View source for Bitcoin

{{Short description|Decentralized digital cryptocurrency}}
{{for|the colloquial expression for coinage|Bit (money)}}
{{Redirect-distinguish-text|₿|"฿" for [[Thai baht]]}}
{{pp-extended|small=yes}}
{{Use dmy dates|date=March 2024}}
{{Use American English|date=December 2017}}
{{infobox cryptocurrency
| currency_name = Bitcoin
| image_1 = Bitcoin.svg
| image_2 = 
| image_width_1 = 150
| image_width_2 = 110
| image_title_1 = Commonly used logo of bitcoin
| alt1 = Prevailing bitcoin logo
| precision = 10<sup>−8</sup>
| subunit_ratio_1 = {{frac|1000}}
| subunit_name_1 = millibitcoin
| subunit_ratio_2 = {{frac|{{val|1000000}}}}
| subunit_name_2 = microbitcoin
| subunit_ratio_3 = {{frac|{{val|100000000}}}}
| subunit_name_3 = {{lang|ja-Latn|satoshi|italic=no}}{{efn|name=satoshi}}<ref name="satoshi unit">{{Cite journal |last=Bradbury |first=Danny |date=November 2013 |title=The problem with Bitcoin |url=https://linkinghub.elsevier.com/retrieve/pii/S1361372313701015 |journal=Computer Fraud & Security |language=en |volume=2013 |issue=11 |pages=5–8 |doi=10.1016/S1361-3723(13)70101-5 |access-date=25 November 2023 |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118052355/https://linkinghub.elsevier.com/retrieve/pii/S1361372313701015 |url-status=live |issn=1361-3723|url-access=subscription }}</ref>
| plural = bitcoins
| symbol = '''₿'''<br/>(Unicode: {{unichar|20BF|BITCOIN SIGN|html=}})<ref name="unicode-10">{{cite web |date=20 June 2017 |title=Unicode 10.0.0 |url=https://www.unicode.org/versions/Unicode10.0.0/ |url-status=live |archive-url=https://web.archive.org/web/20170620130342/http://www.unicode.org/versions/Unicode10.0.0/ |archive-date=20 June 2017 |access-date=20 June 2017 |publisher=Unicode Consortium}}</ref>
| code = BTC
| implementations = [[Bitcoin Core]]
| initial_release_version = 0.1.0
| initial_release_date = {{Start date and age|df=yes|2009|1|9|p=y}}
| code_repository = {{URL|https://github.com/bitcoin/bitcoin}}
| status = Active
| latest_release_version = 30.2.0
| latest_release_date = {{Start date and age|df=yes|2026|1|10|p=y}}<ref>{{cite web |title=Bitcoin Core 30.2 |date=10 January 2026 |url=https://bitcoincore.org/bin/bitcoin-core-30.2/ |access-date=14 January 2026}}</ref>
| forked_from = 
| website = {{URL|https://bitcoin.org}}
| programming_languages = C++
| operating_system = 
| author = [[Satoshi Nakamoto]]
| developer = 
| white_paper = [https://bitcoin.org/bitcoin.pdf "Bitcoin: A Peer-to-Peer Electronic Cash System"]
| source_model = [[Free and open-source software]]
| license = [[MIT License]]
| ledger_start = {{Start date and age|df=yes|2009|1|3|p=y}}
| hash_function = [[SHA-256]] (two rounds)
| circulating_supply = ₿19,934,271 ({{as of|2025|10|14|lc=y}})
| supply_limit = ₿21,000,000{{efn|name=supply}}
| timestamping = [[Proof of work]] (partial hash inversion)
| issuance_schedule = Decentralized (block reward)<br />Initially ₿50 per block, halved every 210,000 blocks
| block_time = 10 minutes
| block_reward = ₿3.125 ({{as of|2025|lc=y}})
| exchange_rate = Floating
| market_cap = <!--A reliable source is required -->
| using_countries = 
}}
{{Special characters}}
'''Bitcoin''' (abbreviation: '''BTC'''; [[Currency symbol|sign]]: '''₿''') is the first [[Decentralized application|decentralized]] [[cryptocurrency]]. Based on a [[free-market]] ideology, bitcoin was invented in 2008 when an unknown person published a [[white paper]] under the pseudonym of [[Satoshi Nakamoto]].<ref name="whoissn">{{Cite news |last=S. |first=L. |date=2 November 2015 |title=Who is Satoshi Nakamoto? |newspaper=[[The Economist]] |url=https://www.economist.com/the-economist-explains/2015/11/02/who-is-satoshi-nakamoto |access-date=21 November 2023 |archive-date=22 November 2020 |archive-url=https://web.archive.org/web/20201122172929/https://www.economist.com/the-economist-explains/2015/11/02/who-is-satoshi-nakamoto |url-status=live }}</ref> Use of bitcoin as a [[currency]] began in 2009,<ref name="NY2011">{{Cite magazine |last=Davis |first=Joshua |date=10 October 2011 |title=The Crypto-Currency: Bitcoin and its mysterious inventor |url=https://www.newyorker.com/magazine/2011/10/10/the-crypto-currency |url-status=live |archive-url=https://web.archive.org/web/20141101014157/http://www.newyorker.com/magazine/2011/10/10/the-crypto-currency |archive-date=1 November 2014 |access-date=31 October 2014 |magazine=[[The New Yorker]]}}</ref> with the release of its [[open-source software|open-source implementation]].<ref name="Antonopoulos2014">{{Cite book |last=Antonopoulos |first=Andreas M. |title=Mastering Bitcoin: Unlocking Digital Crypto-Currencies |year=2014 |publisher=O'Reilly Media |isbn=978-1-4493-7404-4 |author-link=Andreas Antonopoulos}}</ref>{{rp|ch. 1}} From 2021 to 2025, [[Bitcoin in El Salvador|El Salvador adopted it as legal tender currency before revoking it]].<ref name="BTCSVSept7FT">{{cite news |title=El Salvador's dangerous gamble on bitcoin |url=https://www.ft.com/content/c257a925-c864-4495-9149-d8956d786310 |date=7 September 2021 |access-date=7 September 2021 |work=[[Financial Times]] |department=The editorial board |archive-date=7 September 2021 |archive-url=https://web.archive.org/web/20210907081627/https://www.ft.com/content/c257a925-c864-4495-9149-d8956d786310 |url-status=live }}</ref><ref name="El Salvador Abandons Bitcoin as Legal Tender" /><ref name="Bitcoin is no longer legal tender in El Salvador" /> As bitcoin is [[pseudonym]]ous, [[Cryptocurrency and crime|its use by criminals]] has attracted the attention of regulators, leading to [[Legality of cryptocurrency by country or territory|its ban by several countries]].<ref name="SunYin2019">{{Cite journal |last1=Sun Yin |first1=Hao Hua |last2=Langenheldt |first2=Klaus |last3=Harlev |first3=Mikkel |last4=Mukkamala |first4=Raghava Rao |last5=Vatrapu |first5=Ravi |date=2 January 2019 |title=Regulating Cryptocurrencies: A Supervised Machine Learning Approach to De-Anonymizing the Bitcoin Blockchain |url=https://www.researchgate.net/publication/332118587 |journal=[[Journal of Management Information Systems]] |language=en |volume=36 |issue=1 |page=65 |doi=10.1080/07421222.2018.1550550 |s2cid=132398387 |issn=0742-1222 |access-date=29 November 2023 |archive-date=21 April 2024 |archive-url=https://web.archive.org/web/20240421113631/https://www.researchgate.net/publication/332118587_Regulating_Cryptocurrencies_A_Supervised_Machine_Learning_Approach_to_De-Anonymizing_the_Bitcoin_Blockchain |url-status=live }}</ref>

Bitcoin works through the collaboration of computers, each of which acts as a [[Node (networking)|node]] in the [[peer-to-peer]] [[bitcoin network]]. Each node maintains an independent copy of a public [[distributed ledger]] of transactions, called a [[blockchain]], without central oversight. Transactions are validated through the use of [[cryptography]], preventing one person from spending another person's bitcoin, as long as the owner of the bitcoin keeps certain sensitive data secret.<ref name="Antonopoulos2014" />{{rp|ch. 5}}

[[Consensus (computer science)|Consensus]] between nodes about the content of the blockchain is achieved using a [[Computational complexity|computationally intensive]] process based on [[proof of work]], called [[bitcoin mining|mining]], which is performed by purpose-built computers.<ref name="Antonopoulos2014" />{{rp|ch. 12}} Mining consumes large quantities of electricity and has been criticized for [[environmental impact of bitcoin|its environmental impact]].<ref>{{Cite news |last1=Huang |first1=Jon |last2=O’Neill |first2=Claire |last3=Tabuchi |first3=Hiroko |author3-link=Hiroko Tabuchi |date=3 September 2021 |title=Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? |url=https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html |url-status=live |archive-url=https://web.archive.org/web/20230217105559/https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html |archive-date=17 February 2023 |access-date=26 October 2022 |work=The New York Times |language=en-US |issn=0362-4331}}</ref>

{{TOC LIMIT|4}}

==History==
{{Main|History of bitcoin}}
===Background===
Before bitcoin, several [[digital cash|digital cash technologies]] were released, starting with [[David Chaum]]'s [[ecash]] in the 1980s.<ref name=Narayanan2017/> The idea that solutions to computational puzzles could have some value was first proposed by cryptographers [[Cynthia Dwork]] and [[Moni Naor]] in 1992.<ref>{{citation |last1=Dwork |first1=Cynthia |title=Pricing via Processing or Combatting Junk Mail |date=1993 |work=Advances in Cryptology — CRYPTO’ 92 |volume=740 |pages=139–147 |editor-last=Brickell |editor-first=Ernest F. |url=http://link.springer.com/10.1007/3-540-48071-4_10 |access-date=2025-01-02 |place=Berlin, Heidelberg |publisher=Springer Berlin Heidelberg |language=en |doi=10.1007/3-540-48071-4_10 |isbn=978-3-540-57340-1 |last2=Naor |first2=Moni|url-access=subscription }}</ref><ref name=Narayanan2017/> The concept was [[Multiple discovery|independently rediscovered]] by [[Adam Back]] who developed [[Hashcash]], a [[proof-of-work]] scheme for [[Anti-spam techniques|spam control]] in 1997.<ref name="Narayanan2017" /> The first proposals for distributed digital scarcity-based [[cryptocurrencies]] came from [[cypherpunk]]s [[Wei Dai]] (b-money) and [[Nick Szabo]] ([[bit gold]]) in 1998.<ref>{{Cite journal |last1=Tschorsch |first1=Florian |last2=Scheuermann |first2=Bjorn |date=2 March 2016 |title=Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies |journal=IEEE Communications Surveys & Tutorials |volume=18 |issue=3 |pages=2084–2123 |doi=10.1109/COMST.2016.2535718 |s2cid=5115101 |issn=1553-877X }}</ref> In 2004, [[Hal Finney (cypherpunk)|Hal Finney]] developed the first currency based on reusable proof of work.<ref>{{cite book |last1=Judmayer |first1=Aljosha |chapter=History of Cryptographic Currencies |date=2017 |chapter-url=https://link.springer.com/10.1007/978-3-031-02352-1_3 |title=Blocks and Chains |pages=15–18 |publisher=[[Springer Nature|Springer]] |language=en |doi=10.1007/978-3-031-02352-1_3 |isbn=978-3-031-01224-2 |last2=Stifter |first2=Nicholas |last3=Krombholz |first3=Katharina |last4=Weippl |first4=Edgar |series=Synthesis Lectures on Information Security, Privacy, and Trust |url=https://link.springer.com/book/10.1007/978-3-031-02352-1 |access-date=22 November 2023 |archive-date=22 November 2023 |archive-url=https://web.archive.org/web/20231122135006/https://link.springer.com/book/10.1007/978-3-031-02352-1 |url-status=live }}</ref> These various attempts were not successful:<ref name="Narayanan2017" /> Chaum's concept required centralized control and no banks wanted to sign on, Hashcash had no protection against [[double-spending]], while b-money and bit gold were not resistant to [[Sybil attack]]s.<ref name=Narayanan2017>{{Cite journal |last1=Narayanan |first1=Arvind |last2=Clark |first2=Jeremy |date=27 November 2017 |title=Bitcoin's academic pedigree |url=https://queue.acm.org/detail.cfm?id=3136559 |journal=[[Communications of the ACM]] |volume=60 |issue=12 |pages=36–45 |doi=10.1145/3132259 |s2cid=6425116 |issn=0001-0782 |access-date=22 November 2023 |archive-date=14 October 2023 |archive-url=https://web.archive.org/web/20231014120907/https://queue.acm.org/detail.cfm?id=3136559 |url-status=live |url-access=subscription }}</ref>

===2008–2009: Creation===
{{external media
| float = right
| width = 258px
| image1 = [https://www.thetimes03jan2009.com/wp-content/uploads/2015/03/genesis-block-newspaper-bitcoin.jpg Cover page of ''The Times'' 3 January 2009 showing the headline used in the genesis block]
}}
The domain name ''bitcoin.org'' was registered on 18 August 2008.<ref>{{Cite news |last=Bernard |first=Zoë |date=2 December 2017 |title=Everything you need to know about Bitcoin, its mysterious origins, and the many alleged identities of its creator |work=Business Insider |url=http://www.businessinsider.com/bitcoin-history-cryptocurrency-satoshi-nakamoto-2017-12 |url-status=live |access-date=15 June 2018 |archive-url=https://web.archive.org/web/20180615010015/http://www.businessinsider.com/bitcoin-history-cryptocurrency-satoshi-nakamoto-2017-12 |archive-date=15 June 2018}}</ref> On 31 October 2008, a link to a [[white paper]] authored by [[Satoshi Nakamoto]] titled ''Bitcoin: A Peer-to-Peer Electronic Cash System'' was posted to a cryptography mailing list.<ref>{{Cite news |last=Finley |first=Klint |date=31 October 2018 |title=After 10 Years, Bitcoin Has Changed Everything—and Nothing |magazine=Wired |url=https://www.wired.com/story/after-10-years-bitcoin-changed-everything-nothing/ |url-status=live |access-date=9 November 2018 |archive-url=https://web.archive.org/web/20181105070656/https://www.wired.com/story/after-10-years-bitcoin-changed-everything-nothing/ |archive-date=5 November 2018}}</ref> Nakamoto's identity remains unknown.{{r|whoissn}} According to computer scientist [[Arvind Narayanan]], all individual components of bitcoin originated in earlier academic literature.<ref name=Narayanan2017/> Nakamoto's innovation was their complex interplay resulting in the first decentralized, [[Sybil attack|Sybil resistant]], [[Byzantine fault]] tolerant digital cash system, that would eventually be referred to as the first blockchain.<ref name=Narayanan2017/><ref name="te20151031">{{Cite news |last=Economist Staff |date=31 October 2015 |title=Blockchains: The great chain of being sure about things |url=https://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable |url-status=live |newspaper=[[The Economist]] |archive-url=https://web.archive.org/web/20160703000844/http://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable |archive-date=3 July 2016 |access-date=18 June 2016 }}</ref> Nakamoto's paper was not [[peer review]]ed and was initially ignored by academics, who argued that it could not work.<ref name=Narayanan2017/>

