Glossary

Bitcoin

Plain-language definition Crypto glossary

Key takeaways

Bitcoin is the first and largest cryptocurrency, launched in 2009, a decentralized digital money whose ledger is secured by a proof-of-work blockchain and maintained by a global network of nodes.
Transactions are grouped into blocks roughly every ten minutes by miners who compete using computing power, and its supply is capped at 21 million coins with issuance cut in half at regular halving events.
Bitcoin established the model all later cryptocurrencies build on and is widely treated as a benchmark and long-term store of value, with strengths in security and scarcity but limits in throughput and energy use.

Definition

Bitcoin is the first and largest cryptocurrency, launched in 2009. It is a decentralized digital money whose ledger is secured by a proof-of-work blockchain and maintained by a global network of nodes rather than any single company or state.

How it works

Transactions are grouped into blocks roughly every ten minutes by miners, who compete using computing power and are rewarded with newly issued bitcoin and fees. The supply is capped at 21 million coins, and the issuance rate is cut in half at regular intervals through an event called the halving, making Bitcoin’s monetary policy fixed and predictable.

Why it matters

Bitcoin established the model that all later cryptocurrencies build on, and it is widely treated as a benchmark for the market and as a long-term store of value by its holders. Its strengths are security and a transparent, scarce supply; its limits are throughput and energy use, which other designs try to address.

Example

The relative size of Bitcoin versus all other coins is tracked as “Bitcoin dominance,” a common gauge of market sentiment.

FAQ

Frequently asked questions

Why is Bitcoin's supply limited to 21 million coins?

Bitcoin's protocol caps the total supply at 21 million and cuts the issuance rate in half at regular intervals through an event called the halving. This makes its monetary policy fixed, transparent, and predictable, with no central authority able to print more. Holders often cite this scarcity as a reason they treat it as a store of value.

What makes Bitcoin decentralized?

Bitcoin's ledger is maintained by a global network of nodes and secured by proof-of-work mining rather than by any single company or government. Miners compete using computing power to add new blocks and are rewarded with newly issued bitcoin and fees. No single party controls the network or its rules.

What are Bitcoin's main limitations?

Bitcoin's strengths are its security and a transparent, scarce supply, but its design comes with trade-offs. Its main limits are throughput, meaning it processes a limited number of transactions, and the energy use of proof-of-work mining. These constraints are part of the trade-off for its security and decentralization.