What is Bitcoin?

Written and maintained by the BTCNATOR editorial team • Last updated September 8, 2026 • How we research

Quick answer

Bitcoin is a decentralised digital currency and the peer-to-peer network that records its transactions. No company, bank or government issues it or can switch it off. New bitcoin is created on a fixed, publicly known schedule, and its total supply is capped at 21 million coins. Transactions are broadcast to thousands of independent computers, grouped into blocks roughly every ten minutes, and permanently recorded on a shared ledger called a blockchain.

Detailed explanation

Bitcoin was described in a 2008 paper by the pseudonymous "Satoshi Nakamoto" and the software went live in January 2009. The goal was electronic cash that two people could send directly to each other without a trusted intermediary such as a bank or payment processor.

The word "Bitcoin" refers to two things at once: the network (the protocol and the computers running it) and the unit of account (the coin, abbreviated BTC). One bitcoin divides into 100 million satoshis, so small amounts are easy to send.

Bitcoin is "decentralised" because no single party controls it. The rules are enforced by software that anyone can run, thousands of independent nodes keep their own copy of the ledger, and changes to the rules require broad agreement among users, miners and node operators.

How it works

Keys and addresses. Ownership is proven with a private key. From that key the software derives one or more public addresses that others can send funds to.
Transactions. To spend, you sign a transaction with your private key and broadcast it to the network. It moves value from previous received amounts ("inputs") to new destinations ("outputs").
Mempool. Nodes hold unconfirmed transactions in a waiting area called the mempool.
Mining. Miners compete to bundle transactions into a block and solve a computational puzzle (proof of work). About every ten minutes one miner wins, adds the block, and earns newly issued bitcoin plus the fees from the included transactions.
Confirmations. Once your transaction is in a block it has one confirmation. Each later block adds another. More confirmations make it exponentially harder to reverse; many services treat 3–6 confirmations as final.

Supply and "halving"

The block reward started at 50 BTC and is cut in half roughly every four years (every 210,000 blocks), an event called the halving. This is why issuance slows over time and the supply approaches, but never exceeds, 21 million coins — expected around the year 2140. This schedule is fixed in the software and known in advance.

Key facts

Maximum supply: 21 million BTC, enforced by the protocol.
Target block time: about 10 minutes.
Smallest unit: 1 satoshi = 0.00000001 BTC.
Bitcoin transactions are irreversible once confirmed — there is no chargeback or support line that can undo them.
The price of bitcoin is set by open markets and can move sharply in either direction.

Risks and limitations

If you lose your private key or seed phrase, the funds are permanently unrecoverable.
Sending to the wrong address, or to an address on a different network, usually means the funds are lost.
Bitcoin’s price is volatile; its purchasing power can fall significantly over short periods.
Scams frequently impersonate wallets, exchanges and "support" staff. No legitimate service can "reverse", "unlock" or "redirect" a confirmed transaction for a fee.

FAQ

Who controls Bitcoin?

No one entity. The rules are enforced by independently run software, and changing them requires broad agreement among users, node operators and miners.

Is Bitcoin anonymous?

No. It is pseudonymous. Every transaction is public and permanently visible on the blockchain; addresses are not names, but analysis can often link them to real identities.

Can a Bitcoin transaction be cancelled or reversed?

Not once it is confirmed in a block. Before confirmation, only the original sender can attempt a replacement (using a fee-bump feature). A third-party website cannot reverse or redirect someone else’s transaction.

How is new bitcoin created?

Through mining. The miner that adds a valid block receives newly issued bitcoin plus the transaction fees in that block. The issuance amount halves roughly every four years.