Nakamoto released bitcoin as [[open-source software]].<ref name="Humayun-2018">{{cite book |last1=Humayun |first1=Mariam |last2=Belk |first2=Russell W. |chapter='Satoshi is Dead. Long Live Satoshi': The Curious Case of Bitcoin's Creator |pages=19–35 |doi=10.1108/s0885-211120180000019002 |chapter-url={{GBurl|FxJJDwAAQBAJ|p=19}} |editor1-last=N. N. Cross |editor1-first=Samantha |editor2-last=Ruvalcaba |editor2-first=Cecilia |editor3-last=Venkatesh |editor3-first=Alladi |editor4-last=W. Belk |editor4-first=Russell |title=Consumer Culture Theory |date=2018 |isbn=978-1-78743-907-8 }}</ref> On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the ''[[Genesis (blockchain)|genesis block]]''.<ref name="Wired:RFB">{{Cite magazine |last=Wallace, Benjamin |date=23 November 2011 |title=The Rise and Fall of Bitcoin |url=https://www.wired.com/2011/11/mf-bitcoin/ |url-status=live |magazine=Wired |archive-url=https://web.archive.org/web/20131031043919/http://www.wired.com/magazine/2011/11/mf_bitcoin |archive-date=31 October 2013 |access-date=13 October 2012}}</ref> Embedded in this block was the text "The Times 03/Jan/2009 Chancellor on brink of [[2009 United Kingdom bank rescue package|second bailout for banks]]", which is the date and headline of an issue of ''[[The Times]]'' newspaper.<ref name="NY2011" /> Nine days later, Hal Finney received the first bitcoin transaction: ten bitcoins from Nakamoto.<ref>{{Cite news |last=Popper |first=Nathaniel |date=30 August 2014 |title=Hal Finney, Cryptographer and Bitcoin Pioneer, Dies at 58 |work=[[The New York Times]] |url=https://www.nytimes.com/2014/08/31/business/hal-finney-cryptographer-and-bitcoin-pioneer-dies-at-58.html |url-status=live |access-date=2 September 2014 |archive-url=https://web.archive.org/web/20140903162835/http://www.nytimes.com/2014/08/31/business/hal-finney-cryptographer-and-bitcoin-pioneer-dies-at-58.html |archive-date=3 September 2014}}</ref> Wei Dai and Nick Szabo were also early supporters.<ref name="Wired:RFB" /> On May 22, 2010, the first known [[Financial transaction|commercial transaction]] using bitcoin occurred when programmer Laszlo Hanyecz bought two [[Papa John's]] pizzas for ₿10,000, in what would later be celebrated as "Bitcoin Pizza Day".<ref>{{cite news |last1=Cooper |first1=Anderson |title=Meet the man who spent millions worth of bitcoin on pizza |url=https://www.cbsnews.com/news/meet-the-man-who-spent-millions-worth-of-bitcoin-on-pizza-60-minutes-2019-05-16 |work=[[CBS News]] |date=16 May 2019 |access-date=8 December 2021 |archive-date=8 December 2021 |archive-url=https://web.archive.org/web/20211208180706/https://www.cbsnews.com/news/meet-the-man-who-spent-millions-worth-of-bitcoin-on-pizza-60-minutes-2019-05-16/ |url-status=live }}</ref> Satoshi tasked Finnish developer and early Bitcoin contributor {{ill|Martti Malmi|fi}} with creating content for the bitcoin.org website.<ref>{{Cite magazine |last=Khalili|first=Joel |date=23 February 2024 |title=Bitcoin Royalty Descends on the Satoshi Nakamoto Trial |magazine=Wired |url=https://www.wired.com/story/craig-wright-trial-bitcoin-royalty-testimony/ |url-status=live |access-date=25 August 2025 |archive-url= |archive-date=}}</ref><ref name="DominicFrisby2014">{{Cite book |last=Frisby |first=Dominic |title=Bitcoin: The Future of Money? |year=2014 |publisher=Unbound |isbn=9781783520763 |author-link=}}</ref>

===2010–2012: Early growth===
[[Blockchain#Blockchain analysis|Blockchain analysts]] estimate that Nakamoto had mined about one million bitcoins<ref>{{Cite news |last=McMillan |first=Robert |title=Who Owns the World's Biggest Bitcoin Wallet? The FBI |magazine=Wired |url=https://www.wired.com/2013/12/fbi-wallet/ |url-status=live |access-date=7 October 2016 |archive-url=https://web.archive.org/web/20161021221609/https://www.wired.com/2013/12/fbi-wallet/ |archive-date=21 October 2016}}</ref> before disappearing in 2010 when he handed the network alert key and control of the [[Software repository|code repository]] over to [[Gavin Andresen]]. Andresen later became lead developer at the [[Bitcoin Foundation]],<ref>{{cite news |last=Simonite |first=Tom |title=Meet Gavin Andresen, the most powerful person in the world of Bitcoin |date=15 August 2014 |url=https://www.technologyreview.com/2014/08/15/12784/the-man-who-really-built-bitcoin |work=[[MIT Technology Review]] |access-date=22 November 2023 |archive-date=22 November 2023 |archive-url=https://web.archive.org/web/20231122163924/https://www.technologyreview.com/2014/08/15/12784/the-man-who-really-built-bitcoin |url-status=live }}</ref><ref>{{Cite news |last=Odell |first=Matt |date=21 September 2015 |title=A Solution To Bitcoin's Governance Problem |work=TechCrunch |url=https://techcrunch.com/2015/09/21/a-solution-to-bitcoins-governance-problem/ |url-status=live |access-date=24 January 2016 |archive-url=https://web.archive.org/web/20160126051521/http://techcrunch.com/2015/09/21/a-solution-to-bitcoins-governance-problem/ |archive-date=26 January 2016}}</ref> an [[List of bitcoin organizations|organization]] founded in September 2012 to promote bitcoin.<ref>{{Cite news |last=Bustillos |first=Maria |date=1 April 2013 |title=The Bitcoin Boom |magazine=The New Yorker |url=https://www.newyorker.com/tech/elements/the-bitcoin-boom |url-status=live |access-date=30 July 2018 |archive-url=https://web.archive.org/web/20180702064450/https://www.newyorker.com/tech/elements/the-bitcoin-boom |archive-date=2 July 2018}}</ref>

After early "[[proof-of-concept]]" transactions, the first major users of bitcoin were [[black market]]s, such as the [[dark web]] [[Silk Road (marketplace)|Silk Road]]. During its 30 months of existence, beginning in February 2011, Silk Road exclusively accepted bitcoins as payment, transacting ₿9.9&nbsp;million, worth about $214&nbsp;million.<ref name=JEP/>{{rp|222}}

===2013–2014: First regulatory actions===
In March 2013, the US [[Financial Crimes Enforcement Network]] (FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as bitcoin, classifying American bitcoin miners who sell their generated bitcoins as [[money services business]]es, subject to registration and other legal obligations.<ref>{{cite news |last=Lee |first=Timothy B. |date=19 March 2013 |title=US regulator Bitcoin Exchanges Must Comply With Money Laundering Laws |url=https://arstechnica.com/tech-policy/2013/03/us-regulator-bitcoin-exchanges-must-comply-with-money-laundering-laws/ |url-status=live |archive-url=https://web.archive.org/web/20131021203745/http://arstechnica.com/tech-policy/2013/03/us-regulator-bitcoin-exchanges-must-comply-with-money-laundering-laws/ |archive-date=21 October 2013 |access-date=28 July 2017 |work=[[Ars Technica]]}}</ref> In May 2013, US authorities seized the unregistered [[Cryptocurrency exchange|exchange]] [[Mt. Gox]].<ref>{{cite news |last=Dillet |first=Romain |title=Feds Seize Assets From Mt. Gox's Dwolla Account, Accuse It Of Violating Money Transfer Regulations |url=https://techcrunch.com/2013/05/16/mt-gox-dwolla-account-money-seizure/ |work=[[TechCrunch]] |url-status=live |archive-url=https://web.archive.org/web/20131009161856/http://techcrunch.com/2013/05/16/mt-gox-dwolla-account-money-seizure/ |archive-date=9 October 2013 |access-date=15 May 2013}}</ref> In June 2013, the US [[Drug Enforcement Administration]] seized ₿11.02 from an individual attempting to use them to purchase illicit drugs. This marked the first time a government agency had seized bitcoins.<ref>{{Cite news |last=Sampson |first=Tim |year=2013 |title=U.S. government makes its first-ever Bitcoin seizure |work=The Daily Dot |url=http://www.dailydot.com/business/11-bitcoins-seized-government-dea/ |url-status=live |access-date=15 October 2013 |archive-url=https://web.archive.org/web/20130712010826/http://www.dailydot.com/business/11-bitcoins-seized-government-dea/ |archive-date=12 July 2013}}</ref> The FBI seized about ₿30,000 in October 2013 from Silk Road, following the arrest of its founder [[Ross Ulbricht]].<ref>{{Cite news |last=Hill |first=Kashmir |title=The FBI's Plan For The Millions Worth Of Bitcoins Seized From Silk Road |work=Forbes |url=https://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/ |url-status=live |archive-url=https://web.archive.org/web/20140502154935/http://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/ |archive-date=2 May 2014}}</ref>

In December 2013, the [[People's Bank of China]] prohibited Chinese financial institutions from using bitcoin.<ref>{{Cite news |last=Kelion, Leo |date=18 December 2013 |title=Bitcoin sinks after China restricts yuan exchanges |work=BBC News |url=https://www.bbc.co.uk/news/technology-25428866 |url-status=live |access-date=20 December 2013 |archive-url=https://web.archive.org/web/20131219214615/http://www.bbc.co.uk/news/technology-25428866 |archive-date=19 December 2013}}</ref> After the announcement, the value of bitcoin dropped,<ref>{{Cite news |date=6 December 2013 |title=China bans banks from bitcoin transactions |work=[[The Sydney Morning Herald]] |publisher=Reuters |url=https://www.smh.com.au/business/markets/currencies/china-bans-banks-from-bitcoin-transactions-20131206-2yugy.html |url-status=live |access-date=31 October 2014 |archive-url=https://web.archive.org/web/20140323102824/http://www.smh.com.au/business/markets/currencies/china-bans-banks-from-bitcoin-transactions-20131206-2yugy.html |archive-date=23 March 2014}}</ref> and [[Baidu]] no longer accepted bitcoins for certain services.<ref>{{Cite news |date=7 December 2013 |title=Baidu Stops Accepting Bitcoins After China Ban |work=Bloomberg |location=New York |url=https://www.bloomberg.com/news/2013-12-07/baidu-stops-accepting-bitcoins-after-china-ban.html |url-status=live |access-date=11 December 2013 |archive-url=https://web.archive.org/web/20131210214547/http://www.bloomberg.com/news/2013-12-07/baidu-stops-accepting-bitcoins-after-china-ban.html |archive-date=10 December 2013}}</ref> Buying real-world goods with any virtual currency had been illegal in China since at least 2009.<ref>{{cite web |date=29 June 2009 |title=China bars use of virtual money for trading in real goods |url=http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html |url-status=live |archive-url=https://web.archive.org/web/20131129184312/http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html |archive-date=29 November 2013 |access-date=10 January 2014 |publisher=English.mofcom.gov.cn}}</ref>

===2015–2019===
Research produced by the [[University of Cambridge]] estimated that in 2017, there were 2.9 to 5.8 million unique users using a [[cryptocurrency wallet]], most of them using bitcoin.<ref>{{cite web |last1=Hileman |first1=Garrick |last2=Rauchs |first2=Michel |title=Global Cryptocurrency Benchmarking Study |url=https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2017-global-cryptocurrency-benchmarking-study.pdf |url-status=live|archive-url=https://web.archive.org/web/20170410130007/https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2017-global-cryptocurrency-benchmarking-study.pdf |archive-date=10 April 2017 |access-date=14 April 2017 |publisher=Cambridge University}}</ref> In August 2017, the [[SegWit]] software upgrade was activated. Segwit was intended to support the [[Lightning Network]] as well as improve [[scalability]].<ref>{{Cite news |last=Vigna |first=Paul |date=21 July 2017 |title=Bitcoin Rallies Sharply After Vote Resolves Bitter Scaling Debate |work=The Wall Street Journal |url=https://www.wsj.com/articles/bitcoin-rallies-sharply-after-vote-resolves-bitter-scaling-debate-1500656084 |access-date=21 November 2023 |archive-date=21 November 2023 |archive-url=https://web.archive.org/web/20231121164350/https://www.wsj.com/articles/bitcoin-rallies-sharply-after-vote-resolves-bitter-scaling-debate-1500656084 |url-status=live }}</ref> SegWit opponents, who supported larger blocks as a scalability solution, [[Fork (blockchain)|forked]] to create [[Bitcoin Cash]], one of many [[List of bitcoin forks|forks of bitcoin]].<ref>{{Cite news |last=Selena Larson |date=1 August 2017 |title=Bitcoin split in two, here's what that means |work=CNN Tech |publisher=Cable News Network |url=https://money.cnn.com/2017/08/01/technology/business/bitcoin-cash-new-currency/index.html |url-status=live |access-date=2 April 2018 |archive-url=https://web.archive.org/web/20180227214042/https://money.cnn.com/2017/08/01/technology/business/bitcoin-cash-new-currency/index.html |archive-date=27 February 2018}}</ref>

In December 2017, the first [[futures contract|futures]] on bitcoin was introduced by the [[Chicago Mercantile Exchange]] (CME).<ref>{{Cite web |url=https://www.cnbc.com/2017/12/17/worlds-largest-futures-exchange-set-to-launch-bitcoin-futures-sunday-night.html |title=Bitcoin debuts on the world's largest futures exchange, and prices fall slightly |date=17 December 2017 |access-date=19 January 2024 |website=CNBC |last=Cheng |first=Evelyn |archive-date=18 January 2024 |archive-url=https://web.archive.org/web/20240118182719/https://www.cnbc.com/2017/12/17/worlds-largest-futures-exchange-set-to-launch-bitcoin-futures-sunday-night.html |url-status=live }}</ref>

In February 2018, the price crashed after China imposed a complete ban on bitcoin trading.<ref>{{Cite news |last=French |first=Sally |date=9 February 2017 |title=Here's proof that this bitcoin crash is far from the worst the cryptocurrency has seen |publisher=Market Watch |url=https://www.marketwatch.com/story/heres-proof-that-this-bitcoin-crash-is-far-from-the-worst-the-cryptocurrency-has-seen-2018-02-09 |url-status=live |access-date=3 July 2018 |archive-url=https://web.archive.org/web/20180703220246/https://www.marketwatch.com/story/heres-proof-that-this-bitcoin-crash-is-far-from-the-worst-the-cryptocurrency-has-seen-2018-02-09 |archive-date=3 July 2018}}</ref> The percentage of bitcoin trading in the Chinese [[renminbi]] fell from over 90% in September 2017 to less than 1% in June 2018.<ref>{{Cite news |date=7 July 2018 |title=RMB Bitcoin trading falls below 1 pct of world total |publisher=Xinhuanet |agency=[[Xinhua]] |url=http://www.xinhuanet.com/english/2018-07/07/c_137308879.htm |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180710225218/http://www.xinhuanet.com/english/2018-07/07/c_137308879.htm |archive-date=10 July 2018}}</ref> During the same year, bitcoin prices were negatively affected by several hacks or thefts from cryptocurrency exchanges.<ref>{{Cite news |last=Chavez-Dreyfuss |first=Gertrude |date=3 July 2018 |title=Cryptocurrency exchange theft surges in first half of 2018: report |work=Reuters |url=https://www.reuters.com/article/us-crypto-currencies-ciphertrace/cryptocurrency-exchange-theft-surges-in-first-half-of-2018-report-idUSKBN1JT1Q5 |url-status=live |access-date=10 July 2018 |archive-url=https://web.archive.org/web/20180704120854/https://www.reuters.com/article/us-crypto-currencies-ciphertrace/cryptocurrency-exchange-theft-surges-in-first-half-of-2018-report-idUSKBN1JT1Q5 |archive-date=4 July 2018}}</ref>

