What is Bitcoin?
An introduction to Bitcoin: the first decentralized digital currency and peer-to-peer payment network.
A New Form of Money
Bitcoin is a decentralized digital currency that operates without a central bank or single administrator. Created in 2009 by the pseudonymous Satoshi Nakamoto, it enables peer-to-peer transactions without intermediaries. Bitcoin runs on a technology called blockchain:a distributed ledger that records all transactions across a network of computers worldwide.
How Does Bitcoin Work?
Bitcoin transactions are verified by network participants called miners using cryptographic proof instead of trust. When someone sends Bitcoin, the transaction is broadcast to the network where miners compete to validate it by solving complex mathematical puzzles. Once verified, the transaction is added to a block of transactions, which is then chained to the previous block:creating the blockchain. This process makes Bitcoin transactions irreversible and the network highly secure.
Why Does Bitcoin Have Value?
Bitcoin's value comes from its scarcity (only 21 million will ever exist), its decentralized nature (no single entity controls it), its security (backed by the world's largest computer network), and growing adoption as both a store of value and medium of exchange. Often called 'digital gold,' Bitcoin shares gold's properties of scarcity and durability while adding programmability and ease of transfer.
Bitcoin as an Investment
Institutional allocators increasingly view Bitcoin as a portfolio diversifier and hedge against monetary policy uncertainty. Bitcoin ETFs, direct ownership, and mining infrastructure are the primary ways institutions gain exposure. Each approach has different risk-return profiles, with mining offering the unique advantage of acquiring Bitcoin below market price over time.
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