Key takeaways
- Bitcoin is a decentralised digital asset with a fixed maximum supply of 21 million.
- New coins are issued to miners at a rate that halves about every four years.
- It trades 24/7 and is far more volatile than gold or major currencies.
How it works
Bitcoin transactions are recorded on a public blockchain. Miners compete to add blocks about every ten minutes, earning newly issued bitcoin plus fees. The software halves the issuance roughly every four years, most recently to 3.125 BTC per block in 2024.
Bitcoin, gold and the dollar
| US dollar | Gold | Bitcoin | |
|---|---|---|---|
| Issuer | Federal Reserve | None (mined) | None (protocol) |
| Supply | Set by policy | Grows slowly | Capped at 21M |
| Trading hours | 24h weekdays (FX) | Near-24h weekdays | 24/7 |
| Volatility | Low (majors) | Moderate | High |
How BTC trades
On crypto exchanges against USD, EUR and stablecoins; through futures on regulated derivatives exchanges; and, in some countries, via exchange-traded products. Prices differ slightly between venues.
What actually moves the price is covered in what moves the Bitcoin price.
Practical points
- Transfers are irreversible; check addresses carefully.
- 1 BTC = 100,000,000 satoshis, so small amounts can be bought.
- Use the crypto profit calculator to include fees.
Common questions
Is Bitcoin anonymous?
It is pseudonymous: addresses aren't names, but all transactions are public, and regulated exchanges link accounts to identities.
Why is Bitcoin called digital gold?
Because of its fixed supply and use as a store of value by some holders, though its price has been much more volatile than gold's.
Sources
- Bitcoin: A Peer-to-Peer Electronic Cash System (2008)