===2020–present===
[[File:Bitcoin Price.webp|thumb|{{center|'''Bitcoin price'''<ref>{{cite journal |title=Coinbase Bitcoin |journal=[[Coinbase]] |date=4 December 2024 |url=https://fred.stlouisfed.org/graph/?g=1BVJt |access-date=4 December 2024 |publisher=[[Federal Reserve Economic Data]]}}</ref>}} December 1, 2014 – <br> December 4, 2024]]
In 2020, some major companies and institutions started to acquire bitcoin: [[MicroStrategy]] invested $250 million in bitcoin as a [[Treasury management|treasury reserve asset]],<ref>{{Cite news |date=13 September 2021 |title=MicroStrategy buys another $250m worth of bitcoin in hope of 100X price growth |url=https://www.independent.co.uk/tech/microstrategy-bitcoin-crypto-price-prediction-b1919178.html |access-date=22 November 2023 |work=[[The Independent]] |first=Anthony |last=Cuthbertson |language=en |archive-date=22 November 2023 |archive-url=https://web.archive.org/web/20231122163924/https://www.independent.co.uk/tech/microstrategy-bitcoin-crypto-price-prediction-b1919178.html |url-status=live }}</ref> [[Square, Inc.]], $50 million,<ref>{{cite news |author=Oliver Effron |title=Square just bought $50 million in bitcoin |url=https://www.cnn.com/2020/10/08/business/square-bitcoin-crypto-investment/index.html |access-date=22 October 2020 |work=CNN |archive-date=24 October 2020 |archive-url=https://web.archive.org/web/20201024101610/https://www.cnn.com/2020/10/08/business/square-bitcoin-crypto-investment/index.html |url-status=live }}</ref> and [[MassMutual]], $100 million.<ref>{{cite news |url=https://www.bloomberg.com/news/articles/2020-12-10/169-year-old-insurer-massmutual-invests-100-million-in-bitcoin |title=169-Year-Old MassMutual Invests $100 Million in Bitcoin |date=11 December 2020 |work=Bloomberg |access-date=26 December 2020 |author=Olga Kharif |archive-date=19 December 2020 |archive-url=https://web.archive.org/web/20201219220543/https://www.bloomberg.com/news/articles/2020-12-10/169-year-old-insurer-massmutual-invests-100-million-in-bitcoin |url-status=live }}</ref> In November 2020, [[PayPal]] added support for bitcoin in the US.<ref>{{cite news |date=13 November 2020 |title=PayPal says all users in US can now buy, hold and sell cryptocurrencies |url=https://techcrunch.com/2020/11/12/paypal-says-all-users-in-u-s-can-now-buy-hold-and-sell-cryptocurrencies/ |access-date=26 November 2020 |work=Techcrunch |archive-date=24 November 2020 |archive-url=https://web.archive.org/web/20201124050031/https://techcrunch.com/2020/11/12/paypal-says-all-users-in-u-s-can-now-buy-hold-and-sell-cryptocurrencies/ |url-status=live }}</ref>

In February 2021, bitcoin's [[market capitalization]] reached $1 trillion for the first time.<ref>{{Cite news |last1=Chavez-Dreyfuss |first1=Gertrude |last2=Wilson |first2=Tom |date=19 February 2021 |title=Bitcoin hits $1 trillion market cap, surges to fresh all-time peak |language=en-US |work=Reuters |url=https://www.reuters.com.article/idUSKBN2AJ0GC/ |access-date=24 November 2023 }}{{Dead link|date=March 2026 |bot=InternetArchiveBot }}</ref> In November 2021, the [[Taproot (fork)|Taproot]] [[soft-fork]] upgrade was activated, adding support for [[Schnorr signature]]s, improved functionality of [[smart contract]]s and [[Lightning Network]].<ref>{{cite news |last=Sigalos |first=MacKenzie |date=14 November 2021 |title=Bitcoin's biggest upgrade in four years just happened – here's what changes |url=https://www.cnbc.com/2021/11/14/bitcoin-taproot-upgrade-what-it-means-for-investors.html |access-date=15 November 2021 |work=CNBC |archive-date=14 November 2021 |archive-url=https://web.archive.org/web/20211114215032/https://www.cnbc.com/2021/11/14/bitcoin-taproot-upgrade-what-it-means-for-investors.html |url-status=live }}</ref> Before, bitcoin only used a custom [[elliptic curve cryptography|elliptic curve]] with the [[ECDSA]] algorithm to produce [[digital signature|signatures]].<ref>{{Cite book |last1=Van Hijfte |first1=Stijn |title=Blockchain Platforms: A Look at the Underbelly of Distributed Platforms |publisher=Morgan & Claypool Publishers |year=2020 |isbn=978-1681738925}}</ref>{{rp|101}} In September 2021, bitcoin became [[legal tender]] currency [[Bitcoin in El Salvador|in El Salvador]], alongside the US dollar.<ref name=BTCSVSept7FT/> In October 2021, the first bitcoin futures [[exchange-traded fund]] (ETF), called BITO, from [[ProShares]] was approved by the [[U.S. Securities and Exchange Commission|SEC]] and listed on the [[Chicago Mercantile Exchange|CME]].<ref>{{Cite web |url=https://www.wsj.com/articles/a-bitcoin-etf-is-almost-here-what-does-that-mean-for-investors-11634376601 |title=A Bitcoin ETF Is Here. What Does That Mean for Investors? |date=19 October 2021 |access-date=11 January 2024 |website=The Wall Street Journal |last=Wursthorn |first=Michael |url-access=subscription |archive-date=10 January 2024 |archive-url=https://web.archive.org/web/20240110200308/https://www.wsj.com/articles/a-bitcoin-etf-is-almost-here-what-does-that-mean-for-investors-11634376601 |url-status=live }}</ref>

In early 2022, during the [[Canada convoy protest|Canadian trucker protests]] opposing [[COVID-19 vaccine misinformation and hesitancy|COVID-19 vaccine mandates]], organizers turned to bitcoin to receive donations after traditional financial platforms restricted access to funding.<ref>{{Cite web |last=Loh |first=Matthew |title=Canada says it will freeze the bank accounts of 'Freedom Convoy' truckers who continue their anti-vaccine mandate blockades |url=https://www.businessinsider.com/trudeau-canada-freeze-bank-accounts-freedom-convoy-truckers-2022-2 |access-date=2025-01-19 |website=Business Insider |language=en-US}}</ref><ref>{{Cite web |date=2024-12-08 |title=Crypto enthusiasts keep funding convoy protests as traditional banks take action against it – The Globe and Mail |url=https://www.theglobeandmail.com/business/article-crypto-enthusiasts-keep-funding-convoy-protests-as-traditional-banks/ |archive-url=https://web.archive.org/web/20241208224444/https://www.theglobeandmail.com/business/article-crypto-enthusiasts-keep-funding-convoy-protests-as-traditional-banks/ |url-status=dead |archive-date=2024-12-08 |access-date=2025-01-19 |website=The Globe and Mail}}</ref> Proponents highlighted bitcoin's use as a tool for fundraising in situations where access to conventional financial systems may be restricted.<ref>{{Cite web |date=2024-06-20 |title=Meet Greg Foss: A Former Bitcoin Fundraiser For Canada's 'Freedom Convoy' Protest |url=https://www.forbes.com/sites/jasonbrett/2022/02/17/meet-greg-foss-a-former-bitcoin-fundraiser-for-canadas-freedom-convoy-protest/ |archive-url=https://web.archive.org/web/20240620070940/https://www.forbes.com/sites/jasonbrett/2022/02/17/meet-greg-foss-a-former-bitcoin-fundraiser-for-canadas-freedom-convoy-protest/ |url-status=dead |archive-date=2024-06-20 |access-date=2025-01-19 |website=Forbes}}</ref><ref>{{Cite web |date=2022-03-13 |title=Elon Musk–backed 'freedom truckers' in Canada get Bitcoin lifeline after GoFundMe freezes millions in donations |url=https://finance.yahoo.com/news/elon-musk-backed-freedom-truckers-200403223.html |archive-url=https://web.archive.org/web/20220313170541/https://finance.yahoo.com/news/elon-musk-backed-freedom-truckers-200403223.html |url-status=dead |archive-date=2022-03-13 |access-date=2025-01-19 |website=Yahoo! Finance}}</ref> In May and June 2022, the bitcoin price fell following the collapses of [[Terra (blockchain)|TerraUSD]], a [[stablecoin]],<ref>{{cite news|last=Browne|first=Ryan|date=10 May 2022|title=Bitcoin investors are panicking as a controversial crypto experiment unravels|url=https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html|work=CNBC|access-date=11 May 2022|archive-date=11 May 2022|archive-url=https://web.archive.org/web/20220511021259/https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html|url-status=live}}</ref> and the [[Celsius Network]], a cryptocurrency loan company.<ref>{{cite news|last1=Milmo|first1=Dan|title=Bitcoin value slumps below $20,000 in cryptocurrencies turmoil|url=https://www.theguardian.com/technology/2022/jun/18/bitcoin-value-falls-cryptocurrency-markets-turmoil|access-date=19 June 2022|work=The Guardian|date=18 June 2022|language=en|archive-date=18 June 2022|archive-url=https://web.archive.org/web/20220618231120/https://www.theguardian.com/technology/2022/jun/18/bitcoin-value-falls-cryptocurrency-markets-turmoil|url-status=live}}</ref><ref>{{cite news|last=Yaffe-Bellany|first=David|date=13 June 2022|title=Celsius Network Leads Crypto Markets Into Another Free Fall|url=https://www.nytimes.com/2022/06/13/technology/bitcoin-ether-price.html|work=The New York Times|access-date=14 June 2022|archive-date=14 June 2022|archive-url=https://web.archive.org/web/20220614030021/https://www.nytimes.com/2022/06/13/technology/bitcoin-ether-price.html|url-status=live}}</ref>

In 2023, ordinals—[[non-fungible token]]s (NFTs)—on bitcoin, went live.<ref>{{Cite journal |last=Behrendt |first=Philipp |date=2023 |title=Taxation of the New Age: New Guidance for the World of Digital Assets |url=https://heinonline.org/HOL/Page?handle=hein.journals/jtaxpp25&id=105&div=&collection= |journal=Journal of Tax Practice & Procedure |volume=25 |pages=47 |access-date=21 November 2023 |archive-date=21 November 2023 |archive-url=https://web.archive.org/web/20231121164911/https://heinonline.org/HOL/Page?handle=hein.journals/jtaxpp25&id=105&div=&collection= |url-status=live }}</ref> As of June 2023, River Financial estimated that bitcoin had 81.7 million users, about 1% of the global population.<ref>{{cite web |date=2024-03-01 |title=As banks buy up bitcoins, who else are the 'Bitcoin whales'? |url=https://www.bbc.com/news/technology-68434579 |access-date=2024-03-14 |website=BBC Home}}</ref>

In January 2024, the first 11 US [[spot market|spot]] bitcoin [[exchange-traded fund|ETF]]s began trading, offering direct exposure to bitcoin for the first time on American stock exchanges.<ref>{{Cite news |last=Schmitt |first=Will |date=12 January 2024 |title=Bitcoin trading volumes surge after debut of long-awaited US ETFs |url=https://www.ft.com/content/f30ece62-0f1c-492a-8ccd-63ec9730573c |access-date=12 January 2024 |work=Financial Times |archive-date=12 January 2024 |archive-url=https://web.archive.org/web/20240112025105/https://www.ft.com/content/f30ece62-0f1c-492a-8ccd-63ec9730573c |url-status=live }}</ref><ref>{{cite news|last1=Lang|first1=Hannah|title=US bitcoin ETFs see $4.6B in volume in first day of trading|url=https://www.reuters.com/technology/spot-bitcoin-etfs-start-trading-big-boost-crypto-industry-2024-01-11/|access-date=12 January 2024|work=Reuters|date=11 January 2024|language=en}}</ref> In December 2024, bitcoin price reached $100,000 for the first time, as US president-elect [[Donald Trump]] promised to make the US the "crypto capital of the planet" and to stockpile bitcoin.<ref>{{cite news|url=https://www.reuters.com/technology/bitcoin-tops-100000-optimism-over-trump-crypto-plans-2024-12-05/|title=Bitcoin storms above $100,000 as Trump 2.0 fuels crypto euphoria|work=Reuters|date=2024-12-05}}</ref> The same month, [[BlackRock]], the world's largest [[asset manager]], recommended investors to allocate up to 2% of their [[portfolio (finance)|portfolio]] to bitcoin.<ref>{{cite news|url=https://www.reuters.com/markets/us/blackrock-recommends-bitcoin-portfolio-weighting-up-2-interested-investors-2024-12-12/ | title=BlackRock recommends bitcoin portfolio weighting of up to 2% for interested investors|date=2024-12-12|first=Suzanne|last= McGee|work=Reuters}}</ref>

As of 2025, the Salvadoran government continues to describe Bitcoin as legal tender under the 2021 Bitcoin Law; however, a January 2025 reform removed obligations for businesses and the government to accept it, so many analysts regard its legal-tender status as effectively ended in practice.<ref name="El Salvador Abandons Bitcoin as Legal Tender" /><ref name="Bitcoin is no longer legal tender in El Salvador" /> In March 2025, [[President Trump]] signed an [[Executive order (United States)|executive order]] to establish a [[strategic bitcoin reserve]].<ref>{{cite web |last1=Bose |first1=Nandita |last2=Ward |first2=Jasper |title=Trump signs order to establish strategic bitcoin reserve |url=https://www.reuters.com/technology/trump-signs-order-establish-strategic-bitcoin-reserve-white-house-crypto-czar-2025-03-07/ |website=[[Reuters]] |access-date=10 March 2025 |location=[[Washington, D.C.|Washington]] |date=7 March 2025}}</ref> Later that year, some U.S. states, such as [[Texas]] and [[New Hampshire]] also instituted strategic bitcoin reserves,<ref>{{Cite news |date=2025-06-22 |title=Texas Gov. Abbott Signs Bill to Create State Bitcoin Reserve |url=https://news.bgov.com/bloomberg-government-news/texas-gov-abbott-signs-bill-to-create-state-bitcoin-reserve |archive-url=https://web.archive.org/web/20250624034336/https://news.bgov.com/bloomberg-government-news/texas-gov-abbott-signs-bill-to-create-state-bitcoin-reserve |archive-date=2025-06-24 |access-date=2025-07-06 |language=en}}</ref> and the [[Czech National Bank]] bought less than €1 million in a "test portfolio".<ref>{{cite web | title=Czech central bank buys $1 million in bitcoin, other crypto assets for testing | work=Reuters | url=https://www.reuters.com/business/czech-central-bank-buys-1-mln-bitcoin-other-crypto-assets-testing-2025-11-13}}</ref>

==Design==
{{Main|Bitcoin protocol}}
===Units and divisibility===
{{multiple image
| width = 90
| image1 = Bitcoin old.png
| image2 = Bitcoin.png
| footer = Bitcoin logos made by Satoshi Nakamoto in 2009 (left) and 2010 (right).
}}
The [[unit of account]] of the bitcoin system is the ''bitcoin''. It is most commonly represented with the [[currency symbol|symbol]] ₿ designed in 2010<ref name="unicode-10" /> and the [[currency code]] BTC. However, the BTC code does not conform to [[ISO 4217]] as BT is the country code of Bhutan,<ref name="ssrn.3383734">{{Cite journal |last1=Alexander |first1=Carol |last2=Imeraj |first2=Arben |date=2019 |title=Introducing the BITIX: The Bitcoin Fear Gauge |url=https://www.ssrn.com/abstract=3383734 |journal=[[SSRN Electronic Journal]] |language=en |doi=10.2139/ssrn.3383734 |issn=1556-5068|quote=XBT satisfies the norm ‘ISO 4217’ by the International Organisation for Standardisation (ISO) as BTC goes against the name of Bhutan’s currency. In general, transaction instruments that are not national currencies, like gold or silver, begin with an X. However, the symbol XBT is not officially recognised by ISO.|url-access=subscription }}</ref> and ISO 4217 requires the first letter used in global commodities to be 'X'.<ref name="ssrn.3383734"/> XBT, a code that conforms to [[ISO 4217]] though not officially part of it,<ref name="ssrn.3383734"/> is used by [[Bloomberg L.P.]]<ref>{{Cite news |last=Romain Dillet |date=9 August 2013 |title=Bitcoin Ticker Available On Bloomberg Terminal For Employees |work=[[TechCrunch]] |url=https://techcrunch.com/2013/08/09/bitcoin-ticker-available-on-bloomberg-terminal/ |url-status=live |access-date=2 November 2014 |archive-url=https://web.archive.org/web/20141101232825/http://techcrunch.com/2013/08/09/bitcoin-ticker-available-on-bloomberg-terminal/ |archive-date=1 November 2014}}</ref>

No uniform [[capitalization]] convention exists; some sources use ''Bitcoin'', capitalized, to refer to the technology and [[computer network|network]], and ''bitcoin'', lowercase, for the unit of account.<ref>{{Cite magazine |last=Bustillos, Maria |date=2 April 2013 |title=The Bitcoin Boom |url=https://www.newyorker.com/tech/elements/the-bitcoin-boom |url-status=live |magazine=[[The New Yorker]] |archive-url=https://web.archive.org/web/20140727185121/http://www.newyorker.com/tech/elements/the-bitcoin-boom |archive-date=27 July 2014 |access-date=22 December 2013}}</ref> The ''[[Cambridge Advanced Learner's Dictionary]]'' and the ''[[Oxford Advanced Learner's Dictionary]]'' use the capitalized and lowercase variants without distinction.<ref>[https://www.oxfordlearnersdictionaries.com/definition/english/bitcointm?q=bitcoin Bitcoin], ''[[Oxford Advanced Learner's Dictionary]]''</ref><ref>[https://dictionary.cambridge.org/dictionary/english/bitcoin bitcoin] {{Webarchive|url=https://web.archive.org/web/20220503092252/http://dictionary.cambridge.org/dictionary/english/bitcoin |date=3 May 2022 }}, ''[[Cambridge Advanced Learner's Dictionary]]''</ref>

One bitcoin is divisible to eight decimal places.<ref name="Antonopoulos2014" />{{rp|ch. 5}} Units for smaller amounts of bitcoin are the millibitcoin (mBTC), equal to {{frac|1|1000}} bitcoin, and the satoshi{{efn|name=satoshi|Named after [[Satoshi Nakamoto]]}} (sat), representing {{frac|1|{{val|100000000}}}} (one hundred millionth) bitcoin, the smallest amount possible.<ref name="satoshi unit" /> 100,000 satoshis are one mBTC.<ref>{{Cite news |last1=Katie Pisa |last2=Natasha Maguder |date=9 July 2014 |title=Bitcoin your way to a double espresso |work=CNN |url=https://edition.cnn.com/2014/06/18/business/bitcoin-your-way-to-a-double-espresso/ |url-status=live |access-date=23 April 2015 |archive-url=https://web.archive.org/web/20150618072429/http://edition.cnn.com/2014/06/18/business/bitcoin-your-way-to-a-double-espresso/ |archive-date=18 June 2015 }}</ref>

===Blockchain===
{{further|Blockchain#Structure and design}}
As a [[Decentralization|decentralized]] system, bitcoin operates without a central authority or single administrator,<ref name=Gervais2014>{{Cite journal |last1=Gervais |first1=Arthur |last2=Karame |first2=Ghassan O. |last3=Capkun |first3=Vedran |last4=Capkun |first4=Srdjan |date=May 2014 |title=Is Bitcoin a Decentralized Currency? |journal=[[IEEE Security & Privacy]] |volume=12 |issue=3 |pages=54–60 |doi=10.1109/MSP.2014.49 |bibcode=2014ISPri..12c..54G |s2cid=13948781 |issn=1540-7993 }}</ref> so that anyone can create a new bitcoin address and transact without needing any approval.{{r|Antonopoulos2014|page=ch. 1}} This is accomplished through a specialized [[distributed ledger]] called a ''[[blockchain]]'' that records bitcoin transactions.{{r|econbc}}

The blockchain is implemented as an ordered list of ''blocks''. Each block contains a [[SHA-256]] [[Cryptographic hash function|hash]] of the previous block,<ref name="econbc" /> chaining them in chronological order.<ref name="Antonopoulos2014" />{{rp|ch. 7}}<ref name="econbc" /> The blockchain is maintained by a [[peer-to-peer]] network.<ref name=JEP/>{{rp|215–219}} Individual blocks, public addresses, and transactions within blocks are public information, and can be examined using a blockchain explorer.<ref>{{Cite web| url=https://nvlpubs.nist.gov/nistpubs/ir/2021/NIST.IR.8301.pdf| publisher=National Institute of Standards Technology (NIST)| access-date=29 December 2022| title=Blockchain Networks: Token Design and Management Overview| page=32| archive-date=24 December 2022| archive-url=https://web.archive.org/web/20221224003108/https://nvlpubs.nist.gov/nistpubs/ir/2021/NIST.IR.8301.pdf| url-status=live}}</ref>

Nodes validate and broadcast transactions, each maintaining a copy of the blockchain for ownership verification.<ref>{{Cite news |last=Sparkes, Matthew |date=9 June 2014 |title=The coming digital anarchy |work=The Daily Telegraph |url=https://www.telegraph.co.uk/technology/news/10881213/The-coming-digital-anarchy.html |url-status=live |access-date=7 January 2015 |archive-url=https://web.archive.org/web/20150123190900/http://www.telegraph.co.uk/technology/news/10881213/The-coming-digital-anarchy.html |archive-date=23 January 2015}}</ref> A new block is created every 10 minutes on average, updating the blockchain across all nodes without central oversight. This process tracks bitcoin spending, ensuring each bitcoin is [[double-spending|spent only once]]. Unlike a traditional ledger that tracks physical currency, bitcoins exist digitally as [[unspent outputs of transactions]].<ref name="Antonopoulos2014" />{{rp|ch. 5}}

===Addresses and transactions===
[[File:Bitcoin Transaction Visual.svg|thumb|Simplified chain of ownership. In practice, a transaction can have more than one input and more than one output.<ref name="EconOfBTC" />]]
In the blockchain, bitcoins are linked to specific [[string (computer science)|string]]s called addresses. Most often, an address encodes a [[hash (cryptography)|hash]] of a single [[public key]]. Creating such an address involves generating a random private key and then computing the corresponding address. This process is almost instant, but the reverse (finding the private key for a given address) is nearly impossible.<ref name="Antonopoulos2014" />{{rp|ch. 4}} Publishing such a bitcoin address does not risk its private key, and it is extremely unlikely to accidentally generate a used key with funds. To use bitcoins, owners need their private key to [[digital signature|digitally sign]] transactions, which are verified by the network using the public key, keeping the private key secret.<ref name="Antonopoulos2014" />{{rp|ch. 5}} An address may encode the hash of a bitcoin script that specifies more complex requirements to spend the funds. One common example is "multisig", in which multiple distinct private keys must mutually sign any transaction that attempts to spend the funds.<ref name="Antonopoulos2014" />{{rp|ch. 7}}

Bitcoin transactions use a [[Forth (programming language)|Forth]]-like [[scripting language]],{{r|Antonopoulos2014|p=ch. 5}} involving one or more inputs and outputs. When sending bitcoins, a user specifies the recipients' addresses and the amount for each output. This allows sending bitcoins to several recipients in a single transaction. To prevent double-spending, each input must refer to a previous unspent output in the blockchain.<ref name="EconOfBTC">{{Cite conference |last1=Kroll |first1=Joshua A. |last2=Davey |first2=Ian C. |last3=Felten |first3=E. |title=The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries |conference=The Twelfth Workshop on the Economics of Information Security (WEIS 2013) |location=Washington, DC|date= 11–12 June 2013|s2cid=2794725 }}</ref> Using multiple inputs is similar to using multiple coins in a cash transaction. As in a cash transaction, the sum of inputs can exceed the intended sum of payments. In such a case, an additional output can return the change back to the payer.<ref name="EconOfBTC" /> Unallocated input satoshis in the transaction become the transaction fee.<ref name="EconOfBTC" />

Losing a private key means losing access to the bitcoins, with no other proof of ownership accepted by the [[bitcoin protocol|protocol]].<ref name=JEP/> For instance, in 2013, a user lost ₿7,500, valued at US$7.5 million, by accidentally discarding a [[Hard disk drive|hard drive]] with the private key.<ref>{{Cite news |date=29 November 2013 |title=Man Throws Away 7,500 Bitcoins, Now Worth $7.5 Million |work=CBS DC |url=http://washington.cbslocal.com/2013/11/29/man-throws-away-7500-bitcoins-now-worth-7-5-million/ |url-status=live |access-date=23 January 2014 |archive-url=https://web.archive.org/web/20140115062630/http://washington.cbslocal.com/2013/11/29/man-throws-away-7500-bitcoins-now-worth-7-5-million/ |archive-date=15 January 2014}}</ref> It is estimated that around 20% of all bitcoins are lost.<ref>{{Cite news |last=Krause |first=Elliott |date=5 July 2018 |title=A Fifth of All Bitcoin Is Missing. These Crypto Hunters Can Help |work=The Wall Street Journal |url=https://www.wsj.com/articles/a-fifth-of-all-bitcoin-is-missing-these-crypto-hunters-can-help-1530798731 |url-status=live |access-date=8 July 2018 |archive-url=https://web.archive.org/web/20180709010939/https://www.wsj.com/articles/a-fifth-of-all-bitcoin-is-missing-these-crypto-hunters-can-help-1530798731 |archive-date=9 July 2018}}</ref> The private key must also be kept secret as its exposure, such as through a [[data breach]], can lead to theft of the associated bitcoins.<ref name="Antonopoulos2014" />{{rp|ch. 10}}<ref>{{cite news |last=Jeffries |first=Adrianne |date=19 December 2013 |title=How to steal Bitcoin in three easy steps |work=The Verge |url=https://www.theverge.com/2013/12/19/5183356/how-to-steal-bitcoin-in-three-easy-steps |url-status=live |access-date=17 January 2014 |archive-url=https://web.archive.org/web/20190727141228/https://www.theverge.com/2013/12/19/5183356/how-to-steal-bitcoin-in-three-easy-steps |archive-date=27 July 2019}}</ref> {{As of|2017|12}}, approximately ₿980,000 had been stolen from [[cryptocurrency exchange]]s.<ref>{{Cite news |last1=Harney |first1=Alexandra |last2=Stecklow |first2=Steve |date=16 November 2017 |title=Twice burned – How Mt. Gox's bitcoin customers could lose again |work=Reuters |url=https://www.reuters.com/investigates/special-report/bitcoin-gox/ |url-status=live |access-date=6 September 2018 |archive-url=https://web.archive.org/web/20190829052101/https://www.reuters.com/investigates/special-report/bitcoin-gox/|archive-date=29 August 2019}}</ref>

===Mining===
{{See also|Bitcoin protocol#Mining}}
[[File:Argo Blockchain Mirabel Facility.jpg|thumb|Bitcoin mining [[Data center|facility]] with large amounts of mining hardware]]
Miners don't directly act as nodes, but do communicate with nodes. The mining process is primarily intended to prevent [[double-spending]] and get all nodes to agree on the content of the blockchain, but it also has desirable side-effects such as making it infeasible for adversaries to stifle valid transactions or alter the historical record of transactions, since doing so generally requires the adversary to have access to more mining power than the rest of the network combined.<ref name="Antonopoulos2014" />{{rp|ch. 12}}

The mining process in bitcoin involves maintaining the blockchain through computer [[processing power]]. Miners group and broadcast new transactions into blocks, which are then verified by the network.<ref name="econbc">{{Cite news |date=31 October 2015 |title=The great chain of being sure about things |newspaper=The Economist |url=https://www.economist.com/briefing/2015/10/31/the-great-chain-of-being-sure-about-things |access-date=22 November 2023 |archive-date=4 December 2023 |archive-url=https://web.archive.org/web/20231204154941/https://www.economist.com/briefing/2015/10/31/the-great-chain-of-being-sure-about-things |url-status=live }}</ref> Each block must contain a proof of work (PoW) to be accepted,<ref name="econbc" /> involving finding a [[cryptographic nonce|nonce]] number that, combined with the block content, produces a [[cryptographic hash|hash]] numerically smaller than the network's ''difficulty target''.<ref name="Antonopoulos2014" />{{rp|ch. 8}} This PoW is simple to verify but hard to generate, requiring many attempts.<ref name="Antonopoulos2014" />{{rp|ch. 8}} PoW forms the basis of bitcoin's [[Consensus (computer science)|consensus mechanism]].<ref name="Mingxiao2017">{{Cite conference |last1=Mingxiao |first1=Du |last2=Xiaofeng |first2=Ma |last3=Zhe |first3=Zhang |last4=Xiangwei |first4=Wang |last5=Qijun |first5=Chen |date=5–8 October 2017 |title=A review on consensus algorithm of blockchain |publisher=IEEE |pages=2567–2572 |doi=10.1109/SMC.2017.8123011 |isbn=978-1-5386-1645-1 |conference=2017 IEEE International Conference on Systems, Man, and Cybernetics (SMC) |location=Banff, AB, Canada }}</ref>

