Bitcoin

What is Bitcoin?

Bitcoin is a digital currency that runs on a public network with no company or government in charge. Anyone can send BTC to anyone else online, and the rules cap the total supply at 21 million coins. Most people today use it as a long-term store of value, while some also use it for payments and cross-border transfers.

What it’s used for

Most holders treat BTC as a savings asset and keep it in self-custody wallets, on exchanges, or through regulated funds. Since January 2024, US investors can also get exposure through spot bitcoin exchange-traded products listed on national exchanges. Smaller groups use it for cross-border transfers and for payments, often through the Lightning Network, a layer built on top of Bitcoin for faster, cheaper transactions.

Role of the BTC token:

Evidence of real use

• On January 10, 2024, the SEC approved the listing of 11 spot bitcoin exchange-traded products in the US. Source
• A March 17, 2026 joint SEC and CFTC interpretation named Bitcoin (BTC) as an example of a digital commodity. Source
• Bitcoin's April 2024 halving cut the block subsidy paid to miners from 6.25 BTC to 3.125 BTC. Source

How Bitcoin works

Bitcoin is a shared ledger, called a blockchain, that records every transfer of BTC. Copies of that ledger are kept by thousands of computers, called nodes, around the world. Each node checks new transactions against the same public rules, such as making sure nobody spends coins they do not have. Because no single machine holds the master copy, there is no central point that can freeze accounts or rewrite history on its own.

New transactions are bundled into blocks roughly every 10 minutes by miners, who compete to solve a hard math puzzle using specialized hardware. This process is called proof of work. The winner adds the block and earns newly created bitcoin plus the fees users paid. Rewriting past blocks would require redoing all that work, which is what makes confirmed transactions very hard to reverse.

You control bitcoin with a private key, usually backed up as a seed phrase of 12 or 24 words. Whoever has the key can move the coins, so protecting it is your responsibility, not a bank's. Upgrades such as SegWit in 2017 and Taproot in 2021 added efficiency and new features, and they activated only after broad agreement among node operators and miners, which is why Bitcoin changes slowly.

Key moments

1. 2008The pseudonymous Satoshi Nakamoto publishes the Bitcoin white paper.
2. 2009The Bitcoin network launches with its first (genesis) block in January.
3. 2017The SegWit upgrade activates; a split over block size creates Bitcoin Cash.
4. 2021The Taproot upgrade activates, improving privacy and smart-contract flexibility.
5. 2024The SEC approves US spot bitcoin ETPs in January, and the fourth halving cuts the block reward in April.
6. 2025Bitcoin Core 30.0 relaxes default limits on OP_RETURN data, sparking a public debate over how much non-payment data the chain should carry.

Supply

Bitcoin's supply is capped at 21 million BTC by its code. New coins enter circulation only as mining rewards, and that reward halves roughly every four years (about every 210,000 blocks), so issuance slows over time until it reaches zero around the year 2140. After that, miners will be paid only through transaction fees.

Risks to understand

• Price volatility: BTC has experienced repeated drawdowns of more than 50 percent, so short-term values can swing sharply.
• Self-custody mistakes: if you lose your private key or seed phrase, or send to the wrong address, there is no way to recover the funds.
• Mining concentration: a small number of mining pools produce most blocks, which could become a pressure point if they coordinated or were coerced.
• Long-term security budget: as block rewards keep shrinking, the network will rely more on fee income to pay miners, and how that plays out is still an open question.
• Regulatory and tax rules: US tax reporting applies to most sales and spending, and rules for exchanges and custodians continue to change.

Last reviewed October 4, 2026 by The Crypto Guide editorial team. Utility Lens ratings are editorial judgments, not investment advice. Market data from CoinGecko. Spot an error? Request a correction.