Bitcoin is a decentralized cryptocurrency originally detailed in a 2008 whitepaper by an individual or group using the pseudonym Satoshi Nakamoto. It was launched shortly thereafter, in January 2009. Bitcoin operates as a peer-to-peer online currency, facilitating direct transactions between equal and independent network participants without requiring any intermediaries to authorize or assist them. According to Nakamoto's own words, Bitcoin was designed to enable “online payments to be sent directly from one party to another without going through a financial institution.” While some concepts akin to a decentralized electronic currency existed prior to BTC, Bitcoin is distinguished as the first-ever cryptocurrency to be practically implemented and used.

Bitcoin’s original creator is known by the pseudonym Satoshi Nakamoto. As of 2021, the true identity of the individual or group behind this alias remains undisclosed. On October 31, 2008, Nakamoto released Bitcoin’s whitepaper, detailing a method for implementing a peer-to-peer online currency. This concept involved utilizing a decentralized ledger of transactions organized in batches (called “blocks”) and secured through cryptographic algorithms — a system later known as “blockchain.” Merely two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network, referred to as the genesis block, thus inaugurating the world’s first cryptocurrency. Bitcoin's initial value was $0, and most Bitcoins were obtained through mining, which only required moderately powerful devices (such as PCs) and mining software. The first recorded commercial transaction using Bitcoin took place on May 22, 2010, when programmer Laszlo Hanyecz exchanged 10,000 Bitcoins for two pizzas. As of mid-September 2021, at the prevailing Bitcoin price, those pizzas would equate to an astounding $478 million. This event has since been commemorated as “Bitcoin Pizza Day.” In July 2010, Bitcoin trading commenced, with prices ranging from $0.0008 to $0.08 at that time. Although Nakamoto was the original inventor of Bitcoin and the author of its initial implementation, he eventually transferred the network alert key and management of the code repository to Gavin Andresen, who subsequently became the lead developer at the Bitcoin Foundation. Over time, numerous individuals have contributed to enhancing the cryptocurrency’s software by rectifying vulnerabilities and introducing new features. Bitcoin’s source code repository on GitHub lists over 750 contributors, including prominent figures such as Wladimir J. van der Laan, Marco Falke, Pieter Wuille, Gavin Andresen, Jonas Schnelli, and others.

Bitcoin's most distinctive advantage stems from being the inaugural cryptocurrency introduced to the market. It has succeeded in establishing a global community and spawning a whole new industry, comprising millions of enthusiasts who create, invest in, trade, and utilize Bitcoin and other cryptocurrencies in their daily lives. The inception of the first cryptocurrency laid down a conceptual and technological foundation that subsequently inspired the development of thousands of competing projects. The entire cryptocurrency market—now valued at over $2 trillion—is built on the idea conceptualized by Bitcoin: a form of money that can be sent and received by anyone, anywhere globally, without dependence on trusted intermediaries, such as banks and financial services companies. Due to its pioneering nature, BTC has remained at the forefront of this dynamic market for over a decade. Even though Bitcoin has lost its undisputed dominance, it continues to be the largest cryptocurrency, with a market capitalization that exceeded the $1 trillion mark in 2021, following Bitcoin's price reaching an all-time high of $64,863.10 on April 14, 2021. This is largely attributable to increasing institutional interest in Bitcoin and the widespread availability of platforms providing use-cases for BTC: wallets, exchanges, payment services, online games, and more.

Bitcoin's total supply is capped by its software, ensuring it will never surpass 21,000,000 coins. New coins are generated through a process known as "mining": as transactions are communicated across the network, they are processed by miners and grouped into blocks, which are then safeguarded by intricate cryptographic algorithms. As a reward for utilizing their computational resources, miners receive compensation for each block they successfully add to the blockchain. At Bitcoin's inception, the block reward was 50 bitcoins; this amount is halved every 210,000 blocks, a process taking approximately four years. By 2020, the reward had been reduced three times and stands at 6.25 bitcoins. Bitcoin was not premined, indicating that no coins were mined or distributed among the founders before the public release. Nonetheless, in Bitcoin's early years, the competition among miners was relatively low, enabling the first participants to amass a substantial number of coins through standard mining practices. It is believed that Satoshi Nakamoto alone holds over a million Bitcoin. Mining Bitcoins can be highly profitable for miners, contingent on the current hash rate and Bitcoin's market price. Although the mining process is complex, Eulerpool provides insights on the time required to mine one Bitcoin. As previously explained, mining Bitcoin is best quantified by the time it takes to mine one block, rather than a single Bitcoin. As of mid-September 2021, following the 2020 halving, the Bitcoin mining reward is fixed at 6.25 BTC, equating to approximately $299,200 at the current Bitcoin price.

Bitcoin is secured using the SHA-256 algorithm, part of the SHA-2 family of hashing algorithms. This algorithm is also utilized by its fork, Bitcoin Cash (BCH), along with several other cryptocurrencies.

Bitcoin is the first decentralized, peer-to-peer digital currency. One of its key functions is its use as a decentralized store of value. This means it provides ownership rights either as a physical asset or as a unit of account. However, this store-of-value function has been a subject of debate. Numerous crypto enthusiasts and economists believe that widespread adoption of the leading cryptocurrency will usher in a new modern financial era where transaction amounts will be denominated in smaller units. The smallest units of Bitcoin, known as Satoshis (or Sats for short), are equivalent to 0.00000001 BTC, named in honor of the pseudonymous creator. At the current Bitcoin price, 1 Satoshi is approximately $0.00048. For many, the leading cryptocurrency is viewed as a store of value, akin to gold, rather than a currency. This perception of Bitcoin as a store of value instead of a payment method leads many individuals to purchase the cryptocurrency and hold onto it long-term (or HODL), rather than using it for purchases as one might typically use a dollar, thus treating it as digital gold.

A hard fork constitutes a significant alteration to the protocol, which renders previously invalid blocks or transactions valid, necessitating all users to update their software. For instance, if users A and B are at odds over the validity of an incoming transaction, a hard fork could validate the transaction for users A and B, but not for user C. A hard fork represents a protocol upgrade that lacks backward compatibility. This implies that every node (a computer connected to the Bitcoin network using a client that validates and relays transactions) must upgrade to facilitate the activation of the new blockchain with the hard fork, subsequently rejecting any blocks or transactions from the old blockchain. The former blockchain will persist and continue to accept transactions, albeit potentially incompatible with newer Bitcoin clients. Conversely, a soft fork involves modifications to the Bitcoin protocol where previously valid blocks or transactions are rendered invalid. Since legacy nodes recognize new blocks as valid, a soft fork maintains backward compatibility. This form of fork necessitates only that a majority of miners upgrade to enforce the new regulations. Examples of notable cryptocurrencies that have experienced hard forks include Bitcoin, resulting in Bitcoin Cash, and Ethereum, leading to Ethereum Classic. Since its original split, Bitcoin Cash has undergone further hard forks, notably resulting in Bitcoin SV. Read more about the differences among Bitcoin, Bitcoin Cash, and Bitcoin SV on Eulerpool.

Taproot is a soft fork that consolidates BIP 340, 341, and 342, aiming to enhance the scalability, efficiency, and privacy of the blockchain through the introduction of several new features. The two principal modifications are the implementation of the Merkelized Abstract Syntax Tree (MAST) and the Schnorr Signature. MAST incorporates a condition that permits both the sender and the recipient of a transaction to mutually authorize its settlement. The Schnorr Signature enables users to consolidate multiple signatures into a single one for a transaction. This results in multi-signature transactions appearing identical to regular or more complex transactions. By adopting this new address type, users can also benefit from reduced transaction fees, as even intricate transactions resemble simple, single-signature ones. While long-term holders (HODLers) may not observe a significant impact, Taproot has the potential to become a pivotal milestone in equipping the network with smart contract functionality. Notably, Schnorr Signatures could provide the foundation for more complex applications to be developed on top of the existing blockchain, as users begin transitioning to Taproot addresses predominantly. If widely adopted, Taproot could ultimately facilitate the development of the network’s own DeFi ecosystem, comparable to those on alternative blockchains such as Ethereum.