The difficulty of generating a block is [[Deterministic algorithm|deterministically adjusted]] based on the [[Hashrate|mining power on the network]] by changing the difficulty target, which is recalibrated every 2,016 blocks (approximately two weeks) to maintain an average time of ten minutes between new blocks. The process requires significant computational power and specialized [[Computer hardware|hardware]].<ref name="Antonopoulos2014" />{{rp|ch. 8}}<ref>{{cite news |date=4 January 2014 |url=http://www.taipeitimes.com/News/biz/archives/2014/01/04/2003580449 |title=Bitcoin boom benefiting TSMC: report |newspaper=[[Taipei Times]] |access-date=22 October 2021 |archive-date=29 January 2023 |archive-url=https://web.archive.org/web/20230129102127/https://www.taipeitimes.com/News/biz/archives/2014/01/04/2003580449 |url-status=live }}</ref>

Miners who successfully create a new block with a valid nonce can collect transaction fees from the included transactions and a fixed reward in bitcoins.<ref name="bloombergvance111413">{{Cite magazine |last=Ashlee |first= Vance |author-link=Ashlee Vance |date=14 November 2013 |title=2014 Outlook: Bitcoin Mining Chips, a High-Tech Arms Race |url=http://www.businessweek.com/articles/2013-11-14/2014-outlook-bitcoin-mining-chips-a-high-tech-arms-race |url-status=dead |magazine=[[BusinessWeek]] |archive-url=https://web.archive.org/web/20131121225123/http://www.businessweek.com/articles/2013-11-14/2014-outlook-bitcoin-mining-chips-a-high-tech-arms-race |archive-date=21 November 2013 |access-date=24 November 2013}}</ref> To claim this reward, a special transaction called a ''coinbase'' is included in the block, with the miner as the payee. All bitcoins in existence have been created through this type of transaction.<ref name="Antonopoulos2014" />{{rp|ch. 8}} This reward is halved every 210,000 blocks until ₿21&nbsp;million{{efn|name=supply|The exact number is ₿20,999,999.9769.{{r|Antonopoulos2014|page=ch. 8}}}} have been issued in total, which is expected to occur around the year 2140. Afterward, miners will only earn from transaction fees. These fees are determined by the transaction's size and the amount of data stored, measured in satoshis per byte.<ref>{{cite news |first1=Ritchie S. |last1=King |first2=Sam |last2=Williams |first3=David |last3=Yanofsky |date=17 December 2013 |title=By reading this article, you're mining bitcoins |url=http://qz.com/154877/by-reading-this-page-you-are-mining-bitcoins |work=[[Quartz (publication)|Quartz]] |access-date=17 December 2013 |archive-date=17 December 2013 |archive-url=https://web.archive.org/web/20131217221429/http://qz.com/154877/by-reading-this-page-you-are-mining-bitcoins/ |url-status=live }}</ref><ref name="EconOfBTC" /><ref name="Antonopoulos2014" />{{rp|ch. 8}}

The proof of work system and the chaining of blocks make blockchain modifications very difficult, as altering one block requires changing all subsequent blocks. As more blocks are added, modifying older blocks becomes increasingly challenging.<ref>{{Cite news |last=Hampton |first=Nikolai |date=5 September 2016 |title=Understanding the blockchain hype: Why much of it is nothing more than snake oil and spin |work=[[Computerworld]] |url=http://www.computerworld.com.au/article/606253/understanding-blockchain-hype-why-much-it-nothing-more-than-snake-oil-spin/ |url-status=live |access-date=5 September 2016 |archive-url=https://web.archive.org/web/20160906171838/http://www.computerworld.com.au/article/606253/understanding-blockchain-hype-why-much-it-nothing-more-than-snake-oil-spin/ |archive-date=6 September 2016}}</ref><ref name="econbc" /> In case of disagreement, nodes trust the longest chain, which required the greatest amount of effort to produce.<ref name=Mingxiao2017/> To tamper or censor the ledger, one needs to control the majority of the global [[hashrate]].<ref name=Mingxiao2017/> The high cost required to reach this level of computational power [[Computer security|secures]] the bitcoin blockchain.<ref name=Mingxiao2017/>

The [[environmental impact of bitcoin mining]] is controversial and has attracted the attention of regulators, [[Legality of cryptocurrency by country or territory|leading to restrictions or incentives in various jurisdictions]].<ref name=Stoll2023>{{Cite report |jstor=resrep51839 |title=Climate Impacts of Bitcoin Mining in the U.S. |last1=Stoll |first1=Christian |last2=Klaaßen |first2=Lena |date=June 2023 |publisher=MIT Center for Energy and Environmental Policy Research |last3=Gallersdörfer |first3=Ulrich |last4=Neumüller |first4=Alexander |series=Working Paper Series }}</ref> {{As of|2025}}, a [[non-peer-reviewed]] study by the [[Cambridge Centre for Alternative Finance]] (CCAF) estimated that bitcoin mining represented {{sigfig|0.54|1}}% of [[World energy supply and consumption|global electricity consumption]] and {{sigfig|0.08|1}}% of world [[greenhouse gas emissions]], comparable to Slovakia's emissions.<ref>{{Cite web |title=Cambridge Digital Mining Industry Report: Global Operations, Sentiment, and Energy Use – CCAF publications |url=https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/cambridge-digital-mining-industry-report/ |access-date=2025-04-29 |website=Cambridge Judge Business School |language=en-GB}}</ref> About half of the electricity used is generated through [[fossil fuel]]s.<ref name=NYT20220116>{{Cite news |last1=Huang |first1=Jon |last2=O'Neill |first2=Claire |last3=Tabuchi |first3=Hiroko |date=3 September 2021 |title=Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? |work=[[The New York Times]] |url=https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html |issn=0362-4331 |access-date=16 January 2022 |archive-date=17 February 2023 |archive-url=https://web.archive.org/web/20230217105559/https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html |url-status=live }}</ref> Moreover, mining hardware's short lifespan results in [[electronic waste]].<ref name="deVries2021">{{Cite journal |last1=de Vries |first1=Alex |last2=Stoll |first2=Christian |date=December 2021 |title=Bitcoin's growing e-waste problem |journal=Resources, Conservation and Recycling |volume=175 |article-number=105901 |bibcode=2021RCR...17505901D |doi=10.1016/j.resconrec.2021.105901 }}</ref> In October 2025, the US was the largest mining country with 38% of the global bitcoin mining market share, followed by Russia (16%) and China (14%, despite all cryptocurrency trading and mining being banned there in 2021).<ref>{{cite news|url=https://www.reuters.com/world/asia-pacific/bitcoin-mining-china-rebounds-defying-2021-ban-2025-11-24/|website=Reuters|title=Bitcoin mining in China rebounds, defying 2021 ban|date=26 November 2025}}</ref><ref>{{Cite web |date=2025-10-06 |title=Global Hashrate Heatmap Update: Q4 2025 |url=https://hashrateindex.com/blog/global-hashrate-heatmap-update-q4-2025/ |access-date=2025-11-26 |website=Hashrate Index |language=en}}</ref>

===Privacy and fungibility===
Bitcoin is [[pseudonym]]ous, with funds linked to addresses, not real-world identities. While the owners of these addresses are not directly identified, all transactions are public on the blockchain. Patterns of use, like spending coins from multiple inputs, can hint at a common owner. Public data can sometimes be matched with known address owners.<ref>{{cite news |last=Simonite |first=Tom |date=5 September 2013 |title=Mapping the Bitcoin Economy Could Reveal Users' Identities |url=https://www.technologyreview.com/2013/09/05/176558/mapping-the-bitcoin-economy-could-reveal-users-identities/ |access-date=2 April 2014 |work=[[MIT Technology Review]] |archive-date=27 September 2020 |archive-url=https://web.archive.org/web/20200927062235/https://www.technologyreview.com/2013/09/05/176558/mapping-the-bitcoin-economy-could-reveal-users-identities/ |url-status=live }}</ref> [[List of bitcoin companies|Bitcoin exchanges]] might also need to collect personal data as per legal requirements.<ref>{{Cite news |last=Lee, Timothy |date=21 August 2013 |title=Five surprising facts about Bitcoin |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/the-switch/wp/2013/08/21/five-surprising-facts-about-bitcoin-2 |access-date=21 November 2023 |archive-date=9 July 2022 |archive-url=https://web.archive.org/web/20220709135222/https://www.washingtonpost.com/news/the-switch/wp/2013/08/21/five-surprising-facts-about-bitcoin-2/ |url-status=live }}</ref> For enhanced [[Privacy and blockchain|privacy]], users can generate a new address for each transaction.<ref>{{Cite magazine |last=McMillan, Robert |date=6 June 2013 |title=How Bitcoin lets you spy on careless companies |url=https://www.wired.com/2013/06/bitcoin-retai/ |url-status=live |archive-url=https://web.archive.org/web/20140209202222/http://www.wired.co.uk/news/archive/2013-06/06/bitcoin-retail |archive-date=9 February 2014 |access-date=3 April 2020 |magazine=[[Wired UK]] }}</ref>

In the bitcoin network, each bitcoin is treated equally, ensuring basic [[fungibility]]. However, users and applications can choose to differentiate between bitcoins. While wallets and software treat all bitcoins the same, each bitcoin's transaction history is recorded on the blockchain. This public record allows for [[Blockchain analysis|chain analysis]], where users can identify and potentially reject bitcoins from controversial sources.<ref>{{Cite book |last1=Anderson |first1=Ross |last2=Shumailov |first2=Ilia |last3=Ahmed |first3=Mansoor |title=Security Protocols XXVI |chapter=Making Bitcoin Legal |series=Lecture Notes in Computer Science |date=24 November 2018 |volume=11286 |chapter-url=https://www.research.ed.ac.uk/en/publications/making-bitcoin-legal |language=en |publisher=Springer |pages=243–253 |doi=10.1007/978-3-030-03251-7_29 |isbn=978-3-030-03250-0 |editor-last=Matyáš |editor-first=Vashek |editor2-last=Švenda |editor2-first=Petr |editor3-last=Stajano |editor3-first=Frank |editor4-last=Christianson |editor4-first=Bruce |access-date=24 November 2023 |archive-date=24 November 2023 |archive-url=https://web.archive.org/web/20231124165246/https://www.research.ed.ac.uk/en/publications/making-bitcoin-legal |url-status=live }}</ref> For example, in 2012, Mt. Gox froze accounts containing bitcoins identified as stolen.<ref>{{Cite conference |last1=Möser |first1=Malte |last2=Böhme |first2=Rainer |last3=Breuker |first3=Dominic |year=2013 |title=An Inquiry into Money Laundering Tools in the Bitcoin Ecosystem |url=https://maltemoeser.de/paper/money-laundering.pdf |conference=2013 APWG eCrime Researchers Summit |publisher=[[Institute of Electrical and Electronics Engineers|IEEE]] |isbn=978-1-4799-1158-5 |archive-url=https://web.archive.org/web/20180626110754/https://maltemoeser.de/paper/money-laundering.pdf |archive-date=26 June 2018 |access-date=19 June 2019 |url-status=live}}</ref>

===Wallets===
{{Broader|Cryptocurrency wallet}}
{{multiple image
| total_width = 600
| align = center
| image1 = Bitcoin-core-v0.10.0.png
| caption1 = Screenshot of [[Bitcoin Core]]
| image2 = Sample Bitcoin paper wallet.png
| caption2 = A paper wallet with the address as a [[QR code]] while the private key is hidden
| image3 = 10elqpi.jpg
| caption3 = A hardware wallet which processes bitcoin transactions without exposing private keys
}}
Bitcoin wallets were the first [[cryptocurrency wallet]]s, enabling users to store the information necessary to transact bitcoins.<ref>{{cite news |first1=Adam |last1=Serwer |first2=Dana|last2= Liebelson |date=10 April 2013 |title=Bitcoin, Explained |url=https://www.motherjones.com/politics/2013/04/what-is-bitcoin-explained |url-status=live |archive-url=https://web.archive.org/web/20140427022315/https://www.motherjones.com/politics/2013/04/what-is-bitcoin-explained |archive-date=27 April 2014 |access-date=26 April 2014 |work=[[Mother Jones (magazine)|Mother Jones]]}}</ref>{{r|Antonopoulos2014|p=ch. 1, glossary}} The first wallet program, simply named ''Bitcoin'', and sometimes referred to as the ''Satoshi client'', was released in 2009 by Nakamoto as [[open-source software]].<ref name="Humayun-2018" /> [[Bitcoin Core]] is among the best known [[Client (computing)|clients]]. [[fork (software development)|Forks]] of Bitcoin Core exist such as [[Bitcoin Unlimited]].<ref>{{Cite news |last=Vigna |first=Paul |date=17 January 2016 |title=Is Bitcoin Breaking Up? |work=The Wall Street Journal |url=https://www.wsj.com/articles/is-bitcoin-breaking-up-1453044493 |url-status=live |access-date=8 November 2016 |archive-url=https://web.archive.org/web/20160820144312/http://www.wsj.com/articles/is-bitcoin-breaking-up-1453044493 |archive-date=20 August 2016}}</ref> Wallets can be full clients, with a full copy of the blockchain to check the validity of mined blocks,{{r|Antonopoulos2014|p=ch. 1}} or lightweight clients, just to send and receive transactions without a local copy of the entire blockchain.<ref>{{Cite book |last1=Gervais |first1=Arthur |last2=Capkun |first2=Srdjan |last3=Karame |first3=Ghassan O. |last4=Gruber |first4=Damian |title=Proceedings of the 30th Annual Computer Security Applications Conference |chapter=On the privacy provisions of Bloom filters in lightweight bitcoin clients |date=8 December 2014 |chapter-url=https://doi.org/10.1145/2664243.2664267 |series=ACSAC '14 |location=New York, NY, USA |publisher=Association for Computing Machinery |pages=326–335 |doi=10.1145/2664243.2664267 |isbn=978-1-4503-3005-3 |s2cid=9161497 |access-date=22 November 2023 |archive-date=21 April 2024 |archive-url=https://web.archive.org/web/20240421113526/https://consent.cookiebot.com/uc.js |url-status=live }}</ref> Third-party internet services, called online wallets or [[Digital wallet|hot wallets]], store users' credentials on their servers, making them susceptible of hacks.<ref>{{Cite news |first=Bill |last=Barhydt |date=4 June 2014 |title=3 reasons Wall Street can't stay away from bitcoin |publisher=CNBC |url=https://www.cnbc.com/2014/06/04/3-reasons-wall-street-cant-stay-away-from-bitcoin.html |access-date=22 November 2023 |archive-date=4 December 2023 |archive-url=https://web.archive.org/web/20231204140256/https://www.cnbc.com/2014/06/04/3-reasons-wall-street-cant-stay-away-from-bitcoin.html |url-status=live }}</ref> [[Cold wallet|Cold storage]] protects bitcoins from such hacks by keeping private keys offline, either through specialized hardware wallets or paper printouts.<ref>{{Cite news |last=Roberts |first=Daniel |date=15 December 2017 |title=How to send bitcoin to a hardware wallet |work=Yahoo Finance |url=https://finance.yahoo.com/news/send-bitcoin-hardware-wallet-140141385.html |url-status=live |access-date=17 February 2018 |archive-url=https://web.archive.org/web/20180217142235/https://finance.yahoo.com/news/send-bitcoin-hardware-wallet-140141385.html |archive-date=17 February 2018}}</ref><ref name="Antonopoulos2014" />{{rp|ch. 4}}

