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What is Bitcoin?

Bitcoin is a decentralized digital currency and payment system that operates without a central authority or intermediary. It was created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto, who first described the system in the Bitcoin whitepaper published on October 31, 2008.

While this definition captures Bitcoin's technical foundation, Bitcoin is multifaceted. As you go down the Bitcoin rabbit hole, you'll discover that Bitcoin represents something unprecedented in human history. Bitcoin has a way of enticing you to learn more about related topics: economics, game theory, cryptography, monetary history, and the nature of trust itself.

Stay curious and keep learning 🧡

Bitcoin (capitalized) refers to the protocol, network, and system.
bitcoin (lowercase) or BTC refers to the currency unit.

Note: Throughout this documentation, "Bitcoin" refers specifically to BTC (Bitcoin Core), the original and longest-running Bitcoin network. While other networks like Bitcoin Cash (BCH) and Bitcoin SV (BSV) share Bitcoin's history up to their respective fork points, they are separate networks with different consensus rules. This documentation focuses exclusively on Bitcoin (BTC).

Be aware: The website bitcoin.com promotes Bitcoin Cash (BCH), not Bitcoin (BTC). Despite its name, it is not the official Bitcoin website and does not represent the Bitcoin (BTC) network.

Core Components

Bitcoin consists of several key components that work together to create a decentralized monetary system:

Blockchain: The distributed ledger that records all transactions in cryptographically linked blocks, creating an immutable history that all network participants can verify.

Cryptography: The mathematical foundation of Bitcoin. Elliptic curve cryptography enables unforgeable digital signatures, while hash functions provide data integrity and mining security.

Consensus Mechanism: Bitcoin's consensus mechanism allows thousands of nodes worldwide to agree on a single transaction history without central coordination, using proof-of-work and economic incentives.

Script: Bitcoin Script is a simple programming language that defines spending conditions, enabling features like multi-signature wallets and time-locked transactions.

OP Codes: The instruction set that powers Bitcoin Script, with each opcode performing specific operations for transaction validation and program execution.

Block Structure: Blocks are the fundamental units of Bitcoin's ledger, organizing transactions and enabling efficient verification through Merkle trees.

Economic Rules: The subsidy equation mathematically guarantees Bitcoin's fixed supply, creating a predictable monetary policy that approaches 21 million coins.

Technical Innovation

Proof-of-Work

  • Secures the network through computational work
  • Prevents double-spending
  • Reaches consensus without central authority
  • Requires significant computational resources

UTXO Model

  • Unspent Transaction Outputs - The fundamental accounting model of Bitcoin
  • Each transaction consumes and creates UTXOs
  • Enables parallel transaction processing
  • Clear ownership model

Merkle Trees

  • Efficient transaction verification
  • Compact block structure
  • Enables SPV (Simplified Payment Verification)
  • Cryptographic integrity

The Many Faces of Bitcoin

The New Element

Bitcoin represents something unprecedented: Element Zero, consisting only of energy.

Proof of Work is the bridge between the physical and digital worlds. Real energy (electricity, computational power, thermodynamic work) is consumed to maintain the digital scarcity of bitcoin. This is not a bug, but a feature. The energy expenditure is what gives bitcoin its unforgeable costliness, anchoring digital value to physical reality in a way no other digital asset can claim.

The Currency

Bitcoin is deflationary money with absolute scarcity. Only 21 million bitcoin will ever exist, a fixed supply that cannot be inflated, diluted, or manipulated.

This scarcity will produce conditions of human interaction never before seen in monetary history:

  • Abundance through deflation: As productivity increases, the value of saved bitcoin grows
  • Long-term thinking: Sound money encourages saving and investment over consumption
  • True price discovery: Without monetary manipulation, markets can function honestly

The Commodity

Bitcoin can store value across time. Like gold, but better:

  • Infinitely divisible
  • Perfectly portable
  • Easily verifiable
  • Impossible to counterfeit
  • Resistant to confiscation

The Protocol

Bitcoin is a protocol that allows for free and instant transfers of value across the entire planet.

  • Trustless: No need to trust any third party
  • Permissionless: Anyone can participate without asking permission
  • Borderless: Works the same everywhere on Earth

Bitcoin is a trust machine. It replaces trust in institutions with mathematical verification.

The Network

Miners: Transform energy into bitcoin. They compete to solve cryptographic puzzles, securing the network and processing transactions. In doing so, they convert raw energy into the most secure monetary network ever created.

Nodes: Verify that the network rules were followed. Every node is a server on the Bitcoin network, independently validating every transaction and block. This distributed verification is what makes Bitcoin truly decentralized.

The Idea

At its core, Bitcoin is nothing but a meme, an idea that replicates itself through human minds.

Bitcoin embodies the idea that a fixed set of rules can exist around which entire societies can be built, rules that no government, corporation, or individual can change.

It unlocks the true power of human cooperation: voluntary exchange based on mutually agreed rules that cannot be violated.

Once the concept of sound, digital, decentralized money enters someone's mind, it cannot be unseen. It spreads from person to person, generation to generation, border to border.

The Threat

Bitcoin is under constant attack from the most sophisticated entities on this planet:

  • Intelligence agencies (NSA, KGB, Mossad, and countless others)
  • Central banks protecting their monopoly on money
  • Governments seeking to maintain financial control
  • Hackers seeking the largest bug bounty in history

And it has never been hacked.

The network has operated continuously since January 3, 2009, securing hundreds of billions of dollars in value. The only theoretical attack (a 51% attack) would require controlling more computational power than all other miners combined, a feat that grows more impossible as the network expands.

Bitcoin cannot be hacked. It can only be adopted.

Explore Bitcoin Fundamentals

Dive deeper into the core concepts that make Bitcoin work: