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What is Bitcoin?

Bitcoin was created by Satoshi Nakamoto, a pseudonymous person who outlined the technology in a 2008 white paper. The concept is simple: Bitcoin is digital money that allows for secure peer-to-peer transactions on the internet and outside of the control of a government or bank.

Every transaction involving Bitcoin is tracked on the blockchain, which is similar to a bank’s ledger, or log of customers’ funds going in and out of the bank. In simple terms, it’s a record of every transaction ever made using Bitcoin. Unlike a bank’s ledger, the Bitcoin blockchain is distributed across the entire network. No company, country, or third party is in control of it; and anyone can become part of that network.

Bitcoin started out as a curiosity that few people took seriously and has evolved since to a relatively well established asset mostly purchased to protect one’s capital against inflation. The problem with the conventional monetary system is that there is an unlimited supply of money, which is created at will by central banks. Bitcoin’s total supply, in contrast, is set by mathematics to never exceed 21 million. This makes Bitcoin the ideal protection against the threat of hyperinflation of fiat currencies.

Another important property of Bitcoin is that it remains independent of any central organisation like a bank or government. Bitcoin is a currency native to the Internet. Unlike government-issued currencies such as the dollar or euro, Bitcoin allows online transfers without a middleman such as a bank or payment processor. The removal of those gatekeepers creates a whole range of new possibilities, including the potential for money to move around the global internet more quickly and cheaply, and allowing individuals to have maximum control over their own assets.

Bitcoin is legal to use, hold, and trade, and can be spent on everything from travel to charitable donations. It’s accepted as payment by businesses including Microsoft and Expedia.

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