The Lightning Network is an off-chain, layered payment protocol that manages bidirectional payment channels, facilitating instantaneous transfer with immediate reconciliation. It supports private, high-volume, and trustless transactions between any two parties. The Lightning Network enhances transaction capacity without incurring the costs associated with transactions and interventions on the underlying blockchain.

A few years ago, the notion that a publicly traded company might hold Bitcoin on its balance sheets seemed highly improbable. The flagship cryptocurrency was considered too volatile to be adopted by any serious business. Many prominent investors, including Warren Buffett, labeled the asset a “bubble waiting to pop.” This negative sentiment appears to have shifted, with several corporate giants acquiring Bitcoin since 2020. Notably, business intelligence firm MicroStrategy set the standard after purchasing $425 million worth of Bitcoin in August and September 2020. Since then, many others have followed suit, including EV manufacturer Tesla. MicroStrategy possesses the largest Bitcoin portfolio of any publicly traded company. The business analytics platform has adopted Bitcoin as its primary reserve asset, aggressively acquiring the cryptocurrency through 2021 and 2022. As of August 30, 2022, the company held 129,699 Bitcoin in its reserve, equivalent to just over $2.5 billion. Other major corporate holders include Marathon Digital Holdings, with 10,054 BTC, Coinbase (9,000), Square Inc. (8,027), and Hut 8 Mining Corp. (7,078).

Bitcoin is increasingly becoming a political issue, especially since El Salvador adopted the currency as legal tender. The country's president, Nayib Bukele, announced and implemented this decision with minimal consultation, disregarding criticism from his citizens, the Bank of England, the IMF, Vitalik Buterin, and others. Since the Bitcoin legal tender law was enacted in September 2021, Bukele has also revealed plans to develop Bitcoin City, a city fundamentally based on mining Bitcoin using geothermal energy from volcanoes. Countries such as Mexico and Russia have been speculated to possibly accept Bitcoin as legal tender as well, but as of now, El Salvador remains unique in this regard. Conversely, countries like China have taken strong measures to curb Bitcoin mining and trading activities. In May 2021, the Chinese government pronounced all crypto-related transactions illegal. This was followed by a significant crackdown on Bitcoin mining operations, compelling many crypto-related businesses to relocate to more favorable regions. Interestingly, the Chinese government's anti-crypto position has had minimal impact on the industry's growth. According to data from the University of Cambridge, China is currently the second-largest contributor to Bitcoin's global hash rate, surpassed only by the United States, as reported by Eulerpool.

The valuation of Bitcoin is consistently fluctuating around the clock, reflecting its status as a global asset. Since its inception, with a value of less than one cent per coin, BTC has increased in price by thousands of percent to the current figures displayed above. The prices of all cryptocurrencies are notably volatile, which means that the perceived value of Bitcoin can change minute by minute. Additionally, variations can occur when different countries and exchanges report different prices, meaning that an individual's understanding of Bitcoin's worth may depend on their geographical location.

Bitcoin is, in many respects, almost synonymous with cryptocurrency, allowing you to purchase Bitcoin on virtually every crypto exchange for both fiat currency and other cryptocurrencies. Some of the primary markets where BTC trading is available include: * Binance * Coinbase Pro * OKEx * Kraken * Huobi Global * Bitfinex If you are new to crypto, utilize Eulerpool’s educational portal — Alexandria — to learn how to begin buying Bitcoin and other cryptocurrencies.

The most popular cryptocurrency wallets include both hot and cold wallets. Cryptocurrency wallets are categorized into hot wallets and cold wallets. Hot wallets can connect to the internet, while cold wallets are used for storing large amounts of coins offline. Some of the leading crypto cold wallets are Trezor, Ledger, and CoolBitX. Among the top crypto hot wallets are Exodus, Electrum, and Mycelium. Still uncertain about which wallet to choose? Refer to Eulerpool's guide on the top cold wallets of 2021 and top hot wallets of 2021.