=== Scalability and decentralization challenges ===
{{Main|Bitcoin scalability problem}}
Nakamoto limited the block size to one [[megabyte]].<ref>{{Cite news |last=Mike Orcutt |date=19 May 2015 |title=Leaderless Bitcoin Struggles to Make Its Most Crucial Decision |work=MIT Technology Review |url=https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |access-date=15 November 2016 |archive-date=18 October 2017 |archive-url=https://wayback.archive-it.org/all/20171018075515/https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |url-status=live }}</ref> The limited block size and frequency can lead to delayed processing of transactions, increased fees and a bitcoin scalability problem.<ref>{{Cite news |last=Orcutt |first=Mike |date=19 May 2015 |title=Leaderless Bitcoin Struggles to Make Its Most Crucial Decision |work=MIT Technology Review |url=https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |url-status=live |access-date=22 June 2017 |archive-url=https://wayback.archive-it.org/all/20171018075515/https://www.technologyreview.com/s/537486/leaderless-bitcoin-struggles-to-make-its-most-crucial-decision/ |archive-date=18 October 2017}}</ref> The [[Lightning Network]], [[Abstraction layer|second-layer]] [[routing]] network, is a potential scaling solution.<ref name="Antonopoulos2014" />{{rp|ch. 8}}

Research shows a trend towards centralization in bitcoin as miners join [[Mining pool|pools]] for stable income.<ref name="JEP">{{Cite journal |last1=Rainer Böhme |last2=Nicolas Christin |last3=Benjamin Edelman |last4=Tyler Moore |year=2015 |title=Bitcoin: Economics, Technology, and Governance |journal=[[Journal of Economic Perspectives]] |volume=29 |issue=2 |pages=213–238 |doi=10.1257/jep.29.2.213 |doi-access=free |issn=0895-3309}}</ref>{{rp|215, 219–222}}<ref>{{Cite journal |last1=Tschorsch |first1=Florian |last2=Scheuermann |first2=Björn |year=2016 |title=Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies |journal=[[IEEE Communications Surveys and Tutorials]] |volume=18 |issue=3 |pages=2084–2123 |doi=10.1109/comst.2016.2535718 |s2cid=5115101}}</ref>{{rp|3}} If a single miner or pool controls more than 50% of the [[Hashrate|hashing power]], it would allow them to censor transactions and double-spend coins.<ref name=Gervais2014/> In 2014, mining pool [[Ghash.io]] reached 51% mining power, causing safety concerns, but later voluntarily capped its power at 39.99% for the benefit of the whole network.<ref>{{Cite news |last=Wilhelm |first=Alex |title=Popular Bitcoin Mining Pool Promises To Restrict Its Compute Power To Prevent Feared '51%' Fiasco |work=TechCrunch |url=https://techcrunch.com/2014/07/16/popular-bitcoin-mining-pool-promises-to-restrict-its-compute-power-to-prevent-feared-51-fiasco/ |url-status=live |access-date=25 January 2018 |archive-url=https://web.archive.org/web/20171205042008/https://techcrunch.com/2014/07/16/popular-bitcoin-mining-pool-promises-to-restrict-its-compute-power-to-prevent-feared-51-fiasco/ |archive-date=5 December 2017}}</ref> A few entities also dominate other parts of the ecosystem such as the client software, online wallets, and simplified payment verification (SPV) clients.<ref name=Gervais2014/>

==Economics and usage==
{{Main|Economics of bitcoin}}
===Bitcoin's theoretical roots and ideology===
According to the [[European Central Bank]], the decentralization of money offered by bitcoin has its theoretical roots in the [[Austrian school of economics]], especially with [[Friedrich Hayek]]'s ''[[The Denationalisation of Money]]'', in which he advocates a complete [[free market]] in the production, distribution and management of money to end the monopoly of [[central banks]].<ref>{{cite book |author=European Central Bank |url=http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf |title=Virtual Currency Schemes |year=2012 |publisher=[[European Central Bank]] |isbn=978-92-899-0862-7 |archive-url=https://web.archive.org/web/20121106053452/http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf |archive-date=6 November 2012 |url-status=live|oclc=1044382974|doi=10.2866/47380 }}</ref>{{rp|22}} Sociologist [[Nigel Dodd]] argues that the essence of the bitcoin ideology is to remove money from social, as well as governmental, control.<ref>{{cite journal |last1=Dodd |first1=Nigel |date=May 2018 |title=The Social Life of Bitcoin |url=https://eprints.lse.ac.uk/69229/1/Dodd_The%20social%20life%20of%20Bitcoin_author_2017%20LSERO.pdf |journal=Theory, Culture & Society |volume=35 |issue=3 |pages=35–56 |doi=10.1177/0263276417746464 |s2cid=51914607 |issn=0263-2764 |authorlink1=Nigel Dodd |access-date=22 November 2023 |archive-date=22 November 2023 |archive-url=https://web.archive.org/web/20231122163925/https://eprints.lse.ac.uk/69229/1/Dodd_The%20social%20life%20of%20Bitcoin_author_2017%20LSERO.pdf |url-status=live }}</ref> ''[[The Economist]]'' describes bitcoin as "a [[techno-anarchist]] project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks".<ref name="30082018Economist" /> These philosophical ideas initially attracted [[libertarian]]s and [[anarchist]]s.<ref>{{cite news |last=Feuer |first=Alan |date=14 December 2013 |title=The Bitcoin Ideology |work=The New York Times |url=https://www.nytimes.com/2013/12/15/sunday-review/the-bitcoin-ideology.html |url-status=live |access-date=1 July 2018 |archive-url=https://web.archive.org/web/20180701222302/https://www.nytimes.com/2013/12/15/sunday-review/the-bitcoin-ideology.html |archive-date=1 July 2018}}</ref>

=== Recognition as a currency and legal status ===
{{Legal status of bitcoin|300px}}
[[Money]] serves three purposes: a [[store of value]], a [[medium of exchange]], and a [[unit of account]].<ref name="econ315">{{Cite news |date=15 March 2014 |title=Free Exchange. Money from nothing. Chronic deflation may keep Bitcoin from displacing its rivals. |newspaper=The Economist |url=https://www.economist.com/news/finance-and-economics/21599053-chronic-deflation-may-keep-bitcoin-displacing-its-fiat-rivals-money |url-status=live |access-date=25 March 2014 |archive-url=https://web.archive.org/web/20140325085119/http://www.economist.com/news/finance-and-economics/21599053-chronic-deflation-may-keep-bitcoin-displacing-its-fiat-rivals-money |archive-date=25 March 2014}}</ref> According to ''The Economist'' in 2014, bitcoin functions best as a medium of exchange.<ref name=econ315 /> In 2015, ''The Economist'' noted that bitcoins had three qualities useful in a currency: they are "hard to earn, limited in supply and easy to verify".<ref>{{Cite news |date=13 January 2015 |title=The magic of mining |newspaper=[[The Economist]] |url=https://www.economist.com/news/business/21638124-minting-digital-currency-has-become-big-ruthlessly-competitive-business-magic |url-status=live |access-date=13 January 2015 |archive-url=https://web.archive.org/web/20150112165531/http://www.economist.com/news/business/21638124-minting-digital-currency-has-become-big-ruthlessly-competitive-business-magic |archive-date=12 January 2015}}</ref> However, a 2018 assessment by ''The Economist'' stated that cryptocurrencies met none of these three criteria.<ref name="30082018Economist">{{Cite news |date=30 August 2018 |title=Bitcoin and other cryptocurrencies are useless |newspaper=The Economist |url=https://www.economist.com/leaders/2018/08/30/bitcoin-and-other-cryptocurrencies-are-useless |url-status=live |access-date=4 September 2018 |archive-url=https://web.archive.org/web/20180904040905/https://www.economist.com/leaders/2018/08/30/bitcoin-and-other-cryptocurrencies-are-useless |archive-date=4 September 2018 }}</ref> Per some researchers, {{as of|2015|lc=yes}}, bitcoin functions more as a [[payment system]] than as a currency.<ref name=JEP/> In 2014, economist [[Robert J. Shiller]] wrote that bitcoin has potential as a unit of account for measuring the relative value of goods, as with Chile's [[Unidad de Fomento]], but that "Bitcoin in its present form... doesn't really solve any sensible economic problem".<ref name="Shiller">{{Cite news |last=Shiller |first=Robert |date=1 March 2014 |title=In Search of a Stable Electronic Currency |work=The New York Times |url=https://www.nytimes.com/2014/03/02/business/in-search-of-a-stable-electronic-currency.html |url-status=live |archive-url=https://web.archive.org/web/20141024120222/http://www.nytimes.com/2014/03/02/business/in-search-of-a-stable-electronic-currency.html |archive-date=24 October 2014}}</ref> In 2017, François Velde, senior economist at the [[Chicago Fed]], described bitcoin as "unlikely by itself to replace monies in well-functioning monetary systems."<ref>{{cite report | last = Velde | first = François R. | title = Technological Change and the Future of Cash | publisher = SUERF – The European Money and Finance Forum | series = SUERF Policy Note | issue = 15 | date = August 2017 | url = https://www.suerf.org/publications/suerf-policy-notes-and-briefs/technological-change-and-the-future-of-cash/ | access-date = 21 October 2025}}</ref>

The [[Legality of cryptocurrency by country or territory|legal status of bitcoin]] varies substantially from one jurisdiction to another. Because of its decentralized nature and its global presence, regulating bitcoin is difficult. However, the use of bitcoin can be criminalized, and shutting down exchanges and the peer-to-peer economy in a given country would constitute a [[de facto]] ban.<ref>{{cite news |first=Jacob |last=Weindling |date=18 September 2017 |title=China May Be Gearing Up to Ban Bitcoin |url=https://www.pastemagazine.com/politics/bitcoin/china-may-be-gearing-up-to-ban-bitcoin |work=[[Paste (magazine)|Paste]] |access-date=22 November 2023 |archive-date=22 November 2023 |archive-url=https://web.archive.org/web/20231122163924/https://www.pastemagazine.com/politics/bitcoin/china-may-be-gearing-up-to-ban-bitcoin |url-status=live }}</ref> The [[Cryptocurrency and crime|use of bitcoin by criminals]] has attracted the attention of financial regulators, legislative bodies, and law enforcement.<ref>{{Cite news |last=Lavin|first= Tim |date=8 August 2013 |title=The SEC Shows Why Bitcoin Is Doomed |work=[[Bloomberg News]] |url=http://www.bloombergview.com/articles/2013-08-08/did-the-sec-just-validate-bitcoin-no- |url-status=live |access-date=20 October 2013 |archive-url=https://web.archive.org/web/20140325214514/http://www.bloombergview.com/articles/2013-08-08/did-the-sec-just-validate-bitcoin-no- |archive-date=25 March 2014}}</ref> Nobel-prize winning economist [[Joseph Stiglitz]] says that bitcoin's anonymity encourages [[money laundering]] and other crimes.<ref>{{Cite news |last=Montag |first=Ali |date=9 July 2018 |title=Nobel-winning economist: Authorities will bring down 'hammer' on bitcoin |publisher=CNBC |url=https://www.cnbc.com/2018/07/09/nobel-prize-winning-economist-joseph-stiglitz-criticizes-bitcoin.html |url-status=live |access-date=11 July 2018 |archive-url=https://web.archive.org/web/20180711200915/https://www.cnbc.com/2018/07/09/nobel-prize-winning-economist-joseph-stiglitz-criticizes-bitcoin.html |archive-date=11 July 2018}}</ref> This is the main justification behind bitcoin bans.<ref name=SunYin2019/> {{As of|2021|11}}, nine countries applied an absolute ban (Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia) while another 42 countries had an implicit ban.<ref name=LOC2021>{{cite web |title=Regulation of Cryptocurrency Around the World: November 2021 Update |url=https://tile.loc.gov/storage-services/service/ll/llglrd/2021687419/2021687419.pdf |publisher=United States Library of Congress |access-date=28 December 2022 |archive-date=24 December 2021 |archive-url=https://web.archive.org/web/20211224043203/https://tile.loc.gov/storage-services/service/ll/llglrd/2021687419/2021687419.pdf |url-status=live }}</ref>{{Update inline|reason=Many things have changed since Nov 2021.|date=November 2023}}

=== Use for payments ===
[[File:De Waag Bitcoin.jpg|thumb|Café in [[Delft]] accepting Bitcoin]]
According to Harvard Professor [[Kenneth Rogoff]] {{As of|2025|lc=y}}, bitcoin is rarely used in regular transactions with merchants, but is popular in the [[informal economy]] and for criminal activities.<ref name=RogoffEconomist>{{Cite news |title=This time really is different for the dollar, writes Kenneth Rogoff |url=https://www.economist.com/by-invitation/2025/05/05/this-time-really-is-different-for-the-dollar-writes-kenneth-rogoff |access-date=2025-05-25 |newspaper=The Economist |issn=0013-0613}}</ref><ref name=RogoffBloomberg>[https://www.bloomberg.com/news/articles/2025-05-24/crypto-is-infiltrating-the-dollar-s-hegemony-says-ken-rogoff Ken Rogoff on How Crypto Is Cutting Into the Dollar’s Hegemony], Vildana Hajric, Bloomberg, May 24, 2025</ref> Bitcoin has been used by refugees as a means of transferring wealth across borders during displacement. As of 2025, approximately 329,000 refugees had used it for this purpose, a figure projected to reach 7.5 million by 2035.<ref>{{Cite web |last=Sigalos |first=MacKenzie |date=2022-03-23 |title=Ukrainian refugee flees to Poland with $2,000 in bitcoin on a USB drive |url=https://www.cnbc.com/2022/03/23/ukrainian-flees-to-poland-with-2000-in-bitcoin-on-usb-drive.html |access-date=2026-03-24 |website=CNBC |language=en}}</ref><ref>{{Cite web |title=Bring Only What You Can Carry |url=https://www.da-ri.org/articles/bring-only-what-you-can-carry |access-date=2026-03-24 |website=www.da-ri.org |language=en}}</ref> Prices are not usually quoted in bitcoin and trades involve conversions into [[Fiat money|fiat]] currencies.<ref name=JEP/> Commonly cited reasons for not using bitcoin include high costs, the inability to process [[chargeback]]s, high [[Volatility (finance)|price volatility]], long transaction times, and [[Transaction cost|transaction fees]] (especially for small purchases).<ref name="FT08062018">{{Cite news |last=Murphy |first=Hannah |date=8 June 2018 |title=Who really owns bitcoin now? |work=Financial Times |url=https://www.ft.com/content/29259448-69b3-11e8-b6eb-4acfcfb08c11 |url-status=live |access-date=10 June 2018 |archive-url=https://web.archive.org/web/20180610051316/https://www.ft.com/content/29259448-69b3-11e8-b6eb-4acfcfb08c11 |archive-date=10 June 2018}}</ref><ref>{{cite news |last=Katz |first=Lily |date=12 July 2017 |title=Bitcoin Acceptance Among Retailers Is Low and Getting Lower |url=https://www.bloomberg.com/news/articles/2017-07-12/bitcoin-acceptance-among-retailers-is-low-and-getting-lower |url-status=live |archive-url=https://web.archive.org/web/20180125204553/https://www.bloomberg.com/news/articles/2017-07-12/bitcoin-acceptance-among-retailers-is-low-and-getting-lower |archive-date=25 January 2018 |access-date=25 January 2018 |work=Bloomberg News}}</ref> ''[[Bloomberg News|Bloomberg]]'' reported that bitcoin was being used for large-item purchases on the site [[Overstock.com]] and for cross-border payments to [[freelancer]]s.<ref>{{Cite news |last=Kharif |first=Olga |date=1 August 2018 |title=Bitcoin's Use in Commerce Keeps Falling Even as Volatility Eases |work=Bloomberg News|url=https://www.bloomberg.com/news/articles/2018-08-01/bitcoin-s-use-in-commerce-keeps-falling-even-as-volatility-eases |url-status=live |access-date=2 August 2018 |archive-url=https://web.archive.org/web/20180802073219/https://www.bloomberg.com/news/articles/2018-08-01/bitcoin-s-use-in-commerce-keeps-falling-even-as-volatility-eases |archive-date=2 August 2018}}</ref> {{As of|2015}}, there was little sign of bitcoin use in international [[remittance]]s despite high fees charged by banks and [[Western Union]].<ref name=JEP/><ref>{{Cite news |last=Chan |first=Bernice |date=16 January 2015 |title=Bitcoin transactions cut the cost of international money transfers |work=[[South China Morning Post]] |url=https://www.scmp.com/lifestyle/technology/article/1679904/bitcoin-transactions-cut-cost-international-money-transfers |url-status=live |access-date=31 May 2019 |archive-url=https://web.archive.org/web/20190531060301/https://www.scmp.com/lifestyle/technology/article/1679904/bitcoin-transactions-cut-cost-international-money-transfers |archive-date=31 May 2019}}</ref>

