introduced Schnorr signatures, making transactions more private, efficient and flexible.
• Lightning Network: The Lightning Network is a layer-2 network built on top of Bitcoin that routes payments off-chain through payment channels, enabling near-instant transactions with very low fees.
• Decentralized Network: Thousands of independently operated full nodes around the world verify every block and transaction against Bitcoin’s consensus rules, so no single company, government or miner controls the network.

• Scalability: Bitcoin’s network can handle a limited number of transactions per second, leading to slow processing times and high fees during periods of high demand.
• Energy Consumption: Bitcoin’s proof-of-work mining process consumes significant amounts of energy, raising concerns about its environmental impact.
• Regulatory Concerns: Governments and regulatory bodies are still determining how to handle Bitcoin, with potential implications for its future adoption and legality in some regions.
• Volatility: Bitcoin’s price is highly volatile, making it risky for investors and less suitable for everyday transactions compared to more stable currencies.