What is Bitcoin (BTC)
Bitcoin is a decentralised network and a digital asset for transferring value without a central intermediary; issuance is protocol-defined and capped by a maximum limit.
Who created it
Satoshi Nakamoto (pseudonym)
Why it was created
Created as “peer-to-peer electronic cash” — a system for electronic payments directly between parties, without a financial intermediary, with protection against double-spending.
How it’s used
- Store of value (long-term saving)
- Permissionless transfers and payments (P2P payments)
- International transfers/remittances (especially under restrictions)
- Exchange trading and risk management (hedging)
- Collateral in credit and DeFi services (via wrapped versions/bridges)
- Payments via the Lightning Network for small and fast transactions
Risks
- High volatility of the BTC market price
- Irreversibility of transactions: an error in the address or amount may result in an irreversible loss
- Network congestion: higher fees and longer confirmation times
- Risk of chain reorganisations with a low number of confirmations (important for fast payments)
- PoW consensus risks: potential concentration of hashrate and the associated risks of censorship or coordinated influence
- Protocol update risks: controversial changes, forks, and potential rule incompatibilities
- Long-term uncertainty around the “security budget”: declining block subsidy increases reliance on transaction fees
FAQ
- What is Bitcoin (BTC)?
- Bitcoin is a decentralised payments network and a digital asset. Transactions are validated by network participants (miners) and recorded on the blockchain.
- Why is BTC supply limited to 21 million?
- The cap and issuance schedule are defined in the protocol; the miners’ reward is periodically reduced (halving), so issuance trends towards zero over time and the total supply converges on 21 million.
- How are new BTC created?
- New coins are issued as a reward for mined blocks (mining). The reward decreases roughly every 210,000 blocks.