From September 2021 until January 2025, the [[Bitcoin Law]] made bitcoin a [[legal tender]] currency in [[El Salvador]], alongside the US dollar.<ref name=BTCSVSept7FT/> The adoption had been criticized internationally and within El Salvador.<ref name=BTCSVSept7FT/><ref>{{cite news |date=2 September 2021 |title=Majority of Salvadorans do not want bitcoin, poll shows |url=https://www.reuters.com/technology/majority-salvadorans-do-not-want-bitcoin-poll-shows-2021-09-02/ |access-date=30 November 2021 |work=Reuters |archive-date=30 November 2021 |archive-url=https://web.archive.org/web/20211130154620/https://www.reuters.com/technology/majority-salvadorans-do-not-want-bitcoin-poll-shows-2021-09-02/ |url-status=live }}</ref> In 2022, the [[International Monetary Fund]] (IMF) urged El Salvador to reverse its decision.<ref>{{cite news |date=26 January 2022 |title=IMF urges El Salvador to remove Bitcoin as legal tender |work=BBC News |url=https://www.bbc.co.uk/news/world-latin-america-60135552 |access-date=26 January 2022 |archive-date=26 January 2022 |archive-url=https://web.archive.org/web/20220126154241/https://www.bbc.co.uk/news/world-latin-america-60135552 |url-status=live }}</ref> {{As of|2022}}, the use of [[Bitcoin in El Salvador]] remained low: 80% of businesses refused to accept it.<ref>{{cite report |title=Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador |last1=Alvarez |first1=Fernando |last2=Argente |first2=David |publisher=National Bureau of Economic Research |doi=10.3386/w29968 |page= |last3=Van Patten |first3=Diana |doi-access=free |publication-place=Cambridge, MA |year=2022}}</ref> In 2025, El Salvador's government revoked bitcoin's status as legal tender currency in order to comply with conditions set by the IMF for a loan. El Salvador still describes bitcoin as "legal tender", but its acceptance is no longer obligitory (as it is with the US dollar) and the El Salvador government no longer accepts bitcoin for payment of taxes or fees.<ref name="El Salvador Abandons Bitcoin as Legal Tender">{{cite news |title=El Salvador Abandons Bitcoin as Legal Tender After Failed Experiment |url=https://ticotimes.net/2025/02/02/el-salvador-abandons-bitcoin-as-legal-tender-after-failed-experiment |access-date=10 October 2025 |work=The Tico Times |agency= [[Agence France-Presse|AFP]] |date=2 February 2025}}</ref><ref name="Bitcoin is no longer legal tender in El Salvador">{{cite news |title=Bitcoin is no longer legal tender in El Salvador |url=https://dig.watch/updates/bitcoin-is-no-longer-legal-tender-in-el-salvador |access-date=10 October 2025 |work=Dig.watch |publisher=[[DiploFoundation]] |date=7 February 2025}}</ref>

In April 2022, the [[Central African Republic]] (CAR) adopted bitcoin as legal tender alongside the [[CFA franc]],<ref>{{Cite news |date=28 April 2022 |title=Bitcoin Declared Legal Currency in Central African Republic |work=Bloomberg |url=https://www.bloomberg.com/news/articles/2022-04-28/bitcoin-is-declared-a-legal-currency-in-central-african-republic-l2isppnb |access-date=28 April 2022 |archive-date=28 April 2022 |archive-url=https://web.archive.org/web/20220428141222/https://www.bloomberg.com/news/articles/2022-04-28/bitcoin-is-declared-a-legal-currency-in-central-african-republic-l2isppnb |url-status=live }}</ref> but repealed the reform one year later.<ref>{{Cite web |title=Frequently Asked Questions on Central African Republic |url=https://www.imf.org/en/Countries/CAF/central-african-republic-qandas |access-date=11 August 2023 |website=International Monetary Fund |language=en |archive-date=11 August 2023 |archive-url=https://web.archive.org/web/20230811002905/https://www.imf.org/en/Countries/CAF/central-african-republic-qandas |url-status=live }}</ref>

Bitcoin is also used by some governments. For instance, the [[Government of Iran|Iranian government]] initially opposed cryptocurrencies, but later began using them to circumvent [[Sanctions against Iran|sanctions]].<ref>{{cite news |date=3 November 2020 |title=Iran Is Pivoting to Bitcoin |url=https://www.vice.com/en/article/iran-bitcoin-us-sanctions/ |work=[[Vice (magazine)|Vice]] |last=Rasool |first=Mohammed |access-date=10 November 2020 |archive-date=3 November 2020 |archive-url=https://web.archive.org/web/20201103235640/https://www.vice.com/en/article/qjppx3/iran-bitcoin-us-sanctions |url-status=live }}</ref> Since 2020, Iran has required local bitcoin miners to sell bitcoin to the [[Central Bank of Iran]], allowing the central bank to use it for imports.<ref name="aawsat202011">{{cite news |date=31 October 2020 |title=Iran: New Crypto Law Requires Selling Bitcoin Directly to Central Bank to Fund Imports |url=https://english.aawsat.com/home/article/2596686/iran-new-crypto-law-requires-selling-bitcoin-directly-central-bank-fund-imports |work=[[Asharq Al-Awsat]] |access-date=31 October 2020 |archive-date=31 October 2020 |archive-url=https://web.archive.org/web/20201031235032/https://english.aawsat.com/home/article/2596686/iran-new-crypto-law-requires-selling-bitcoin-directly-central-bank-fund-imports |url-status=live }}</ref> Some [[constituent state]]s and [[local government]]s also accept tax payments in bitcoin, including [[Colorado]] in the US<ref>{{Cite news |date=21 September 2022 |title=Colorado accepts cryptocurrency to pay taxes, moving the state "tech forward" |url=https://www.denverpost.com/2022/09/21/colorado-accepts-cryptocurrency-taxes/ |first=Judith |last=Kohler |work=[[The Denver Post]] |language=en-US |access-date=29 December 2022 |archive-date=29 December 2022 |archive-url=https://web.archive.org/web/20221229090417/https://www.denverpost.com/2022/09/21/colorado-accepts-cryptocurrency-taxes/ |url-status=live }}</ref> and [[Canton of Zug|Zug]] and [[Lugano]] in Switzerland.<ref>{{Cite news |date=3 September 2020 |title='Crypto Valley' canton to accept Bitcoin for tax payments |url=https://www.swissinfo.ch/eng/business/-crypto-valley--canton-to-accept-bitcoin-for-tax-payments/46010364 |work=[[SWI swissinfo]] |language=en |access-date=22 November 2023 |archive-date=22 November 2023 |archive-url=https://web.archive.org/web/20231122163924/https://www.swissinfo.ch/eng/business/-crypto-valley--canton-to-accept-bitcoin-for-tax-payments/46010364 |url-status=live }}</ref><ref>{{Cite web |last=swissinfo.ch |first=S. W. I. |date=2023-12-05 |title=Lugano accepts bitcoin and tether payments for all city invoices |url=https://www.swissinfo.ch/eng/business/lugano-accepts-bitcoin-and-tether-payments-for-all-city-invoices/49032696 |access-date=2025-10-21 |website=SWI swissinfo.ch |language=en}}</ref> As of 2023, the US government owned more than $5 billion worth of seized bitcoin.<ref>{{Cite news |last=Huang |first=Vicky Ge |title=Why the U.S. Government Has $5 Billion in Bitcoin |url=https://www.wsj.com/finance/currencies/federal-government-bitcoin-5-billion-78ce0938 |date=15 October 2023 |work=[[The Wall Street Journal]] |language=en-US |access-date=20 February 2024 |archive-date=20 February 2024 |archive-url=https://web.archive.org/web/20240220023509/https://www.wsj.com/finance/currencies/federal-government-bitcoin-5-billion-78ce0938 |url-status=live }}</ref><ref>{{Cite news |last=Castillo |first=Michael del |title=U.S. Government Owns Way More Bitcoin Than Any Other Country–So Why Aren't They Selling It? |url=https://www.forbes.com/sites/michaeldelcastillo/2023/06/16/us-government-owns-way-more-bitcoin-than-any-other-countryso-why-arent-they-selling-it |date=16 June 2023 |website=[[Forbes]] |language=en |access-date=21 February 2024 |archive-date=21 February 2024 |archive-url=https://web.archive.org/web/20240221155659/https://www.forbes.com/sites/michaeldelcastillo/2023/06/16/us-government-owns-way-more-bitcoin-than-any-other-countryso-why-arent-they-selling-it/ |url-status=live }}</ref>

===Use for investment and status as an economic bubble ===
{{Further|Cryptocurrency bubble}}
[[File:El Salvador Bitcoin reserves.png|thumb|Government website with El Salvador reserves]]
{{As of|2018}}, the overwhelming majority of bitcoin transactions took place on [[cryptocurrency exchange]]s.<ref name="FT08062018" /> Since 2014, regulated bitcoin funds also allow [[Market exposure|exposure]] to the asset or to [[Futures contract|futures]] as an investment.<ref>{{Cite news |date=10 July 2014 |title=Jersey approve Bitcoin fund launch on island |work=BBC News |url=https://www.bbc.com/news/world-europe-jersey-28247796 |url-status=live |access-date=10 July 2014 |archive-url=https://web.archive.org/web/20140710211917/http://www.bbc.com/news/world-europe-jersey-28247796 |archive-date=10 July 2014}}</ref><ref>{{Cite news |date=18 December 2017 |title=Chicago Mercantile Exchange jumps into bitcoin futures |work=CBS News |url=https://www.cbsnews.com/news/chicago-mercantile-exchange-jumps-into-bitcoin-futures/ |url-status=live |access-date=31 May 2019 |archive-url=https://web.archive.org/web/20190531054602/https://www.cbsnews.com/news/chicago-mercantile-exchange-jumps-into-bitcoin-futures/ |archive-date=31 May 2019}}</ref> Bitcoin is used as a [[store of value]]:<ref>{{Cite news |date=2021-10-25 |title=Gold or Bitcoin? Store-of-value debate rages as Bitcoin grows |url=https://www.bloomberg.com/professional/insights/trading/gold-or-bitcoin-store-of-value-debate-rages-as-bitcoin-grows/ |access-date=2024-10-02 |work=Bloomberg Professional Services |language=en-US}}</ref><ref>{{cite news|url=https://www.reuters.com/business/finance/goldman-sachs-says-bitcoin-will-compete-with-gold-store-value-2022-01-05/|title=Goldman Sachs says bitcoin will compete with gold as "store of value"|website=Reuters|date=2022-01-05}}</ref> individuals and companies such as the [[Winklevoss Capital Management|Winklevoss twins]]<ref>{{Cite news |last=Lee |first=Timothy B. |title=The $11 million in bitcoins the Winklevoss brothers bought is now worth $32 million |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/the-switch/wp/2013/11/09/the-11-million-in-bitcoins-the-winklevoss-brothers-bought-is-now-worth-32-million/ |url-status=live |access-date=11 August 2017 |archive-url=https://web.archive.org/web/20170706111658/https://www.washingtonpost.com/news/the-switch/wp/2013/11/09/the-11-million-in-bitcoins-the-winklevoss-brothers-bought-is-now-worth-32-million/ |archive-date=6 July 2017}}</ref> and [[Elon Musk]]'s companies [[SpaceX]] and [[Tesla, Inc.|Tesla]] have each bought and sold hundreds of millions of dollars worth of bitcoin.<ref>{{cite news |title=Tesla Sells 75% of Its Bitcoin Purchases |url=https://www.wsj.com/livecoverage/tesla-earnings-q2-2022-elon-musk-live/card/tesla-sells-75-of-its-bitcoin-purchases-tgkMdMf1EHDvdniqHu8S |access-date=23 November 2025 |work=The Wall Street Journal |archive-url=https://archive.today/20220720221842/https://www.wsj.com/livecoverage/tesla-earnings-q2-2022-elon-musk-live/card/tesla-sells-75-of-its-bitcoin-purchases-tgkMdMf1EHDvdniqHu8S |archive-date=20 Jul 2022 |url-access=subscription |url-status=live}}</ref><ref>{{cite news |last1=Maidenberg |first1=Micah |last2=Driebusch |first2=Corrie |last3=Jin |first3=Berber |title=A Rare Look Into the Finances of Elon Musk's Secretive SpaceX |url=https://www.wsj.com/tech/behind-the-curtain-of-elon-musks-secretive-spacex-revenue-growth-and-rising-costs-2c828e2b |access-date=19 November 2023 |work=The Wall Street Journal |date=17 August 2023 |url-access=subscription |archive-date=17 August 2023 |archive-url=https://archive.today/20230817224420/https://www.wsj.com/tech/behind-the-curtain-of-elon-musks-secretive-spacex-revenue-growth-and-rising-costs-2c828e2b |url-status=live }}</ref><ref>{{Cite news |last1=Ostroff |first1=Caitlin |last2=Elliott |first2=Rebecca |date=8 February 2021 |title=Tesla Buys $1.5 Billion in Bitcoin |language=en-US |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/tesla-buys-1-5-billion-in-bitcoin-11612791688 |access-date=22 November 2023 |issn=0099-9660 |url-access=subscription |archive-date=6 January 2024 |archive-url=https://web.archive.org/web/20240106160013/https://www.wsj.com/articles/tesla-buys-1-5-billion-in-bitcoin-11612791688 |url-status=live }}</ref> Bitcoin wealth is highly concentrated, with 0.01% holding 27% of in-circulation currency, as of 2021.<ref>{{Cite news |last1=Vigna |first1=Paul |title=Bitcoin's 'One Percent' Controls Lion's Share of the Cryptocurrency's Wealth |work=[[Wall Street Journal]] |date=20 December 2021 |url=https://www.wsj.com/articles/bitcoins-one-percent-controls-lions-share-of-the-cryptocurrencys-wealth-11639996204 |issn=0099-9660 |url-access=subscription |access-date=22 December 2021 |archive-date=22 December 2021 |archive-url=https://web.archive.org/web/20211222180909/https://www.wsj.com/articles/bitcoins-one-percent-controls-lions-share-of-the-cryptocurrencys-wealth-11639996204 |url-status=live }}</ref>

