What Is Bitcoin?
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What Is Bitcoin?
Bitcoin is a digital currency that exists only electronically, with no physical coins or notes and no central bank or government controlling it. Created in 2009, it runs on a public blockchain — a shared, tamper-evident ledger copied across thousands of computers worldwide — that records every transaction ever made. Anyone can send Bitcoin directly to anyone else, anywhere in the world, without going through a bank.
How Do Bitcoin Transactions Work?
Each Bitcoin transaction is broadcast to the network and verified by computers called "miners," who compete to solve complex mathematical problems to confirm the transaction is legitimate and hasn't already been spent elsewhere (this is called preventing "double-spending"). Once verified, the transaction is bundled into a block and permanently added to the blockchain. This process, called mining, is also how new Bitcoin is created and released into circulation, following a fixed schedule that caps the total supply at 21 million coins.
Key Risks to Understand
Bitcoin's price is highly volatile and can swing dramatically within hours based on market sentiment, regulation news, or macroeconomic events. Transactions are irreversible — if you send Bitcoin to the wrong address or fall for a scam, there's no bank to call for a refund. Storing it also carries responsibility: losing access to your private keys (the password to your holdings) means losing the funds permanently, with no recovery option. Anyone considering buying or holding Bitcoin should treat it as a high-risk asset, only invest what they can afford to lose, and be aware that this article is educational information, not financial advice.