The short answer
- Bitcoin is a decentralised network and a currency, bitcoin, whose total supply is capped at 21 million.
- A new block lands roughly every ten minutes. Its reward is cut in half each 210,000 blocks; since the April 2024 halving it has stood at 3.125 BTC.
- Ownership means controlling a private key. The price is volatile, and lost keys or scams cannot be reversed.
What is Bitcoin, in one sentence? It is a public ledger, maintained by thousands of independent computers, that records who controls each unit of a digital currency called bitcoin, with no bank, company or government able to change the rules on its own. It launched in January 2009, created by a person or group using the name Satoshi Nakamoto, and its design has barely changed since.
What problem was Bitcoin built to solve?
Short answer: spending the same digital money twice without a trusted middleman to stop it.
Digital files can be copied endlessly. Banks solve the copying problem by keeping the only authoritative ledger. Bitcoin solves it by letting everyone keep the ledger and making it extremely expensive to rewrite history: to reverse a confirmed payment, an attacker would need to redo the work behind every block since, faster than the rest of the network combined.
How does mining work?
Miners gather pending transactions into a candidate block and repeatedly hash it with a changing number until the result falls below a target set by the network. The first to find a valid result broadcasts the block, the other nodes check it, and the winning miner collects the block reward plus the fees paid by the transactions inside.
The network adjusts the difficulty every 2,016 blocks so that, however much computing power joins or leaves, a new block arrives roughly every 10 minutes. That timing gives a useful piece of arithmetic:
New bitcoin per day ≈ 144 × 3.125 BTC = 450 BTC
What is Bitcoin's supply limit, and why 21 million?
The reward for mining a block started at 50 BTC and halves every 210,000 blocks. At about 10 minutes per block, 210,000 blocks take roughly four years. Halvings took place in 2012, 2016, 2020 and April 2024, when the reward fell to 3.125 BTC; the next is expected around 2028. Because each era issues half as much as the one before, the total converges on just under 21 million coins, and the last fractions will not be mined until well into the next century.
Once block rewards become tiny, miners will depend on transaction fees. Whether fees alone will pay for enough mining to keep the network secure is one of the long-running open questions about Bitcoin's design.
What is a satoshi, and do I have to buy a whole bitcoin?
No. Each bitcoin splits into a hundred million smaller units, known as satoshis or sats. As an illustration, at a price of $60,000, spending $50 buys 50 ÷ 60,000 = 0.00083333 BTC, or about 83,333 sats, before fees. The price per whole coin says nothing about whether a purchase is large or small, a point that also matters when reading a cryptocurrency list price table.
How do people hold and move bitcoin?
Bitcoin sits at addresses controlled by private keys. You can leave it with a trading platform, which holds the keys for you, or move it to your own wallet: a phone app, desktop software or a hardware device that keeps the key offline. The trade-off is the one described in how crypto works: a platform can fail or freeze withdrawals, while self-custody puts all the responsibility on you. Write a recovery phrase on paper or metal, store it offline, and never type it into a website or share it with "support".
Transactions pay a fee to miners, set by how much block space is in demand rather than by the amount sent. Sending a small sum at a busy time can cost a noticeable fraction of it. Layer-two systems such as the Lightning Network move many small payments off the main chain and settle them in batches.
What does running a node mean?
A node is a computer running Bitcoin software that downloads every block and checks it against the rules independently. Nodes do not need to mine. Their role is to refuse invalid blocks, for example one that creates more coins than allowed, so the supply rules are enforced by thousands of participants rather than trusted to miners alone. Anyone can run one on modest hardware, and doing so lets you verify your own transactions without relying on a third party's view of the ledger.
How is Bitcoin different from other cryptocurrencies?
Most later networks set out to do something Bitcoin deliberately does not: run general-purpose programs, process many more transactions per second, or reward holders who lock up coins. Bitcoin's design is conservative, and changes to it are slow and contested. Supporters see that as its main strength; critics see it as a limit on what the network can do. Other coins may have different supply rules, including no cap at all, and many are controlled far more closely by their founders or foundations. Comparing them on unit price alone is meaningless, as our guide to reading a coin list explains.
Why does the price move so much?
Bitcoin has no earnings or interest to anchor its value, so its price reflects what buyers are willing to pay at any moment. Demand has been influenced by changes in regulation, the launch of exchange-traded products in some countries, interest rate expectations, large holders moving coins and the general mood towards risk. Falls of more than half from a peak have happened repeatedly. Fixed supply limits how many coins exist; it does not limit how far the price can move in either direction.
How can I think about Bitcoin's risks?
- Price risk: long, deep drawdowns are part of its history.
- Custody risk: lost keys, stolen recovery phrases and failed platforms are all permanent.
- Regulatory risk: rules on trading, tax reporting and platforms differ between countries and continue to change.
- Scam risk: Bitcoin's reputation is used as bait in fake investment schemes, as our scam guide shows.
To test what a trade would have returned after fees, use the crypto profit calculator. For the dollar-linked tokens that most bitcoin is traded against, see what USDT is.
Follow-up questions
Who controls Bitcoin?
No single party. Developers propose software changes, but node operators choose which software to run and miners choose which blocks to build on. Changing core rules such as the supply cap would need broad agreement across all of them.
What happens to Bitcoin after all 21 million are mined?
Miners will be paid only by transaction fees. The network will keep working as long as fees make mining worthwhile, although that balance cannot be tested until rewards become very small.
Is buying bitcoin through a fund the same as owning it?
No. A fund or exchange-traded product gives exposure to the price through a regulated wrapper, with its own fees and rules. You do not control the keys and cannot send the coins yourself.
Sources
- Bitcoin white paper and Bitcoin Core documentation
- UK Financial Conduct Authority, ban on crypto-derivatives for retail consumers