The short answer
- Bitcoin is a digital money system run by a network of computers, with no company or government in charge.
- Its supply is capped at 21 million coins, released in rewards that halve roughly every four years; the reward has been 3.125 BTC since April 2024.
- You control bitcoin through private keys: hold them yourself, or trust a platform to hold them for you.
What is Bitcoin?
What is Bitcoin? It is a digital currency and payment network, launched in 2009, that runs without a central operator. Its rules are enforced by software shared by thousands of computers.
The word covers two things. Bitcoin with a capital B is the network: the software, the rules and the blockchain that records every transfer. bitcoin, or BTC, is the unit that moves across it. Nobody can print more than the rules allow, and nobody can block a valid transaction, although individual platforms can refuse to process one for their own customers.
Bitcoin's anonymous creator, known as Satoshi Nakamoto, described it as peer-to-peer electronic cash. Today most people treat it less as a way to pay for coffee and more as a scarce digital asset whose price moves with demand.
How does the network agree on who owns what?
Through mining: computers compete to add the next block of transactions, and the winner is paid in new bitcoin plus fees.
Miners bundle waiting transactions into a block and repeatedly run a calculation until one of them finds a result that meets a difficulty target. That takes enormous computing effort but is easy for everyone else to check. The first valid block is added to the chain, and the others move on to the next one. The network adjusts the difficulty so that a block arrives about every ten minutes on average, which works out to roughly 144 blocks a day.
Rewriting past transactions would mean redoing that work faster than the rest of the network combined, which is why a transaction is treated as settled once several blocks have been added after it.
Why is there a 21 million limit, and what is a halving?
The limit is written into the rules. New coins enter only as mining rewards, and that reward halves every 210,000 blocks, roughly every four years.
| Period | Reward per block |
|---|---|
| 2009 launch | 50 BTC |
| After the 2012 halving | 25 BTC |
| After the 2016 halving | 12.5 BTC |
| After the 2020 halving | 6.25 BTC |
| After the April 2024 halving | 3.125 BTC |
| Next halving, expected around 2028 | 1.5625 BTC |
At 3.125 BTC per block and about 144 blocks a day, around 450 new bitcoin are created each day. Because 210,000 blocks at ten minutes each take close to four years, halvings arrive on a predictable rhythm, although the exact date depends on how fast blocks are found. Rewards keep shrinking until, well over a century from now, the 21 million cap is reached and miners rely on fees alone.
Halvings are often discussed as price events. The supply change is known years in advance, so what happens to the price afterwards depends on demand, which nobody can schedule.
Do you have to buy a whole bitcoin?
No. Each bitcoin divides into 100 million units called satoshis, or sats.
Fees matter most on small purchases. A fixed fee that is trivial on a large buy can take a noticeable share of a small one. The crypto profit calculator shows the effect on a round trip.
Where is your bitcoin actually kept?
On the blockchain. What you keep is the private key that lets you move it.
A self-custody wallet, whether an app or a small hardware device, stores those keys under your control, backed up as a recovery phrase. Lose the phrase and the coins are gone; reveal it and someone else can take them. On a platform, the firm holds the keys and shows you a balance, which is easier to use but exposes you to hacks, frozen withdrawals and insolvency. Several large platforms have failed over the years, and customers of failed firms have waited a long time for partial repayment. The same decision applies to every coin, as our guide on how crypto works explains.
How long does a Bitcoin transfer take?
A new block arrives about every ten minutes on average, but when your transfer counts as final depends on the fee you pay and how many confirmations the receiver wants.
Transactions wait in a queue until a miner includes them in a block, and miners pick the best-paying ones first. In busy periods a low-fee transfer can wait much longer. Platforms usually credit a deposit only after a set number of confirmations, meaning blocks added on top of the one with your transaction, so an hour or so is not unusual. Unlike a card payment, there is no chargeback once it is confirmed.
Why does the bitcoin price swing so much?
The supply schedule is fixed, so every change in demand shows up in the price. Demand shifts with interest rates and general risk appetite, flows into and out of investment funds that hold bitcoin, regulatory news, and heavy use of leverage on derivatives platforms, where forced selling can turn a fall into a cascade. There is no earnings figure or dividend to anchor a valuation, so estimates of what bitcoin "should" be worth vary enormously. We make no forecasts, and you should be wary of anyone who does.
Can you get bitcoin exposure without holding coins?
Yes, in several ways, each with its own trade-offs. Since January 2024, exchange-traded funds that hold bitcoin directly have traded on US stock exchanges, so investors there can buy exposure through an ordinary share account. Some countries offer exchange-traded products with a similar aim. There are also futures and, where allowed, CFDs, which are leveraged and restricted for retail clients in several places. None of these gives you the keys or the ability to send bitcoin; you hold a financial product that tracks its price, with fees and the provider's rules attached.
How is Bitcoin different from USDT?
| Bitcoin | USDT | |
|---|---|---|
| Issuer | None | Tether, a company |
| Price aim | None; set by the market | One US dollar |
| Supply | Capped at 21 million | Grows and shrinks with demand |
| Can addresses be frozen? | Not by the protocol | Yes, by the issuer |
Many people hold both: bitcoin for exposure to price moves, USDT as a dollar stand-in between trades. See what USDT is for its risks.
Quick follow-ups
Who controls Bitcoin?
No single party. Developers propose software changes, miners produce blocks, and people running nodes decide which rules to accept. Changes need broad agreement, which is why the core rules have stayed stable.
When is the next Bitcoin halving?
It is expected around 2028, after another 210,000 blocks. The exact date depends on how quickly blocks are found, so estimates shift slightly over time.
Is Bitcoin anonymous?
Not really. Every transaction is public; only the owner's name is missing. Platforms that verify identity link addresses to people, and analysis firms can often trace flows.
Sources
- Bitcoin protocol rules and the Bitcoin whitepaper (Satoshi Nakamoto, 2008)
- Public Bitcoin block data for halving heights and block rewards