As of March 2025, El Salvador had $550 million worth of bitcoin in its [[Foreign exchange reserves|international reserves]], about 6,102 coins.<ref>{{Cite web |last=Renteria |first=Nelson |date=March 5, 2025 |title=El Salvador announces more bitcoin purchases, gives IMF assurances |url=https://www.reuters.com/technology/el-salvador-announces-more-bitcoin-purchases-gives-imf-assurances-2025-03-05/}}</ref>

In 2018, research published in the ''[[Journal of Monetary Economics]]'' concluded that [[Market manipulation|price manipulation]] occurred during the [[Mt. Gox]] bitcoin theft and that the market remained vulnerable to manipulation.<ref>{{cite journal |last1=Gandal |first1=Neil |last2=Hamrick |first2=J.T. |last3=Moore |first3=Tyler |last4=Oberman |first4=Tali |date=May 2018 |title=Price manipulation in the Bitcoin ecosystem |journal=[[Journal of Monetary Economics]] |volume=95 |pages=86–96 |doi=10.1016/j.jmoneco.2017.12.004 |s2cid=26358036 |doi-access=free}}</ref> Research published in ''[[The Journal of Finance]]'' also suggested that trading associated with increases in the amount of the [[Tether (cryptocurrency)|Tether cryptocurrency]] and associated trading at the [[Bitfinex]] exchange accounted for about half of the price increase in bitcoin in late 2017.<ref>{{Cite journal |last1=Griffin |first1=John M. |last2=Shams |first2=Amin |date=August 2020 |title=Is Bitcoin Really Untethered? |url= |journal=[[The Journal of Finance]] |language=en |volume=75 |issue=4 |pages=1913–1964 |doi=10.1111/jofi.12903 |doi-access=free|s2cid=229576274 |issn=0022-1082}}</ref><ref>{{Cite news |last=Popper |first=Nathaniel |date=13 June 2018 |title=Bitcoin's Price Was Artificially Inflated Last Year, Researchers Say |work=The New York Times |url=https://www.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html |url-status=live |access-date=13 June 2018 |archive-url=https://web.archive.org/web/20180613100732/https://www.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html |archive-date=13 June 2018}}</ref>

Bitcoin, along with other cryptocurrencies, has been described as an [[economic bubble]] by several economists, including [[Nobel Memorial Prize in Economic Sciences|Nobel Prize in Economics]] laureates, such as [[Joseph Stiglitz]],<ref name="Stiglitz">{{Cite news |last=Costelloe |first=Kevin |date=29 November 2017 |title=Bitcoin 'Ought to Be Outlawed,' Nobel Prize Winner Stiglitz Says |work=Bloomberg News |url=https://www.bloomberg.com/news/articles/2017-11-29/bitcoin-ought-to-be-outlawed-nobel-prize-winner-stiglitz-says-jal10hxd |url-status=live |access-date=5 June 2018 |archive-url=https://web.archive.org/web/20180612224313/https://www.bloomberg.com/news/articles/2017-11-29/bitcoin-ought-to-be-outlawed-nobel-prize-winner-stiglitz-says-jal10hxd |archive-date=12 June 2018 |quote=It doesn't serve any socially useful function. |url-access=subscription}}</ref> [[James Heckman]],<ref name="4Nobels">{{Cite news |last=Wolff-Mann |first=Ethan |date=27 April 2018 |title='Only good for drug dealers': More Nobel prize winners snub bitcoin |url=https://finance.yahoo.com/news/good-drug-dealers-nobel-prize-winners-snub-bitcoin-184903784.html |url-status=live |archive-url=https://web.archive.org/web/20180612141128/https://finance.yahoo.com/news/good-drug-dealers-nobel-prize-winners-snub-bitcoin-184903784.html |archive-date=12 June 2018 |access-date=7 June 2018 |work=Yahoo Finance}}</ref> and [[Paul Krugman]].<ref name=Krugman>{{Cite news |last=Mohamed |first=Theron |title=Nobel economist Paul Krugman slams crypto as mostly useless, after saying it's hugely overpriced and helps criminals |url=https://markets.businessinsider.com/news/currencies/paul-krugman-crypto-bitcoin-price-bubble-crime-cbdc-desantis-banks-2023-5 |date=30 May 2023 |website=[[Business Insider]] |language=en-US |access-date=23 November 2023 |archive-date=23 November 2023 |archive-url=https://web.archive.org/web/20231123131322/https://markets.businessinsider.com/news/currencies/paul-krugman-crypto-bitcoin-price-bubble-crime-cbdc-desantis-banks-2023-5 |url-status=live }}</ref> Another recipient of the prize, [[Robert Shiller]], argues that bitcoin is rather a [[fad]] that may become an [[Asset classes|asset class]]. He describes its price growth as an "epidemic", driven by [[Social contagion|contagious narratives]].<ref>{{Cite news |date=9 June 2021 |title=Don't Call Bitcoin a Bubble. It's an Epidemic |language=en |work=Bloomberg.com |url=https://www.bloomberg.com/opinion/articles/2021-06-09/don-t-call-bitcoin-a-bubble-it-s-an-epidemic |first=John |last=Authers|author-link=John Authers|archive-url=https://web.archive.org/web/20210610021335/https://www.bloomberg.com/opinion/articles/2021-06-09/don-t-call-bitcoin-a-bubble-it-s-an-epidemic |archive-date=10 June 2021 |url-status=live |url-access=subscription}}</ref> In 2024, [[Jean Tirole]], also Nobel laureate, described bitcoin as a "pure bubble" as its [[Intrinsic value (finance)|intrinsic value]] is zero. According to him, some bubbles are long-lasting such as gold and fiat currencies, and that it was impossible to predict whether it would implode like other financial bubbles or become an alternative to gold.<ref>{{Cite news |date=2024-02-01 |title=Cryptocurrencies: an economist's view |url=https://www.tse-fr.eu/cryptocurrencies-economists-view |access-date=2024-11-15 |language=en | first1=Jean|last1=Tirole|author-link1=Jean Tirole|work=La Jaune et la Rouge|issue=792|volume=February 2024}}</ref> The same year, [[Chair of the Federal Reserve|Federal Reserve Chair]] [[Jerome Powell]] described bitcoin as a digital competitor to gold but not to the dollar as he argued it is a highly volatile [[Speculation|speculative]] asset not used as a form of payment.<ref>{{Cite news |author= |date= |title=Bitcoin breaks $100,000 barrier amid post-election cryptocurrency surge |url=https://www.washingtonpost.com/business/2024/12/04/bitcoin-price-100k-crypto-trump/ |access-date=5 December 2024 |newspaper=Washington Post |quote=“People use bitcoin as a speculative asset. It’s like gold, it’s just like gold, only it’s virtual, it’s digital. People are not using it as a form of payment or a store of value,” he said. “It’s highly volatile. It’s not a competitor for the dollar; it’s really a competitor for gold.”}}</ref> In 2025, [[Kenneth Rogoff]] claimed that Krugman was wrong and that Bitcoin had value as it is competing with the dollar to become the [[means of exchange]] of the [[Informal economy|underground economy]] which represents 20% of the world's [[Gross domestic product|GDP]].<ref name="RogoffEconomist" /><ref name="RogoffBloomberg" />

According to research published in the ''[[International Review of Financial Analysis]]'' in 2018, bitcoin as an asset is highly volatile and does not behave like any other conventional asset.<ref>{{Cite journal |last1=Klein |first1=Tony |last2=Pham Thu |first2=Hien |last3=Walther |first3=Thomas |date=October 2018 |title=Bitcoin is not the New Gold – A comparison of volatility, correlation, and portfolio performance |url=https://pureadmin.qub.ac.uk/ws/files/155247201/crypto_V2.pdf |journal=International Review of Financial Analysis |language=en |volume=59 |pages=105–116 |doi=10.1016/j.irfa.2018.07.010 |s2cid=158400153 |doi-access= |access-date=24 November 2023 |archive-date=25 November 2023 |archive-url=https://web.archive.org/web/20231125164037/https://pureadmin.qub.ac.uk/ws/files/155247201/crypto_V2.pdf |url-status=live }}</ref> According to one 2022 analysis published in ''[[The Journal of Alternative Investments]]'', bitcoin was less volatile than [[Price of oil|oil]], [[Silver as an investment|silver]], [[United States Treasury security|US Treasuries]], and 190 stocks in the [[S&P 500]] during and after the [[2020 stock market crash]].<ref>{{Cite journal |last=Mazur |first=Mieszko |date=31 March 2022 |title=Misperceptions of Bitcoin Volatility |url= |journal=The Journal of Alternative Investments |language=en |volume=24 |issue=4 |pages=33–44 |doi=10.3905/jai.2022.1.153 |s2cid=247843794 |issn=1520-3255 |doi-access=}}</ref> The term {{wikt-lang|en|hodl}} was created in December 2013 for [[Buy and hold|holding]] bitcoin rather than selling it during periods of volatility.<ref>{{cite news |last1=Montag |first1=Ali |title='HODL,' 'whale' and 5 other cryptocurrency slang terms explained |url=https://www.cnbc.com/2018/01/23/what-hodl-whale-and-other-cryptocurrency-slang-terms-mean.html |work=CNBC |date=26 August 2018 |access-date=16 March 2021 |archive-date=12 January 2022 |archive-url=https://web.archive.org/web/20220112091630/https://www.cnbc.com/2018/01/23/what-hodl-whale-and-other-cryptocurrency-slang-terms-mean.html |url-status=live }}</ref><ref>{{Cite news |url=https://www.bloomberg.com/news/articles/2020-11-19/what-the-heck-is-hodl-bitcoin-lingo-for-crypto-noobs-quicktake |title=All the Bitcoin Lingo You Need to Know as Crypto Heats Up |last=Hajric |first=Vildana |date=19 November 2020 |work=Bloomberg |access-date=1 December 2020 |url-access=subscription |archive-date=29 November 2020 |archive-url=https://web.archive.org/web/20201129234847/https://www.bloomberg.com/news/articles/2020-11-19/what-the-heck-is-hodl-bitcoin-lingo-for-crypto-noobs-quicktake |url-status=live }}</ref>

In 2014, economist [[Nouriel Roubini]] described bitcoin as a [[Ponzi scheme]].<ref>{{cite news |last=Clinch |first=Matt |date=10 March 2014 |title=Roubini launches stinging attack on bitcoin |url=https://www.cnbc.com/2014/03/10/nches-stinging-attack-on-bitcoin.html |publisher=[[CNBC]] |access-date=22 November 2023 |archive-date=9 July 2022 |archive-url=https://web.archive.org/web/20220709232801/https://www.cnbc.com/2014/03/10/nches-stinging-attack-on-bitcoin.html |url-status=live }}</ref> Legal scholar [[Eric Posner]] disagrees, however, as "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective [[delusion]]".<ref>{{Cite news |last=Posner |first=Eric |author-link=Eric Posner |date=11 April 2013 |title=Fool's Gold |language=en-US |work=Slate |url=https://slate.com/news-and-politics/2013/04/bitcoin-is-a-ponzi-scheme-the-internet-currency-will-collapse.html |access-date=22 November 2023 |issn=1091-2339 |archive-date=8 July 2022 |archive-url=https://web.archive.org/web/20220708202651/https://slate.com/news-and-politics/2013/04/bitcoin-is-a-ponzi-scheme-the-internet-currency-will-collapse.html |url-status=live }}</ref> A 2014 [[World Bank]] report also concluded that bitcoin was not a deliberate Ponzi scheme.<ref>{{Cite book |last1=Davradakis |first1=Emmanouil |last2=Santos |first2=Ricardo |url=https://data.europa.eu/doi/10.2867/11329 |title=Blockchain, FinTechs and their relevance for international financial institutions |date=2019 |publisher=[[European Investment Bank]] |doi=10.2867/11329 |isbn=978-92-861-4184-3 |access-date=24 November 2023 |archive-date=21 April 2024 |archive-url=https://web.archive.org/web/20240421113801/https://op.europa.eu/en/publication-detail/-/publication/ae472145-237a-11e9-8d04-01aa75ed71a1/language-en |url-status=live }}</ref>

=== Market characteristics ===
Bitcoin markets operate 24 hours a day, seven days a week, contrasting with traditional financial markets that have fixed trading hours. Bitcoin prices show much higher volatility and respond strongly to both regulatory changes and market events.<ref>{{Cite journal |last1=Feng |first1=Wenjun |last2=Wang |first2=Yiming |last3=Zhang |first3=Zhengjun |date=2018-09-01 |title=Informed trading in the Bitcoin market |journal=Finance Research Letters |volume=26 |pages=63–70 |doi=10.1016/j.frl.2017.11.009 |issn=1544-6123|doi-access=free }}</ref>

The volume of bitcoin trading can fluctuate considerably among various exchanges and geographic regions. The daily transaction volume of bitcoin across all exchanges typically reaches $50 billion as of 2025.<ref>{{Cite news |date=2025-05-08 |title=Bitcoin set to break records and shatter the $100K barrier |url=https://economictimes.indiatimes.com/news/international/us/bitcoin-set-to-break-records-and-shatter-the-100k-barrier/articleshow/120988931.cms |access-date=2025-05-20 |work=The Economic Times |issn=0013-0389}}</ref>

==See also==
*{{anl|Alternative currency}}
*{{anl|List of cryptocurrencies}}

==Notes==
{{Notelist|2}}

==References==
{{Reflist}}

==Further reading==
*{{cite web|last=Nakamoto|first=Satoshi|date=31 October 2008|title=Bitcoin: A Peer-to-Peer Electronic Cash System|url=https://bitcoin.org/bitcoin.pdf|url-status=dead|archive-url=https://web.archive.org/web/20140320135003/https://bitcoin.org/bitcoin.pdf|archive-date=20 March 2014|access-date=28 April 2014|publisher=bitcoin.org}}

== External links==
{{Wiktionary}}
{{Wikiquote}}
* [https://github.com/bitcoin/bitcoin Code repository on Github ]

{{Bitcoin}}
{{Cryptocurrencies}}
{{Currency symbols}}
{{Authority control}}
{{Subject bar|commons=Bitcoin|portal1=Business and economics|portal2=Free and open-source software|portal3=Internet|portal4=Numismatics|portal5=Money}}

[[Category:Bitcoin| ]]
[[Category:Cryptocurrencies]]
[[Category:Currencies introduced in 2009]]