Bitcoin (BTC)

Bitcoin is a decentralized digital currency that was created in January 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It operates on a peer-to-peer network without the need for intermediaries like banks or governments.

Bitcoin was designed to be a form of electronic cash that could be sent directly from one party to another without going through a financial institution. It uses cryptography to secure transactions and control the creation of new units.

As the first cryptocurrency, Bitcoin pioneered the concept of blockchain technology—a distributed ledger that records all transactions across a network of computers. This innovation has since spawned thousands of other cryptocurrencies and blockchain applications.

Bitcoin has a fixed supply cap of 21 million coins, making it a deflationary asset. This scarcity, combined with its decentralized nature, has led many to view Bitcoin as 'digital gold' or a store of value.

Bitcoin operates on a proof-of-work (PoW) consensus mechanism. Miners use powerful computers to solve complex mathematical puzzles, and the first to solve the puzzle gets to add a new block of transactions to the blockchain and receive newly minted bitcoins as a reward.

Every Bitcoin transaction is broadcast to the network and grouped into blocks. Each block contains a cryptographic hash of the previous block, creating a chain of blocks (blockchain) that cannot be altered without redoing all subsequent work.

Bitcoin addresses are derived from public keys, which are paired with private keys that only the owner knows. To spend bitcoin, you must sign the transaction with your private key, proving ownership without revealing the key itself.

The Bitcoin network adjusts mining difficulty approximately every two weeks to maintain an average block time of 10 minutes. The mining reward is also halved approximately every four years in an event known as the 'halving,' which reduces the rate of new bitcoin creation over time.