What is Bitcoin (BTC)?

Bitcoin is the first cryptocurrency. It is digital money that no bank or government issues, kept on a public record that independent computers around the world check. Its supply is capped at 21 million coins.

Where it came from

On 31 October 2008, someone using the name Satoshi Nakamoto published a nine-page paper describing a way for strangers to pay each other online with nobody in the middle. The first block is dated 3 January 2009.

Nobody knows who Satoshi is. Satoshi stepped away from the project in late 2010, and Bitcoin has run without its creator ever since. Lesson 2 tells the full story.

How it works

Bitcoin's record is a blockchain: a chain of blocks, each holding a batch of transactions and locked to the block before it. Lesson 3 explains the lock.

New blocks are added by mining. Miners compete to solve a guessing puzzle, and the winner adds the next block. This is called proof of work. A new block arrives about every ten minutes, and the network adjusts the puzzle's difficulty every 2,016 blocks to keep that pace. Lesson 4 covers mining.

Supply

New bitcoin is created only as the reward for mining a block.

• The reward started at 50 bitcoin in 2009 and is cut in half every 210,000 blocks, about every four years.
• Since April 2024 it has been 3.125 bitcoin per block. The next cut is expected in 2028.
• The total approaches a limit just under 21 million. More than 20 million had been mined by October 2026.

One bitcoin divides into 100 million units called satoshis, so you never need to buy a whole one. Lesson 5 covers the schedule.

What people use it for

People mostly hold bitcoin as a long-term store of value, send it across borders and trade it. You can keep it on an exchange or hold the keys yourself. Level 2 of the course teaches self-custody.

Risks to know

• Price swings. After reaching $19,783 in December 2017, bitcoin fell more than 80% within a year. Lesson 17 has the details.
• Payments are final. A confirmed transaction cannot be reversed.
• Lost keys are lost coins. Nobody can reset a private key.
• Energy use. Proof of work uses a lot of electricity by design. That is the main criticism of it.
• A fixed supply is not a fixed price. Scarcity does not guarantee demand.

Learn more

Start with Lesson 1 for the basics, then Lessons 2 to 5 for Bitcoin itself. Lesson 14 walks through a first purchase, and Lesson 20 covers how much to put in.