The picture in three lines
- Bitcoin is a decentralised digital currency launched in 2009, with a hard cap of 21 million coins.
- Miners add a block roughly every ten minutes; the block reward halves about every four years and has been 3.125 BTC since April 2024.
- Bitcoin divides into 100 million satoshis, so you can buy a fraction; its price is very volatile.
What is Bitcoin? It is a digital currency that runs on a public network with no company, bank or government in charge. It was described in a 2008 paper published under the name Satoshi Nakamoto, and the network started in January 2009. Its rules, including the total number of coins that can ever exist, are enforced by software that thousands of independent computers run and check.
What is Bitcoin, in numbers?
| Number | What it means |
|---|---|
| 21 million | The maximum number of bitcoin that can ever be created. |
| About 10 minutes | The target time between blocks; the network adjusts mining difficulty to keep it there. |
| About 144 | Blocks per day at that pace (24 × 60 ÷ 10). |
| 3.125 BTC | The new-coin reward per block since the April 2024 halving. |
| About 450 BTC | New coins issued per day at that reward (144 × 3.125). |
| 100 million | Satoshis in one bitcoin, the smallest unit. |
How mining creates blocks
From waiting transactions to a new block
- CollectMiners gather waiting transactions, favouring higher fees.
- CompeteThey repeatedly hash the block until one meets the difficulty target.
- PublishThe winner broadcasts the block to the network.
- VerifyEvery node checks the block against the rules.
- RewardThe miner receives the block reward plus fees.
This is proof of work. It is deliberately expensive, because the cost is what protects the ledger: to rewrite past transactions, an attacker would need to redo that work faster than all honest miners combined. Every two weeks or so, the network adjusts difficulty so blocks keep arriving at around ten-minute intervals, however much mining power joins or leaves.
Halvings, drawn as a staircase
The reward for mining a block started at 50 BTC and is cut in half every 210,000 blocks, which works out to roughly every four years.
Bitcoin block reward by era
The next halving is expected around 2028. Issuance keeps shrinking until the 21 million cap is reached.
Each halving reduces the flow of new coins. Some people argue this supports the price over time; history is short and other forces clearly matter too, so treat any claim that a halving guarantees a rise with suspicion. As rewards shrink, transaction fees are expected to make up a larger share of what miners earn.
Satoshis: buying a fraction
You do not need to buy a whole coin. One bitcoin divides into 100,000,000 satoshis. At an illustrative price of $80,000 per bitcoin, $50 buys 0.000625 BTC, which is 62,500 satoshis. The crypto profit calculator shows how the fee on the buy and the fee on the sell change what that purchase actually returns.
Keeping bitcoin: platform or wallet
A bitcoin address can be held in a wallet you control or on a platform that holds keys for you. The difference is who can move the coins. On a platform, the company can; in your own wallet, only the holder of the private key can. Both carry risk: platforms can fail or freeze withdrawals, and self-custody fails if a recovery phrase is lost or stolen. Our crypto basics guide explains keys and wallets, and our platform checklist covers what to ask a provider.
How a Bitcoin payment is structured
Bitcoin does not store account balances the way a bank does. Instead, the ledger records unspent outputs from earlier transactions, a little like notes of different sizes in a wallet. To pay someone, your wallet picks enough outputs to cover the amount, sends the payment to the recipient and returns the rest to an address you control as change.
An illustrative case: your wallet holds a single output of 0.01 BTC and you pay 0.004 BTC. The transaction spends the whole 0.01 BTC output, sends 0.004 BTC to the recipient and returns just under 0.006 BTC to you, the small difference being the fee paid to the miner. Wallets handle this automatically, but it explains why a transaction's fee depends on its data size rather than on the amount sent.
Bitcoin and gold compared
Bitcoin is often described as digital gold. The comparison works on some points and breaks down on others.
| Bitcoin | Gold | |
|---|---|---|
| Supply | Fixed schedule, capped at 21 million | Grows slowly as new metal is mined |
| Transfer | Any hour, worldwide, final after confirmation | Physical delivery, or through a custodian |
| Other uses | None beyond the network | Jewellery, industry, central-bank reserves |
| History as a store of value | Since 2009 | Thousands of years |
| Price swings | Very large | Much smaller, though not trivial |
The energy question
Proof of work uses a large amount of electricity by design, and this is one of the most debated aspects of Bitcoin. Supporters argue that the energy buys security for a global settlement network and that miners seek out cheap, often stranded, power. Critics argue that the consumption is hard to justify for a payment system and that it depends on the local energy mix. Estimates of total use vary with the price of bitcoin and of electricity, so treat any single figure with care and check its source and date.
What Bitcoin is not
- Not anonymous. Every transaction is public. Addresses are not labelled with names, but they can often be linked to people through platforms and analysis.
- Not reversible. A confirmed payment cannot be recalled. Mistakes and thefts are usually permanent.
- Not stable. The price has repeatedly fallen by more than half from its highs. It is priced by the market alone.
- Not a company. There is no issuer to pay dividends, publish accounts or compensate losses.
Risks and how people get hurt
The largest losses rarely come from the protocol itself. They come from leverage, from platforms that fail, from lost keys and from scams that use Bitcoin's name, such as fake mining schemes promising daily returns and "doubling" giveaways. If someone contacts you first about a Bitcoin opportunity, read how to spot trading scams before replying. For a comparison with the dollar-pegged token many traders pair with it, see what USDT is.
Short answers
Who controls Bitcoin?
No single party. Changes to the rules need broad agreement among the people who run node software, and miners, developers and users each influence that process.
What happens when all 21 million bitcoin are mined?
No new coins will be issued, and miners will be paid through transaction fees alone. At the current halving pace, that point is more than a century away.
Why does a Bitcoin transaction sometimes take longer?
When many transactions compete for block space, those with low fees wait longer. Wallets usually let you choose a higher fee for faster confirmation.
Sources
- Bitcoin whitepaper, Satoshi Nakamoto (2008)
- Bitcoin Core developer documentation on block rewards and difficulty
- UK Financial Conduct Authority, PS20/10 ban on crypto-derivatives for retail consumers