Bitcoin

Bitcoin is the first and largest cryptocurrency by market capitalization. It was introduced in a 2008 white paper published under the pseudonym Satoshi Nakamoto and launched in January 2009 as a decentralized digital currency, designed to let two parties transact directly without a bank or payment processor as an intermediary.

The network runs on a proof-of-work blockchain: transactions are grouped into blocks and validated by "miners" who compete to solve a computationally expensive puzzle, with the winner adding the next block and earning newly issued bitcoin plus transaction fees as a reward. This process is what secures the network against fraudulent transactions without relying on a central authority.

Bitcoin's protocol caps total supply at 21 million coins, a fixed, hard-coded limit that proponents frequently cite as a structural contrast to fiat currencies, which central banks can expand without a hard ceiling. New bitcoin is issued on a fixed, decreasing schedule — the reward miners receive per block is cut in half roughly every four years, an event known as "the halving," which gradually slows the rate of new supply until the full 21 million cap is approached around the year 2140.

Because of its fixed supply and first-mover position, Bitcoin is often described by proponents as "digital gold" — a store of value rather than a everyday payment method — though its price has historically been far more volatile than gold's, and its practical use for retail payments remains limited compared with its use as a speculative and store-of-value asset held on exchanges and in self-custodied wallets.

Institutional access to Bitcoin expanded significantly in January 2024, when U.S. regulators approved the first spot Bitcoin exchange-traded funds, allowing investors to gain price exposure through a regular brokerage account without directly holding or securing the underlying cryptocurrency. That followed years of corporate treasury adoption led by companies like MicroStrategy, and national-level adoption by El Salvador, which made Bitcoin legal tender in 2021.

Bitcoin can be held two ways: on a centralized exchange, where the exchange itself controls the private keys and the user trusts the platform to safeguard funds, or in "self-custody," where the holder controls their own private keys directly. The failures of major exchanges — most notably Mt. Gox in 2014 and FTX in 2022, both of which resulted in billions of dollars in customer losses — are frequently cited as the reason self-custody and exchange due diligence are treated as first-order considerations by experienced holders, distinct from the question of Bitcoin's own protocol security, which has not been compromised in its history.