Bitcoin (BTC)

Bitcoin: a closer look

What Bitcoin is

Bitcoin started the whole industry: the system was described in a 2008 paper signed Satoshi Nakamoto, and the first block was mined in January 2009. There is no company running the network — the rules are kept by thousands of independent nodes around the world, and nobody can issue more than 21 million coins.

How Bitcoin works

Underneath it is Proof of Work on SHA-256. Miners compete for the right to close the next block, which happens roughly every 10 minutes, and the reward is made up of new coins plus transaction fees. Every 210,000 blocks, about once every four years, the reward is cut in half, so issuance gradually fades out. Balances are not held in accounts but as unspent outputs (UTXO).

What Bitcoin is for

Most people buy bitcoin for the long run and hold it, treating it as a way to preserve capital. At the same time it stays the reference point for the whole market: trading pairs, indices and derivatives are quoted against it. Less often, it is used for what it was built for — cross-border transfers — while small payments are moved to the Lightning Network.

Sending BTC

Addresses start with 1, 3 or bc1. The fee depends on how busy the network is, not on how much you send, so wallets usually let you pick between faster and cheaper. Every new block adds one confirmation; most recipients wait for several, which takes anywhere from ten minutes to an hour.

Where to keep Bitcoin

For amounts that sit untouched for months a hardware wallet is the best option: the private keys never leave the device. For everyday operations a mobile or desktop non-custodial wallet is enough. Write the seed phrase down on paper and show it to no one: the phrase is the access to the coins.

What to keep in mind

The price can move tens of percent in a couple of weeks. A sent transaction cannot be cancelled — a wrong address or the wrong network means the money is gone. When the network is congested, fees jump and sending small amounts stops making sense.