Bitcoin

Bitcoin is the first and largest cryptocurrency, launched in 2009. It is a decentralized digital money whose ledger is secured by a proof-of-work blockchain and maintained by a global network of nodes rather than any single company or state.

How it works

Transactions are grouped into blocks roughly every ten minutes by miners, who compete using computing power and are rewarded with newly issued bitcoin and fees. The supply is capped at 21 million coins, and the issuance rate is cut in half at regular intervals through an event called the halving, making Bitcoin’s monetary policy fixed and predictable.

Why it matters

Bitcoin established the model that all later cryptocurrencies build on, and it is widely treated as a benchmark for the market and as a long-term store of value by its holders. Its strengths are security and a transparent, scarce supply; its limits are throughput and energy use, which other designs try to address.

Example

The relative size of Bitcoin versus all other coins is tracked as “Bitcoin dominance,” a common gauge of market sentiment.