What is Bitcoin?
Bitcoin was created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It was the first cryptocurrency — digital money that operates without a central bank or government. The Bitcoin network is maintained by thousands of computers (called nodes) around the world, making it impossible for any single entity to control or shut down.
What makes Bitcoin unique?
- Fixed supply: There will only ever be 21 million Bitcoin. This hard cap is written into the code and cannot be changed. It's what gives Bitcoin its "digital gold" reputation — scarcity by design.
- Decentralisation: No company, government, or individual controls Bitcoin. Transactions are verified by a global network of computers.
- Security: Bitcoin's blockchain is the most battle-tested in existence, having operated continuously since 2009 without a successful hack of the core network.
- Transparency: Every Bitcoin transaction ever made is visible on the public blockchain.
How does Bitcoin work?
When you send Bitcoin, your transaction is broadcast to the network and grouped into a "block". Miners — computers competing to solve complex mathematical puzzles — validate the block and add it to the chain. The winning miner receives newly created Bitcoin as a reward. This process is called Proof of Work.
💡 Bitcoin "halving" events occur roughly every four years, cutting the miner reward in half. The most recent halving occurred in April 2024, reducing the block reward from 6.25 to 3.125 BTC.
What is Bitcoin used for?
Bitcoin is primarily used as a store of value — a long-term investment similar to gold. Some use it for international money transfers. El Salvador became the first country to make Bitcoin legal tender in 2021.
Bitcoin's limitations
Bitcoin processes around 7 transactions per second — extremely slow compared to Visa. Transactions can take 10–60 minutes to confirm and fees can be high during busy periods. The Lightning Network is a second-layer solution for faster, cheaper payments.
⚠️ Bitcoin's price is highly volatile. It has experienced multiple 70–80% drops from its all-time high during bear markets. Only invest what you can afford to lose entirely.
Decentralised trading on Bitcoin
Unlike Ethereum or Solana, Bitcoin does not have a native smart contract layer, so there is no traditional DEX built directly on the Bitcoin blockchain. Bitcoin was intentionally designed to be simple and secure. However, Wrapped Bitcoin (WBTC) is an ERC-20 token on Ethereum that represents Bitcoin 1:1, allowing BTC holders to use their value in Ethereum-based DEXes like Uniswap.