Skip to content
Glossary

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.

Bitcoin: Frequently Asked Questions

Who controls Bitcoin?
No single company or state controls Bitcoin. Its ledger is maintained by a global network of nodes, and transactions are processed by miners who compete using computing power. Changes to the rules require broad agreement across this decentralized network, which is what makes Bitcoin resistant to control by any one party.
Why is Bitcoin's supply limited to 21 million?
Bitcoin's design caps the total supply at 21 million coins, and the rate of new issuance is cut in half at regular intervals through an event called the halving. This makes its monetary policy fixed and predictable, creating transparent scarcity. The cap is a core reason many holders treat Bitcoin as a long-term store of value.
What are Bitcoin's main limitations?
Bitcoin's strengths are its security and transparent, scarce supply, but it has trade-offs. Its main limits are throughput, since it processes a limited number of transactions, and its energy use from proof-of-work mining. Other blockchain designs and Layer 2 networks try to address these constraints, often by making different trade-offs.